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Registration No. 33-
22-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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1st FRANKLIN FINANCIAL CORPORATION
A Georgia Corporation I.R.S. Employer No. 58-0521233
213 East Tugalo Street
Post Office Box 880
Toccoa, Georgia 30577
(706) 886-7571
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Agent for Service: Copy To:
A. Roger Guimond Dom H. Wyant
213 East Tugalo Street Jones, Day, Reavis & Pogue
Post Office Box 880 3500 One Peachtree Center
Toccoa, Georgia 30577 303 Peachtree Street, N.E.
(706) 886-7571 Atlanta, Georgia 30308-3242
(404) 581-8075
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Approximate date of proposed sale to public: As soon as
possible after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following. (X)
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following. (X)
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CALCULATION OF REGISTRATION FEE
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Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to to be offering aggregate registration
be registered registered price per unit offering price fee
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Variable Rate
Subordinated
Debentures.... $20,000,000 100% $20,000,000 $6,897
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission acting
pursuant to said Section 8(a) may determine.
AS FILED WITH SEC ON NOVEMBER 3, 1994
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1st FRANKLIN FINANCIAL CORPORATION
Cross Reference Sheet Required by Item 1. of Form S-2
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Item in Form S-2 Prospectus Caption
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Part I
Item 1. Forepart of the Registration Outside Front Cover Page
Statement and Outside
Front Cover Page of
Prospectus
Item 2. Inside Front and Outside Available Information
Back Cover Pages of Incorporation of Certain
Prospectus Documents by Reference
Reports to Security Holders
Item 3. Summary Information, Investor Considerations
Risk Factors and Ratio Summary Description of
of Earnings to Fixed Securities Offered
Charges Appendix I
Item 4. Use of Proceeds Use of Proceeds
Item 5. Determination of Offering Price Not Applicable
Item 6. Dilution Not Applicable
Item 7. Selling Security Holders Not Applicable
Item 8. Plan of Distribution Plan of Distribution
Item 9. Description of Securities Description of Variable
to be Registered Rate Subordinated
Debentures
Item 10. Interest of Named Experts and Not Applicable
Counsel
Item 11. Information with Respect to Incorporation of Certain
the Registrant Documents by Reference
Reports to Security Holders
The Company
Item 12. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
Item 13. Disclosure of Commission Not Applicable
Position on
Indemnification for
Securities Act Liabilities
<PAGE>
1st FRANKLIN FINANCIAL CORPORATION
PROSPECTUS dated November __, 1994
$20,000,00 0 VARIABLE RATE SUBORDINATED DEBENTURES
_________________________________________________
The Variable Rate Subordinated Debentures (the "Debentures") will be issued
in varying minimum purchase amounts established by 1st Franklin Financial
Corporation (the "Company") each Thursday, on a weekly basis. For each
respective purchase amount, the Company will establish an interest rate and
an interest adjustment period ("established features"). The established
features will be available for the period from Thursday through the following
Wednesday and will be applicable to all Debentures sold by the Company during
that period. At the end of each interest adjustment period, the interest
rate will be adjusted to the current rate or the holder may request
redemption. All other provisions will remain unchanged for the entire term
of the Debenture.
The established features will be published weekly in a newspaper of general
circulation and, in addition, may be obtained from the Company in Toccoa,
Georgia. A Rule 424(b)(2) prospectus supplement setting forth the established
features will be filed weekly with the Securities and Exchange Commission.
The Debentures mature four years from date of issue but may be redeemed by
the holder without penalty at the end of any interest adjustment period.
There is not, nor is there likely to be, a market for these securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT BANK DEPOSITS NOR BANK OBLIGATIONS AND ARE NOT
INSURED BY THE FDIC.
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Underwriting
Price to Discounts and Proceeds to
Public Commissions (a) Company (b)
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Per Debenture. . . 100% None 100%
Total . . . . . $20,000,000 None $20,000,000
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(a) None of the securities described above will be underwritten and no
commissions or other remunerations will be paid in connection with their
sale. They will be sold at face value by the Company through its executive
officers.
(b) Before deduction of the Company's expenses, estimated at $39,897.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 3, 1994
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AVAILABLE INFORMATION
1st Franklin Financial Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Such reports and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
St., N.W., Washington, D.C. 20549 and at the Commission's Regional Offices or
the public reference offices thereof located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60601. In addition, copies of
such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth St., N.W., Washington, D.C. 20549 at the rates
prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents:
(a) The Company's Annual Report on Form 10-K dated as of December 31,
1993 and filed pursuant to Section 15(d) of the Exchange Act with
the Commission.
(b) From the Company's annual report to security holders dated as of
December 31,1993, which is delivered with this Prospectus, the
following:
(i) Description of business furnished in accordance with the
provisions of Rule 14a-3(b)(6) under the Exchange Act;
(ii) Financial statements and information furnished in
accordance with the provisions of Rule 14a-3(b)(1);
(iii) Selected financial data furnished as required by Item 301
of Regulation S-K;
(iv) Supplementary financial data furnished as required by Item
302 of Regulation S-K; and
(v) Management's Discussion and Analysis of Financial Condition
and Results of Operations furnished as required by Item 303
of Regulation S-K.
(c) The Company's Quarterly Reports on Form 10-Q dated as of March
31, 1994 and June 30, 1994 filed pursuant to Section 15(d) of the
Exchange Act with the Commission.
(d) The Company's Quarterly Report on Form 10-Q dated as of September
30, 1994 and the quarterly report to security holders, included
therein, which is delivered with this Prospectus.
