Document:

Exhibit

Exhibit 10.1

INCREMENTAL AGREEMENT AND AMENDMENT NO. 1 
INCREMENTAL AGREEMENT AND AMENDMENT NO. 1 dated as of March 10, 2020 (this “Incremental Agreement”), by and among CAPITOL INTERMEDIATE HOLDINGS, LLC, a Delaware limited liability company (“Holdings”), CAPITOL INVESTMENT MERGER SUB 2, LLC, a Delaware limited liability company (the “Borrower”), JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent (in such capacities, the “Administrative Agent”) under the Credit Agreement (as defined below), each Letter of Credit Issuer, the Swingline Lender, MUFG UNION BANK, N.A., as “Increasing Lender” (the “Increasing Lender”) and the Lenders party hereto.
WHEREAS, reference is hereby made to the Credit Agreement dated as of July 31, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Credit Agreement”), among Holdings, the Borrower, the Administrative Agent, Fifth Third Bank as the Additional Collateral Agent, the other agents, arrangers and bookrunners party thereto and each Lender from time to time party thereto;
WHEREAS, pursuant to Section 2.6 of the Credit Agreement, the Borrower may obtain a “Revolving Credit Commitment Increase” by, among other things, entering into an “Incremental Agreement” in accordance with the terms and conditions of the Credit Agreement;
WHEREAS, the Borrower has notified the Administrative Agent that it is requesting a “Revolving Credit Commitment Increase” in the amount of $35,000,000 (the “Revolving Credit Commitment Increase”) pursuant to Section 2.6(a) of the Credit Agreement;
WHEREAS, the Increasing Lender party to this Incremental Agreement as a lender with respect to the Revolving Credit Commitment Increase set forth on Schedule 1.1 hereto has indicated its willingness to provide such Revolving Credit Commitment Increase on the terms and subject to the conditions herein;
WHEREAS, in accordance with Section 12.1(a), the Borrower and the Required Lenders have agreed that four Appraisals per twelve (12) month period may be conducted at the Borrower’s expense; and
WHEREAS, the Required Lenders have agreed to amend Section 8.4 of the Credit Agreement and the parties hereto have indicated their willingness to amend certain other terms of the Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:
Section 1.Defined Terms; References.  Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.  Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Credit Agreement shall, after this Incremental Agreement becomes effective, refer to the Credit Agreement as amended hereby.  This Incremental Agreement is a “Loan Document” and an “Incremental Agreement,” each as defined under the Credit Agreement.
Section 2.Revolving Credit Commitment Increase.  
(a)    The Borrower and the Increasing Lender hereby agree that, subject to the satisfaction of the conditions in Section 6 hereof, on the Commitment Effective Date (as defined below), the Revolving Credit Commitment Increase of the Increasing Lender shall become effective and the Commitments shall be deemed increased by the amount of the Revolving Credit Commitment Increase of the Increasing Lender.  Pursuant to Section 2.6 of the Credit Agreement, the Revolving Credit Commitment Increase shall be a Commitment for all purposes under the Credit Agreement and each of the other Loan Documents and shall have terms identical to the Commitments outstanding under the Credit Agreement immediately prior to the date hereof.
(b)    The Increasing Lender acknowledges and agrees that upon the Commitment Effective Date, the Increasing Lender shall be a “Lender” under, and for all purposes of, the Credit Agreement and the other Loan Documents, and shall be subject to and bound by the terms thereof, and shall perform all the obligations of and shall have all rights of a Lender thereunder.
(c)    Upon the Commitment Effective Date, Schedule 1.1 of the Credit Agreement will be amended and restated in its entirety by Schedule 1.1 hereto. 
Section 3.Reallocation.  The reallocation of the Lenders’ Revolving Loans contemplated by Section 2.6(f)(ii) of the Credit Agreement with respect to any Revolving Credit Commitment Increase shall occur with respect to the Revolving Credit Commitment Increase contemplated hereby on the Commitment Effective Date, and the Increasing Lender shall make such Revolving Loans on the Commitment Effective Date as may be required to effectuate such reallocation.  Furthermore, on the Commitment Effective Date, all participations in Letters of Credit and Swingline Loans shall be reallocated as contemplated by Section 2.6(f)(ii) of the Credit Agreement pro rata among the Lenders after giving effect to the Revolving Credit Commitment Increase contemplated hereby.  Each Lender party hereto hereby agrees to waive reimbursement of any costs incurred by such Lender in connection with such reallocation pursuant to Section 5.4 of the Credit Agreement.
Section 4.Amendments. The Borrower and the Required Lenders hereby agree that the third sentence of Section 8.4(c) of the Credit Agreement shall be amended and restated in its entirety to read as follows:
