Document:

EX-10.10

Exhibit 10.10

AMENDED AND RESTATED

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

     AMENDED AND RESTATED PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this
“Agreement”), dated as of March 31, 2009 (the “Effective Date”), by FRANKLIN
CREDIT MANAGEMENT CORPORATION, a Delaware corporation (the “Grantor”), in favor of THE
HUNTINGTON NATIONAL BANK, a national banking association as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders.

W i t n e s s e t h:

     Whereas, Franklin Credit Asset Corporation, Tribeca Lending Corporation, the other
borrowers party thereto, the financial institutions party thereto as lenders, and The Huntington
National Bank, as Administrative Agent are entering into that certain Amended and Restated Credit
Agreement, dated as of the Effective Date (as amended, modified, supplemented or restated from time
to time, the “Credit Agreement”);

     Whereas, it is a condition precedent to the obligations of the Administrative Agent
and the Lenders to make and/or maintain advances and the financial accommodations provided under
the Credit Agreement, that the Grantor shall have executed and delivered this Agreement to the
Administrative Agent (for the benefit of the Lenders); and

     Whereas, the Grantor acknowledges that the making and/or maintaining of the advances
and other financial accommodations to the Borrowers under the Credit Agreement and other Loan
Documents will inure to the substantial benefit of the Grantor.

     Now, Therefore, in consideration of the premises and to comply with the requirements
of the Credit Agreement and the other Loan Documents, the Grantor hereby agrees with Administrative
Agent as follows:

Section 1. Defined Terms

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein have the
meaning given to them in the Credit Agreement.

Section 2. Grant of Security Interest in Collateral

     The Grantor, as collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the Obligations, hereby
collaterally pledges, assigns, conveys, mortgages, pledges, hypothecates and transfers to
Administrative Agent, and grants to Administrative Agent a lien on and security interest in, all of
its right, title and interest in, to and under the following collateral of such Grantor (the
“Collateral”):

     (a) all of its proceedings, choses in action and Commercial Tort Claims in which it has an
interest, including, without limitation, any proceeding, choses in action, and Commercial Tort
Claim referred to on Schedule I attached hereto; and

     (b) all Proceeds of the foregoing.

 

 

Section 3. Amendment and Restatement Agreement; No Novation.

     The security interest granted pursuant to this Agreement is granted in conjunction with the
security interest granted to The Huntington National Bank in or under one or more existing security
agreements (the “Existing Security Agreement”), and this Agreement amends and restates the
Existing Security Agreement. This Agreement is not in any way intended to constitute a novation of
any obligation or liability of the Grantor existing under the Existing Security Agreement or
evidence payment of all or any portion of any such obligation and liability. Each security
agreement and financing statement filed pursuant to the Existing Security Agreement or any
predecessor thereto shall remain in full force and effect in all respects as if such “Obligations”
or “Secured Obligations” had been payable and effective originally as provided by this Agreement.

Section 4. Waiver of Rights.

     The Grantor waives any claims or other rights which the Grantor might now have or hereafter
acquire against any Borrower or any other Person that is primarily or contingently liable on the
obligations that arise from the existence or performance of the Grantor’s obligations under this
Agreement, including, without limitation, any right of subrogation, suretyship, reimbursement,
exoneration, contribution, indemnification, or any right to participate in any claim or remedy of
the Administrative Agent or any Lender against any Borrower or any collateral security therefore
which the Administrative Agent or any Lender now has or hereafter acquires; whether such claim,
remedy or right arises in equity, under contract or statute, at common law, or otherwise. The
waivers contained in this Section inure only to the benefit of the Administrative Agent and each
Lender, and their respective successors and assigns, and not to any other parties. The Grantor
acknowledges and agrees that the Grantor shall benefit directly and indirectly by the
Administrative Agent and the Lenders executing and delivering the Credit Agreement and other Loan
Documents.

[Signature Page Follows]

2

 

     In witness whereof, the Grantor has caused this Agreement to be executed and
delivered by its duly authorized offer as of the date first set forth above.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	FRANKLIN CREDIT MANAGEMENT CORPORATION,
as Grantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Thomas J. Axon	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Thomas J. Axon	 	 
	 	 	Title: President	 	 

Accepted and Agreed

as of the date first above written:

THE HUNTINGTON NATIONAL BANK

	 	 	 	 	 
	By:
	 	/s/ Alan D. Seitz	 	 
	 

	 	 

Name: Alan D. Seitz
	 	 
	 

	 	Title: Senior Vice President	 	 

Signature Page To Amended And Restated Pledge, Assignment And Security Agreement

 

 

Acknowledgement of Grantor

	 	 	 	 	 
	 

	 	 	 	 
	State of Ohio

	 	)	 	 
	 

	 	) ss.	 	 
	County of Franklin

	 	)	 	 

     On
this 25thday of March, 2009, before me personally appeared Thomas J. Axon, proved to me on
the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf
of Franklin Credit Management Corporation, a Delaware corporation, who being by me duly sworn did
depose and say that he is an authorized representative of said entity, that the said instrument was
signed on behalf of said entity and that he acknowledged said instrument to be the free act and
deed of said entity.

