Exhibit 10.2

 

AMENDED AND RESTATED

LINE OF CREDIT PROMISSORY NOTE

(this “Note)

   

$30,000,000.00

Atlanta, Georgia

September 24, 2004

   

FOR VALUE RECEIVED, the undersigned, 1ST FRANKLIN FINANCIAL CORPORATION
(“Borrower”), a Georgia corporation, promises to pay to the order of SOUTHTRUST
BANK (“Bank”), an Alabama banking corporation, at the office of Bank in Atlanta,
Georgia, or at such other place as the holder of this Note may from time to time
designate in writing, the principal sum of Thirty Million and No/100 Dollars
($30,000,000.00), or so much thereof as may have been advanced to Borrower from
time to time and not repaid by Borrower pursuant to the terms hereof, together
with interest on the unpaid principal amount of such advances at a per annum in
accordance with that certain Loan Agreement (as may be subsequently amended or
modified from time to time, the “Loan Agreement”) dated as of September 25, 2001
between Borrower and Bank, as previously amended, so long as the principal
amount, or any part thereof, is outstanding.  The principal amount of such
advances shall bear interest from the date of each such advance in accordance
with the Loan Agreement.

 

Interest provided for herein shall be due and payable monthly in arrears
commencing on the first (1st) day of October, 2004, and continuing on the same
day of each month thereafter through and until such time as there remains no
unpaid principal balance on the amounts advanced to Borrower hereunder or under
the Loan Agreement.

 

Principal and interest shall be payable in lawful money of the United States of
America.  Interest on the principal amount shall be calculated on the basis of a
365-day year by multiplying the principal amount by the per annum rate set forth
above, multiplying the product thereof by the actual number of days elapsed, and
dividing the product so obtained by 365.  The term “Base Rate” means the rate of
interest designated by Bank periodically as its Base Rate.  Borrower understands
that the Base Rate merely serves as a basis for calculating rates of interest
and is not necessarily the lowest rate charged by Bank.  The Base Rate on the
date of this Note is 4.75%.  Time is of the essence with respect to the amounts
due hereunder.

 

During the Commitment Period (as defined in the Loan Agreement), Borrower may
borrow, repay and reborrow the principal sum of this Note, all in accordance
with the terms of the Loan Agreement but only in such amounts and to the extent
therein provided. On September 23, 2005 or such earlier date as may be provided
in the Loan Agreement (the “Maturity Date”), this Note shall mature and all
principal, interest, and other fees and charges due with respect hereto, if not
previously paid, shall be immediately due and payable.

 

This Note may be prepaid as set forth in the Loan Agreement.

 

Borrower will pay to Bank a late charge equal to three percent (3%) of any
payment not received by Bank within fifteen (15) days after the due date
thereof. Collection or acceptance by Bank of such late charge shall not
constitute a waiver of any remedies of Bank provided herein.

 

This Note is referred to in and is entitled to the benefits of the Loan
Agreement and is secured by the security set forth and/or referred to in said
Loan Agreement. Any capitalized terms not otherwise defined herein shall have
the same meaning set forth in the Loan Agreement. Funds disbursed hereunder
shall be disbursed in accordance with the Loan Agreement.  This Note is
unconditionally guaranteed by Franklin Securities, Inc. (“Guarantor”) pursuant
to that certain Guaranty Agreement executed by Guarantor dated September 25,
2001, as amended and reaffirmed from time to time.

 

The principal sum evidenced by this Note, together with accrued but unpaid
interest, shall be due and payable on the Maturity Date, but in any event at the
option of Bank upon the occurrence of any Event of Default under the Loan
Agreement.

 

Upon any default, Borrower agrees to pay interest to Bank (or any holder) at the
annual rate of two percent (2%) in excess of the rate otherwise herein provided,
as said rate shall change from time to time, on the aggregate indebtedness
represented by this Note, including interest earned to maturity, from maturity,
whether or not resulting from acceleration, until such aggregate indebtedness is
paid in full.  The Bank (or any holder) shall be entitled to recover all
expenses of collecting this Note, including, without limitation, costs of court
and reasonable and actual attorneys’ fees.

 

The acceptance by Bank of any payment or payments due hereunder, or any part of
such payment, after any default shall not constitute a waiver of such default by
Bank.

 

With respect to the amounts due under this Note, Borrower waives the following:

 

1.

All rights of exemption of property from levy or sale under execution or other
process for the collection of debts under the Constitution or laws of the United
States or any state thereof; and

 

2.

Demand, presentment, protest, notice of dishonor, notice of non-payment, suit
against any party, diligence in collection, and all other requirements necessary
to charge or hold the undersigned liable on any obligations hereunder.

