AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED FORBEARANCE AGREEMENT AND AMENDMENT TO CREDIT AGREEMENTS

THIS AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED FORBEARANCE AGREEMENT AND AMENDMENT TO CREDIT AGREEMENTS (this “ Amendment ”), is effective as of the 20th day of April, 2009 (the “ Amendment Effective Date ”), by and among FRANKLIN CREDIT MANAGEMENT CORPORATION (“ FCMC ”), FRANKLIN CREDIT ASSET CORPORATION (“ Franklin Asset ”), FRANKLIN CREDIT HOLDING CORPORATION (“ Holding ”), Flow 2006 F CORP., FCMC 2006 M CORP., FCMC 2006 K CORP. and THE HUNTINGTON NATIONAL BANK (“ Lender ”).  This Amendment amends and modifies a certain First Amended and Restated Forbearance Agreement and Amendment to Credit Agreements, dated as of December 19, 2008 (the “ Forbearance Agreement ”) by and among the parties hereto and certain other borrowers party to such Forbearance Agreement.  All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Forbearance Agreement.  FCMC, Franklin Asset, Holding, and each Static Loan Borrower (as defined below) shall be individually an “ Amendment Loan Party ” and together the “ Amendment Loan Parties .”

WHEREAS, Flow 2006 F Corp., FCMC 2006 M Corp., and FCMC 2006 K Corp. (together, the “ Static Loan Borrowers ”), FCMC, certain other borrowers party thereto, and Lender 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 Amendment (the “ Franklin Master Agreement ”), pursuant to which Lender holds certain outstanding loans evidenced by (i) a certain Flow 2006 F Corp. note dated December 1, 2006, in the original principal amount of $19,863,972.93, (ii) a certain FCMC 2006 M Corp. amended and restated note dated August 30, 2006, in the original principal amount of $16,183,766.66, and (iii) a certain FCMC 2006 K Corp. amended and restated promissory note dated August 30, 2006, in the original principal amount of $14,433,383.90 (collectively, the “ Static Loans ”);

WHEREAS, the Static Loan Borrowers have defaulted and may continue to default under the Forbearance Agreement, the Franklin Master Agreement and the promissory notes and other Loan Documents executed in connection therewith in respect of (i) their failure to make scheduled principal and interest payments when due thereunder, and (ii) their failure after the Amendment Effective Date to make any scheduled principal and interest payments due thereunder as a result of the cash flow from the Mortgage Loans securing the Static Loans being insufficient to pay such amounts (collectively the defaults under clauses (i) and (ii) above shall be referred to as the “ Identified Forbearance Defaults ”);

WHEREAS, pursuant to the terms of the Forbearance Agreement, Lender has agreed not to exercise its rights to initiate proceedings to foreclose or otherwise realize upon the Mortgage Loans securing the Static Loans prior to May 15, 2009, and the Static Loan Borrowers have requested that Lender extend such forbearance through and including June 30, 2009;

WHEREAS, in connection with the Forbearance Agreement, Franklin Asset, Holding, and FCMC, among other Affiliates, entered into the Reorganization, in which, among other things, FCMC became a wholly-owned subsidiary of Holding, and Franklin Asset became the holder of 100% of the Capital Stock of, among other Subsidiaries, the Static Loan Borrowers;

WHEREAS, since the Forbearance Effective Date, Franklin Asset, certain other borrowers party to the Legacy Loan Credit Agreement (as defined below), Lender, in its capacity as administrative agent and a lender and certain other lenders party to such Legacy Loan Credit Agreement have entered into a certain Amended and Restated Credit Agreement dated as of March 31, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “ Legacy Loan Credit Agreement ”), pursuant to which, among other things, (i) all of the Franklin Master Term Loans other than the Static Loans were made subject to the Legacy Loan Credit Agreement and (ii) FCMC was released from its Guaranty of any obligation under, among other loan documents, the Forbearance Agreement and the Franklin Master Agreement, and FCMC has requested that Lender clarify that FCMC has no further obligation under the Forbearance Agreement and the Franklin Master Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1.       Extension of Forbearance for the Static Loans .  The first and second sentences of Section 1(a) of the Forbearance Agreement are deleted in their entirety and are hereby replaced with the following:

Absent the occurrence and continuance of a Forbearance Default other than an Identified Forbearance Default, prior to June 30, 2009 (the “ Forbearance Date ”), Lender agrees not to initiate collection proceedings or exercise its remedies under the Loan Documents in respect of any Static Loan against any Loan Party or any Collateral for such Static Loan or elect to have interest accrue under the respective Loan Documents at the stated rate applicable after default.

2.       Amendment of Franklin Master Agreement .   As of the Amendment Effective Date, all references to the “Company” in the Franklin Master Agreement shall mean Franklin Credit Asset Corporation, and not Franklin Credit Management Corporation.

3.       Conditions of Effectiveness .  This Amendment shall become effective as of the Amendment Effective Date, upon satisfaction of all of the following conditions precedent:

(a)          Lender shall have received execution and delivery of, to the satisfaction of Lender and its counsel, three (3) duly executed copies of this Amendment;

(b)          The representations contained in the immediately following paragraph shall be true and accurate.

4.       Representations and Warranties .  Each Amendment Loan Party represents and warrants to Lender as follows: except in respect of the Identified Forbearance Defaults, (a) the execution, delivery, and performance of this Amendment by each Amendment Loan Party has been duly authorized by all requisite corporate or organizational action on the part of such