/s/ Susan E. Portwood

              Notary Public

Acknowledgment Page To Amended And Restated Pledge, Assignment And Security Agreement

Susan E. Portwood
Notary Public State of
Ohio
 My Commission expires July 12, 2009

 

 

Schedule I

to

Agreement

Proceedings, Choses in Action and Commercial Tort Claims

	1.	 	All claims arising out of all loan purchase agreements between Franklin Credit
Management Corporation (“FCMC”) and WMC Mortgage, LLC (“WMC”), successor to WMC
Mortgage Corp., including, without limitation, (1) that certain loan purchase agreement
between FCMC and WMC, dated as of September 29, 2006 and (2) that certain loan purchase
agreement between FCMC and WMC, dated as of November 30, 2006.

	2.	 	All claims arising out of all loan purchase agreements between Franklin Credit
Management Corporation (“FCMC”) and WMC Mortgage, LLC (“WMC”) including, without
limitation, (1) that certain loan purchase agreement between FCMC and WMC, dated as of
May 25, 2006, (2) that certain loan purchase agreement between FCMC and WMC, dated as
of September 29, 2006, and (3) that certain loan purchase agreement between FCMC and
WMC, dated as of November 30, 2006.

	3.	 	All claims arising out of all loan purchase agreements between Franklin Credit
Management Corporation (“FCMC”), Decision One Mortgage Company, LLC (“Decision One”),
and HSBC Finance Corporation including, without limitation, (1) that certain loan
purchase agreement between FCMC and Decision One, dated as of June 23, 2006, (2) that
certain loan purchase agreement between FCMC and Decision One, dated as of August 29,
2006, (3) that certain loan purchase agreement between FCMC and Decision One, dated as
of September 27, 2006, (4) that certain loan purchase agreement between FCMC and
Decision One, dated as of January 26, 2007, and (5) that certain loan purchase
agreement between FCMC and Decision One, dated as of February 26, 2007.

	4.	 	All claims arising out of all loan purchase agreements between Franklin Credit
Management Corporation (“FCMC”) and Pine State Mortgage Corporation (“Pine State”)
including, without limitation, (1) that certain loan purchase agreement between FCMC
and Pine State, dated as of February 12, 2007, (2) that certain loan purchase agreement
between FCMC and Pine State, dated as of February 28, 2007, (3) that certain loan
purchase agreement between FCMC and Pine State, dated as of March 30, 2007, (4) that
certain loan purchase agreement between FCMC and Pine State, dated as of April 19,
2007, and (5) that certain loan purchase agreement between FCMC and Pine State, dated
as of May 15, 2007.

	5.	 	All claims arising out of all loan purchase agreements between Franklin Credit
Management Corporation (“FCMC”) and Metrocities Mortgage, LLC (“Metro”) including,
without limitation, that certain loan purchase agreement between FCMC and Metro, dated
as of June 18, 2007.

	6.	 	All claims arising out of all loan purchase agreements between Franklin Credit
Management Corporation (“FCMC”) and First Residential Mortgage Services Corporation
(“First Residential”) including, without limitation, that certain loan purchase
agreement between FCMC and First Residential, dated as of February 22, 2007.

	7.	 	All claims arising out of an action commenced on February 6, 2008, in the
Supreme Court of the State of New York, County of New York captioned Franklin
Credit Management Corporation v. WMC Mortgage LLC, successor to WMC Mortgage Corp.,
Index No. 08/600355 (Sup. Ct. N.Y. County) whereby Franklin Credit Management
Corporation seeks damages in an amount not less than $35,500,000.

1

 

	8.	 	All claims arising out of an action commenced on August 15, 2008, in the
Supreme Court of the State of New York, County of New York captioned Franklin
Credit Management Corporation v. WMC Mortgage LLC, successor to WMC Mortgage Corp.,
Index No. 08/602390 (Sup. Ct. N.Y. County) whereby Franklin Credit Management
Corporation seeks damages in an amount not less than $36,800,000.

	9.	 	All claims arising out of an action commenced on February 13, 2008, in the
Supreme Court of the State of New York captioned Franklin Credit Management
Corporation v. Decision One Mortgage Company, LLC and HSBC Finance Corporation,
Index No. 08/600434 (Sup. Ct. N.Y. County) whereby Franklin Credit Management
Corporation seeks damages in an amount not less than $8,750,000 from Decision One
Mortgage Company, LLC and not less than $4,400,000 from HSBC Finance Corporation.

	10.	 	All claims arising out of a settlement agreement being negotiated between
Franklin Credit Management Corporation (“FCMC”) and Pine State Mortgage Company (“Pine
State”) in the amount of $150,000, arising from an action commenced on March 10, 2008,
in the United States District Court for the Southern District of New York captioned
Franklin Credit Management Corporation v. Pine State Mortgage Corporation, Case
No. 08 CV 2430 (SHS) whereby FCMC seeks damages in an amount not less than $780,000.

