EXHIBIT 10.1

   

FIRST AMENDMENT TO LOAN AGREEMENT

AND LINE OF CREDIT PROMISSORY NOTE

 

THIS FIRST AMENDMENT TO LOAN AGREEMENT AND LINE OF CREDIT PROMISSORY NOTE (this
"Amendment") is made and this 25th day of September, 2002, by and between 1ST
FRANKLIN FINANCIAL CORPORATION, a Georgia corporation, ("Borrower"), and
SOUTHTRUST BANK, an Alabama banking corporation, having its principal office in
Birmingham, Alabama ("Lender").

R E C I T A L S:

Borrower and Lender are parties to that certain Loan Agreement dated as of
September 25, 2001, (as may be amended or modified from time to time, the "Loan
Agreement")  Borrower, pursuant to the Loan Agreement, executed and delivered to
Lender that certain Line of Credit Promissory Note dated September 25, 2001, in
the original principal amount of Twenty One Million and No/100 Dollars
($21,000,000.00) (the “Note”).  Borrower has requested Lender to modify the
terms of the Loan Agreement and the Note.

Lender has agreed to the modification, subject to the execution and delivery of
this Amendment, the other documents required hereby and the terms and conditions
hereof.  

NOW, THEREFORE, for and in consideration of the mutual agreements set forth
herein, TEN DOLLARS ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower and Lender,
intending to be legally bound, agree as follows:

1.

Recitals; Definitions.  The foregoing recitals are true and correct and are
hereby incorporated herein by this reference.  All capitalized terms utilized
herein, not defined herein but defined in the Loan Agreement, shall have the
definitions ascribed thereto in the Loan Agreement.

2.

Amendments to Loan Agreement.

(a)

The definition of "Commitment Period" defined in Section 1.1 of the Loan
Agreement is hereby amended by deleting the reference to “September 25, 2002”
and inserting in lieu thereof “September 25, 2003”.

(b)

Section 2.3 of the Loan Agreement is hereby amended by deleting the second
sentence from said section in its entirety and inserting in lieu thereof the
following:

“The Commitment Fee is payable, in arrears, quarterly December 25, March 25,
June 25 and September 25 each year, during the Commitment Period.

3.

Amendment to Note.  The Note is hereby amended and modified to extend the
Maturity Date of the Note from “September 25, 2002” to “September 25, 2003”.

4.

No Novation; Reaffirmation.  The execution and delivery of this Amendment does
not and shall not constitute a novation of the Note, the Loan Agreement or any
of the obligations set forth therein.  Borrower hereby reaffirms the Loan
Agreement and the Note, as amended hereby, in all respects.  The Loan Agreement
and the Note, as amended hereby, shall continue hereafter in full force and
effect.  Borrower represents and warrants to Lender that there exists under the
Note, the Loan Agreement or any other loan documents related thereto
(collectively, the “Loan Documents") no Event of Default or any circumstance or
state of facts that with the giving of notice, the passage of time or both could
constitute an Event of Default.

5.

Modification of Loan Documents.  Borrower hereby reaffirms and restates each and
every warranty and representation set forth in all Loan Documents. The terms of
the Loan Documents are hereby modified and amended, effective as of the date
hereof, so that any reference in any of the Loan Documents to the Note or the
Loan Agreement shall refer to the Note or the Loan Agreement as amended herein
or pursuant hereto or as referred to herein.

6.

No Waiver or Implication.  Nothing herein shall constitute a waiver by Lender of
any default, whether known or unknown, which may exist under Note, the Loan
Agreement or any other Loan Document.  No action, inaction or agreement by
Lender, including, without limitation, any extension, indulgence, waiver,
consent or agreement of modification which may have occurred or have been
granted or entered into (or which may be occurring or be granted or entered into
hereunder or otherwise) with respect to nonpayment of the Loan or any portion
thereof, or with respect to matters involving security for the Loan, or with
respect to any other matter relating to the Loan, shall require or imply any
future extension, indulgence, waiver, consent or agreement by Lender.  Lender
has made no agreement, and is in no way obligated, to grant any future extens
ion, indulgence, waiver or consent with respect to the Loan or any matter
relating to the Loan.

