RATE CAP TRANSACTION AGREEMENT
This
Agreement is made as of August 29, 2006 (the "Trade Date"), by and among
LASALLE
BANK NATIONAL ASSOCIATION (the
"Floating Rate Payer") and FRANKLIN
CREDIT MANAGEMENT CORPORATION (the
"Fixed Rate Payer").
WHEREAS,
the Fixed Rate Payer desires to enter into an arrangement for the purpose of
limiting its interest expense on certain existing floating rate liabilities;
and
WHEREAS,
the Floating Rate Payer desires to enter into such an arrangement with the
Fixed
Rate Payer;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Payment
of Fixed Amount.
The
Fixed Rate Payer agrees to pay to the Floating Rate Payer a Fixed Amount USD
101,000.00 on or before August 31, 2006 (the "Fixed Rate Payer Payment Date"),
in consideration of the Floating Rate Payer agreeing to make a payment to the
Fixed Rate Payer for each Calculation Period (as defined below) during which
the
Floating Rate (as defined below) exceeds the Cap Rate (as defined
below).
2. Payment
of Floating Amounts.
The
Floating Rate Payer agrees to make a payment of the Floating Amount (as defined
below) on each Floating Rate Payer Payment Date (as defined below) in
immediately available funds at such location as the Fixed Rate Payer shall
direct. For each Floating Rate Payer Payment Date, the Floating Rate Payer
shall
deliver to the Fixed Rate Payer a notice containing a computation of the
Floating Amount payable.
3. Definitions.
The
definitions and provisions contained in the 2000 ISDA Definitions (as published
by the International Swap Dealers Association, Inc.) are incorporated by
reference into this Agreement. In the event of any inconsistency between those
definitions and provisions and the provisions of this Agreement, the provisions
of this Agreement shall govern.
(a) "Business
Day" shall mean a day on which banks are open in New York for the transaction
of
general commercial banking business and
on
which dealings may be carried on in the London interbank eurodollar
market.
(b) "Calculation
Agent" shall mean the Floating Rate Payer.
(c) "Calculation
Period" shall mean each period from, and including, one Floating Rate Payer
Payment Date to, but excluding, the next following Floating Rate Payer Payment
Date, except that (i) the initial Calculation Period will commence on, and
include, the Effective Date, and (ii) the final Calculation Period will end
on,
but exclude, the Termination Date.
(d) "Cap
Rate" shall mean 5.75%.
(e)
"Designated
Maturity" shall mean 1 Month
(f) "USD"
and
the sign "$" mean lawful currency of the United States of America.
(g) "Effective
Date" shall mean August 31, 2006.
(h) "Floating
Amount" with respect to any Calculation Period shall mean an amount equal to
(i)
the amount by which the interest earned on the Notional Amount for the
Calculation Period at the Floating Rate would exceed (ii) the amount of interest
which would have been earned on the Notional Amount for the Calculation Period
at the Cap Rate, all said calculations being based on a Floating Rate Day Count
Fraction of Actual/360. (If the amount calculated in clause (i) shall be less
than the amount calculated under clause (ii), the Floating Amount for said
Calculation Period shall be zero).
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(i) "Floating
Rate" means (i) with respect to the initial Calculation Period, the rate
determined for the Floating Rate Option two (2) London Banking Days prior to
the
Effective Date for value on the Effective Date; and (ii) with respect to any
subsequent Calculation Period, the rate determined with respect to such period
for the Floating Rate Option.
(j)
"Floating
Rate Option" shall mean USD-LIBOR-BBA
(k) "Floating
Rate Payer Payment Date" shall mean the last day of each month, commencing
on
September 30, 2006 and ending on the Termination Date, subject to adjustment
in
accordance with the Modified Following Business Day Convention.
(l)
"Notional
Amount" shall mean USD 300,000,000.00.
(m) "Reset
Date" shall mean each Floating Rate Payer Payment Date to, but not including,
the Termination Date.
(n) "Termination
Date" shall mean August 31, 2007.
4. Representations
and Warranties - The Fixed Rate Payer.