Any statement in the documents incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus and the
Registration Statement of which it is a part to the extent that a statement
contained herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as modified or superseded,
to constitute a part of this Prospectus or the Registration Statement of
which it is a part.
Copies of the Forms 10-K and 10-Q (other than exhibits) will be provided
without charge upon request to the Company's Secretary at 213 East Tugalo
Street, Post Office Box 880, Toccoa, Georgia 30577, telephone number (706)
886-7571 or 1-(800)-282-0709.
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REPORTS TO SECURITY HOLDERS
The Company provides each security holder an annual report containing
financial information that has been examined and reported upon, with an
opinion expressed, by an independent public accountant. Additionally, the
Company provides each security holder a quarterly report containing unaudited
financial information.
INVESTOR CONSIDERATIONS
The operations of the Company are subject to regulation by federal, state and
local government authorities and are subject to various laws and judicial and
administrative decisions imposing various requirements and restrictions
which, among other things, require that the Company obtain and maintain
certain licenses and qualifications, limit the interest rates, fees and other
charges the Company is allowed to charge, limit or prescribe other terms of
the Company's loans, require specified disclosures to borrowers, govern the
sale and terms of insurance products offered by the Company and the insurers
for which it acts as agent, and define the Company's rights to repossess and
sell collateral. Although the Company believes that it is in compliance in
all material respects with applicable federal, state and local laws, rules
and regulations, there can be no assurance that a change in such laws, or in
the interpretation thereof, will not make the Company's compliance therewith
more difficult or expensive, restrict the Company's ability to originate
loans, further limit or restrict the amount of interest and other charges
earned under such loans, or otherwise adversely affect the business or
prospects of the Company.
The loans made by the Company in the ordinary course of its business are
subject to the interest rate and regulatory provisions of each applicable
state's lending laws and are made at fixed rates which are not adjustable
during the term of the loan. Since the loans are made at fixed interest
rates and are made using the proceeds from the sale of the Company's fixed
and variable rate securities (such as the securities offered hereby), the
Company may experience a decrease in its net interest margin because
increased interest costs cannot be passed on to all of the Company's loan
customers. Net interest margin represents the difference between the amount
the Company earns on loans and investments and the amount the Company pays on
debt securities and other borrowings. An increase in prevailing interest
rates could adversely affect the Company's net interest margin.
Liquidity of the Company is dependent on the sale of its debt securities, the
continued availability of unused bank credit from its lenders and the
collection of its receivables. Numerous investment alternatives have caused
investors to evaluate more critically investment opportunities. The
securities offered hereby will have interest rates and redemption terms which
the Company believes will generate sufficient sales of debt securities to
meet the Company's liquidity requirements. Although all of the Company's
debt securities are subject to redemption prior to maturity at the option of
the holder thereof, management does not anticipate that redemptions will have
a material adverse effect on the Company's liquidity because all of the
subordinated debt securities contain an interest penalty for holders thereof
who request early redemption.
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The Company has a Credit Agreement with four major banks to meet the
redemption requests of debtholders and other liquidity and operating
requirements of the Company. The Credit Agreement provides for maximum
borrowings of $21,000,000 or 70% of the net finance receivables, whichever is
less. Borrowings are on an unsecured basis at 1/4% above the prime rate of
interest. In addition, there is a commitment fee of 5/8% of the available
line less average borrowings and an agent's fee of 1/8% of the total line.
The Company's right to borrow funds under this Credit Agreement is scheduled
to expire on December 31, 1999, unless extended, on which date the
outstanding balance of all loans pursuant to such Credit Agreement must be
paid in full. The Company intends to seek to extend such Credit Agreement or
enter into a new agreement on similar terms. Although the Company does not
anticipate difficulty in obtaining bank credit in the future on acceptable
terms, no assurance can be given that the terms of a new credit facility
would not be less favorable than the current Credit Agreement.
Another Credit Agreement with a major bank provides for an additional
$2,000,000 for general operating purposes. This agreement provides for
borrowings on an unsecured basis at 1/4% above the prime rate of interest.
There can be no assurances that these Agreements will continue to be
available to the Company at their present amounts, or at all, because each
are subject to periodic reviews by the lenders, which consider the Company's
profitability, economic conditions and other lending criteria in evaluating
whether they will continue the Agreements. The Company's liquidity is
dependent, among other things, on the collection of its receivables. The
Company continually monitors the delinquency status of its receivables and
promptly institutes collection efforts on each delinquent account.
Delinquencies of the Company's consumer finance receivables are likely to be
affected by general economic conditions. Although current economic
conditions have not had a material adverse effect on the Company's ability to
collect its receivables, no assurances can be given regarding future economic
conditions or their effect on the Company's ability to collect its
receivables.
If one or more of the sources of funds discussed above are significantly
curtailed for any reason, the Company's ability to meet its obligations,
including its obligations with respect to the securities offered hereby,
could be adversely affected.
The Debentures will be general, unsecured obligations of the Company and
subordinated in right of payment to all of the Company's Senior Debt (as
defined). The incurrence of additional Senior Debt or secured obligations is
not limited.
In the event of any insolvency or bankruptcy proceeding, or of any
receivership, liquidation, reorganization or other similar proceeding in
connection therewith, relative to the Company or to its creditors, as such,
or to its property, or in the event of any proceeding for voluntary
liquidation, dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy, then the holders of Senior Debt shall be
entitled to receive payment in full of all principal and interest on all
Senior Debt before the holders of the Debentures are entitled to receive any
payments.