7.

Release and Waiver.  Borrower hereby agrees and certifies to Lender that it has
absolutely no defenses, rights of set-off, claims or counterclaims against
Lender with respect to the Loan Agreement or any other of the Loan Documents.
 Borrower hereby waives, releases, and discharges Lender, its participants, and
all directors, officers, employees, and agents of Lender and its participants,
from any and all claims, demands, actions, or causes of action arising out of or
in any way relating to the obligations evidenced by the Loan Agreement, and any
of the other Loan Documents, including, without limitation, all known and
unknown matters, claims, transactions, or things occurring prior to the date of
this Amendment related to the obligations evidenced by the Loan Agreement and
the Loan Documents.

8.

Successors and Assigns.  This Amendment shall be binding upon and inure to the
benefit of the parties and their respective heirs, successors and assigns,
whether voluntary by act of the parties or involuntary by operation of law.  

9.

Counterparts.  This Amendment may be executed in multiple counterparts, each of
which shall constitute an original, but all of which shall constitute one
document.

10.

Conditions.  Lender’s agreements set forth herein are conditioned upon
satisfaction of each of the following conditions:

(a)

Corporate Proceedings.  All proper corporate proceedings shall have been taken
by Borrower to authorize this Amendment and the transactions contemplated
hereby.

(b)

Documentation.  All instruments and proceedings in connection with the
transactions contemplated by this Amendment shall be satisfactory in form and
substance to Lender, and Lender shall have received on the date of this
Amendment copies of all documents, including records of corporate proceedings,
which it may have requested in connection therewith, including, without
limitation, certified copies of resolutions adopted by the Board of Directors of
Borrower, certificates of good standing, and certified copies of the Articles of
Incorporation and By-Laws, and all amendments thereto, of Borrower.

(c)

Loan Documents.  Lender shall have received all other agreements, documents and
instruments required by Lender.

(d)

No Default.  No event shall have occurred or be continuing which constitutes an
Event of Default or which would constitute an Event of Default with the giving
of notice or the lapse of time or both; and neither the business nor assets nor
the condition, financial or otherwise, of Borrower shall have been adversely
affected in any material manner as the result of any fire, explosion, accident,
strike, riot, condemnation, act of God, or any other event or development.

(e)

Payment of Fees.  Borrower shall have paid all fees and expenses of Lender in
regard to this Amendment  and the transactions described herein.

(f)

Incumbency Certificate.  Lender shall have received an incumbency certificate,
dated as of the date of this Amendment, executed by the Secretary or Assistant
Secretary of Borrower, which shall identify by name and title and bear the
signature of the officer of such Borrower authorized to sign this Amendment on
behalf of Borrower.  Lender shall be entitled to rely upon such incumbency
certificate in completing the transactions contemplated herein or in the Loan
Documents and in all its other dealings with Borrower.

(g)

Disbursement Authorization.  Borrower shall have delivered to Lender such
disbursement authorizations, draw requests, and other documents and writings as
Lender shall have requested evidencing Borrower's request for disbursement of
funds.

 

IN WITNESS WHEREOF, each of Borrower and Lender has caused this instrument to be
executed under seal by its duly authorized officer as of the date first above
written.

 

BORROWER:

 

1ST FRANLIN FINANCIAL CORPORATION,

a Georgia corporation

   

By:

/s/ A. Roger Guimond

Name:  A. Roger Guimond

Title:    Vice President

 

[CORPORATE SEAL]

   

LENDER:

 

SOUTHTRUST BANK,

an Alabama banking corporation

   

By:

/s/ R. Christopher Mallet

Name:  R. Christopher Mallet

Title:    Vice President

 

[BANK SEAL]