AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING)
Franklin Credit Management Corporation 10-12G
Exhibit 10.13
Exhibit 7
AMENDMENT NO. 3 TO
AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING)
AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING)
THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING) (this “Amendment”)
is entered into as of September 22, 2010 (the “Amendment Effective Date”), by and among
FRANKLIN CREDIT MANAGEMENT CORPORATION, a Delaware Corporation, and FRANKLIN CREDIT HOLDING
CORPORATION, a Delaware corporation (each, a “Borrower” and collectively
“Borrowers”), THE FINANCIAL INSTITUTIONS PARTY HERETO AS LENDERS (each, a “Lender”
and collectively, the “Lenders”) and THE HUNTINGTON NATIONAL BANK, a national banking
association (“Huntington”), as administrative agent for the Lenders (in such capacity,
together with its successors and assigns in such capacity, the “Administrative Agent”).
This Amendment further amends and modifies a certain Amended and Restated Credit Agreement
(Licensing) dated as of March 31, 2009 (as amended, supplemented, restated or otherwise modified
from time to time prior to the date hereof, the “Credit Agreement”) by and among Borrowers,
the Lenders, the Administrative Agent and Issuing Bank. Capitalized terms used in this Amendment
and not otherwise defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
A. As of March 31, 2009, Borrowers, the Lenders, the Administrative Agent and Issuing Bank
executed the Credit Agreement setting forth the terms of certain extensions of credit to the
Borrower; and
B. As of March 31, 2009, Borrowers executed and delivered to the Administrative Agent, inter
alia, a Revolving Promissory Note (Licensing) in the original principal sum of Two Million Dollars
($2,000,000), which principal sum was thereafter reduced to One Million Dollars ($1,000,000); and
C. As of March 31, 2009, and at various other times, Borrowers executed and delivered to the
Administrative Agent, inter alia, one or more Applications and Agreements for Letter of Credit in
connection with Issuing Bank’s issuance of Letters of Credit for the account of one or more of the
Borrowers; and
D. As of May 31, 2010, the Draw Loan Commitment expired by its terms and Borrowers have no
right to obtain any Draw Loan Advances under the Credit Agreement; and
E. Borrowers have requested that (i) the Administrative Agent and the Lenders under the Credit
Agreement and that the administrative agent under the Legacy Loans Credit Agreement consent to the
sale, restructuring or spin off by Holding of its ownership interests in FCMC, subject to the
further written consent of the Administrative Agent at the time such Restructuring is accomplished,
(ii) the Administrative Agent release its Liens in certain real property owned by FCMC, commonly
known as (A) 0 Xxxxxxxx Xxxxxx, Xxxx 0, Xxx Xxxx, Xxx Xxxx, and (B) 000 Xxxxxx Xx. Xxx Xxxx, Xxx Xxxx), (xxx) discharge FCMC from any liability under a
certain Limited Recourse Guaranty dated as of March 31, 2009, (iv) consent to a Change of Control
of FCMC resulting from the Restructuring, (v) waive any other Events of Default resulting from the
Restructuring, (vi) extend the maturity of the Revolving Loan Commitment and the Letter of Credit
Commitment and (vii) amend and modify certain other terms and covenants in the Credit Agreement,
and each Lender, the Administrative Agent and the Issuing Bank, are willing to do so upon the terms
and subject to the conditions contained herein.
16. The definitions of “Change of Control”, “Collateral”, “Loan
Documents” “Mandatory Prepayment Event”, and “Termination Date” set forth in
Section 1.01, “Certain Defined Terms,” of the Credit Agreement are hereby amended to
recite as follows:
“Change of Control” shall mean, other than in connection with the
Restructuring: (a) with respect to any Borrower, the replacement of a
majority of the board of directors from the directors who constituted the
board of directors on the Effective Date for any reason other than death or
disability, and such replacement shall not have been approved by such board
of directors, as constituted on the Effective Date (or as changed over time
with the approval of the then existing board of directors of Holding); or
(b) a Person or Persons acting in concert, as a result of a tender 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 any Borrower representing more
than 20% of the combined voting power of the outstanding securities of such
Person, ordinarily having the right to vote in the election of directors
from the beneficial owners as of the Effective Date.
“Collateral” shall have the meaning assigned to such term in the
Security Agreement, Mortgage, or any other Loan Document executed and
delivered to the Administrative Agent by any Loan Party, unless released
from time to time pursuant to the terms of this Agreement or the Restructure
Agreement, and shall include without limitation:
(i) | a first and best Lien on FCMC’s Cash or Cash Equivalents in
account number 01892543486 at Huntington, maintained in an amount satisfactory
to the Administrative Agent, but not less than $7,500,000; |
(ii) | a Mortgage in the FCMC Real Estate, subject to the existing
Lien of Huntington, as agent for certain lenders on 0 Xxxxxxxx Xx., Xxxx 0, Xxx Xxxx,
Xxx Xxxx under the Legacy Loans Credit Agreement, and subject to the
agreement of the applicable administrative agents and the lenders to release
the FCMC Real Estate pursuant to the terms of the Restructure Agreement; |
(iii) | a first and best Lien on all FCMC’s now owned or hereafter
acquired right, title, and interest in personal property; |
(iv) | any monies or sums due FCMC in respect of any program sponsored
by any Governmental Authority, including without limitation any fees received,
directly or indirectly, under the U.S. Treasury Homeowners Affordability and
Stability Plan. |
“Loan Documents” shall mean, collectively, this Agreement, the Notes, the
Security Agreement, each agreement in respect of a Blocked Account, Disbursement
Account, Collection Account, or Reserve Account, each deposit account control
agreement, each Application and Agreement for Letter of Credit, letter of credit
reimbursement agreement, pledge agreement, joinder agreement, collateral
assignments, Guarantee, banking services agreement, cash management agreement,
amendment, modification agreement, instrument, financing statements and each other
document or agreement relating to this Agreement or the transactions contemplated by
this Agreement; provided, however, no Transaction Document shall be a Loan
Document, and the FCMC Limited Recourse Guaranty shall not be a Loan Document.
