This
GUARANTY (this “ Guaranty ”), dated as of
December 19, 2008 (the “ Effective Date ”),
is made by TRIBECA LENDING CORP., a New York corporation
(“the “ Guarantor ”), in favor of THE
HUNTINGTON NATIONAL BANK, a national banking association (the
“ Lender ”).
WHEREAS,
pursuant to (i) that certain First Amended and Restated
Forbearance Agreement and Amendment to Credit Agreements, dated as
of December 19, 2008, between Lender, the borrowers party
thereto (the “ Franklin Borrowers ”), Franklin
Credit Management Corporation (“ FCMC ”),
Franklin Credit Asset Corporation (“ Franklin Asset
”), and Franklin Credit Holding Corporation (“
Holding ”) (as amended, supplemented or otherwise
modified from time to time in accordance with the provisions
thereof, the “ Franklin Forbearance Agreement ”)
and (ii) that certain First Amended and Restated Tribeca
Forbearance Agreement and Amendment to Credit Agreements, dated as
of December 19, 2008, between Lender, the borrowers party
thereto (the “ Tribeca Borrowers ”), the
Guarantor, FCMC, and Holding (as amended, supplemented or otherwise
modified from time to time in accordance with the provisions
thereof, the “ Tribeca Forbearance Agreement ”)
(the Franklin Forbearance Agreement and the Tribeca Forbearance
Agreement are referred to as the “ Forbearance
Agreements ” and the Franklin Borrowers and the Tribeca
Borrowers are referred to collectively as the “
Borrowers ”), at the request of Holding, Franklin
Asset, FCMC, and Tribeca, Lender has agreed to consent to the
assignment to Holding and the assumption by Holding (by way of that
certain Assignment Agreement dated December 19, 2008, between FCMC,
Holding and Lender, the “ SWAP Assignment Agreement
”) of all of FCMC’s rights and obligations under each
Interest Rate Hedge Agreement (as defined below), and the Lender
has agreed to make and/or maintain Advances and other financial
accommodations to and for the benefit of the Borrowers, Franklin
Asset, Holding, Tribeca and FCMC, upon the terms and subject to the
conditions set forth in the Forbearance Agreements; and
WHEREAS,
it is a condition precedent to Lender’s entering into the
Forbearance Agreements and the SWAP Assignment Agreement that the
Guarantor shall have executed and delivered this Guaranty to the
Lender; and
WHEREAS,
the Guarantor acknowledges that the entering into one or more
Interest Rate Hedge Agreements will inure to the substantial
benefit of the Guarantor;
NOW,
THEREFORE, in consideration of the premises and in order to induce
the Lender to consent to the execution and delivery of the SWAP
Assignment Agreement and the transactions contemplated therein, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby
agrees with the Lender as follows:
1.
Guaranty . (a) The Guarantor hereby unconditionally and
irrevocably guarantees to the Lender, and its successors,
endorsees, transferees and assigns, the prompt and
complete
payment and performance by Holding and FCMC of all Obligations when
and as the same shall become due (whether at stated maturity, by
acceleration or otherwise). The Guarantor further agrees to pay any
and all expenses (including, without limitation, all reasonable
fees and disbursements of counsel) that may be paid or incurred by
the Lender in enforcing any rights with respect to, or collecting,
any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, the Guarantor under this
Guaranty. This Guaranty shall remain in full force and effect until
the Obligations are paid in full in cash, notwithstanding that from
time to time prior thereto FCMC , Holding, Franklin Asset, or the
Borrowers may be free from any Obligations.
“
Obligations ” shall mean all obligations, indebtedness
and liabilities of FCMC and/or Holding 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 one or more Interest
Rate Hedge Agreements between FCMC and/or Holding and Lender dated
February 27, 2008, evidenced by one or more ISDA Master
Agreements, one or more Schedules to any such ISDA Master
Agreement, one or more Confirmations in connection with any of the
foregoing, and any other Loan Document executed in connection
therewith, each as amended, supplemented, assigned (by way of the
SWAP Assignment Agreement or otherwise) or otherwise modified from
time to time in accordance with the provisions of such Loan
Document, on account of any payment due, indebtedness, obligation
or other liability pursuant to any such Interest Rate Hedge
Agreement, and any interest, reimbursement obligations, fees,
indemnities arising under any such Loan Document, including without
limitation, any interest, fee, cost and expense arising under such
Loan Document accrued or incurred after the filing of any petition
under any bankruptcy or insolvency law.