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SUMMARY DESCRIPTION OF SECURITIES OFFERED
The following is a summary of the principal features of the
securities being offered hereby. For a detailed discussion, see
"Description of Variable Rate Subordinated Debentures".
Variable Rate Subordinated Debentures
Denominations Established weekly by the Company.
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Indenture Trustee The Debentures will be issued pursuant to an
indenture between the Company and Columbus Bank and
Trust Company, as trustee.
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Interest Rate Weekly offering rate, compounded daily, for each
established amount.
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Interest Adjustment Rate adjusted at the end of each interest adjustment
period to the current interest rate, compounded
daily.
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Payment of Interest Interest will be earned daily and will be payable at
any time at the holder's request.
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Maturity Four years from date of issue but may be redeemed at
the end of any interest adjustment period without
penalty.
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Redemption by Holder At the end of any interest adjustment period without
penalty; redemption at any other time subject to an
interest penalty.
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Redemption by Company The Company may redeem prior to maturity upon 30
days written notice to holder for a price equal to
principal plus interest accrued to date of
redemption.
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Extension of Maturity Maturity of each Debenture is automatically extended
on its original terms for one additional four-year
term subject to Interest Adjustment. Holder may
prevent such extension by redeeming the Debenture
within 15 days after maturity. The Company will
notify holders 30 days in advance of maturity date.
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Compound Interest Debentures are offered at interest rates which are
compounded daily. Examples of annualized effective
yields for daily compounded rates are set forth
below:
Example Effective
Nominal Annual
Rates Yield
5.0% 5.13%
6.0 6.18
7.0 7.25
8.0 8.33
9.0 9.42
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THE COMPANY
1st Franklin Financial Corporation is a wholly owned subsidiary of 1st
Franklin Corporation. The Company has been engaged in the consumer finance
business since 1941, particularly in making and servicing direct cash, real
estate and sales finance loans. The business is operated through 83 branch
offices in Georgia, 23 in Alabama and 11 in South Carolina. The Company
funds its loan demand through a combination of debt securities and a Credit
Agreement with four major banks. The Agreement provides for borrowings on an
unsecured basis up to $21,000,000 or 70% of the net finance receivables (as
defined by the Agreement), whichever is less. The amount of unused
borrowings under this Agreement at a recent date is set forth on Appendix I.
On the basis of total capital funds employed (common stockholder's equity and
subordinated debt), American Banker recently ranked the Company as the 61st
largest finance company in the United States.
USE OF PROCEEDS
Net proceeds from sales of the securities offered hereby, after payment of
estimated expenses of $39,897, will be placed in the general treasury of the
Company as sales are made. No segregation of proceeds will be made, but the
Company will use the net proceeds for the redemption of senior and
subordinated securities as such debtholders request redemption over the next
two years. Such subordinated securities include debentures of the same
series as the Debentures offered hereby; such senior securities include
senior demand notes of the Company, which are sold in varying principal
amounts and at various interest rates. Any proceeds not used for redemptions
will be used to repay bank borrowings and repay amounts outstanding under the
Company's commercial paper program as such amounts come due, make additional
finance receivables and for general operating purposes.
The offering is to be conducted by the Company through its executive officers
and there is no assurance that all of the securities offered herein will be
sold. The offering, however, is not made contingent upon any minimum amount
of securities being sold.
PLAN OF DISTRIBUTION
The Debentures will be offered by the Company through its executive officers.
No selling commissions or other remunerations will be paid directly or
indirectly to any officers, directors or employees of the Company in
connection with the sale of the Debentures. All purchase proceeds from sales
of the Debentures will be placed in the general treasury of the Company. All
offering expenses, including registration fees, printing, advertising,
postage and professional fees, will be paid by the Company.
The Debentures will be sold and redeemed at the Company's executive office
located at 213 East Tugalo Street, Post Office Box 880, Toccoa, Georgia
30577. The telephone number is (706) 886-7571 or 1-(800)-282-0709.
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DESCRIPTION OF VARIABLE RATE SUBORDINATED DEBENTURES
General
The Variable Rate Subordinated Debentures are issued under an indenture
(hereinafter called the "Variable Rate Indenture") dated as of October 31,
1984 between the Company and Columbus Bank and Trust Company (hereinafter
called the "Trustee"). The following statements with respect to the
Debentures are subject to the detailed provisions of the Variable Rate
Indenture. Whenever any particular article or section of the Variable Rate
Indenture is referred to, the statement made in connection with such
reference is qualified in its entirety by such reference.
The Debentures are registered and issued without coupons in Series form. Any
amount of any Series may be issued. There is no limit on the principal
amount of Debentures of any Series, or of all Series issuable under the
Variable Rate Indenture. The dollar amount of Debentures outstanding under
the Variable Rate Indenture as of a recent date is set forth on Appendix I.
The Company and the Trustee may amend the Variable Rate Indenture to limit
the principal amount of a particular Series or to allow additional Series of
Debentures with no limitations as to the maximum amount of any increase or to
the number of increases which may be made. The Company may change the
interest rates and the maturities of the Debentures offered herein and of any
subsequent Series which may be offered, provided that no such change shall
affect any Debenture of any Series issued prior to the date of change.
The Debentures are direct obligations of the Company, but are not secured.
Principal and interest are payable at the executive office of the Company in
Toccoa, Georgia. The Debentures are executed by the Company and
authenticated and delivered to the purchaser by the Trustee upon written
order of the Company.