	11.	 	All claims arising out of an action commenced on April 7, 2008, in the Supreme
Court of the State of New York, County of New York captioned Franklin Credit
Management Corporation v. Metrocities Mortgage, LLC, Index No. 08/104977 (Sup. Ct.
N.Y. County) whereby Franklin Credit Management Corporation seeks damages in an amount
not less than $149,000.

	12.	 	All claims arising out of an action commenced on March 27, 2008, in the Supreme
Court of the State of New York, County of New York captioned Franklin Credit
Management Corporation v. First Residential Mortgage Services Corporation, Index
No. 08/600904 (Sup. Ct. N.Y. County) whereby Franklin Credit Management Corporation
seeks damages in an amount not less than $86,000.

	13.	 	All claims arising out of an action commenced on August 14, 2008, in the
Supreme Court of the State of New York, County of New York captioned Franklin
Credit Management Corporation v. Ace Mortgage Funding, LLC, Index No. 08/602380
(Sup. Ct. N.Y. County) whereby Franklin Credit Management Corporation seeks damages in
an amount not less than $180,000.

	14.	 	All claims arising out of an action commenced on September 18, 2008, in the
Supreme Court of the State of New York, County of New York captioned Franklin
Credit Management Corporation v. AmericaHomeKey, Inc., Case No. 08 CV 8068 (SHS)
whereby Franklin Credit Management Corporation seeks damages in an amount not less than
$130,000.

	15.	 	All claims arising out of a pending action likely to be captioned Franklin
Credit Management Corporation v. EMC Mortgage Corporation, whereby Franklin Credit
Management Corporation seeks damages in an amount not less than $3,482,236.10.

2EX-10.11

Exhibit 10.11

INVESTMENT PROPERTY SECURITY AGREEMENT

     This Investment Property Security Agreement (this “Agreement”), is entered into as of
the 31st day of March, 2009. FRANKLIN CREDIT MANAGEMENT CORPORATION, a corporation
organized under the laws of the State of Delaware (hereinafter called “Pledgor”), for
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby
grants, pledges, and assigns to (a) THE HUNTINGTON NATIONAL BANK, acting as contractual
representative pursuant to the Credit Agreement (Licensing) (as defined below)
(“Huntington,” and acting as such contractual representative and any successor or
successors to Huntington acting in such capacity, being referred to as “Administrative
Agent”) and (b) THE HUNTINGTON NATIONAL BANK, acting as contractual representative pursuant to
the Credit Agreement (Legacy) (as defined below) (“Huntington,” and acting as such
contractual representative and any successor or successors to Huntington acting in such capacity,
being referred to as “Administrative Agent”), for the benefit of the Lenders (as defined
below), a security interest in the following account (the “Account”), whether Pledgor’s
interest therein be now owned or existing or hereafter arising or acquired, together with all
substitutions, replacements, exchanges, reissues and additions therefor or thereto:

	 	 	 
	Account Number	 	Name and Address
	and Title	 	of “Intermediary”
	Acct. No: 01892543486

	 	Name: The Huntington National Bank
	Name: FMCC Money Market Account

	 	Address: 41 South High St.

	 

	 	               Columbus, Ohio 43214
	 

	 	Attention: Melanie Arthur

as it exists on the date hereof and as it may be constituted in the future, and in

	 	•	 	any free credit balance or other money, now or hereafter credited to, or owing
from Intermediary to Pledgor in respect of, the Account;
	 
	 	•	 	any money, securities (certificated or uncertificated), commodities contracts,
instruments, documents, general intangibles, financial assets or other investment
property arising in connection with, constituting a portion of, or distributed from the
Account, now or in the future;
	 
	 	•	 	all books and records relating thereto;
	 
	 	•	 	all proceeds, cash or non-cash, of the sale, exchange, redemption or exercise of
any of the foregoing thereof, including, but not limited to, any dividend, interest
payment or other distribution of cash or property in respect thereof; and
	 
	 	•	 	any rights incidental to the ownership of any of the foregoing, such as voting,
conversion and registration rights and rights of recovery for violations of applicable
securities laws

(all of the foregoing may be referred to herein as the “Collateral”) on the following terms
and subject to the following conditions:

Article 1. Other Credit Documents.

 

 

     Section 1.1. Credit Agreement. This Agreement is executed pursuant to, and subject to the
terms and conditions of, each Credit Agreement. “Credit Agreement” means each of those
certain (a) Amended and Restated Credit Agreement (Licensing), dated as of March 31, 2009 (the
“Credit Agreement (Licensing)”), by and among Pledgor and Franklin Credit Holding
Corporation (“Holding”) as borrowers, the Administrative Agent, and the financial
institutions party thereto as Lenders (Huntington, in its individual capacity and as Issuing Bank,
and such other financial institutions being hereafter referred to collectively as “Licensing
Lenders” and individually as a “Licensing Lender”) together with all amendments,
modifications, supplements and restatements thereto from time to time and (b) Amended and Restated
Credit Agreement, dated as of March 31, 2009 (the “Credit Agreement (Legacy)”), by and
among Franklin Credit Asset Corporation, Tribeca Lending Corporation, the other borrowers party
thereto (the “Legacy Borrowers”), the Administrative Agent, and the financial institutions
party thereto as Lenders (Huntington, in its individual capacity, and such other financial
institutions being hereafter referred to collectively as “Legacy Lenders” and individually
as a “Legacy Lender”). “Lenders” means the Licensing Lenders and the Legacy
Lenders. Capitalized terms used in this Agreement but not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement (Licensing), unless otherwise designated.