“Absent the continuance of a Specified Event of Default, during each period of twelve (12) consecutive calendar months commencing on or after the Agreement Date, the Agent and the Co-Collateral Agents may, collectively, at the Borrower’s expense, conduct (i) Appraisals of the Inventory not more than four (4) times during any such period and (ii) Appraisals of the Equipment not more than four (4) times during any such period.”
Section 5.Representations Correct. By its execution of this Incremental Agreement, the Borrower hereby certifies that:  
(a)    The execution, delivery and performance of this Incremental Agreement has been duly authorized by all necessary corporate or other organizational action of, and has been duly executed and delivered by, each Obligor that is a party hereto and constitutes a legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, winding up, moratorium and other similar Laws relating to or affecting creditors’ rights generally and by general equitable principles (whether considered in a proceeding in equity or at law) and implied covenants of good faith and fair dealing; and
(b)    the execution, delivery and performance of this Incremental Agreement by each Obligor that is a party hereto and the other documents executed by such Persons in connection herewith (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except for such as (i) have been obtained or made and are in full force and effect, or (ii) the failure of which to obtain would not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Requirement of Law applicable to such Obligor or the Charter Documents of such Obligor, except to the extent that such violation would not reasonably be expected to result in a Material Adverse Effect, (c) will not violate or result in a default under any Material Indebtedness and (d) will not result in the imposition of any Lien on any asset of any Obligor (other than Permitted Liens).
Section 6.Effectiveness of this Incremental Agreement.  This Incremental Agreement shall become effective as of the date on which the following conditions have been satisfied (the “Commitment Effective Date”, which for the avoidance of doubt occurred on March 10, 2020):
(a)    The Administrative Agent (or its counsel) shall have received from (i) the Borrower, (ii) Holdings, (iii) the Increasing Lender, (iv) the Issuing Lenders, (v) the Swingline Lender, (vi) the Required Lenders and (vii) the Administrative Agent, either (x) counterparts of this Incremental Agreement signed on behalf of such parties or (y) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmissions of signed signature pages) that such parties have signed counterparts of this Incremental Agreement.
(b)    Immediately before and immediately after giving effect to the Incremental Revolving Credit Commitment Increase on such date, (i) no Event of Default has occurred and is continuing or would result therefrom and (ii) the representations and warranties (x) of each Obligor set forth in the Loan Documents and (y) in Section 5 of this Incremental Agreement shall be true and correct in all material respects as of such date (it being understood that, to the extent that any such representation and warranty specifically refers to an earlier date, it shall be true and correct in all material respects as of such earlier date and any such representation and warranty that is qualified as to “materiality,” Material Adverse Effect or similar language shall be true and correct in all respects (after giving effect to any such qualification therein)).
(c)    The Administrative Agent shall have received a certificate of an appropriate officer of the Borrower certifying that the conditions set forth in Section 6(b) of this Incremental Agreement and the conditions to the Revolving Credit Commitment Increase set forth in Section 2.6(e) of the Credit Agreement, in each case, are satisfied as of the Commitment Effective Date.
(d)    The Administrative Agent shall have received a duly executed certificate of an appropriate officer of each Obligor party to the Credit Agreement, certifying (i)that the copies of such Obligor’s Charter Documents (x) as previously certified and delivered to the Administrative Agent, remain in full force and effect as of the Commitment Effective Date without modification or amendment since such previous delivery or (y) as attached to such officer’s certificate are true, correct and complete and in full force and effect as of the Commitment Effective Date and, with respect to any applicable Charter Document, certified as of a recent date by an appropriate Governmental Authority of the jurisdiction of such Obligor’s organization or formation, (ii) that the copies of such Obligor’s resolutions approving and adopting the Loan Documents to which it is party, the transactions contemplated herein, and authorizing the execution and delivery thereof, as attached to such officer’s certificate, are true, correct and complete copies  and in full force and effect as of the Commitment Effective Date, (iii) as to incumbency certificates identifying the officers of such Obligor that are authorized to execute the Incremental Agreement and who will execute the Incremental Agreement and (iv) certificates of good standing or the equivalent (if any) for each Obligor party to the Credit Agreement from such Obligor’s jurisdiction of organization or formation, in each case certified as of a recent date by the appropriate Governmental Authority .