Established Features of Series 1 Debentures
The Variable Rate Subordinated Debentures Series 1 ("Series 1 Debentures")
offered herein are issued and dated as of the date when purchased. The
interest rate for a Series 1 Debenture is compounded daily and payable at any
time at the holder's request. The Series 1 Debentures mature four years from
date of issue, and may be extended for one additional four-year term as
described under "Extension After Maturity".
Each Thursday, on a weekly basis, the Company establishes various minimum
purchase amounts with varying interest rates and interest adjustment periods
("established features") for each respective minimum purchase amount. The
purchase amount and the interest adjustment period thereby established are
maintained for the term of the Series 1 Debenture. The interest rate at
which the Series 1 Debenture is sold is set only for the initial interest
adjustment period. The Company anticipates that it will offer the Series 1
Debentures with interest rate adjustment periods ranging from one month to
four years.
At the end of each interest adjustment period, the Company will notify the
holder by mail of the new interest rate which will be the same interest rate
that is applicable to all new Series 1 Debentures being offered during the
same week and at the same terms. The new interest rate will be determined by
the Company, in its discretion, based on general market rates of interest.
If the holder elects to retain the Series 1 Debenture at the new rate, no
action is required of the holder as the new rate will become effective as of
the first day of the interest adjustment period. If the holder elects not to
accept the new rate, the holder can redeem the Series 1 Debenture without
penalty prior to the first day of the interest adjustment period. See
"Redemption at Request of Holder Prior to Maturity".
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<PAGE>
Debentures with the current established features are available for the period
from Thursday through the following Wednesday. The current established
features are applicable to all Series 1 Debentures sold by the Company during
that period. The Company publishes this information in a newspaper of
general circulation and, in addition, such information may be obtained
directly from the Company's executive offices in Toccoa, Georgia.
Subordination
The payment of the principal of and interest on the Debentures is subordinate
in right of payment, as set forth in Article Ten of the Variable Rate
Indenture, to all Senior Debt of the Company.
The term "Senior Debt" means all indebtedness of the Company outstanding at
any time except debt of the Company that by its terms is not senior in right
of payment to the Debentures, and indebtedness represented by the Company's
outstanding Debentures, all of which are pari passu.
The indebtedness evidenced by the Debentures shall, in case the Debentures
are declared due and payable before their expressed maturity because of the
occurrence of a default under the Variable Rate Indenture, be entitled to
payment only after there shall have been paid in full all principal and
interest on such Senior Debt. Likewise, in the event of any insolvency or
bankruptcy proceeding, or of any receivership, liquidation, reorganization or
other similar proceeding in connection therewith, relative to the Company or
to its creditors, as such, or to its property, or in the event of any
proceeding for voluntary liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy, then the holders
of Senior Debt shall be entitled to receive payment in full of all principal
and interest on all Senior Debt before the holders of the Debentures are
entitled to receive any payments.
The amount of the Company's Senior Debt outstanding at a recent date is set
forth in Appendix I.
Redemption by Company Prior to Maturity
The Company may redeem any Debenture of any Series at any time prior to
maturity for a redemption price equal to the principal amount plus any unpaid
interest thereon to date of redemption. The Company will notify
Debentureholders whose Debentures are to be redeemed not less than 30 nor
more than 60 days prior to the date fixed for redemption. In the event the
entire Series is not called for redemption, the redemption call shall be made
pro rata.
Redemption at Request of Holder Prior to Maturity
At the request of the holder, the Company will redeem any Series 1 Debenture
at the end of any interest adjustment period for a redemption price equal to
the principal amount plus any unpaid interest thereon to date of redemption.
At the request of the holder, the Company may, at its option, redeem any
Series 1 Debenture during any interest adjustment period for a price equal to
the principal amount plus interest at one-half the stated rate on the Series
1 Debenture.
If the holder dies before maturity, the Company may, at its option, redeem
any Series 1 Debenture for a redemption price equal to the principal amount
plus any unpaid interest thereon to date of redemption.
All redemptions will be made at the Company's executive offices in Toccoa,
Georgia, either in person or by mail.
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<PAGE>
Extension After Maturity
The maturity of a Series 1 Debenture will be automatically extended from the
original maturity date for a period equal to the original term of such Series
1 Debenture unless the holder submits the Series 1 Debenture for redemption
within 15 days after its maturity or the Company tenders the amount due the
holder within 15 days after maturity. In the event of such an extension, all
provisions of the Series 1 Debenture will remain unchanged with the exception
of the interest rate which will be changed in accordance with the interest
adjustment provision. If the Company does not elect to tender payment, it
will notify the holder of this extension provision at least 30 days prior to
the maturity date.
Restrictions Upon the Company
There are no restrictions in the Variable Rate Indenture against the issuance
of additional securities or the incurring of additional debt including Senior
Debt and secured obligations.
Modification of the Variable Rate Indenture
The Variable Rate Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than two-thirds in
principal amount of the Debentures, to execute supplemental indentures adding
any provisions to or changing in any manner or eliminating any of the
provisions of the Variable Rate Indenture or of any supplemental indenture or
modifying in any manner the rights of the holders of such Debentures;
provided, however, that no such supplemental indenture shall change the fixed
maturity of any Debenture, reduce the principal amount thereof, reduce the
rate, change the time of payment of interest thereon, reduce the amount of
Debentures whose holders must consent to an amendment, or make any changes
regarding the Variable Rate Indenture that relate to waiver of default, the
rights of holders to receive payments, and the requirements of consent of the
Debentureholders, without the consent of the holder of each Debenture so
affected.