Article 2. Security Interest.

     Section 2.1. Control Agreement and Capitalized Terms. Simultaneously with the execution and
delivery of this Agreement, Pledgor, Administrative Agent and Intermediary have executed and
delivered that certain Account Control Agreement dated of even date herewith (the “Control
Agreement”) for the purpose of providing Administrative Agent with control of the Account and
perfecting the security interest and Lien granted by Pledgor to Administrative Agent herein.

     Section 2.2. Secured Obligations. The pledge, security interest, and collateral assignment
hereby granted is to secure the prompt and full payment and complete performance of all Obligations
to the Administrative Agent or any Lender (i) of Pledgor and Holding arising under or in connection
with the Credit Agreement (Licensing), the promissory notes and all other Loan Documents (as
defined in the Credit Agreement (Licensing)) executed in connection with the Credit Agreement
(Licensing) and (ii) of Pledgor and the Legacy Borrowers arising under or in connection with the
Credit Agreement (Legacy), the promissory notes and all other Loan Documents (as defined in the
Credit Agreement (Legacy)) executed in connection with the Credit Agreement (Legacy).
“Obligations” means, as to any Person, all loans, debts, principal, interest (including any
interest that, but for the commencement of an insolvency proceeding, would have accrued), premiums,
liabilities (including all amounts charged to Pledgor’s account pursuant hereto), obligations
(including indemnification obligations), fees (including any fees provided for in any Credit
Agreement), charges, costs, expenses (including any fees or expenses that, but for the commencement
of an insolvency proceeding would have accrued), lease payments, guaranties, covenants, and duties
of any kind and description owing such Person to the Administrative Agent or any Lender and
irrespective of whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and including all interest not
paid when due and all expenses that any such Person is required to pay or reimburse, all of the
foregoing arising in connection with any Credit Agreement, by law, or otherwise. The absence of
any reference to this Agreement in any documents, instruments or agreements evidencing or relating
to any Obligation secured hereby shall not limit or be construed to limit the scope or
applicability of this Agreement.

     Section 2.3. Blocked Account. Pledgor acknowledges and agrees that the Account is designated
as a “blocked account” under the Control Agreement, and thus the Intermediary may not act upon any
direction or instruction of Pledgor with respect to any portion of the Collateral at any time.

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     Section 2.4. Duty of Administrative Agent. If Administrative Agent takes possession of any
of the Collateral, the duty of Administrative Agent with respect to the Collateral shall be solely
to use reasonable care in the physical custody thereof, and Administrative Agent shall not be under
any obligation to take any action with respect to any of the Collateral or to preserve rights
against prior parties. The powers conferred on Administrative Agent hereunder are solely to
protect its interest in the Collateral and do not impose any duty upon it to exercise any such
powers. Pledgor is not looking to Administrative Agent to provide it with investment advice.
Administrative Agent shall have no duty to ascertain or take any action with respect to calls,
conversions, exchanges, maturities, tenders or other matters concerning any Collateral, whether or
not Administrative Agent has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve any rights pertaining to any Collateral. Administrative Agent
shall have no duty to exercise reasonable care to preserve the value of any of the Collateral.

     Section 2.5. Subsequent Changes Affecting Collateral. Pledgor acknowledges that it has made
its own arrangements for keeping informed of changes or potential changes affecting the Collateral
and Pledgor agrees that Administrative Agent has no responsibility to inform Pledgor of such
matters or to take any action with respect thereto even if any of the Collateral has been
registered in the name of Administrative Agent or its agent or nominee.

     Section 2.6. Return of Collateral. Except as otherwise provided herein or as in any Loan
Documents (as defined in the Credit Agreements), the security interest granted to Administrative
Agent hereunder shall not terminate and Administrative Agent shall not be required to return the
Collateral to Pledgor or to terminate its security interest therein unless and until (a) the
Obligations have been fully paid or performed, (b) all of Pledgor’s obligations hereunder have been
fully and indefeasibly paid or performed, (c) the obligations of all parties to the Loan Documents
(as defined in the Credit Agreements) have been discharged or released, and (d) Pledgor has
reimbursed Administrative Agent for any expenses of returning the Collateral and filing any
termination statements and other instruments as are required to be filed in public offices under
applicable laws.

     Section 2.7. Tax Reporting. All items of income, gain, expense and loss recognized in the
Account shall be reported to the Internal Revenue Service and all state and local taxing
authorities under the name and taxpayer identification number of Pledgor.

     Section 2.8. Financing Statements. Pledgor hereby authorizes Administrative Agent to file
financing statements describing the Collateral, and any necessary future amendments thereto, in any
and all public offices in which Administrative Agent deems such filing to be necessary or
desirable.

