Rate Modification Agreement between Sky Bank, Franklin Credit Management Corporation, and Tribeca Lending Corporation (August 2, 2006)

Summary

Sky Bank, Franklin Credit Management Corporation (FCMC), and Tribeca Lending Corporation have agreed to modify the interest rates on certain outstanding loan facilities originated before July 1, 2005. The agreement outlines specific conditions under which interest rates will be reduced by up to 50 basis points, depending on changes to the federal funds rate at upcoming Federal Reserve meetings. The new terms take effect immediately, while all other terms of the existing loan agreements remain unchanged.

EX-10.2 3 kl08008_ex10-2.htm EXHIBIT 10.2 LETTER Exhibit 10.2 Letter

Exhibit 10.2

[SKY BANK LOGO]

Paul Colasono

Chief Financial Officer

Franklin Credit Management Corporation

101 Hudson Street

Jersey City, NJ 07302

RE: Rate Modifications August 2, 2006

Paul,

As a follow up to our recent conversations regarding certain terms of the various outstanding loan facilities by and between Sky Bank, Tribeca Lending Corporation (Tribeca) and Franklin Credit Management Corporation (FCMC) I would like to reiterate the details of our agreements. Specifically, the interest rate to be charged by Sky Bank for all debt existing as a result of FCMC or Tribeca facilities, excluding the portion of such debt that is shared by participants and subject to various participation agreements thereto, originated before July 1, 2005 shall be lowered initially by at least 25 BP no later than October 1, 2006. This rate reduction will take place on September 1, 2006 if the Federal Reserve chooses to raise the federal funds rate by 25BP at its meeting on or about August 8, 2006. In the event that the Federal Reserve should raise the federal funds rate by 50BP at such meeting, a rate reduction of 50 BP shall take place on September l, 2006. If the Federal Reserve should choose to keep the federal funds rate at its current standard or decrease such rate at this meeting, the rate currently charged by Sky Bank shall remain unchanged until October 1, 2006 when it will decrease by 25BP.

Furthermore, in addition to the rate reduction described above, Sky Bank shall lower the interest rate to be charged for all debt existing as a result of FCMC or Tribeca facilities, excluding the portion of such debt that is shared by participants and subject to various participation agreements thereto, originated before July 1, 2005 by an additional 25 BP no later than January 1, 2007. This rate reduction will take place on October 1, 2006 if the Federal Reserve chooses to raise the federal funds rate by 25BP or more at its meeting on or about September 20, 2006. If the Federal Reserve should choose to keep the federal funds rate at its current standard or decrease such rate at this meeting, the rate currently charged by Sky Bank shall remain unchanged until January 1, 2007 when it will decrease by 25BP.

In any event, the interest rate to be charged FCMC/ Tribeca on the above debt shall be reduced by no greater than a total of 50 BP.

110 East Main Street

Specialty Lending

Salineville, Ohio 43945

Phone: (330) 679-2324

Phone: (330) 679-0028

We agree that these new terms will go into effect immediately and that all other terms of the various debt facilities by and between Sky Bank and FCMC/Tribeca shall remain unchanged.

As always, please feel free to contact me with questions.

Regards,

/s/ Jerry S. Sutherin

Jerry S. Sutherin

Senior Vice President

Sky Bank, Specialty Lending Group

110 East Main Street

Salineville, OH 43945

330 ###-###-####