Document:

THIS NOTE AND THE COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)

 

 

US $70,000.00 

 

 

HEMP NATURALS INC.

8% CONVERTIBLE REDEEMABLE NOTE

DUE DECEMBER 19, 2019

BACK END NOTE

 

 

FOR VALUE RECEIVED,
Hemp Naturals Inc. (the “Company”) promises to pay to the order of GS CAPITAL PARTNERS, LLC and its authorized successors
and Permitted Assigns, defined below, ("Holder"), the aggregate principal face amount of Seventy Thousand Dollars
exactly (U.S. $70,000.00) on December 19, 2019 ("Maturity Date") and to pay interest on the principal amount outstanding
hereunder at the rate of 8% per annum commencing on December 19, 2018 (“Issuance Date”). The interest will be paid
to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this
Note. This Note contains a $1,500.00 OID such that purchase price shall be $68,500.00. The principal of, and interest on, this
Note are payable at 30 Broad Street, Suite 1201, New York, NY 10004, initially, and if changed, last appearing on the records of
the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the
outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld,
to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the
Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall
satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer.
Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein. Permitted Assigns means any Holder
assignment, transfer or sale of all or a portion of this Note accompanied by an Opinion of Counsel as provided for in Section 2(f)
of the Securities Purchase Agreement.

 

This Note is subject
to the following additional provisions:

 

    	 		 

     

    

1.       This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder
shall pay any tax or other governmental charges payable in connection therewith. To the extent that Holder subsequently transfers,
assigns, sells or exchanges any of the multiple lesser denomination notes, Holder acknowledges that it will provide the Company
with Opinions of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.

 

2.       The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

 

3.       This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act"), applicable
state securities laws and Sections 2(f) and 5(f) of the Securities Purchase Agreement. Any attempted transfer to a non-qualifying
party shall be treated by the Company as void. Prior to due presentment for transfer of this Note, the Company and any agent of
the Company may treat the person in whose name this Note is duly registered on the Company's records as the owner hereof for all
other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound by notice
to the contrary. Any Holder of this Note electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition
to the requirements set forth in Section 4(a), and any prequalified prospective transferee of this Note, also is required to give
the Company written confirmation that this Note is being converted ("Notice of Conversion") in the form annexed
hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion shall be the Conversion
Date. All notices of conversion will be accompanied by an Opinion of Counsel.

 

4.(a)The Holder of this Note
is entitled, at its option, at any time after 6 months and full cash payment, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock") at a price
("Conversion Price") for each share of Common Stock equal to 55% of the lowest trading price
of the Common Stock as reported on the National Quotations Bureau OTC Market exchange which the Company’s shares are traded
or any exchange upon which the Common Stock may be traded in the future ("Exchange"), for the twenty
prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such Notice
of Conversion is delivered together with an Opinion of Counsel, by fax or other electronic method of communication to the Company
after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares
have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated
by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice
of Conversion. Accrued, but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions
of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. To the
extent the Conversion Price of the Company’s Common Stock closes below the par value per share, the Company will take all
steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The
Company agrees to honor all conversions submitted pending this increase. In the event the Company experiences a DTC “Chill”
on its shares, the conversion price shall be decreased to 45% instead of 55% while that “Chill” is in effect.
In no event shall

 

    	 	2	 

     

    

the
Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned
by the Holder and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of the Company (which may be
increased up to 9.9% upon 60 days’ prior written notice by the Investor). All the terms set forth herein, including but not
limited to interest rate, prepayment terms, conversion discount or lookback period will be adjusted downward (i.e. for the benefit
of the Holder) if the Company offers a more favorable conversion discount (whether via interest, rate OID or otherwise) or lookback
period to another party or otherwise grants any more favorable terms to any third party than those contained herein while this
note is in effect.

 

(b)       Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in
Common Stock ("Interest Shares"). Holder may, at any time commencing six months after the date of funding to the Company
by the Holder, send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a)
above. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid
principal balance of this Note to the date of such notice.

 

(c)       This
Note may not be prepaid, except that if this Note has not been cash paid, and if the $70,000 Rule 144 convertible redeemable note
issued by the Company of even date herewith is redeemed by the Company within 6 months of the issuance date of such Note, all obligations
of the Company under this Note and all obligations of the Holder under the Holder issued Back End Note will be automatically be
deemed satisfied and this Note and the Holder issued Back End Note will be automatically be deemed cancelled and of no further
force or effect.

 

(d)        Upon
(i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions, (ii) a reclassification, capital reorganization (excluding an increase in authorized capital) or other change or
exchange of outstanding shares of the Common Stock, other than a forward or reverse stock split or stock dividend, or (iii) any
consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other
than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii)
being referred to as a "Sale Event"), then, in each case, the Company shall, upon request of the Holder, redeem this
Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election
of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid
interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.

