FIRST AMENDED AND RESTATED TRIBECA FORBEARANCE AGREEMENT AND AMENDMENT TO CREDIT AGREEMENTS

Exhibit 10.4

EXECUTION COPY

FIRST AMENDED AND RESTATED TRIBECA FORBEARANCE AGREEMENT
AND AMENDMENT TO CREDIT AGREEMENTS

     THIS FIRST AMENDED AND RESTATED TRIBECA FORBEARANCE AGREEMENT AND AMENDMENT TO CREDIT AGREEMENTS (this “ Agreement ”) is entered into as of the 19 ^th day of December 2008, (the “ Forbearance Effective Date ”) by and among THE BORROWERS listed on Schedule 1 hereto (each, a “ Borrower ” and collectively, the “ Borrowers ”), including without limitation, TRIBECA LENDING CORP., a New York corporation, in its individual capacity (“ Tribeca ”), and FRANKLIN CREDIT MANAGEMENT CORPORATION, a Delaware corporation, in its capacity as a Guarantor and as servicer (“ FCMC ”), FRANKLIN CREDIT HOLDING CORPORATION (“Holding”), a Delaware corporation, in its capacity as a Guarantor, and THE HUNTINGTON NATIONAL BANK (“ Huntington ” or “ Lender ”).

RECITALS:

     WHEREAS, certain of the Borrowers, Tribeca and Huntington (as successor-in-interest to Sky Bank) are parties to that certain Master Credit and Security Agreement, dated as of February 28, 2006, as the same has been amended, supplemented, restated or otherwise modified prior to the date of this Agreement (the “ Tribeca Master Agreement ”), pursuant to which Huntington holds certain outstanding loans made to the applicable Borrowers (the “ Tribeca Master Term Loans ”), which Tribeca Master Term Loans are secured by, among other things, certain Mortgage Loans as provided in the Tribeca Master Agreement and the other agreements entered into in connection therewith; and

     WHEREAS, Tribeca and Huntington (as successor-in-interest to Sky Bank) are parties to that certain Warehousing Credit and Security Agreement, dated as of October 18, 2005, as the same has been amended, supplemented, restated or otherwise modified prior to the date of this Agreement (the “ Tribeca Warehousing Agreement ”), pursuant to which Huntington holds certain outstanding loans made to Tribeca (the “ Tribeca Warehousing Credits” ), which loans are secured by, among other things, certain Mortgage Loans as provided in the Tribeca Warehousing Agreement and the other agreements entered into in connection therewith; and

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

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

A. Tribeca Master Agreement:

     (i) certain Borrowers have failed to pay at the respective maturity dates set forth in the column designated as “Maturity Date” on Schedule 2 to the Existing Forbearance Agreement certain of the Commercial Loans;

     (ii) Tribeca and its Subsidiaries have failed to maintain the minimum net worth requirements set forth in the Credit Agreements;

     (iii) by not maintaining the required minimum net worth, Tribeca has breached a covenant to comply with laws, rules and regulations, including minimum net worth requirements under certain governmental licenses to hold and service mortgage loans; and

     (iv) Tribeca and its Subsidiaries (A) have failed to maintain the minimum consolidated pretax net income set forth in the Credit Agreements, (B) have sustained a loss in more than three consecutive quarters and (C) have permitted total indebtedness, less indebtedness due to affiliates, to exceed 95% of total assets;

(the defaults set forth in clauses (A)(i), (ii), (iii) and (iv) above shall be referred to as the “ Tribeca Master Acknowledged Defaults ”.