The
Fixed Rate Payer hereby represents and warrants to the Floating Rate Payer
that:
(a) The
Fixed
Rate Payer is a corporation validly existing and in good standing under the
laws
of the jurisdiction of its organization and such jurisdiction is a State of
the
United States of America.
(b) The
Fixed
Rate Payer has the corporate power and authority to own its property and assets
and to carry on its business as currently conducted.
(c) The
Fixed
Rate Payer has the corporate power to execute, deliver and perform this
Agreement.
(d) The
execution, delivery and performance of this Agreement (i) have been duly
authorized by all requisite corporate or organizational action on the part
of
the Fixed Rate Payer and (ii) will not (A) violate (1) any provision of law,
(2)
the constitutional documents of the Fixed Rate Payer, (3) any applicable order
of any court or agency of government or (4) any indenture, agreement or
other instrument to which the Fixed Rate Payer is a party or by which the Fixed
Rate Payer or any of its property or assets is bound, (B) be in conflict with,
result in a breach of or constitute (with due notice or lapse of time or both)
a
default under any indenture, agreement or other instrument to which the Fixed
Rate Payer is a party or by which the Fixed Rate Payer or any of its property
or
assets is bound or (C) result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any property or assets of the
Fixed
Rate Payer.
(e) This
Agreement has been duly executed and delivered by the Fixed Rate Payer and
constitutes a legal, valid and binding obligation of the Fixed Rate Payer,
enforceable in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency or similar laws
from time to time in effect).
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(f) No
action, consent or approval of, or registration or filing with, or any other
action by any governmental agency, bureau, commission or court has been required
in connection with the execution, delivery and performance by the Fixed Rate
Payer of this Agreement, or if so required, such registration or filing has
been
made, such consent or approval has been given or such other appropriate action
has been taken.
5. Representations
and Warranties - The Floating Rate Payer.
The
Floating Rate Payer hereby represents and warrants to the Fixed Rate Payer
that:
(a) The
Floating Rate Payer is a bank organized or formed under the laws of the United
States of America.
(b) The
Floating Rate Payer has the corporate or organizational power and authority
to
own its property and assets and to carry on its business as currently
conducted.
(c) The
Floating Rate Payer has the corporate or organizational power to execute,
deliver and perform this Agreement.
(d) The
execution, delivery and performance of this Agreement (i) have been duly
authorized by all requisite corporate or organizational action on the part
of
the Floating Rate Payer and (ii) will not (A) violate (1) any provision of
law,
(2) the constitutional documents of the Floating Rate Payer, (3) any applicable
order of any court or agency of government or (4) any indenture, agreement
or
other instrument to which the Floating Rate Payer is a party or by which the
Floating Rate Payer or any of its property or assets is bound, (B) be in
conflict with, result in a breach of or constitute (with due notice or lapse
of
time or both) a default under any indenture, agreement or other instrument
to
which the Floating Rate Payer is a party or by which the Floating Rate Payer
or
any of its property or assets is bound or (C) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
any
property or assets of the Floating Rate Payer.
(e) This
Agreement has been duly executed and delivered by the Floating Rate Payer and
constitutes a legal, valid and binding obligation of the Floating Rate Payer,
enforceable in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency or similar laws
from time to time in effect).
(f) No
action, consent or approval of, or registration or filing with, or any other
action by any governmental agency, bureau, commission or court has been required
in connection with the execution, delivery and performance by the Floating
Rate
Payer of this Agreement, or if so required, such registration or filing has
been
made, such consent or approval has been given or such other appropriate action
has been taken.
6. Assignment
and Transfer.
Neither
party may assign or transfer its rights or obligations under this Agreement
without the prior written consent of the other party and any purported
assignment in violation of this Section shall be void; provided,
however,
that
the consent to transfer shall not be unreasonably withheld.
7. Other
Provisions Relating to the Fixed Amount.
