Form 8K Current Report
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15 (d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): February 22, 2007
FRANKLIN
CREDIT MANAGEMENT CORPORATION
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-17771
|
75-2243266
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
file number)
|
(I.R.S.
employer
identification
no.)
|
|
101
Hudson Street
Jersey
City, New Jersey
(Address
of principal executive offices)
|
|
07302
(Zip
code)
|
Registrant’s
telephone number, including area code: (201) 604-4402
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2.
below):
r
Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
r
Soliciting
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240. 14a-12)
r
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
r
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry
into a Material Definitive Agreement.
On
February 22, 2007, Tribeca Lending Corp. (“Tribeca”), a wholly-owned subsidiary
of Franklin Credit Management Corporation (the “Company”), closed its
acquisition from The New York Mortgage Company, LLC (“NYMC”) of certain assets
of NYMC used in connection with NYMC’s wholesale mortgage loan origination
business (the “Business”), pursuant to an Asset Purchase and Sale Agreement with
NYMC, dated as of February 14, 2007 (the “APA”). The Company had reported entry
into the APA in a Current Report on Form 8-K filed on February 15, 2007. In
connection with closing of the acquisition, the Company entered into the
following agreements, among others.
Assumption
of Lease.
Effective
February 22, 2007, Tribeca assumed NYMC’s lease for the space in Bridgewater,
New Jersey used in the Business (the “Lease”). The Lease relates to
approximately 14,070 rentable square feet of office space leased from First
States Investors 5200 LLC (the “Landlord”) at 1125 Route 22 West, Bridgewater,
New Jersey (the “Property”). The initial term of the lease expires on January
31, 2011, subject to a five (5) year tenant renewal option which must be
exercised prior to August 4, 2010. Under the Lease, the Landlord retained the
right to relocate the tenant to comparable space in another unidentified
building owned by Landlord in the event that another tenant demands such
relocation in connection with such other tenant's enforcement of the exclusive
use provisions of such other tenant's lease. If there is no other available
space owned by Landlord within a five (5) mile radius of the Property, tenant
and Landlord each may terminate the Lease.
The
Lease
provides for base rent of approximately $20,621 per month which increases in
increments to a base rent of approximately $21,996 per month in the last year
of
the Lease term. The base rent for the renewal term is 95% of Landlord's then
current market rental rate. In addition to the base rent, tenant is responsible
for paying Landlord on account of each calendar year during the lease term,
14.7147% of the difference between (x) the Operating Expenses (as hereinafter
defined) for such calendar year minus (y) the Operating Expenses for calendar
year 2005. The term “Operating Expenses” is defined in the Lease to include all
of Landlord's expenses and real estate taxes incurred in operating and
maintaining the Property. The Company will guarantee Tribeca’s obligations under
the Lease and NYMC will be released from any further obligation under the
lease.
Employment
Agreement with Richard W. Payne III
On
February 22, 2007, Franklin Credit Management Corporation (the “Company”)
entered into an employment agreement, effective as of February 22, 2007, between
the Company and Richard W. Payne III.
Under
the
employment agreement, Mr. Payne will serve as President of Tribeca.
Mr.
Payne
will be entitled to a base salary of $300,000, subject to adjustment by the
Board of Directors. Mr. Payne will be entitled to participate in a bonus pool
based on the performance of Tribeca and the loans it originates, which will
be
determined and paid in respect of each year on or before May 1st
of the
following year. Mr. Payne will also receive a car allowance of $400 per
month.
Mr.
Payne’s employment term runs for two years from the effective date of the
employment agreement, or until its earlier termination by the Company or Mr.
Payne. Pursuant to the employment agreement, the Company may terminate Mr.
Payne's employment with or without cause (as defined in the
employment
agreement) and Mr. Payne may terminate it with or without good reason (as
defined in the employment agreement).
In
the
event:
| · |
Mr.
Payne is terminated by the Company without
cause,
|
| · |
Mr.
Payne terminates his employment for good
reason,
|
| · |
Mr.
Payne’s employment terminates as a result of his death or disability (as
defined in the employment
agreement)
|
Mr.
Payne
will be entitled to severance, including a lump sum payment in an amount equal
to six months’ salary at the rate in effect immediately prior to such
termination a bonus in respect of any completed year prior to termination as
to
which such bonuses have not been paid and a prorated bonus in respect of the
year of termination.
Under
the
employment agreement, Mr. Payne is subject to covenants not engage in certain
competitive activities during his term of employment and for six months
thereafter, and not to solicit employees or certain business relations of the
Company during the term of his employment and for nine months thereafter.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release, dated February 23, 2007.
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
FRANKLIN
CREDIT
MANAGEMENT CORPORATION
By:
/s/
A. Gordon
Jardin
Name: A.
Gordon
Jardin
Title: Chief
Executive Officer
Date: February
23, 2007