The Company and the Trustee may amend the Variable Rate Indenture to allow
the issuance of additional amounts of a particular Series or additional
Series of Debentures without the consent of the Debentureholders. There are
no limitations as to the maximum amount of any increase or to the number of
increases which may be made. The Company may change the interest rates and
the maturities of the Debentures offered hereby and of any subsequent Series
which may be offered without entering into a supplemental indenture, provided
that no such change will affect any Debenture of any Series issued prior to
the date of change.
Events of Default and Notice Thereof
An Event of Default is defined by the Variable Rate Indenture to mean any of
the following: (a) failure to pay principal upon any Debenture when the same
becomes due; (b) failure to pay interest upon any Debenture when the same
becomes due and the Default continues for 30 days; (c) failure, after notice
from the Trustee or from the holders of at least 25% in principal amount of
the Debentures of the affected Series, to observe or perform within 30 days
any of the covenants contained in the Variable Rate Indenture or Debentures;
or (d) the occurrence of certain events of bankruptcy, insolvency or
reorganization.
The Variable Rate Indenture provides that the Trustee shall, within 90 days
after the occurrence thereof, give the registered holders of the Debentures
notice of any existing default known to the Trustee, but, except in case of
a default in the payment of principal or interest, the Trustee may withhold
such notice if and for so long as the Trustee in good faith determines that
the withholding of such notice is in the interest of such holders.
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Rights on Default
The Trustee by notice to the Company, or the holders of at least 25% in
principal amount of the Debentures of the affected Series, may declare the
principal of and accrued interest on all Debentures due upon the happening of
any of the Events of Default specified in the Variable Rate Indenture, but
the holders of a majority in principal amount of such Debentures may waive
any default and rescind such declaration if the default is cured within the
30 day period, except a default in the payment of the principal of or
interest on any Debenture or a default on Senior Debt. The holders of a
majority in principal amount of the Debentures of the affected Series may
direct the time, method and place of conducting any proceeding for any remedy
available to, or exercising any power or trust conferred upon, the Trustee,
but the Trustee may decline to follow any direction that conflicts with law,
provisions of the Variable Rate Indenture, or is unduly prejudicial to the
rights of the other Debentureholders or would involve the Trustee in personal
liability. Holders may not institute any proceeding to enforce the Variable
Rate Indenture unless the Trustee refuses to act for 60 days after request
from the holders of at least 25% in principal amount of the Debentures of the
affected Series and during such 60 day period the holders of a majority in
principal amount do not give the Trustee a direction inconsistent with the
request, and tender to the Trustee of satisfactory indemnity. Nevertheless,
any holder may enforce the payment of the principal of and interest on the
holder's Debenture when due.
Concerning the Trustee
The Trustee does not have any other business relationship with the Company.
The Trustee maintains its principal corporate trust office in Columbus,
Georgia.
Evidence to be Furnished Trustee
The Variable Rate Indenture provides that, as evidence of compliance with the
conditions precedent provided for in the Variable Rate Indenture relating to
any action to be taken by the Trustee upon the application or demand of the
Company, the Company shall furnish to the Trustee an officer's certificate
and an opinion of counsel stating that all such conditions precedent have
been met. Within 120 days after the end of each fiscal year, the Company
shall file with the Trustee an officer's certificate stating whether or not,
to the best knowledge of the signers, the Company is in default in the
performance of any covenant, agreement or condition contained in the Variable
Rate Indenture and, if so, specifying each such default, and, with respect to
each, the action taken or proposed to be taken by the Company to remedy such
default.
LEGAL OPINION
The validity of the securities offered herein has been passed upon for the
Company by Jones, Day, Reavis & Pogue, 3500 One Peachtree Center, 303
Peachtree Street, N.E., Atlanta, Georgia 30308-3242.
-10-
<PAGE>
1st FRANKLIN FINANCIAL CORPORATION
Appendix I to Prospectus
Information as of September 30, 1994
1. Ratio of Earnings to Fixed Charges (page 3):
Sept. 30 December 31
-------- ----------------------------------------------
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
2.99 2.60 2.34 2.09 2.01 2.01
2. Unused borrowings under the $21,000,000 Credit
Agreement (page 6): $21,000,000
3. Debentures outstanding under Indenture (page 7): $21,212,182
4. Senior Debt (as defined) outstanding (page 8): $62,107,646
A more current Appendix I, if appropriate, will be attached to the cover page
of this Prospectus as a supplement. If attached, that supplemental Appendix
I supersedes this information.
-11-
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in the Prospectus in connection
with the offering contained herein, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities covered by this Prospectus in
any State to any person to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale hereunder
shall, under any circumstances, create an implication that there has been no
change in the facts herein set forth since the date hereof.