(e)    The Administrative Agent shall have received on or prior to such date, in immediately available funds, payment or reimbursement (or the Borrower shall have made arrangements reasonably satisfactory to the Administrative Agent for such payment or reimbursement) of all reasonable and documented or invoiced out-of-pocket costs and expenses then due and payable to  it under Section 14.7 of the Credit Agreement in connection with this Incremental Agreement, including all reasonable and invoiced fees and expenses of Cahill Gordon & Reindel LLP, as counsel to the Administrative Agent, in each case, to the extent invoiced at least (3) Business Days prior to the Commitment Effective Date (or such later date as the Borrower may agree).
(f)    If the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation and the Increasing Lender has provided its electronic delivery requirements, the Increasing Lender requesting a certification regarding beneficial ownership in relation to the Borrower as required by the Beneficial Ownership Regulation (the “Beneficial Ownership Certification”) shall have received prior to the Commitment Effective Date, the Beneficial Ownership in relation to the Borrower.  
(g)    The Borrower shall have paid (or shall have made arrangements reasonably satisfactory to the Increasing Lender for such payment) to the Increasing Lender an upfront fee equal to 0.25% of the aggregate principal amount of the Revolving Credit Commitment Increase.
Section 7.Acknowledgments.  The Borrower and each other Obligor party to the Credit Agreement hereby expressly acknowledges the terms of this Incremental Agreement and reaffirms, as of the date hereof, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Incremental Agreement and the transactions contemplated hereby, (ii) its guarantee of the Obligations (including, without limitation, the Obligations that may arise pursuant to the Revolving Credit Commitment Increase) under the Security Documents and (iii) its grant of Liens on the Collateral to secure the Obligations (including, without limitation, the Obligations that may arise pursuant to the Revolving Credit Commitment Increase) pursuant to the Security Documents.
Section 8.Amendment, Modification and Waiver.  This Incremental Agreement may not be amended, modified or waived except pursuant to Section 12.1 of the Credit Agreement.  
Section 9.Liens Unimpaired.  After giving effect to this Incremental Agreement, neither the modification of the Credit Agreement effected pursuant to this Incremental Agreement nor the execution, delivery, performance or effectiveness of this Incremental Agreement:
(a)    impairs the validity, effectiveness or priority of the Liens granted pursuant to any Security Document, and such Liens continue unimpaired with the same priority (subject to Permitted Liens) to secure repayment of all Obligations, whether heretofore or hereafter incurred; or
(b)    requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.
Section 10.Entire Agreement.  This Incremental Agreement, the Credit Agreement and the other Loan Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties hereto with respect to the subject matter hereof.  Except as expressly set forth herein, this Incremental Agreement shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Credit Agreement, nor (except as expressly contemplated hereby) alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect.  It is understood and agreed that each reference in each Loan Document to the Credit Agreement, whether direct or indirect, shall hereafter be deemed to be a reference to the Credit Agreement as amended hereby and that this Incremental Agreement is a Loan Document.
Section 11.GOVERNING LAW.  THIS INCREMENTAL AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  SECTIONS 14.3(b), 14.3(c) AND 14.4 OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS INCREMENTAL AGREEMENT AND SHALL APPLY HERETO.  
Section 12.Severability.  If any provision of this Incremental Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Incremental Agreement shall not be affected or impaired thereby.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 13.Counterparts.  This Incremental Agreement may be signed in any number of counterparts, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  Delivery by facsimile or other electronic means of an executed counterpart of a signature page to this Incremental Agreement shall be effective as delivery of an original executed counterpart of this Incremental Agreement.
Section 14.Headings.  The headings of this Incremental Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.
[Remainder of Page Intentionally Left Blank]
A.