B. Tribeca Warehousing Agreement:

(i) the Tribeca Master Acknowledged Defaults are defaults under the Tribeca Warehousing Agreement;

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

(iii) by not maintaining the required minimum net worth, Tribeca has breached a covenant to comply with laws, rules and regulations, including minimum net worth requirements under certain governmental licenses to hold and service mortgage loans;

(the defaults set forth in clauses (B) (i), (ii) and (iii) above shall be referred to as the “ Tribeca Warehousing Acknowledged Defaults ”, and together with the Tribeca Master Acknowledged Defaults, the “ Acknowledged Defaults ”); and

     WHEREAS, FCMC, the Borrowers, including Tribeca, and Lender are parties to that certain Tribeca Forbearance Agreement and Amendment to Credit Agreement dated as of December 28, 2007, as the same has been amended, supplemented, restated or otherwise modified prior to the date of this Agreement (the “ Existing Tribeca Forbearance Agreement ”), pursuant to the terms of which Lender agreed not to exercise its rights to initiate proceedings to foreclose or otherwise realize upon the Collateral that secures the Obligations of Tribeca and the other Borrowers as a consequence of the defaults acknowledged therein; and

     WHEREAS, the Loan Parties and Lender wish to continue 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 establish the aggregate outstanding principal amounts thereof as of December 28, 2007 and March 31, 2008 respectively into (i) a term loan facility in the amount of Tranche A, and (ii) a term loan facility in the amount of Tranche B, divided into four (4) sub-tranches, (b) maintain each of Tranche A and Tranche B as a full recourse obligation of each Borrower, and make each Borrower jointly and severally liable for the repayment of Tranche A and Tranche B, and (c) reaffirm all obligations, liabilities and Liens

on substantially all assets of each Loan Party, including without limitation all of the collateral which secures the Commercial Loans; and

     WHEREAS, in order to induce Lender to enter into this Agreement, each 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, FCMC desires to reorganize the corporate structure of itself and its Subsidiaries (the “ Reorganization ”) in order to (a) establish Franklin Credit Holding Corporation, a newly formed Delaware corporation, inter alia , as a public company, which, immediately after the filing at the Delaware Secretary of State of a Certificate of Merger of Franklin Merger Sub, Inc. into FCMC (the “ Certificate of Merger ”) will deliver a Guaranty to Lender and grant a security interest to Lender in all of its assets and will become the parent company of the following four (4) direct subsidiaries: (1) FCMC, which will remain a Guarantor and reaffirm its grant to Lender of security interests in all of its assets, (2) Franklin Asset, (3) Franklin Credit Loan Servicing, LLC, a newly formed Delaware limited liability company (“ Franklin Servicing LLC ”), which will service consumer mortgage loans in selected states to the extent set forth in this Agreement, and (4) Tribeca, which will remain a Borrower, own the Capital Stock of all of its present Subsidiaries, reaffirm its grant to Lender of security interests in all of its assets, and continue to own all REO Properties of all the Loan Parties; (b) establish Franklin Trust, the sole certificate holder of which is Lender, as pledgee of Franklin Asset, and cause Franklin Trust to guaranty all obligations of the Loan Parties to Lender and grant security interests to Lender in all of its assets, and (c) establish Tribeca Trust, the sole certificate holder of which is Lender, as pledge of Tribeca, and cause Tribeca Trust to guaranty all obligations of the Loan Parties to Lender and grant security interests to Lender in all of its assets.

     WHEREAS, in connection with the Credit Agreements, the Commercial Loans and the Existing Tribeca Forbearance Agreement, certain of the Borrowers and FCMC 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, each other Guaranty, and all other agreements executed in connection herewith or with any of the foregoing, a “ Loan Document ” and collectively, the “ Loan Documents ”); and

     WHEREAS, as of December 5, 2008, Borrowers owe to Lender, without offset, claim, recoupment or dispute, the outstanding aggregate principal balances of the Commercial Loans pursuant to the respective Tranches as are set forth on Schedule 3 hereto, together with interest, fees, expenses, and other charges pursuant to the Credit Agreements; 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, each Loan Party has requested that Lender forbear, pursuant to the terms of this Agreement, from the exercise of its rights under the Loan Documents 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 consent to the Reorganization, and each Loan Party acknowledges that Lender is entitled to exercise all rights and remedies available to Lender under the Loan Documents; and

     WHEREAS, each Loan Party acknowledges that Lender is granting and continuing the forbearance as provided in this Agreement in consideration and reliance upon the promises and agreements of each Loan Party contained in this Agreement, and each Loan Party acknowledges and agrees that all actions taken by Lender prior to the date hereof have been reasonable and appropriate under the circumstances.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Loan Party acknowledges and agrees 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 .