TABLE OF CONTENTS
Available Information . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . 2
Reports to Security Holders . . . . . . . . . . . . . . 3
Investor Considerations . . . . . . . . . . . . . . . . 3
Summary Description of Securities Offered . . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . 6
Plan of Distribution. . . . . . . . . . . . . . . . . . 6
Description of Variable Rate Subordinated Debentures. . 7
Legal Opinion . . . . . . . . . . . . . . . . . . . . . 10
Appendix I. . . . . . . . . . . . . . . . . . . . . . . 11
$20,000,000
Variable Rate Subordinated Debentures -
Series 1
-12-
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The expenses to be incurred in the issuance and distribution of the
securities being registered are estimated as follows:
Filing Fee - Securities and Exchange
Commission. . . . . . . . . . . $ 6,897
Registration Fees in States. . . . . 3,000
Legal Fees and Expenses. . . . . . . 15,000
Accounting Fees. . . . . . . . . . . 5,000
Printing Cost. . . . . . . . . . . . 1,000
Advertising. . . . . . . . . . . . . 2,000
Trustee's Fees . . . . . . . . . . . 5,000
Postage and Miscellaneous. . . . . . 2,000
-------
Total . . . . . . . . . . . . . $39,897
=======
Item 15. Indemnification of Directors and Officers
- ---------------------------------------------------
The registrant has, pursuant to the authority granted in Section 14-2-
851 of the Official Code of Georgia Annotated, agreed to indemnify any
officer or director of the registrant against any expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually or reasonably incurred by him in any action, suit or
proceeding brought or threatened to be brought against him by reason of
the fact that he is or was an officer or director of the registrant if
he acted in a manner he reasonable believed to be in or not opposed to
the best interests of the registrant, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Item 16. Exhibits
- ------------------
4. (a) The Variable Rate Indenture dated October 31, 1984 between
the registrant and The First National Bank of Gainesville,
Trustee. (Incorporated by reference to Exhibit 4(a) to the
registrant's Registration Statement on Form S-2,
Registration No. 2-94191.)
(b) Form of Variable Rate Subordinated Debenture.
(Incorporated by reference to Exhibit 4(b) to the
registrant's Registration Statement on Form S-2,
Registration No. 33-25180.)
(c) Agreement of Resignation, Appointment and Acceptance dated
as of May 28, 1993 between the registrant, the First
National Bank of Gainesville, and Columbus Bank and Trust
Company. (Incorporated herein by reference to Exhibit 4(c)
to the registrant's Post-Effective Amendment No. 1 dated
June 8, 1993 to the Registration Statement on Form S-2,
Registration No. 33-49151.)
5. Opinion of Counsel (to be filed by amendment).
II-1
<PAGE>
10. (a) Credit Agreement dated May, 1993 between the registrant and
SouthTrust Bank of Georgia, N.A..(Incorporated by reference
to Exhibit 10(a) to the registrant's Form 10-K for the year
ended December 31, 1993, No. 2-27985.)
(b) Revolving Credit Agreement dated October 1, 1985 as amended
November 10, 1986; March 1, 1988; August 31, 1989 and May
1, 1990, among the registrant and the banks named therein
(Incorporated by reference to Exhibit 10 to the
registrant's Form SE dated November 9, 1990.)
(c) Fifth Amendment to Revolving Credit Agreement dated April
23, 1992. (Incorporated by reference to Exhibit 10(c) to
the Registrant's Form SE dated November 5, 1992.)
(d) Sixth Amendment to Revolving Credit Agreement dated July
20, 1992. (Incorporated by reference to Exhibit 10(d) to
the Registrant's Form SE dated November 5, 1992.)
(e) Seventh Amendment to Revolving Credit Agreement dated June
20, 1994.
11. Not applicable due to registrant being a wholly owned subsidiary.
12. Computation of Ratio of Earnings to Fixed Charges.
13. (a) Annual Report to securities holders for the year ended
December 31, 1993. (Incorporated by reference to Exhibit
13 to the registrant's Form 10-K for the year ended
December 31, 1993, No. 2-27985.)
(b) Form 10-Q for the period ended September 30, 1994.
(Incorporated by reference to registrant's Form 10-Q for
the period ended September 30, 1994, No. 2-27985.)
23. (a) Consent of Independent Public Accountants.
(b) Consent of Counsel (set forth in Exhibit 5, to be filed by
amendment).
24. Power of Attorney (included on signature page hereto)
25. Form T-1 as to the eligibility and qualification of
Columbus Bank and Trust Company, Trustee, under the
indenture dated as of October 31, 1984 between the
registrant and Columbus Bank and Trust Company.
25.1-P A copy of the Charter and/or Articles of Incorporation of
the Trustee, (Incorporated by reference to Exhibit 25.1 of
the registrant's Form SE dated June 8, 1993, filed pursuant
to continuing hardship exemption.)
25.4-P Copy of the bylaws of Columbus Bank and Trust Company, as
now in effect. (Incorporated by reference to Exhibit 25.4
of the registrant's Form SE dated June 8, 1993, filed
pursuant to continuing hardship exemption.)
II-2
<PAGE>
Item 17. Undertakings
- ----------------------
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement: (i) to include any prospectus required by
section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; (iii) to include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
(iv) to file weekly with the Securities and Exchange
Commission a Rule 424(b)(2) prospectus supplement setting
forth the established features (as defined in the
prospectus).
(2) that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Toccoa, State of Georgia, on
November 3, 1994.