IN WITNESS WHEREOF, the parties hereto have caused this Incremental Agreement to be duly executed and delivered by their respective authorized signatories as of the day and year first above written.
 

CAPITOL INTERMEDIATE HOLDINGS, LLC, as Holdings
		
	By:
	         
Name:    Bruce Heinemann 
Title:    Chief Financial Officer

CAPITOL INVESTMENT MERGER SUB 2, LLC, as Borrower
		
	By:
	         
Name:    Bruce Heinemann 
Title:    Chief Financial Officer 

JPMORGAN CHASE BANK, N.A., as Administrative Agent, a Lender, a Swingline Lender and a Letter of Credit Issuer
		
	By:
	         
Name:     
Title:    

MUFG UNION BANK, N.A., as an Increasing Lender and a Lender
		
	By:
	         
Name:     
Title:    

FIFTH THIRD BANK, as a Letter of Credit Issuer and a Lender
		
	By:
	         
Name:     
Title:    

MORGAN STANLEY SENIOR FUNDING, INC., as a Letter of Credit Issuer and a Lender
		
	By:
	         
Name:     
Title:    

DEUTSCHE BANK AG NEW YORK BRANCH, as a Letter of Credit Issuer and a Lender
		
	By:
	         
Name:     
Title:    

CITIBANK, N.A., as a Letter of Credit Issuer and a Lender
		
	By:
	         
Name:     
Title:    

                        
SCHEDULE 1.1 
TO INCREMENTAL AGREEMENT
Schedule 1.1
As of as of March 10, 2020:

Lenders’ Commitments

	
			
	Lender
	Revolving Credit Commitment
	Applicable Percentage

	JPMorgan Chase Bank, N.A.
	$100,000,000.00
	25.974%

	Fifth Third Bank
	$100,000,000.00
	25.974%

	Morgan Stanley Senior Funding, Inc.
	$50,000,000.00
	12.987%

	Deutsche Bank AG New York Branch
	$50,000,000.00
	12.987%

	Citibank, N.A.
	$50,000,000.00
	12.987%

	MUFG Union Bank, N.A.
	$35,000,000.00
	9.091%

	Total
	$385,000,000.00
	100.000%

Letter of Credit Commitments

	
			
	Letter of Credit Issuer
	Letter of Credit Commitments
	Applicable Percentage

	JPMorgan Chase Bank, N.A.
	$29,000,000.00
	29%

	Fifth Third Bank
	$29,000,000.00
	29%

	Morgan Stanley Senior Funding, Inc.
	$14,000,000.00
	14%

	Deutsche Bank AG New York Branch
	$14,000,000.00
	14%

	Citibank, N.A.
	$14,000,000.00
	14%

	Total
	$100,000,000.00
	100%fwfi_Ex4_4

		

			 

		

		
			DESCRIPTION OF REGISTRANT’S SECURITIES
		

		
			As of December 31, 2019, First Western Financial, Inc. (the “Company,” “we,” or “our”) had one class of securities, our common stock, no par value (“common stock”), registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
		

		
			DESCRIPTION OF COMMON STOCK
		

		
			General
		

		
			We are incorporated in the State of Colorado. The rights of our shareholders are generally governed by Colorado law and our Amended and Restated Articles of Incorporation (“articles of incorporation”) and our Amended and Restated Bylaws, as amended (“bylaws”). The terms of our capital stock are therefore subject to Colorado law, including the Colorado Business Corporation Act, and the common and constitutional law of Colorado.
		

		
			The following description of our common stock is a summary and is subject to, and is qualified in its entirety by reference to, the provisions of our articles of incorporation and our bylaws.  For more detailed information about the rights of our common stock, you should refer to our articles of incorporation and bylaws and the applicable provisions of Colorado law, including the Colorado Business Corporation Act, for additional information.
		

		
			Authorized Capital Stock
		

		
			The total number of shares of capital stock that we are authorized to issue by our articles of incorporation is 100,000,000 shares, which consists of 90,000,000 shares of common stock, without par value, and 10,000,000 shares of preferred stock, without par value.  All outstanding shares of our common stock are fully paid and non-assessable.
		

		
			Voting Rights
		

		
			Each holder of our common stock is entitled to one vote for each share held of record on all matters on which shareholders generally are entitled to vote, except as otherwise required by law. Rights of common stock to vote on certain matters may be subject to the rights and preferences of the holders of any outstanding shares of any preferred stock that we may issue. Our articles of incorporation expressly prohibits cumulative voting.
		

		
			No Preemptive or Similar Rights
		

		
			Our common stock has no preemptive or conversion rights and is not entitled to the benefits of any redemption or sinking fund provision.
		

		
			Dividend Rights
		

		
			Subject to certain regulatory restrictions and to the rights of holders of our preferred stock and any other class or series of stock having a preference as to dividends over the common shares then outstanding, dividends may be paid on the shares of common stock out of assets legally available for dividends, but only at such times and in such amounts as our board of directors shall determine and declare.
		