     (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 any Loan Party or any Collateral or elect to have interest accrue under the respective Loan Documents at the stated rate applicable after default. Each Loan Party 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 any Loan Party 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) Each Loan Party agrees that (i) all Obligations under the Loan Documents are the valid and binding obligations of each Loan Party respectively and are enforceable in accordance with the terms thereof, except as modified by this Agreement; (ii) the Obligations of each Borrower evidenced by each promissory note executed in connection with any Loan Document, including without limitation, each promissory note executed in connection with each Commercial Loan and the Existing Tribeca Forbearance Agreement, executed and delivered by any 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 and each Tranche as of the date set forth in Schedule 3 hereto is set forth on Schedule 3 hereto; (iii) FCMC agrees that all of its obligations under the FCMC Guaranty 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 (iv) the Liens and security interests granted to Lender with respect to each Mortgage Loan and other Collateral pledged as security for all Obligations of the Loan Parties under the Loan Documents 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) [reserved]

     2.  Certain Defined Terms . All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Tribeca 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 Original 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 FCMC fails to deliver such standards and policies, with the standards and policies prescribed by Lender).

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

     “ Advance ” or “ Advances ” shall mean one or more of the Tranche A Advances or the Tranche B 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.

     “ Agreement ” shall have the meaning assigned to that term in the Preamble of this Agreement.

     “ Amendment No. 1 ” shall mean a certain Joinder and Amendment No. 1 to the Existing Tribeca Forbearance Agreement.

     “ Amendment No. 2 ” shall mean a certain Amendment No. 2 to the Existing Tribeca Forbearance Agreement.

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

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

     “ Approved Expenses ” shall mean those expenses of Holding and its Subsidiaries as shall be approved by Lender in its sole discretion, and which shall include the expenses of Holding and its Subsidiaries in the ordinary course of business, including without limitation, all fees and expenses as described in Section 40 of this Agreement, out-of-pocket collection advances, expenses related to the maintenance of REO Properties, fees and expenses of custodians and trustees incurred in the ordinary course of business relating to the Collateral, all fees and charges in respect of Letters of Credit and banking services provided for the account of any Loan Party 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.

     “ Borrower ” and “ Borrowers ” shall have the meanings assigned to such terms in the Preamble of this Agreement.

     “ 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.

     “ Cash Flow Available for Debt Service ” shall have the meaning assigned to that term in Section 12(d).

     “ Change of Control ” shall mean, (a) with respect to Holding, the replacement of a majority of the board of directors from the directors who constituted the board of directors on the Original Forbearance 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 Original Forbearance Effective Date (or as changed over time with the approval of the then existing board of directors of Holding); or (b) with respect to Holding, 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 Holding representing more than 20% of the combined voting power of the outstanding securities of Holding, ordinarily having the right to vote in the election of directors from the beneficial owners as of the Original Forbearance Effective Date; or (c) with respect to any Loan Party other than Holding, the failure of Holding 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 the Security Agreement, as well as in the Credit Agreements, executed and delivered to Lender by FCMC, Tribeca and the Borrowers and shall include without limitation all monies owing to any Loan Party from taxing authorities, all amounts owing pursuant to any deposit account or securities account of any Loan Party, any commercial tort or other claim of any Loan Party, certain real property interests of FCMC at 6 Harrison Street—Unit 6, New York, New York, granted to Lender, and certain real property interests of FCMC in respect to the Proprietary Leases.

