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Exhibit
10.1
LIMITED
WAIVER
This
Limited Waiver is made and entered into as of November 15,
2007, between The Huntington National Bank, successor by
merger to Sky Bank, Franklin Credit Management Corporation, a
Delaware corporation (“Borrower”) and each
subsidiary of the Borrower listed on the signature pages
hereof.
Reference
is hereby made to (1) a certain Master Credit and Security
Agreement dated as of October 13, 2004 (as amended, restated,
modified or supplemented from time to time, the
“Master Credit Agreement” )
entered into between Sky Bank, now known as The Huntington
National Bank (“ Lender ”) and
Franklin Credit Management Corporation, a Delaware corporation
(“ Borrower ”), certain
subsidiaries of Borrower from time to time party to the Master
Credit Agreement and (2) a certain Flow Warehousing Credit and
Security Agreement dated as of August 11, 2006, entered into
between Lender and Borrower (as amended, restated, modified or
supplemented from time to time, the “ Flow
Credit Agreement ). All
capitalized terms not otherwise defined in this Limited Waiver
shall have the meanings ascribed to such terms in the Master
Credit Agreement or the Flow Credit Agreement, as
specified.
Borrower agrees that
Lender has reasonably requested pursuant to Section 6.1(b)(i)
of the Master Credit Agreement and Section 6.2(a) of the Flow
Credit Agreement that Borrower provide, within 30 days and 45
days respectively after the end of each calendar quarter,
statements of income and cash flows and related balance
sheet, each for the fiscal quarter ending September 30, 2007,
certified by the chief financial officer or other appropriate
officer of the Borrower (the “ 9/30/07
Quarterly Financials
”). Borrower has advised Lender that it has
failed to deliver to Lender the 9/30/07 Quarterly Financials
as required, and Lender hereby provides notice to Borrower of
such failure and that such failure constitutes an Event of
Default under each of the Master Credit Agreement and the
Flow Credit Agreement (the “ Identified
Defaults ”). Borrower hereby
acknowledges the Identified Defaults and has requested that
Lender waive the Identified Defaults through the earlier of
(i) such time as Borrower files copies of the 9/30/07
Quarterly Financials with the Securities and Exchange
Commission or (ii) December 31, 2007, (the “
Specified Waiver Date ”).
Borrower hereby agrees (i)
not to request any further loans, advances or other
extensions of credit pursuant to the Master Credit Agreement,
the Flow Credit Agreement or any other loan document, letter
of credit agreement, hedging agreement or banking services
agreement (each of the foregoing a “ Credit
Extension ”) through and including the
Specified Waiver Date and (ii) contemporaneously herewith to
enter into a Security Agreement, in form and substance
satisfactory to Lender, pursuant to which Borrower will grant
to Lender, to secure all present and future loans,
liabilities and obligations of Borrower and each direct and
indirect subsidiary thereof to Lender, a first priority lien
in all property and assets of Borrower and each direct and
indirect subsidiary (each of the foregoing, a “
Condition of Waiver
”). Subject to the terms and
conditions set forth herein, including without limitation
Lender’s satisfaction with each Condition of Waiver and
the execution of this Limited Waiver by each of Borrower and
each Company Subsidiary (as defined in the Master Credit
Agreement), Lender hereby waives the Identified Defaults
through and including the Specified Waiver Date.
Nothing in this Limited
Waiver shall (i) cause a modification of the Master Credit
Agreement, the Flow Credit Agreement, any other loan document
agreement in connection with any extension of credit from
Lender to Borrower, except as precisely set forth above, (ii)
establish any custom, course of dealing or in any manner
waive or modify any future default or Event of Default, (iii)
entitle Borrower or any Company Subsidiary to any other
waiver or any other or further notice or demand whatsoever,
or (iv) in any wa
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