This
GUARANTY (this “ Guaranty ”), dated as of
December 19, 2008 (the “ Effective Date ”),
is made by FRANKLIN CREDIT HOLDING CORPORATION, a Delaware
corporation (“ Holding ” or the “
Guarantor ”), in favor of THE HUNTINGTON NATIONAL
BANK, a national banking association (the “ Lender
”).
WHEREAS,
pursuant to that certain First Amended and Restated Tribeca
Forbearance Agreement and Amendment to Credit Agreements, dated as
of the Effective Date (as amended, supplemented or otherwise
modified from time to time in accordance with the provisions
thereof, the “ Forbearance Agreement ”), among
the Loan Parties party thereto (the “ Loan Parties
”), Tribeca Lending Corp., a New York corporation, in its
individual capacity (“ Tribeca ”), Franklin
Credit Management Corporation (“ FCMC ”), in its
capacities as defined in the Forbearance Agreement, and the Lender,
the Lender has agreed to make and/or maintain Advances and other
financial accommodations to and for the benefit of the Loan
Parties, upon the terms and subject to the conditions set forth in
the Forbearance Agreement; and
WHEREAS,
it is a condition precedent to the obligations of the Lender to
make and/or maintain Advances and the financial accommodations
provided under the Forbearance Agreement, that the Guarantor shall
have agreed that this Guaranty shall become in full force and
effect immediately after the filing of the Certificate of Merger;
and
WHEREAS,
the Guarantor acknowledges that the making and/or maintaining of
the Advances and the other financial accommodations to the
Guarantor and the Borrowers under the Forbearance Agreement will
inure to the substantial benefit of the Guarantor.
NOW,
THEREFORE, in consideration of the premises and in order to induce
the Lender to enter into the Forbearance Agreement and to make
and/or maintain the extensions of credit contemplated thereby, 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 the Borrowers 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 the Borrowers and/or any other guarantor
may be free from any Obligations.
(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 any Borrower or any other guarantor shall be applied
to reduce the Obligations unless and until the Lender shall have
made a demand for payment under this Guaranty.
2.
Representations, Warranties and Covenants of the Guarantor .
This Guaranty is delivered pursuant to the Forbearance Agreement
and the Guarantor hereby confirms to the Lender each of its
representations and warranties as set forth in the Forbearance
Agreement.
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 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 Agreement, 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 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 the
Borrowers 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 Agreement, 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
2
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 therefor
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, waived, surrendered or released by the
Lender, and the Forbearance Agreement, and any other documents
executed and delivered in connection therewith may be amended,
restated, modified, supplemented or terminated, in whole or in
part, as the Lender may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held
by the Lender (and its Affiliates) for the payment of the
Obligations may be sold, exchanged, waived, surrendered or
released. The Lender shall not have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as
security for the Obligations or for this Guaranty or any assets
subject thereto. When making any demand hereunder against the
Guarantor, the Lender may, but shall be under no obligation to,
make a similar demand on any Borrower or any other guarantor, and
any failure by the Lender to make any such demand or to collect any
payments from a Borrower or any such other guarantor or any release
of a Borrower or such other guarantor shall not relieve the
Guarantor of its respective obligations or liabilities hereunder,
and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Lender against the
Guarantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal
proceedings.
6.
Waiver of Rights . The Guarantor waives any and all
notice
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