     “ 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 any Loan Party, or received by 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 Loan Party 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.

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

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

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

     “ Debt Service ” shall have the meaning assigned to that term in Section 12(d).

     “ 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.

     “ Existing Tribeca Forbearance Agreement ” shall have the meaning assigned to that term in the recitals of this Agreement.

     “ FCMC ” shall have the meaning assigned to that term in the Preamble of this Agreement.

     “ FCMC Guaranty ” shall mean the Guaranty dated as of the Original Forbearance Effective Date and made by FCMC 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.

     “ Forbearance Effective Date ” shall have the meaning assigned to that term in the Preamble of this Agreement.

     “ Franklin 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 parties listed therein as Borrowers, FCMC, and Lender, as amended, supplemented, restated or otherwise modified from time to time, including as amended and restated by a certain First Amended and Restated Forbearance Agreement dated as of even date herewith among FCMC, certain parties listed therein as Borrowers, Holding, Franklin Asset and Lender (the “ Franklin Forbearance Agreement ”).

     “ Franklin Asset ” means Franklin Credit Asset Corporation, a Delaware corporation.

     “ Franklin Servicing LLC ” shall have the meaning assigned to that term in the recitals of this Agreement.

     “ Franklin Trust ” shall mean FRANKLIN CREDIT TRUST SERIES I, a Delaware statutory trust, the sole certificate holder of which will be Lender, as pledge of Franklin Asset.

     “ 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 any Loan Party, any of their Affiliates or any of their properties.

     “ Guarantor ” shall mean each of Holding, FCMC, Franklin Trust, Tribeca Trust and any other Person which has become obligated to Lender in respect of the Obligations under any Loan Document pursuant to the terms of a Guaranty.

     “ Guaranty ” by any Guarantor means any obligation, contingent or otherwise, of a Guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person in any manner, whether directly or indirectly, and including any obligation of a Guarantor, directly or indirectly, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the holder of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of such Person so as to enable such Person to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term Guaranty shall not include endorsements for collection or deposit in the ordinary course of business.

     “ Holding ” shall have the meaning assigned to that term in the Preamble of this Agreement.

     “ Huntington ” shall have the meaning assigned to that term in the Preamble of this Agreement.

     “ 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 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 the Tranche A Advances or the Tranche B Advances, a per annum rate equal to LIBOR for that day plus the relevant Applicable Margin.

     “ 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.

     “ Lender ” shall have the meaning assigned to that term in the Preamble of this Agreement.

     “ 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 any Loan Party 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.

     “ Loan Document ” and “ Loan Documents ” shall have the meanings assigned to such terms in the recitals of this Agreement.

     “ Loan Parties ” shall mean the Borrowers and the Guarantors collectively, and “ Loan Party ” means any Borrower, any Guarantor, and any other Person which has become obligated to Lender under the terms of this Agreement or any other Loan Document pursuant to a joinder, supplement or guaranty agreement and other Loan Documents satisfactory to Lender in its sole and absolute discretion.

     “ Mandatory Prepayment Event ” shall mean:

     (a) any sale, transfer or other disposition of any property of any Loan Party (other than Holding and FCMC), 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 Loan Party (other than Holding and FCMC); or

     (c) the incurrence by any Loan Party (other than Holding and FCMC) of any Indebtedness for borrowed money other than Subordinated Indebtedness; or

          (d) the receipt by any Borrower of the proceeds of (i) any settlement or monetary judgment in respect of any claim, litigation or 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 the Loan Parties, taken as a whole, (b) the ability of any Loan Party 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, $3,900,000, 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, $275,000, which amount will be allocated first to Tranche B-1 Advances, second to Tranche B-2 Advances, third to Tranche B-3 Advances and fourth to Tranche B-4 Advances 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 Loan Party 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 any Loan Party 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 Loan Party, 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, 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, as applicable.