		
			Liquidation Rights
		

		
			Subject to applicable law, upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, all shares of our common stock would be entitled to share, ratably in proportion to the number of shares held by them, in all of our remaining assets available for distribution to our shareholders after payment of creditors and subject to any prior distribution rights related to our preferred stock and any other class or series of stock having a preference over the common shares then outstanding.
		

		
			

		 

		

		
			Certain Provisions of Our Articles of Incorporation and Bylaws
		

		
			Advance Notice for Shareholder Proposals and Director Nominations
		

		
			Our bylaws contain provisions requiring that advance notice be delivered to the Company of any business to be brought by a shareholder before an annual meeting of shareholders and provide for certain procedures to be followed by shareholders in nominating candidates for election as directors. Generally, the advance notice provisions require that shareholder proposals and director nominations be provided to us between 90 and 120 days prior to the first anniversary of the preceding year’s annual meeting in order to be properly brought before a shareholders meeting. The notice must set forth specific information regarding the shareholder submitting the proposal or nomination and the proposal or director nominee, as described in our bylaws, and must otherwise comply with the terms of our bylaws. These requirements are in addition to those set forth in the regulations adopted by the SEC under the Exchange Act.
		

		
			Special Meetings of Shareholders
		

		
			Our bylaws provide that special meetings of the shareholders may be called for any purpose by the president or by the board of directors. The president shall call a special meeting of the shareholders if the Company receives one or more written demands for the meeting, stating the purpose or purposes for which it is to be held, signed and dated by holders of shares representing at least ten percent (10%) of all the votes entitled to be cast on any issue proposed to be considered at the meeting.
		

		
			Potential Anti-Takeover Effect
		

		
			Our articles of incorporation and our bylaws contain certain provisions that may have the effect of deterring or discouraging, among other things, a non-negotiated tender or exchange offer for our common stock, a proxy contest for control of the Company, the assumption of control of the Company by a holder of a large block of our common stock and the removal of our directors or management. These provisions:
		

			
	
			
				 ·
			

			
	
			
			empower our board of directors, without shareholder approval, to issue our preferred stock, the terms of which, including voting power, are set by our board of directors;

			
	
			
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			provide that directors may only be removed from office for cause by a majority shareholder vote;

			
	
			
				 ·
			

			
	
			
			eliminate cumulative voting in elections of directors;

			
	
			
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			permit our board of directors to alter, amend or repeal our bylaws or to adopt new bylaws;

			
	
			
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			require the request of holders of at least 10.0% of the outstanding shares of our capital stock entitled to vote at a meeting to call a special shareholders’ meeting;

			
	
			
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			prohibit shareholder action by less than unanimous written consent, thereby requiring virtually all shareholder actions to be taken at a meeting of the shareholders;

			
	
			
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			require any shareholder derivative suit or shareholder claim against an officer or director of breach of fiduciary duty or violation of the Colorado Business Corporation Act, articles of incorporation, or bylaws to be brought in Denver County in the State of Colorado;

			
	
			
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			require shareholders that wish to bring business before our annual meeting of shareholders or nominate candidates for election as directors at our annual meeting of shareholders to provide timely notice of their intent in writing; and

			
	
			
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			enable our board of directors to increase the number of persons serving as directors and to fill vacancies created as a result of the increase by a majority vote of the directors present at a meeting of directors.

		
			Our bylaws may have the effect of precluding a contest for the election of directors or the consideration of shareholder proposals if the established procedures for advance notice are not followed, or of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its proposal without regard to whether consideration of the nominees or proposals might be harmful or beneficial to us and our shareholders.
		

		
			

		 

		

		
			Exclusive Forum for Adjudication of Disputes
		

		
			Our bylaws provide that the state courts located in Denver County, Colorado, the county in which our headquarters in Denver lie, shall be the sole and exclusive forum for certain shareholder litigation matters, unless we consent in writing to the selection of an alternative forum. Although we believe this provision benefits us by providing increased consistency in the application of Colorado law in the types of lawsuits to which it applies and in limiting our litigation costs, the provision may have the effect of discouraging lawsuits against our directors and officers and may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. However, it is possible that a court could rule that this provision is unenforceable or inapplicable to a particular dispute.
		

		
			Stock Exchange Listing
		

		
			Our common stock is traded on the Nasdaq Stock Market LLC under the symbol “MYFW.”
		

		
			Transfer Agent and Registrar
		

		
			The transfer agent and registrar for our common stock is Philadelphia Stock Transfer, Inc. 2320 Haverford Rd., Suite 230, Ardmore, PA 19003.

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