 

(e)        In
case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which
this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note
shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of
stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the
Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions
shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash,
the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.

 

    	 	3	 

     

    

5.       No
provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.       The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of
dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

7.       The
Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder
in collecting any amount due under this Note.

 

8.       If
one or more of the following described "Events of Default" shall occur:

 

(a)       The
Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company;
or

 

(b)       Any
of the representations or warranties made by the Company herein or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or
the Securities Purchase Agreement under which this note was issued shall be false or misleading in any respect; or

 

(c)       The
Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or any other note issued to the Holder; or

 

(d)       The
Company shall (1) become insolvent (which does not include a “going concern opinion); (2) admit in writing its inability
to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its
dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part
of its property or business; (5) file a petition for bankruptcy relief, consent to the filing of such petition or have filed against
it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable; or

 

(e)       A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or

 

(f)       Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company; or

 

    	 	4	 

     

    

(g)       One
or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in
the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or

 

(h)       Defaulted
on or breached any term of any other note of similar debt instrument into which the Company has entered and failed to cure such
default within the appropriate grace period; or

 

(i)       The
Company shall have its Common Stock delisted from an exchange (including the OTC Markets exchange) or, if the Common Stock trades
on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934
act reports with the SEC;

 

(j)       If
a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;

 

(k)       The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion which includes an Opinion of Counsel expressing an opinion which supports the removal
of a restrictive legend; or

 

(l)        The
Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder.

 

(m)       The
Company’s Common Stock has a closing bid price of less than $0.09 per share for at least 5 consecutive trading days; or

 

(n)        The
aggregate dollar trading volume of the Company’s Common Stock in any 5 trading day period is less than $15,000 (fifteen thousand);
or

 

(o)        The
Company shall cease to be “current” in its filings with the Securities and Exchange Commission; or

 

(p) The Company shall
lose the “bid” price for its stock in a market (including the OTCBB marketplace or other exchange)

 

Then, or at any time thereafter, unless
cured (except for 8(m) and 8(n) which are incurable defaults, the sole remedy of which is to allow the Holder to cancel
both this Note and the Holder Issued Note, and in each and every such case, unless such Event of Default shall have been waived
in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder
and in the

 

    	 	5	 

     

    

Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand,
protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything
herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without
expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights
or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per annum or, if
such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event of a
breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4th day after the
conversion notice was delivered to the Company. This penalty shall increase to $500 per day beginning on the 10th day.
The penalty for a breach of Section 8(p) shall be an increase of the outstanding principal amounts by 20%. Further, if a breach
of Section 8(o) occurs or is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the
lowest closing bid price during the delinquency period as a base price for the conversion. For example, if the lowest closing bid
price during the delinquency period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future
conversions at $0.005 per share.

 

If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails
in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.

 

Make-Whole for Failure
to Deliver Loss. At the Holder’s election, if the Company fails for any reason to deliver to the Holder the conversion shares
by the by the 3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder incurs a Failure
to Deliver Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable to the Holder
in respect of the Failure to Deliver Loss and the Company must make the Holder whole as follows:

Failure to Deliver Loss = [(Highest VWAP
price for the 30 trading days on or after the day of exercise) x (Number of conversion shares)]

 

The Company must pay the Failure to Deliver
Loss by cash payment, and any such cash payment must be made by the third business day from the time of the Holder’s written
notice to the Company.

 

9.       In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

10.       Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.

 

11.       The
Company represents that it is not a “shell” issuer and that if it previously has been a “shell” issuer
that at least 12 months have passed since the Company has reported Form 10 type information indicating it is no longer a “shell
issuer.

 

    	 	6	 

     

    

12.       Prior
to cash funding of this Note, The Company will issue irrevocable transfer agent instructions reserving 3x the number of shares
of Common Stock necessary to allow the holder to convert this note based on the discounted conversion price set forth in Section
4(a) herewith. Upon full conversion of this Note, the reserve representing this Note shall be cancelled. The Company will pay all
transfer agent costs associated with issuing and delivering the shares. If such amounts are to be paid by the Holder, it may deduct
such amounts from the Conversion Price. Conversion Notices may be sent to the Company or its transfer agent via electric mail.
The Company will instruct its transfer agent to provide the outstanding share information to the Holder in connection with its
conversions.

 

13.       The
Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.

 

14.       If
it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest permitted
under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage
of any law that would prohibit or forgive the Company from paying all or a portion of the principal or interest on this Note.

 

15.       This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be
performed within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and
the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of
New York or in the Federal courts sitting in the county or city of New York. This Agreement may be executed in counterparts, and
the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.

 

    	 	7	 

     

    

IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed by an officer thereunto duly authorized.