     “ Obligations ” shall mean all obligations, loans, advances indebtedness and liabilities of each Loan Party 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 any Loan Party and any amount due or owing Lender pursuant to any Credit Agreement or other Loan Document.

     “ Original Forbearance Effective Date ” shall mean December 28, 2007.

     “ 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 or the Tranche B Advances, the Tranche A Termination Date, or the Tranche B 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) of the Franklin Forbearance Agreement.

     “ 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

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 any Loan Party, subject to any maximum or minimum interest rate limitation specified by applicable law. Each Loan Party 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 Loan Party or (ii) Huntington may make loans to certain borrowers at interest rates that are lower than its “Prime Commercial Rate.”

     “ Proprietary Leases ” means each of that certain (i) Proprietary Lease, dated March 12, 2008, by and between FCMC and Wallace-Holland Owners Corp., and (ii) Proprietary Lease, dated on or around October 15, 2007, by and between FCMC and The Sherbrooke Co-Op, Inc.

     “ REO Property ” shall mean any real property, the title to which is held by any Loan Party 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.

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

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

     “ Reserves ” shall mean such reserves as Lender reasonably deems appropriate to establish in such amounts, and with respect to such matters, as Lender in its good faith discretion shall deem necessary or appropriate, including without limitation, reserves with respect to (i) sums that any Loan Party is required to pay pursuant to its contractual obligations (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases), (ii) Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law in and to an item of Collateral, and (iii) up to $5,000,000 at any time as a reserve for the payment of any Required Payment or interest under any Advance, or any fees or expenses owing or anticipated to be owing to Lender under the terms of any Loan Document.

     “ Restricted Payment ” shall mean (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 Holding) 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 Loan Party 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.

     “ 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.

     “ Restatement Fee ” shall mean the sum of $10,000, payable in full at the Forbearance Effective Date.

     “ Restructuring Fee ” shall mean the fee paid to Lender on the Original Forbearance Effective Date.

     “ Security Agreement ” shall mean each Credit Agreement, the Security Agreement dated as of the Original Forbearance Effective Date, and each joinder agreement, made by FCMC, any Borrower or any other Loan Party, 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.

     “ Subordinated Indebtedness ” shall mean any Indebtedness incurred by a Loan Party 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 or the Tranche B Termination Date.

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

     “ Tranche A ” shall mean a term loan facility made by Lender to the Borrowers in the original principal amount of $400,000,000, as reduced by certain payments made in respect thereof between the Original Forbearance Effective Date and March 31, 2008, and as increased as of March 31, 2008 to $410,859,753.55.

     “ 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 original amount of $400,000,000, as increased to $410,859,753.55.

     “ 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 mean a term loan facility made by Lender to the Borrowers in the original principal amount of $91,133,187, as reduced by certain payments made in respect thereof between the Original Forbearance Effective Date and March 31, 2008, and as increased as of March 31, 2008, to the principal amount of $98,774,361.20, divided into four (4) sub-tranches, with (i) the first such sub-tranche being in the original amount of $22,783,296.75, and increased as of March 31, 2008, to $24,131,090.30 (“ Tranche B-1 ”), and (ii) the second, third and fourth sub-tranches, each being in the original amount of $22,783,296.75 and each as increased as of March 31, 2008, to $24,881,090.30, each referred to as “ Tranche B-2 ,” “ Tranche B-3 ” and “ Tranche B-4 ” “ 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).

     “ Tranche B-1 Advance ”, “ Tranche B-2 Advance ”, “ Tranche B-3 Advance ” and “ Tranche B-4 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 $91,133,187, as increased to $98,774,361.20.

     “ 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 and Tranche B-4 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.

     “ Tribeca ” shall have the meaning assigned to that term in the Preamble of this Agreement.

     “ Tribeca Master Acknowledged Defaults ” shall have the meaning assigned to that term in the recitals of this Agreement.

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

     “ Tribeca Master Term Loans ” shall have the meaning assigned to that term in the recitals of this Agreement.