In no
event shall the Fixed Amount (or any portion thereof) paid to the Floating
Rate
Payer pursuant to Section 1 hereof be refundable, provided that nothing
contained herein shall be deemed to constitute a waiver by the Fixed Rate Payer
of any of its rights to collect damages from, or to enforce other remedies
against, the Floating Rate Payer in the event that the Floating Rate Payer
fails
to perform its obligations hereunder.
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8. Amendments
and Waivers.
No
amendment, modification or waiver with respect to this Agreement will be
effective unless in writing and executed by each of the parties
hereto.
9. Notices.
All
notices, requests and other communications to either party hereunder shall
be in
writing and shall be given to such party at its address, telex or telecopier
number set forth on the signature page hereof
or
such other address, telex or telecopier number as such party may hereafter
specify for the purpose of notice to the other party.
10. Termination.
This
Agreement shall terminate on the Termination Date, subject to any applicable
requirement for payment as set forth in Section 2 hereof.
11. Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
12. Authorization
Documents.
Upon
the
execution of this Agreement, the Fixed Rate Payer shall promptly deliver to
the
Floating Rate Payer, certified evidence of the authority, incumbency and
specimen signature of each authorized person executing this Agreement on its
behalf.
13. Account
Details:
Payments
to the Floating Rate Payer:
LaSalle
Bank National Association, ABA #▇▇▇▇-▇▇▇▇-▇, A/C 2090102-9030, Attn: Derivative
Operations
Payments
to the Fixed Rate
Payer:
Please Advise
14. Set-off.
Upon
the occurrence of any default by the Fixed Rate Payer with respect to any
indebtedness or other amounts payable by the Fixed Rate Payer to the Floating
Rate Payer (irrespective of the currency, place of payment or booking office
of
the obligation) under any other agreements between the Fixed Rate Payer and
the
Floating Rate Payer or instrument(s) or undertaking(s) issued or executed by
one
party to, or in favor of, the other party, the Floating Rate Payer may at its
option (but shall not be obligated to) reduce such amounts by its setoff of
such
amounts against any amount(s) payable (whether at such time or in the future
or
upon the occurrence of a contingency) by the Floating Rate Payer to the Fixed
Rate Payer hereunder. For purposes hereof, if a payment obligation is
unascertained, the Floating Rate Payer may in good faith estimate that
obligation and setoff in respect of the estimate, subject to an accounting
when
the obligation is ascertained.
15.
Relationship
Between the Parties.
Each
party represents to the other party that:
(a) Non-Reliance.
It is
acting for its own account, and it has made its own independent decisions to
enter into this Transaction and as to whether this Transaction is appropriate
or
proper for it based upon its own judgment and upon advice from such advisors
as
it has deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation to enter
into this Transaction; it being understood that information and explanation
related to the terms and conditions of this Transaction shall not be considered
investment advice or a recommendation to enter into this Transaction. No
communication (written or oral) received from the other party shall be deemed
to
be an assurance or guarantee as to the expected results of this
Transaction.
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(b) Assessment
and Understanding.
It is
capable of assessing the merits of and understanding (on its own behalf or
through independent professional advice), and understands and accepts the terms,
conditions and risks of this Transaction. It is also capable of assuming, and
assumes, the risks of this Transaction.
(c) Status
of Parties. The
other
party is not acting as a fiduciary or an advisor to it in respect of this
Transaction.
16.
Waiver
of Jury Trial.
Each
party irrevocably waives any and all right to trial by jury in any legal
proceeding instituted in connection with this Agreement or this Transaction
to
the fullest extent permitted by law. As to any matter for which a jury trial
cannot be waived, each party agrees not to assert any such matter as a cross
claim or counterclaim in, nor move to consolidate the same with, any legal
proceeding in which a jury trial is waived."
17. IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To
help
the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each entity or person that opens an
account.
When
you
open an account, we will ask for the business’ full legal name, street address,
and tax identification number and other information that will assist us in
identifying the business. We may also ask for other identifying information
such
as your date of birth and a copy of your driver’s license.
[Signature
Following Page]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
LASALLE
BANK NATIONAL ASSOCIATION
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FRANKLIN
CREDIT MANAGEMENT CORPORATION
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