Article 3. Representations and Warranties. Pledgor hereby represents and warrants to
Administrative Agent and Lenders as follows:

     Section 3.1. Enforceability. This Agreement and the Control Agreement have been duly
executed and delivered by Pledgor, constitute its valid and legally binding obligations and are
enforceable in accordance with their respective terms against Pledgor.

     Section 3.2. No Conflict. The execution, delivery and performance of this Agreement and the
Control Agreement, the grant of the security interest in the Collateral hereunder and the
consummation of the transactions contemplated hereby and thereby will not, with or without the
giving of notice or the lapse of time, (a) violate any material law applicable to Pledgor, (b)
violate any judgment, writ, injunction or order of

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any court or governmental body or official applicable to Pledgor, (c) violate or result in the
breach of any material agreement to which Pledgor is a party or by which any of its properties,
including the Collateral, is bound; (d) conflict with, or result in any breach of any of the
provisions of, or constitute a default under, or result in the creation or imposition of, any lien
upon any of the property of Pledgor pursuant to, the provisions of the Certificate of Incorporation
or bylaws of Pledgor; nor (e) violate any restriction on the transfer of any of the Collateral.

     Section 3.3. No Consents. No consent, approval, license, permit or other authorization of
any third party (other than Intermediary) or any governmental body or officer is required for the
valid and lawful execution and delivery of this Agreement and the Control Agreement, the creation
and perfection of Administrative Agent’s security interest in the Collateral, or the valid and
lawful exercise by Administrative Agent of remedies available to it under this Agreement, the
Control Agreement or applicable law, or of the voting and other rights granted to it in this
Agreement or the Control Agreement, except as may be required for the offer or sale of those items
of Collateral which are securities under applicable securities laws.

     Section 3.4. Account. The securities entitlements credited to the Account are valid and
genuine and Pledgor has provided Administrative Agent with a complete and accurate statement of the
financial assets and the money credited to the Account as of the date hereof.

     Section 3.5. Security Interest. Pledgor is the sole owner of the Collateral free and clear
of all liens, encumbrances, and adverse claims (other than those created by this Agreement), has
the unrestricted right to grant the security interest provided for herein to Administrative Agent
and has granted to Administrative Agent a valid and perfected first priority security interest in
the Collateral free of all liens, encumbrances, transfer restrictions, and adverse claims.

     Section 3.6. Information. None of the information, documents, or financial statements which
have been supplied by Pledgor or its officers, agents or representatives to Administrative Agent or
any of its representatives in connection with the transactions contemplated by this Agreement or
the Loan Documents contains any untrue statement of material fact or omits to state any material
fact required to be stated hereby or thereby to make such statements not misleading.

Article 4. Covenants. Pledgor hereby covenants and agrees with Administrative Agent that Pledgor
shall:

     Section 4.1. Defend Title. Defend its title to the Collateral and the security interest of
Administrative Agent therein against the claims of any person claiming rights in the Collateral
against or through Pledgor and maintain and preserve such security interest so long as this
Agreement shall remain in effect.

     Section 4.2. No Transfer. Neither withdraw any money or property from the Account; nor sell
nor offer to sell nor otherwise transfer nor encumber or convey any portion of the Collateral.
This provision shall not prohibit Pledgor from making trades within the Account, so long as all
Investments in the Account are cash or Cash Equivalents (as defined in the Credit Agreement
(Licensing).

     Section 4.3. Control and Customer Agreements. Neither attempt to modify nor attempt to
terminate the Control Agreement or the customer agreement with Intermediary under which the Account
was established.

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     Section 4.4. Further Assurances.

     (a) At Pledgor’s expense, do such further acts and execute and deliver such additional
conveyances, certificates, instruments, legal opinions, and other assurances as Administrative
Agent may at any time request or require to protect, assure or enforce its interests, rights, and
remedies under this Agreement. Pledgor hereby authorizes Administrative Agent to file any UCC (as
defined below) financing statements or amendments thereto describing the Collateral as
Administrative Agent may from time to time desire.

     (b) Promptly deliver to Intermediary for credit to the Account any certificate or instrument
constituting or representing any of the Collateral it may obtain possession from time to time,
forthwith duly endorsed in blank without restriction.

     (c) Promptly deliver to Intermediary any endorsements or instruments which may be necessary or
convenient to transfer any financial assets held by Intermediary, which are registered in the name
of, payable to the order of, or specially endorsed to Pledgor, to Intermediary or its securities
intermediary or to one of their respective nominees.

     Section 4.5. Statements. Cause Intermediary to send to Administrative Agent a complete and
accurate copy of every statement, confirmation, notice, or other communication concerning the
Account that Intermediary sends to Pledgor. All information furnished by Pledgor concerning the
Collateral or otherwise in connection with this Agreement, is or shall be at the time the same is
furnished, accurate, correct, and complete in all material respects.

     Section 4.6. Advice. Advise Administrative Agent promptly, completely, accurately, in
writing and in reasonable detail, (a) of any material encumbrance upon or claim asserted against
any of the Collateral; and (b) of the occurrence of any event, other than changes in general market
conditions adequately reported in the general news media, that would have a material adverse effect
upon the aggregate value of the Collateral or upon the security interest of Administrative Agent.