 

 

Dated: December 27, 2018

 

 

 

HEMP NATURALS INC.

 

By: /s/ Levi Jacobson

 

Title: CEO

 

    	 	8	 

     

    

 

EXHIBIT A

 

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder
in order to Convert the Note)

 

The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Hemp Naturals Inc. (“Shares”)
according to the conditions set forth in such Note, as of the date written below.

 

If Shares are to be
issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable
with respect thereto.

 

Date of Conversion: __________________

Applicable Conversion Price: __________________

Signature: __________________

 

[Print Name of Holder and Title of Signer]

 

Address: __________________

 

 

SSN or EIN: __________________

Shares are to be registered in the following name: __________________

 

Name: __________________

Address: __________________

Tel: __________________

Fax: __________________

SSN or EIN: __________________

 

Shares are to be sent or delivered to the following account:

 

Account Name: __________________

Address: __________________

    	 	9Amendment to Loan and Security Agreement

EXHIBIT 10.1

 

EIGHTH AMENDMENT TO 

LOAN AND SECURITY AGREEMENT

 

This Eighth Amendment to Loan and Security Agreement (“Amendment”) is dated as of December 28, 2018 by and among 1ST FRANKLIN FINANCIAL CORPORATION (“Borrower”), WELLS FARGO BANK, N.A., successor by merger to Wells Fargo Preferred Capital, Inc., as agent for Lenders (in such capacity, “Agent”) and the financial institutions a party hereto as lenders (collectively, the “Lenders” and each is a “Lender”).

BACKGROUND

 

A.Borrower, Lenders, and Agent are parties to a certain Loan and Security Agreement dated as of September 11, 2009 (as amended or modified from time to time, the “Loan Agreement”) and related agreements, instruments and documents (collectively with the Loan Agreement, the “Existing Loan Documents”).  Capitalized terms used but not otherwise defined in this Amendment shall have the meanings respectively ascribed to them in the Loan Agreement. 

B.Borrower has requested and Agent and Lenders have agreed to amend the Loan Agreement in certain respects, all on the terms and conditions set forth herein. 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby promise and agree as follows:

1.Amendments.    

 

(a)Definition. The following definition contained in Section 1.1 of the Loan Agreement is hereby amended and restated as follows:  

 

“Maturity Date” means December 31, 2019, as such date may be extended from time to time in accordance with the provisions of Section 2.4 of this Agreement. 

 

2.Effectiveness Conditions.  This Amendment shall be effective upon the completion of the following conditions precedent (all agreements, documents and instruments to be in form and substance satisfactory to Agent and Agent’s counsel): 

(a)Execution and delivery by Borrower, Guarantors and Lenders of this Amendment to Agent; 

(b)Execution and/or delivery by the parties of all other agreements, instruments and documents requested by Agent to effectuate and implement the terms hereof and the Existing Loan Documents. 

3.Representations and Warranties.  Borrower represents and warrants to Agent and Lenders that: 

(a)All warranties and representations made to Agent and Lenders under the Loan Agreement and the Existing Loan Documents are true and correct in all material respects. 

(b)The execution and delivery by Borrowers and Guarantors of this Amendment and the performance by each of them of the transactions herein and therein contemplated do not and will not violate any provisions of any law, rule, regulation, judgment, order, writ, decree, determination or award or breach any provisions of the charter, bylaws or other organizational documents of any Borrower or any Guarantor, or constitute a default or result in the creation or imposition of any security interest in, or lien or encumbrance upon, any assets of any Borrower or any Guarantor (immediately or with the passage of time or with the giving of notice and passage of time, or both) under any other contract, agreement, indenture or instrument to which a Borrower or a Guarantor is a party or by which a Borrower or a Guarantor or its property is bound with failure to comply resulting in a material adverse change in the business, operations, property (including the Collateral), prospects or financial condition of any Borrower or any Guarantor. 

(c)This Amendment and any assignment, instrument, document, or agreement executed and delivered in connection herewith will be valid, binding and enforceable in accordance with its respective terms. 

(d)No Event of Default or Default has occurred under the Loan Agreement. 