1st FRANKLIN FINANCIAL CORPORATION
Ben F. Cheek, III
---------------------
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ben F. Cheek, III and A. Roger Guimond, and
each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
registration statement and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and their
substitutes, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, and
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement or amendment thereto has been signed by the following persons in
the capacities and on the dates indicated:
Signature Title Date
Ben F. Cheek, III Chairman of the Board; November 3, 1994
- -------------------- Principal Executive Officer;
Director
T. Bruce Childs President November 3, 1994
- --------------------
A. Roger Guimond Vice President; November 3, 1994
- -------------------- Principal Financial Officer;
Principal Accounting Officer
Richard Acree Director November 3, 1994
- --------------------
Mrs. Lorene M. Cheek Director November 3, 1994
- --------------------
Jack Stovall Director November 3, 1994
- --------------------
Robert E. Thompson Director November 3, 1994
- --------------------
II-4
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
4. (a) The Variable Rate Indenture dated October 31, 1984
between the registrant and The First National Bank
of Gainesville, Trustee. (Incorporated by reference
to Exhibit 4(a) to the registrant's Registration
Statement No. 2-94191.)
(b) Form of Variable Rate Subordinated Debenture.
(Incorporated by reference to Exhibit 4(b) to the
registrant's Registration Statement on Form S-2,
Registration No. 33-25180.)
(c) Agreement of Resignation, Appointment and Acceptance
dated as of May 28, 1993 between the registrant, The
First National Bank of Gainesville, and Columbus
Bank and Trust Company. (Incorporated herein by
reference to Exhibit 4(c) to the registrant's Post
Effective Amendment No. 1, dated June 8, 1993, to
the Registration Statement on Form S-2, Registration
No. 33-49151.)
10. (a) Credit Agreement dated May, 1993 between the
registrant and SouthTrust Bank of Georgia, N.A..
(Incorporated by reference to Exhibit 10(a) to the
registrant's Form 10-K for the year ended December
31,1993, No. 2-27985.)
(b) Revolving Credit Agreement dated October 1, 1985 as
amended November 10, 1986; March 1,1988; August 31,
1989 and May 1, 1990, among the registrant and the
banks named therein, (Incorporated by reference to
Exhibit 10 to the registrant's Form SE dated
November 9, 1990.)
(c) Fifth Amendment to Revolving Credit Agreement dated
April 23, 1992. (Incorporated by reference to
Exhibit 10(c) to the Registrant's Form SE dated
November 5, 1992.)
(d) Sixth Amendment to Revolving Credit Agreement dated
July 20, 1992. (Incorporated by reference to Exhibit
10(d) to the Registrant's Form SE dated November 5,
1992.)
(e) Seventh Amendment to Revolving Credit Agreement
dated June 20, 1994.
12. Computation of Ratio of Earnings to Fixed Charges
13. (a) Annual Report to the securities holders for the year
ended December 31, 1993. (Incorporated by reference
to Exhibit 13 to the registrant's Form 10-K for the
year ended December 31, 1993, No. 2-27985.)
(b) Form 10-Q for the period ended September 30, 1994.
(Incorporated by reference to registrant's Form 10-Q
for the period ended September 30, 1994, No. 2-27985.)
<PAGE>
23.(a) Consent of Arthur Andersen LLP
24. Power of Attorney (included on signature page, hereto)
25. Form T-1 as to the eligibility and qualification of
Columbus Bank and Trust Company, Trustee, under the
indenture dated as of October 31, 1984 between the
registrant and Columbus Bank and Trust Company.
25.1-P A copy of the Charter and/or Articles of Incorporation of
the Trustee. (Incorporated by reference to Exhibit 25.1 of
the registrant's Form SE dated June 8, 1993, filed pursuant
to continuing hardship exemption.)
25.4-P Copy of the bylaws of Columbus Bank and Trust Company, as
now in effect. (Incorporated by reference to Exhibit 25.4
of the registrant's Form SE dated June 8, 1993, filed
pursuant to continuing hardship exemption.)
<PAGE>
<PAGE>
Exhibit 12
CALCULATION OF
RATIO OF EARNINGS TO FIXED CHARGES
Nine
Months
Ended Year Ended
Sept. 30 December 31
-------- -----------------------------------------
1994 1993 1992 1991 1990 1989
Income Before
Income Taxes. . . . $ 8,671 $ 8,427 $ 6,266 $ 5,375 $4,941 $4,613
Interest on
Indebtedness. . . . 4,049 4,890 4,398 4,692 4,666 4,352
Portion of rents
representative of
the interest
factor. . . . . . . 308 362 304 257 230 207
------- ------- ------- ------- ------ ------
Earnings as
Adjusted. . $13,028 $13,679 $10,988 $10,324 $9,837 $9,172
======= ======= ======= ======= ====== ======
Interest on
Indebtedness. . . . $ 4,049 $ 4,890 $ 4,398 $ 4,692 $4,666 $4,352
Portion of rents
representative of
the interest
factor. . . . . . . 308 362 304 257 230 207
------- ------- ------- ------- ------ ------
Fixed Charges . . $ 4,357 $ 5,252 $ 4,702 $ 4,949 $4,896 $4,559
======= ======= ======= ======= ====== ======
Ratio of Earnings
to Fixed Charges. . 2.99 2.60 2.34 2.09 2.01 2.01
==== ==== ==== ==== ==== ====
<PAGE>
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 23,
1994 included in the Company's Form 10-K for the year ended December 31, 1993
and to all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
November 3, 1994
<PAGE>
<PAGE>
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM T - 1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility
of a Trustee pursuant to Section 305(b)(2) _____
----------------------------------
COLUMBUS BANK AND TRUST COMPANY
(Exact Name of Trustee as Specified in its Charter)
Georgia 58-0201800
(Jurisdiction of Incorporation or (I.R.S. Employer
Organization if not a National Bank) Indentification No.)