“
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 and shall include
without limitation any transaction (including an agreement and/or
assignment with respect thereto) now existing or hereafter entered
into by or among FCMC, Holding, Franklin Asset, any Borrower, or
any Subsidiary thereof, on the one hand, and Lender or any
affiliate of Lender, or any of its subsidiaries or affiliates or
their successors, on the other hand, which is a basis swap, forward
rate transaction, interest rate option, floor transaction, collar
transaction, forward transaction, cross-currency rate swap
transaction, or any other similar transaction (including any option
with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates or other
financial measures.
(b) The
Guarantor agrees that whenever, at any time or from time to time,
it shall make any payment to the Lender on account of its liability
hereunder, it will notify the Lender in writing that such payment
is made under this Guaranty for such purpose; provided ,
however , that no payment made by the Guarantor through or
on behalf of FCMC and/or Holding shall be applied to reduce the
Obligations unless and until the Lender shall have made a demand
for payment under this Guaranty.
3.
Right of Set-off . Upon the occurrence of a Forbearance
Default, the Guarantor hereby irrevocably authorizes the Lender
(and its Affiliates), at any time and from
2
time to time
and without notice to the Guarantor, any such notice being
expressly waived by the Guarantor, to set-off and appropriate and
apply any and all property and deposits (general or special, time
or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Lender (or any of its
Affiliates) to or for the credit or the account of the Guarantor,
or any part thereof in such amounts as the Lender may elect,
against and on account of the obligations and liabilities of the
Guarantor to the Lender hereunder and claims of every nature and
description of the Lender (or any of its Affiliates) against the
Guarantor, in any currency, whether arising hereunder or under any
other Loan Document, as the Lender (or any of its Affiliates) may
elect, regardless of whether the Lender (or such Affiliate) has
made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Lender
(or its Affiliate) shall notify the Guarantor promptly of any such
set-off and the application made by the Lender or such Affiliate;
provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of
the Lender (and its Affiliates) under this Section 3 are in
addition to other rights and remedies (including, without
limitation, other rights of set-off) that the Lender (and such
Affiliates) may have under the Forbearance Agreements, any Interest
Rate Hedge Agreements, at law or in equity.
4.
No Subrogation . Notwithstanding any payment or payments
made by the Guarantor hereunder or any set-off or application of
funds of the Guarantor by the Lender (or any of its Affiliates),
the Guarantor shall be not be entitled to be subrogated to any of
the rights of the Lender (or any of its Affiliates) against FCMC,
Holding, Franklin Asset, the Borrowers or any other guarantor or
any Collateral or guarantee or right of offset held by the Lender
(or its Affiliates) for the payment of the Obligations, nor shall
the Guarantor seek or be entitled to seek any contribution or
reimbursement from FCMC, Holding, Franklin Asset, any Borrower or
any other guarantor in respect of payments made by the Guarantor
hereunder, in each case until all amounts owing to the Lender (or
its Affiliates) on account of the Obligations are paid in full and
the Forbearance Agreements, the Credit Agreements and all other
Loan Documents are terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such
amount shall be held by the Guarantor in trust for the Lender (and
its Affiliates), segregated from other funds of the Guarantor, and
shall, forthwith upon receipt by the Guarantor, be turned over to
the Lender in the exact form received by the Guarantor (duly
indorsed by the Guarantor to the Lender, if required), to be
applied against the Obligations, whether matured or unmatured, in
such order as the Lender may determine.
5.
Amendments, Etc. with Respect to the Obligations . The
Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without
notice to or further assent by the Guarantor, any demand for
payment of any of the Obligations made by the Lender may be
rescinded by the Lender and any of the Obligations continued, and
the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefore
or right of offset with respect thereto, may, from time to time and
in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, w
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