4.Representations and Release of Claims.  Except as otherwise specified herein, the terms and provisions hereof shall in no manner impair, limit, restrict or otherwise affect the obligations of Borrower, any Guarantor or any third party to Agent and Lenders as evidenced by the Existing Loan Documents.  Borrower and each Guarantor hereby acknowledge, agree, and represent that (a) as of the date of this Amendment, there are no known claims or offsets against, or defenses or counterclaims to, the terms or provisions of the Existing Loan Documents or the other obligations created or evidenced by the Existing Loan Documents; (b) as of the date of this Amendment, neither Borrower nor any Guarantor has any known claims, offsets, defenses or counterclaims arising from any of Agent’s acts or omissions with respect to the Existing Loan Documents or Agent’s performance under the Existing Loan Documents; (c) as of the date of this Amendment, Borrower has reviewed and reconciled all Advances, calculations of interest due and principal owing, and agrees with and has no claims regarding any such matters and (d) Borrower promises to pay to the order of Agent and Lenders the indebtedness evidenced by the Note according to the terms thereof.  In consideration of the modification of certain provisions of the Existing Loan Documents, all as herein provided, and the other benefits received by Borrower hereunder, Borrower and each Guarantor hereby RELEASE, RELINQUISH and forever DISCHARGE Agent and Lenders, and their predecessors, successors, assigns, shareholders, principals, parents, subsidiaries, agents, officers, directors, employees, attorneys and representatives (collectively, the “Released Parties”), of and from any and all present known claims, demands, actions and causes of action of any and every kind or character, which Borrower or Guarantors, or any of them, has or may have against Released Parties arising out of or with respect to any and all transactions relating to the Loan Agreement, the Note, the Guaranties, and the other Existing Loan Documents occurring prior to the date hereof.  Further, Borrower and Guarantors warrant and represent that they are not now aware of any claims or potential claims against Agent or Lenders pursuant to the Loan Agreement.  

5.Collateral.  As security for the payment of the Obligations to Agent and Lenders under the Loan Agreement and satisfaction by Borrower of all covenants and undertakings contained in the  

Loan Agreement and the Existing Loan Documents, Borrower reconfirms the prior security interest and lien on, upon and to, its Collateral, whether now owned or hereafter acquired, created or arising and wherever located.  Borrower hereby confirms and agrees that all security interests and Liens granted to Agent for the ratable benefit of Lenders continue in full force and effect and shall continue to secure the Obligations.  All Collateral remains free and clear of any Liens other than Permitted Liens.  Nothing herein contained is intended to in any manner impair or limit the validity, priority and extent of Agent’s existing security interest in and Liens upon the Collateral.

6.Acknowledgment of Indebtedness and Obligations.  Borrower and Guarantors hereby acknowledge and confirm that as of the date hereof, Borrower is indebted to Agent and Lenders, without known defense, setoff or counterclaim, under the Loan Agreement (in addition to any other indebtedness or obligations owed by Borrowers to Wells Fargo Affiliates) in the aggregate principal amount of $52,500,000, plus continually accruing interest and all fees, costs, and expenses, including reasonable attorneys’ fees, incurred through the date hereof. 

7.Ratification of Existing Loan Documents.  This Amendment shall be incorporated into and deemed a part of the Loan Agreement.  Except as expressly set forth herein, all of the terms and conditions of the Loan Agreement and Existing Loan Documents are hereby ratified and confirmed and continue unchanged and in full force and effect.  All references to the Loan Agreement shall mean the Loan Agreement as modified by this Amendment. 

8.Acknowledgment of Guarantors.  By execution of this Amendment, each Guarantor hereby acknowledges the terms and conditions of this Amendment and confirms that such Guarantor guarantees, as surety, all of Borrower’s Obligations to Agent and Lenders pursuant to and subject to the terms, conditions and limitations contained in its respective Guaranty. 

9.Governing Law.  THIS AMENDMENT, THE LOAN AGREEMENT AND THE EXISTING CREDIT DOCUMENTS SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN THE STATE OF NEW YORK AND SHALL, TOGETHER WITH ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

10.Counterparts.  This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same respective agreement.  Signature by facsimile or PDF shall also bind the parties hereto. 

SIGNATURES ON FOLLOWING PAGE

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized officers as of the date first above written.

	BORROWER:

	1ST FRANKLIN FINANCIAL CORPORATION

 

 

By: /s/ A. Roger Guimond                           

Name: A. Roger Guimond                                 

Title: Exectutive Vice President and CFO       

 

	GUARANTORS:

	FRANDISCO LIFE INSURANCE COMPANY 

 

 

By: /s/ A. Roger Guimond                           

Name: A. Roger Guimond                                

Title: President                                                

 

	 

	FRANDISCO PROPERTY & CASUALTY LIFE INSURANCE COMPANY 

 

 

By: /s/ A. Roger Guimond                           

Name: A. Roger Guimond                                 

Title: President                                                

 

	 

	FRANKLIN SECURITIES, INC.

 

 

By: /s/ A. Roger Guimond                          

Name: A. Roger Guimond                                

Title: Vice President                                        

 

	AGENT AND LENDER:

	WELLS FARGO BANK, N.A.

 

 

By:  /s/ William M. Laird                             

William M. Laird, Senior Vice President 

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO EIGHTH AMENDMENT

TO LOAN AND SECURITY AGREEMENT]

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