Article 5. Default.

     Section 5.1. Events of Default. The occurrence or existence of one or more of the following
events or conditions shall constitute an event of default (a “Default”) under this
Agreement.

     (a) If any set of facts or circumstances exists that, by itself, upon the giving of notice,
the lapse of time, or any one or more of the foregoing, would constitute a “Default” or an “Event
of Default” under any Credit Agreement; or

     (b) If Pledgor fails to perform any obligation or violates any covenant contained in this
Agreement or the Control Agreement other than those referred to in paragraph (a) above, and such
failure or violation continues unremedied for a period of three (3) days after Administrative Agent
requests Pledgor to remedy such failure or violation;

     (c) If any representation or warranty made by Pledgor in this Agreement, the Control Agreement
or any information contained in any financial statement or other document delivered to
Administrative Agent by or on behalf of Pledgor contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein not misleading in light of
the circumstances in which they were made;

-5-

 

     (d) If Intermediary closes or terminates, or notifies Pledgor or Administrative Agent of its
intent to close or terminate, the Account; or

     (e) If Intermediary terminates, or notifies Pledgor or Administrative Agent of its intent to
terminate, the Control Agreement.

If any Default shall occur, Administrative Agent shall have, in addition to any other remedies
available to it under Section 5.2 below and under the law or any agreement, the rights and remedies
of a secured party under Article 9 of the Uniform Commercial Code, as adopted in the State of Ohio
(the “UCC”).

     Section 5.2. Remedies.

     (a) If a Default has occurred and is continuing, Administrative Agent may, in its discretion:
(i) to the extent applicable, cause the Account to be reregistered in its sole name or transfer the
Account to another broker/dealer in its sole name; (ii) to the extent applicable, remove any
Collateral from the Account and register such Collateral in its name or in the name of its
broker/dealer, agent or nominee or any of their nominees; (iii) to the extent applicable, exchange
certificates representing any of the Collateral for certificates of larger or smaller
denominations, (iv) to the extent applicable, exercise any voting, conversion, registration,
purchase or other rights of a holder of any of the Collateral and any reasonable expense of such
exercise shall be deemed to be an expense of preserving the value of such Collateral for the
purposes of Section 6.1 below; and (v) to the extent applicable, collect, including by legal
action, any notes, checks or other instruments for the payment of money included in the Collateral
and compromise or settle with any obligor of such instruments.

     (b) If notice of the time and place of any public sale of the Collateral or the time after
which any private sale or other intended disposition is required by the UCC, Pledgor acknowledges
that five (5) days advance notice thereof will be a reasonable notice. Administrative Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale having been given.
Administrative Agent may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.

     (c) If, under the Uniform Commercial Code, Administrative Agent may purchase any part of the
Collateral, it may in payment of any part of the purchase price thereof, cancel any part of the
Obligations in accordance with (d) below.

     (d) Any cash held by Administrative Agent as Collateral and all cash proceeds of any sale of,
collection from, or other realization upon all or any part of the Collateral shall be applied
(after payment of any amounts payable to Administrative Agent pursuant to Article 6 below) in whole
or in part against the Obligations in the following order of priority (unless Administrative Agent
under the Credit Agreement (Licensing) otherwise consents in writing):

     First, to the Obligations arising under the Credit Agreement (Licensing) any and Loan
Documents related thereto, in the order as determined by the Administrative Agent under the Credit
Agreement (Licensing), until such Obligations are indefeasibly paid in full in cash;

     Second, to all other Obligations, in the order as determined by the Administrative
Agent under the Credit Agreement (Legacy), until such Obligations are indefeasibly paid in full in
cash; and

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     Third, any surplus of such cash or cash proceeds held by Administrative Agent and
remaining after the indefeasible payment in full in cash of the Obligations and all of
Administrative Agent’s expenses hereunder shall be paid over to Pledgor or to whomever may be
lawfully entitled to receive such surplus.

     Section 5.3. Appointment of Administrative Agent as Agent. Pledgor hereby irrevocably
appoints and constitutes Administrative Agent, its successors and assigns, and any officer or agent
thereof, with full power of substitution, as Pledgor’s true and lawful agent and attorney-in-fact
with full irrevocable power and authority in the place and stead of Pledgor and in the name of
Pledgor or in Administrative Agent’s own name, from time to time in Administrative Agent’s
discretion for the purpose of carrying out the provisions of this Agreement and taking any action
or executing any instrument that Administrative Agent considers necessary or convenient for such
purpose, including the power to endorse and deliver checks, notes and other instruments for the
payment of money in the name of and on behalf of Pledgor, to endorse and deliver in the name of and
on behalf of Pledgor securities certificates and execute and deliver in the name of and on behalf
of Pledgor instructions to the issuers of uncertificated securities, and to execute and file in the
name of and on behalf of Pledgor financing statements (which may be photocopies of this Agreement)
and continuations and amendments to financing agreements in the State of Ohio or elsewhere and
Forms 4, 5, 144 and Schedules 13D and 13G with the United States Securities and Exchange
Commission. This appointment and power of attorney is a power coupled with an interest and is
irrevocable and will not be affected by the bankruptcy or insolvency proceeding of Pledgor or by
the lapse of time. If Pledgor fails to perform any act required by this Agreement, Administrative
Agent may perform such act in the name of and on behalf of Pledgor and at its expense which shall
be chargeable to Pledgor under Article 6 below. Pledgor hereby consents and agrees that the
issuers of, or obligors with respect to, the Collateral or any registrar or transfer agent or
trustee for any of the Collateral shall be entitled to accept the provisions hereof as conclusive
evidence of the rights of Administrative Agent to effect any transfer pursuant to this Agreement
and the authority granted to Administrative Agent herein, notwithstanding any other notice or
direction to the contrary heretofore or hereafter given by Pledgor, or any other person, to any of
such issuers, obligors, registrars, transfer agents, or trustees.