     “ Tribeca Trust ” shall mean TRIBECA LENDING TRUST SERIES I, a Delaware statutory trust, the sole certificate holder of which will be Lender, as pledgee of Tribeca.

     “ Tribeca Warehousing Acknowledged Defaults ” shall have the meaning assigned to that term in the recitals of this Agreement.

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

     “ Tribeca Warehousing Credits ” shall have the meaning assigned to that term in the recitals of this Agreement.

     “ Trusts ” shall mean the Franklin Trust and the Tribeca Trust, and “ Trust ” means either of the Franklin Trust or the Tribeca Trust.

     “ Trust Agreements ” shall mean (i) a certain Master Trust Agreement for the Franklin Trust, dated as of December 15, 2008, among FCMC, as depositor, Deutsche Bank National Trust Company, as certificate trustee, and Deutsche Bank Trust Company Delaware, as Delaware trustee and (ii) a certain Master Trust Agreement for the Tribeca Trust, dated as of December 15, 2008, among Tribeca, as depositor, Deutsche Bank National Trust Company, as certificate trustee, and Deutsche Bank Trust Company Delaware, as Delaware trustee.

     “ 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 Loan Parties herein set forth, Lender hereby agrees to make, or maintain, as applicable, 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 agreed, on the Original 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 agreed, on the Original Forbearance Effective Date and as of March 31, 2008, to convert a portion of the outstanding principal amount of Lender’s Commercial Loans and loans originally made to Tribeca by BOS(USA), Inc. equal to Lender’s Tranche B Commitment into four term loans to the Borrowers, each in an amount of Tranche B-1, Tranche B-2, Tranche B-3, and Tranche B-4 (each aggregate amount so converted, a “ Tranche B Advance ” and, collectively, the “ Tranche B Advances ”; and each such respective portion thereof a “ Tranche B-1 Advance ”, “ Tranche B-2 Advance ”, “ Tranche B-3 Advance ”, and “ Tranche B-4 Advance ”, and collectively, the “ Tranche B-1 Advances ”, “ Tranche B-2 Advances ”, “ Tranche B-3 Advances ”, and “ Tranche B-4 Advances ”). Any portion of the Tranche B Advances that is subsequently repaid or prepaid may not be reborrowed.

     (c) [reserved]

     (d) [reserved]

     (e) Notes .

     (i) Lender’s Tranche A Advance, Tranche B-1 Advance, Tranche B-2 Advance, Tranche B-3 Advance, and Tranche B-4 Advance, each are evidenced by a promissory note of the Borrowers, substantially in the form of Exhibit A, Exhibit B-1, Exhibit B-2, Exhibit B-3, and Exhibit B-4, to the Existing Tribeca Forbearance Agreement respectively, in each case dated the Original Forbearance Effective Date and payable to Lender or its assigns in a principal amount equal to Lender’s Advance under the applicable Tranche.

     (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 Holding that it has become unlawful for Lender to honor its obligations to make or maintain LIBOR Advances hereunder;

then Lender shall give Holding notice thereof and, so long as such condition remains in effect, all Advances of Lender shall bear interest at a rate per annum equal to the Prime Commercial Rate, plus the Applicable Margin.

     5.  Payments of Interest and Principal on the Advances .

     (a) Interest on the Advances .

     (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 the Tranche A Termination Date, or Tranche B 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) [Reserved] .

     (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.

     (c) Payment Date Reports . No later than two business days prior to each Payment Date, Lender shall provide to Holding 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, and the Tranche B 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, and Tranche B 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 Original Forbearance Effective Date) to but excluding such Payment Date (the aggregate amount of such Collections, minus any Reserves established during such period, 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 amounts constituting additional periodic payments of interest required under any Interest Rate Hedge Agreement to Lender in full;

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

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

sixth , 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;

seventh , 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;

eighth , to repay any Obligations (other than payments constituting additional period payments of interest payable under item “third” above) under any Interest Rate Hedge Agreement to Lender in full;

ninth , [Reserved]; and

tenth , to pay Franklin Advances until paid in full and then to Holding for the benefit of the Borrowers.