“Mandatory Prepayment Event” shall mean:
(a) other than with respect to the Restructuring, any sale, transfer,
or other disposition of any Property of any Borrower or any property
constituting Collateral pursuant hereto; 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 or any Collateral; or
(c) other than with respect to the Restructuring, the issuance by any
Borrower of any Equity Interests, or the receipt by Borrower of any capital
contribution; or
(d) the incurrence by any Borrower of any Subordinated Indebtedness; or
(e) the receipt by any Borrower of the proceeds of any settlement or
monetary judgment in respect of any litigation or other similar proceeding.
“Termination Date” shall mean (i) in respect of the Revolving Loan
and the Revolving Loan Commitment and the Letters of Credit and the Letter
of Credit Commitment, September 30, 2011, or such earlier date on which this
Agreement shall terminate in accordance with the provisions hereof or by
operation of law, and (ii) in respect of the Draw Loan and the Draw Loan
Commitment May 31, 2010, which Draw Loan and Draw Commitment have expired
and are of no force and effect.
“Amendment No. 3” means a certain Amendment No. 3 to Amended and Restated
Credit Agreement (Licensing) between and among the Administrative Agent, the Lenders
and the Borrowers dated September 22, 2010.
“Deferred Payment Agreement” means a certain Deferred Payment Agreement
entered into as of the effective date of Amendment No. 3.
“FCMC Limited Recourse Guaranty” means a certain Limited Recourse
Guaranty dated as of March 31, 2009, executed and delivered in connection
with the Legacy Loans Credit Agreement.
“FCMC Real Estate” means certain real property owned by FCMC,
commonly known as (i) 0 Xxxxxxxx Xxxxxx, Xxxx 0, Xxx Xxxx, Xxx Xxxx, and
(ii) 000 Xxxxxx Xx. Xxx Xxxx, Xxx Xxxx).
“Restructure Agreement” means that certain Restructure Agreement,
dated as of the date of Amendment No. 3, by and among, inter alia, the
Borrowers, the Administrative Agent, and Franklin Mortgage Asset Trust
2009-A.
“Restructuring” means the sale, restructuring or spin off by Holding
of its ownership interests in FCMC, which shall be in form acceptable to the
Administrative Agent.
“TJA Secured Note” means a secured promissory note issued by FCMC for
$1,000,000, guaranteed in full by Xxxxxx X. Xxxx, and secured by the Guarantor
Collateral.
Section 7.04 Prohibition of Fundamental Changes; Subsidiaries. No
Borrower shall enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation, winding up or dissolution) or sell any substantial portion of
its assets other than pursuant to the Transaction Documents or in connection
with the Restructuring. No Borrower shall permit to exist or establish any
Subsidiary (other than a Subsidiary existing as of the Effective Date).
19. Section 7.05, “Restricted Payments,” of the Credit Agreement is hereby amended to
recite as follows:
Section 7.05 Restricted Payments. No Borrower shall make or
declare any Restricted Payment without the prior written consent of the
Administrative Agent.
20. Section 7.11, “Limitation on Indebtedness,” of the Credit Agreement is hereby
amended to recite as follows:
Section 7.11 Limitation on Indebtedness. Except with the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld or delayed, no Borrower shall incur any liabilities for Indebtedness, other
than (i) the Advances, (ii) the Letters of Credit, (iii) the TJA Secured Note, and
(iv) liabilities owing under the Deferred Payment Agreement.
21. Subsection 8.01(n) of the Credit Agreement is hereby amended to recite as follows:
(n) [Intentionally Deleted];
(a) The Administrative Agent shall have received execution and delivery of, by all
parties signatory hereto, originals, or completion as the case may be, to the satisfaction
of the Administrative Agent and its counsel, of three duly executed originals of this
Amendment;
(b) The representations contained in the immediately following paragraph shall be true
and accurate;
(c) The Administrative Agent shall have received all of the documents and deliveries
required by the Restructure Agreement; and
(d) The Borrowers shall have paid a nonrefundable extension fee of $0.00 in connection
with this Amendment.
33. Governing Law. This Amendment 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.
[Signature Page Follows.]
BORROWERS: | ||||||
FRANKLIN CREDIT MANAGEMENT CORPORATION | ||||||
By: | /s/ Xxxxxx X. Xxxx | |||||
Title: President | ||||||
FRANKLIN CREDIT HOLDING CORPORATION | ||||||
By: | /s/ Xxxxxx X. Xxxx | |||||
Title: President | ||||||
ADMINISTRATIVE AGENT AND ISSUING BANK: | ||||||
THE HUNTINGTON NATIONAL BANK | ||||||
By: | /s/ Xxxxxxx X. Cheap | |||||
Title: General Counsel and Secretary | ||||||
LENDER AND RISK PARTICIPANT: | ||||||
HUNTINGTON FINANCE, LLC | ||||||
By: | /s/ Xxxxxxx X. Cheap | |||||
Title: Vice President |