LIMITED WAIVER
Exhibit
10.1
This
Limited Waiver is made and entered into as of November 15, 2007, between The
Huntington National Bank, successor by merger to Sky Bank, Franklin Credit
Management Corporation, a Delaware corporation (“Borrower”) and each subsidiary
of the Borrower listed on the signature pages hereof.
Reference
is hereby made to (1) a certain Master Credit and Security Agreement dated
as of
October 13, 2004 (as amended, restated, modified or supplemented from time
to
time, the “Master Credit Agreement”) entered into between Sky
Bank, now known as The Huntington National Bank (“Lender”) and
Franklin Credit Management Corporation, a Delaware corporation
(“Borrower”), certain subsidiaries of Borrower from time to
time party to the Master Credit Agreement and (2) a certain Flow Warehousing
Credit and Security Agreement dated as of August 11, 2006, entered into between
Lender and Borrower (as amended, restated, modified or supplemented from time
to
time, the “Flow Credit Agreement). All
capitalized terms not otherwise defined in this Limited Waiver shall have the
meanings ascribed to such terms in the Master Credit Agreement or the Flow
Credit Agreement, as specified.
Borrower
agrees that Lender has
reasonably requested pursuant to Section 6.1(b)(i) of the Master Credit
Agreement and Section 6.2(a) of the Flow Credit Agreement that Borrower provide,
within 30 days and 45 days respectively after the end of each calendar quarter,
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 the Borrower (the
“9/30/07Quarterly
Financials”). Borrower has advised Lender that it has failed
to deliver to Lender the 9/30/07 Quarterly Financials as required, and Lender
hereby provides notice to Borrower of such failure and that such failure
constitutes an Event of Default under each of the Master Credit Agreement and
the Flow Credit Agreement (the “Identified
Defaults”). Borrower hereby acknowledges the Identified
Defaults and has requested that Lender waive the Identified Defaults through
the
earlier of (i) such time as Borrower files copies of the 9/30/07 Quarterly
Financials with the Securities and Exchange Commission or (ii) December 31,
2007, (the “Specified Waiver Date”).
Borrower
hereby agrees (i) not to
request any further loans, advances or other extensions of credit pursuant
to
the Master Credit Agreement, the Flow Credit Agreement or any other loan
document, letter of credit agreement, hedging agreement or banking services
agreement (each of the foregoing a “Credit Extension”) through
and including the Specified Waiver Date and (ii) contemporaneously herewith
to
enter into a Security Agreement, in form and substance satisfactory to Lender,
pursuant to which Borrower will grant to Lender, to secure all present and
future loans, liabilities and obligations of Borrower and each direct and
indirect subsidiary thereof to Lender, a first priority lien in all property
and
assets of Borrower and each direct and indirect subsidiary (each of the
foregoing, a “Condition of Waiver”). Subject
to the terms and conditions set forth herein, including without limitation
Lender’s satisfaction with each Condition of Waiver and the execution of this
Limited Waiver by each of Borrower and each Company Subsidiary (as defined
in
the Master Credit Agreement), Lender hereby waives the Identified Defaults
through and including the Specified Waiver Date.
Nothing
in this Limited Waiver shall
(i) cause a modification of the Master Credit Agreement, the Flow Credit
Agreement, any other loan document agreement in connection with any extension
of
credit from Lender to Borrower, except as precisely set forth above, (ii)
establish any custom, course of dealing or in any manner waive or modify any
future default or Event of Default, (iii) entitle Borrower or any Company
Subsidiary to any other waiver or any other or further notice or demand
whatsoever, or (iv) in any way modify, change, impair, effect, diminish, or
release Borrower's or any Company Subsidiary’s liability under or pursuant to
the Master Credit Agreement, the Flow Credit Agreement or any other loan
document or agreement.
Borrower
and each Company Subsidiary
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 Limited Waiver, the Master Credit
Agreement, the Flow Credit Agreement or any other loan agreement or
document.
This
Limited Waiver and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
This
Limited Waiver may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same
instrument.
Borrower
and each Company Subsidiary,
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 Lender, its
successors, assigns, directors, officers, shareholders, agents, employees and
attorneys, the obligations evidenced by the Master Credit Agreement, the Flow
Credit Agreement, each promissory note or instrument in connection
therewith, each other loan document and the Collateral, whether
previously or now existing or arising out of or related to any transaction
or
dealings between Lender and Borrower or Lender and any Company Subsidiary,
which
Borrower or any Company Subsidiary, may have or may have made at any time up
through and including the date of this Limited Waiver, including without
limitation, any affirmative defenses, counterclaims, setoffs, deductions or
recoupments, by Borrower or any Company Subsidiary. “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 or contingent, in contract, tort,
at law or in equity, Borrower, each Company Subsidiary or any of them ever
had,
claimed to have, now has, or shall or may have. Nothing contained in
this Limited Waiver prevents enforcement of this waiver and
release.
IN
WITNESS WHEREOF, this Limited Waiver has been executed as of the date first
appearing above notwithstanding the date it is actually executed.
[Signature
page follows]
Lender:
The
Huntington National Bank
By:
/s/ Xxxxx X.
Xxxxx
Its: President
Borrower:
Franklin
Credit Management Corporation
By:
/s/ Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Title: Chairman
& President
Each
Company Subsidiary listed on Schedule A attached hereto:
By:
/s/ Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Title: Chairman
& President, as an authorized officer of, and on behalf of, each
Company Subsidiary listed on Schedule A attached hereto
SCHEDULE
A
COMPANY
SUBSIDIARIES
EXECUTING
LIMITED WAIVER
SCHEDULE
A TO FRANKLIN LIMITED WAIVER
COMPANY
SUBSIDIARIES
EXECUTING
LIMITED WAIVER
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