Furthermore, notwithstanding the foregoing applications of Collections, all Collections arising from the sale, lease or other disposition of REO Property purchased or acquired directly or as a result of an intercompany advance from FCMC or any subsidiary thereof to any Borrower with any “Tranche D Advance” (as defined in the Franklin Forbearance Agreement) shall be used first to repay the principal of the revolving credit portion of any such Tranche D Advance until the same is paid in full and then applied pursuant to clauses first through tenth of this Section 5(d).

     (e) Mandatory Prepayments . Within five (5) 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.  [Reserved] .

     7.  Conditions Precedent . The obligations of Lender to make or maintain, as applicable, the Tranche A Advances, and the Tranche B Advances and to continue to forbear pursuant to the terms hereof are subject to the satisfaction, immediately prior to or concurrently with, the making of such Advances of the following conditions precedent, and in the case of Holding as a condition subsequent immediately after filing of the Certificate of Merger, each of which shall be in form and substance satisfactory to Lender and its counsel:

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

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

     (i) A Guaranty duly executed and delivered by each of Holding, Franklin Trust and Tribeca Trust;

     (ii) A joinder by any Loan Party (other than Franklin Trust and Tribeca Trust) not party to the Security Agreement prior to the Forbearance Effective Date;

     (iii) Execution of the Franklin Forbearance Agreement and any loan document related thereto;

     (iv) Lender shall have received a Pledge Amendment, one or more Collateral Assignment of Proprietary Lease, and Stock Powers, all in respect to collateral assignment of FCMC’s interests in the Proprietary Lease, executed and delivered by a duly authorized officer of FCMC; and

     (v) A security agreement in all assets duly executed and delivered by each of Franklin Trust and Tribeca Trust.

     (c) Lender shall have received one or more legal opinions of counsel to the Loan Parties, in form satisfactory to Lender;

     (d) Lender shall have received the Restatement Fee and all other fees and expenses required to be paid by the Loan Parties on or prior to the Forbearance Effective Date;

     (e) Lender shall have received consolidating proforma balance sheets dated as of the Forbearance Effective Date of each of FCMC, Franklin Asset, Tribeca, Franklin

Servicing, Franklin Trust and Tribeca Trust, and a consolidated proforma balance sheet dated as of the Forbearance Effective Date of Holding;

     (f) Lender shall have received such other certificates, instruments, documents, agreements, including without limitation those documents described on the Closing Memorandum attached hereto as Exhibit 7(f) , as may be required by Lender, each of which shall be in form and substance satisfactory to Lender and its counsel;

     (g) Lender shall have received Schedule 12(l) dated as of the Forbearance Effective Date of all deposit accounts, security accounts and investments (other than investments in Subsidiaries of each of the Loan Parties and Franklin Servicing); and

     (h) Lender shall have received such other certificates, documents and deliveries as Lender or its counsel may reasonably request.

     8.  Amendments to Credit Agreements . Section 2.1 of the Tribeca Master Agreement, entitled “ The Commitment ,” and Section 2.1 of the Tribeca Warehousing Agreement, entitled “ The Commitment ,” are each hereby amended to delete any commitment or other obligation of Lender to make any further “Subsidiary Loans” (as defined in the Tribeca Master Agreement), or “Advances” (as defined in the Tribeca Warehousing Agreement) on and after the Original Forbearance Effective Date. In addition Section 8.2 (c)(iv) of the Tribeca 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, each Loan Party represents and warrants to Lender as follows:

     (a) Organization . Each Loan Party 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 Loan Party 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.

     (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 Loan Party, 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 Loan Party 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 Loan Party.

     (d) Completeness of Collateral . The C