     Section 5.4. Impact of Regulations. Pledgor acknowledges that compliance with the Securities
Act of 1933 and the rules and regulations thereunder and any relevant state securities laws and
other applicable laws may impose limitations on the right of Administrative Agent to sell or
otherwise dispose of securities included in the Collateral. For this reason, Pledgor hereby
authorizes Administrative Agent to sell any securities included in the Collateral in such manner
and to such persons as would, in the judgment of Administrative Agent, help to ensure that the
transfer of such securities will be given prompt and effective approval by any relevant regulatory
authorities and will not require any of the securities to be registered or qualified under any
applicable securities laws. Pledgor understands that a sale under the foregoing circumstances may
yield a substantially lower price for such Collateral than would otherwise be obtainable if the
same were registered and sold in the open market, and Pledgor shall not attempt to hold
Administrative Agent responsible for selling any of the Collateral at an inadequate price even if
Administrative Agent accepts the first offer received or if only one possible purchaser appears or
bids at any such sale. If Administrative Agent shall sell any securities included in the
Collateral at such sale, Administrative Agent shall have the right to rely upon the advice and
opinion of any qualified appraiser or investment banker as to the commercially reasonable price
obtainable on the sale thereof but shall not be obligated to obtain such advice or opinion.
Pledgor hereby assigns to Administrative Agent any registration rights or similar rights Pledgor
may have from time to time with respect to any of the Collateral.

Article 6. Expenses.

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     Section 6.1. Payment. Pledgor agrees that it will forthwith upon demand pay to
Administrative Agent:

     (a) the amount of any taxes which Administrative Agent may have been required to pay by reason
of holding the Collateral or to free any of the Collateral from any lien encumbrance or adverse
claim thereon, and

     (b) the amount of any and all out-of-pocket expenses, including the fees and disbursements of
counsel and of any brokers, investment brokers, appraisers or other experts, that Administrative
Agent may incur in connection with (i) the administration or enforcement of this Agreement,
including such expenses as are incurred to preserve the value of the Collateral and the validity,
perfection, rank and value of Administrative Agent’s security interest therein, (ii) the
collection, sale, or other disposition of any of the Collateral, (iii) the exercise by
Administrative Agent of any of the rights conferred upon it hereunder, or (iv) any action or
proceeding to enforce its rights under this Agreement or in pursuit of any non-judicial remedy
hereunder, including the sale of the Collateral.

Any such amount not paid on demand shall bear interest (computed on the basis of the number of days
elapsed over a year of three hundred sixty (360) days) at a rate per annum equal to 15%.

     Section 6.2. Indemnity. Pledgor shall indemnify Administrative Agent and its directors,
officers, employees, agents, and attorneys against, and hold them harmless from, any liability,
cost, or expense, including the fees and disbursements of their legal counsel, incurred by any of
them under the corporate or securities laws applicable to holding or selling any of the Collateral,
except for liability, cost, or expense arising out of the recklessness or willful misconduct of the
indemnified parties.

     Section 6.3. Discharge of Liens. At its option, Administrative Agent may pay and discharge
taxes, liens, security interests or other encumbrances on the Collateral. Pledgor agrees to
reimburse Administrative Agent under Section 6.1 above for any payment made or any expense incurred
including reasonable attorneys’ fees) by Administrative Agent pursuant to the foregoing
authorization.

Article 7. Miscellaneous.

     Section 7.1. This Agreement. This Agreement, the schedules and exhibits hereto, and the
agreements and instruments required to be executed and delivered hereunder set forth the entire
agreement of the parties with respect to the subject matter hereof and supersede and discharge all
prior agreements (written or oral) and negotiations and all contemporaneous oral agreements
concerning such subject matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement

     Section 7.2. Non-Waiver. Neither the failure of nor any delay by any party to this Agreement
to enforce any right hereunder or to demand compliance with its terms is a waiver of any right
hereunder. No action taken pursuant to this Agreement on one or more occasions is a waiver of my
right hereunder or constitutes a course of dealing that modifies this Agreement.