 

Regardless of any provision contained in this Note or any of the Loan Documents,
in no event shall the aggregate of all amounts that are contracted for, charged
or collected pursuant to the terms of this Note or any of the Loan Documents,
and that are deemed interest under Applicable Law, exceed the Maximum Rate.  No
provision of this Note or in any of the Loan Documents or the exercise by Bank
of any right hereunder or under any Loan Document or the prepayment by Borrower
of any of the Obligations or the occurrence of any contingency whatsoever, shall
entitle Bank to charge or receive, or to require Borrower to pay, interest or
any amounts deemed interest by Applicable Law (such amounts being referred to
herein collectively as “Interest”) in excess of the Maximum Rate, and all
provisions hereof or in any Loan Document which may purport to require Borrower
to pay Interest exceeding the Maximum Rate shall be without binding force or
effect to the extent only of the excess of Interest over such Maximum Rate.  Any
Interest charged or received in excess of the Maximum Rate (“Excess”), shall be
conclusively presumed to be the result of an accident and bona fide error, and
shall, to the extent received by Bank, at the option of Bank, either be applied
to reduce the principal amount of the Obligations or returned to Borrower.  The
right to accelerate the maturity of any of the Obligations does not include the
right to accelerate unaccrued interest and no such interest will be collected by
Bank.  All monies paid to Bank hereunder or under any of the Loan Documents
shall be subject to any rebate of unearned interest as and to the extent
required by Applicable Law. By the execution of this Note, Borrower covenants
that (i) the credit or return of any Excess shall constitute the acceptance by
Borrower of such Excess, and (ii) Borrower shall not seek or pursue any other
remedy, legal or equitable, against Bank, based in whole or in part upon
contracting for, charging or receiving any Interest in excess of the Maximum
Rate.  For the purpose of determining whether or not any Excess has been
contracted for, charged or received by Bank, all interest at any time contracted
for, charged or received from Borrower in connection with this Note shall, to
the extent permitted by Applicable Law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of the Obligations. Borrower and
Bank shall, to the maximum extent permitted under Applicable Law, (i)
characterize any non-principal payment as an expense, fee or premium rather than
as Interest and (ii) exclude voluntary prepayments and the effects thereof. The
provisions of this Section shall be deemed to be incorporated into each Loan
Document (whether or not any provision of this Section is referred to therein).

 

Borrower and Bank hereby waive any right to trial by jury on any claim,
counterclaim, setoff, demand, action or cause of action (a) arising out of or in
any way pertaining or relating to this Note, the Loan Agreement, any Loan
Document, or any other instrument, document or agreement executed or delivered
in connection with this Note or (b) in any way connected with or pertaining or
related to or incidental to any dealings of the parties hereto with respect to
this Note, the Loan Agreement, any Loan Document, or any other instrument,
document or agreement executed or delivered in connection herewith or in
connection with the transactions related thereto or contemplated thereby or the
exercise of either party’s rights and remedies thereunder, in all of the
foregoing cases whether now existing or hereafter arising, and whether sounding
in contract, tort or otherwise.  Borrower and Bank agree that either or both of
them may file a copy of this paragraph with any court as written evidence of the
knowing, voluntary and bargained agreement between the parties irrevocably to
waive trial by jury, and that any dispute or controversy whatsoever between them
shall instead be tried in a court of competent jurisdiction by a judge sitting
without a jury.

 

Bank shall not by any act, delay, omission, or otherwise be deemed to have
waived any of its rights or remedies, and no waiver of any kind shall be valid
unless in writing and signed by Bank.  All rights and remedies of Bank under the
terms of this Note and under applicable statutes or rules of law shall be
cumulative and may be exercised successively or concurrently. Borrower agrees
that there are no defenses, equities or setoffs in respect to the obligations
set forth herein.  The obligations of Borrower hereunder shall be binding upon
and enforceable against Borrower’s successors and assigns.  The obligations of
each person named as Borrower herein shall be joint and several obligations of
all such persons.  This Note shall be governed by, and construed in accordance
with, the laws of the State of Georgia without regard to any choice or conflict
of law principles.  Any provision in this Note which may be unenforceable or
invalid under any law shall be ineffective to the extent of such
unenforceability or invalidity without affecting the enforceability or validity
of any other provision hereof.  Any notice required to be given shall be deemed
given if mailed, postage prepaid, to Borrower at the address set forth in the
Loan Agreement.

 

This Note is an amendment and restatement of, and replaces in its entirety, that
certain Line of Credit Promissory Note dated September 25, 2001, as amended,
made by Borrower to the order of Bank in the original principal amount of
Twenty-One Million and No/100 Dollars ($21,000,000.00) (the “Original Note”),
and is not intended to be, nor shall it be construed to create a novation or
accord and satisfaction of the Original Note or any other obligation of Borrower
owing to Bank at any time and shall be only a modification and increase of
existing obligations of Borrower to Bank.

   

IN WITNESS WHEREOF, Borrower has executed this instrument under seal as of the
day and year first above written.

 

BORROWER:

 

1st FRANKLIN FINANCIAL CORPORATION, a Georgia corporation

   

By:     /s/  A. Roger Guimond

     A. Roger Guimond

     Vice President-Chief Financial Officer

 

[CORPORATE SEAL]

   

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