     Section 7.3. Waivers. No waiver of any right or remedy under this Agreement shall be binding
on any party unless it is in writing and is signed by the party to be charged. No such waiver of
any right or remedy under any term of this Agreement shall in any event be deemed to apply to any
subsequent default under the same or any other term contained herein.

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     Section 7.4. Administrative Agent. In acting under or by virtue of this Agreement,
Administrative Agent shall be entitled to all the rights, authority, privileges, and immunities
provided in any Credit Agreement, the provisions of which are incorporated by reference herein with
the same force and effect as if set forth herein in their entirety.

     Section 7.5. Amendments. No amendment, modification, or termination of this Agreement shall
be binding on any party hereto unless it is in writing and is signed by the party to be charged.

     Section 7.6. Severability. If any term of provision forth in this Agreement shall be invalid
or unenforceable, the remainder of this Agreement, or the application of such terms or provisions
to persons or circumstances, other than those to which it is held invalid or unenforceable, shall
be construed in all respects as if such invalid or unenforceable term or provision were omitted.

     Section 7.7. Successors. The terms of this Agreement shall be binding upon Pledgor, its
successors and assigns, and shall inure to the benefit of Administrative Agent, its successors and
assigns, and any holder, owner, or assignee of any rights in any of the Loan Documents (as defined
in each Credit Agreement) and will be enforceable by them as their interest may appear.

     Section 7.8. Third Parties. Nothing herein expressed or implied is intended or shall be
construed to give any person other than the parties hereto any rights or remedies under this
Agreement.

     Section 7.9. Joint Preparation. This Agreement shall be deemed to have been prepared jointly
by the parties hereto. Any ambiguity herein shall not be interpreted against any party hereto and
shall be interpreted as if each of the parties hereto had prepared this Agreement.

     Section 7.10. Rules of Construction. In this Agreement, words in the singular number include
the plural, and in the plural include the singular, words of the masculine gender include the
feminine and the neuter, and when the sense so indicates words of the neuter gender may refer to
any gender and the word “or” is disjunctive but not exclusive. The captions and section numbers
appearing in this Agreement are inserted only as a matter of convenience. They do not define,
limit, or describe the scope or intent of the provisions of this Agreement.

     Section 7.11. Notices. Any notice, request, or other communication required or permitted to
be given under this Agreement shall be given in the manner set forth in each Credit Agreement.

     Section 7.12. Counterparts. This Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto may execute this
Agreement by signing and delivering one or more counterparts.

     Section 7.13. Legal Matters.

     (a) Choice of Law. The validity, terms, performance and enforcement of this Agreement shall
be governed by those laws of the State of Ohio which are applicable to agreements which are
negotiated, executed, delivered and performed solely in the State of Ohio.

     (b) Jurisdiction, Venue, Service of Process. The State and Federal District Courts located in
Franklin County, State of Ohio shall have exclusive jurisdiction and venue of any action or
proceeding

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arising out of or related to the negotiation, execution, delivery, performance, breach or
enforcement of this Agreement or any other agreement, document or instrument negotiated, executed,
delivered, entered into or performed in connection with this Agreement or any of the transactions
contemplated hereby or thereby; any waiver, modification, amendment or termination hereof or
thereof or any action taken or omission made by Pledgor or Administrative Agent or any of their
respective directors, officers, employees, agents or attorneys in connection with the payment,
performance, exercise or enforcement of any right, duty or obligation created or implied hereby or
thereby or arising hereunder or thereunder, regardless of whether any claim, counterclaim or
defense in any such action, suit or proceeding is characterized as arising out of fraud,
negligence, recklessness, intentional misconduct, a breach of contract or fiduciary duty, or
violation of a statute, law, ordinance, and or regulation. The parties hereto hereby irrevocably
consent to the personal jurisdiction of such courts, to such venue and to the service of process in
the manner provided for the giving of notices in this Agreement. The parties hereto hereby waive
all objections to such jurisdiction and venue including those which might be based upon
inconvenience or the nature of the forum.

     (c) Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE;
AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

[Signatures on following page.]

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     IN WITNESS WHEREOF, Pledgor has signed this Investment Property Security Agreement as of the
date first set forth above.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	PLEDGOR:	 	 
	 
	 	 	 	 	 	 
	 	 	FRANKLIN CREDIT MANAGEMENT CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Thomas J. Axon 	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Thomas J. Axon	 	 
	 	 	Its: President	 	 

Accepted as of this 31st day of March, 2009.

ADMINISTRATIVE AGENT:

THE HUNTINGTON NATIONAL BANK

	 	 	 	 	 
	By:
	 	/s/ Alan D. Seitz 	 	 
	 

	 	 

	 	 
	Name: Alan D. Seitz	 	 
	Its: Senior Vice President	 	 
	 
	 	 	 	 
	ADMINISTRATIVE AGENT:	 	 
	 
	 	 	 	 
	THE HUNTINGTON NATIONAL BANK
	 
	 	 	 	 
	By:
	 	/s/ Alan D. Seitz 	 	 
	 

	 	 	 	 
	Name: Alan D. Seitz	 	 
	Its: Senior Vice President	 	 

Signature Page to Investment Property Security Agreement

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