P.O. Box 120, Columbus, Georgia 31902-0120
(Address of Principal Executive Office) (Zip Code)
Ms. Alice Herin Stagg
Vice President and Trust Officer
Columbus Bank and Trust Company
Post Office Box 120
Columbus, Georgia 31902-0120
(706) 649-2245
(Name, Address and Telephone No. of Agent for Service)
----------------------------------
1st FRANKLIN FINANCIAL CORPORATION
(Exact Name of Obligor as Specified in its Charter)
Georgia 58-0521233
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
213 East Tugalo Street
Toccoa, Georgia 30577
(Address of Principal Executive Offices) (Zip Code)
----------------------------------
Variable Rate Subordinated Debentures
Due Four Years From Date of Issuance
(Title of the Indenture Securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Georgia Department of Banking and Finance
2990 Brandywine Road
Suite 200
Atlanta, Georgia 30041
Federal Deposit Insurance Corporation
Marquis Tower One
Suite 1700
Atlanta, Georgia 30303
Federal Reserve Bank of Atlanta
104 Marietta Street, N.W.
Atlanta, Georgia 30303-2713
(b) Whether it is authorized to exercise corporate trust
powers.
The Trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe
such affiliation.
None
Item 3. Voting Securities of the Trustee. *
Item 4. Trusteeships under Other Indentures. *
Item 5. Interlocking Directorates and Similar Relationships with the
Obligor or Underwriters. *
Item 6. Voting Securities of the Trustee Owned by the Obligor or its
Officials. *
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials. *
Item 8. Securities of the Obligor Owned or Held by the Trustee. *
Item 9. Securities of Underwriters Owned or Held by the Trustee. *
Item 10. Ownership or Holdings by the Trustee of Voting Securities of
Certain Affiliates or Security Holders of the Obligor. *
Item 11. Ownership or Holdings by the Trustee of any Securities of a
Person Owning 50 Percent or more of the Voting Securities of the
Obligor. *
_______________
* Not Applicable pursuant to General Instruction B.
<PAGE>
Item 12. Indebtedness of the Obligor to the Trustee. *
Item 13. Defaults by the Obligor.
There has been no default with respect to the securities
under the Indenture, or any other indenture or series under
which (i) the Trustee is a trustee, and (ii) any other
securities, or certificates of interest or participation in
any other securities, of 1st Franklin Financial Corporation
are outstanding.
Item 14. Affiliations with the Underwriters. *
Item 15. Foreign Trustee. *
Item 16. List of Exhibits.
(1) A copy of the Charter and/or Articles of Incorporation of
the Trustee. (Incorporated herein by reference to Exhibit
25.1 of the registrant's Form SE dated June 8, 1993, filed
pursuant to continuing hardship exemption.)
(2) Not applicable.
(3) Not applicable.
(4) Copy of the Bylaws of the Trustee, as now in effect.
(Incorporated herein by reference to Exhibit 25.4 of the
Registrant's Form SE dated June 8, 1993, filed pursuant to
continuing hardship exemption.)
(5) Not Applicable.
(6) The consent of the Trustee required by Section 321(b) of
the Act, filed as Exhibit 25.6.
(7) Copy of the latest Report of Condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority, filed as Exhibit 25.7.
___________________
* Not Applicable pursuant to General Instruction B.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Columbus Bank and Trust Company, a Georgia state bank, has duly caused this
statement of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Columbus, and the
State of Georgia, on the 27 day of October, 1994.
COLUMBUS BANK AND TRUST COMPANY
By: Alice H. Stagg
--------------------------------
Title: Vice President and Trust Officer
<PAGE>
<PAGE>
EXHIBIT 25.6
FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939 in connection with the proposed issuance of $20,000,000 Variable Rate
Subordinated Debentures of 1st Franklin Financial Corporation, Columbus Bank
and Trust Company hereby consents that reports of examinations by Federal,
State, Territorial or District Authorities may be furnished by such authority
to the Securities and Exchange Commission upon request therefor. It is
understood that the foregoing consent is subject to the non-disclosure
provisions of said Section 321(b).
COLUMBUS BANK AND TRUST COMPANY
By: Alice H. Stagg
--------------------------------
Title: Vice President and Trust Officer
Dated: October 27, 1994
<PAGE>
<PAGE>
EXHIBIT 25.7
Legal Title of Bank: Columbus Bank and Trust Company Call Date: 9/30/94
Address: PO Box 120 ST-BK: 13-0890
City, State, Zip: Columbus, GA 31902 Page RC-1
FDIC Certificate No: 00873
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC -- Balance Sheet
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------
ASSETS
1 Cash and balances due from depository institutions:
a. Noninterest-bearing balances and currency and coin(1). . 70,539
b. Interest-bearing balances(2) . . . . . . . . . . . . . . 708
2. Securities:
a. Held-to-maturity securities. . . . . . . . . . . . . . . 60,687
b. Available-for-sale securities. . . . . . . . . . . . . . 176,632
3. Federal funds sold and securities purchased under
agreements to resell:
a. Federal funds sold . . . . . . . . . . . . . . . . . . . 46,750
b. Securities purchased under agreements to resell. . . . . 0
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income . . . . 897,067
b. LESS: Allowance for loan and lease losses. . . . 15,335
c. LESS: Allocated transfer risk reserve. . . . . . 0
d. Loans and leases, net of unearned income,
allowance, and reserve . . . . . . . . . . . . . . . . . . 881,732
5. Assets held in trading accounts. . . . . . . . . . . . . . . 0
6. Premises and fixed assets (including capitalized leases) . . 79,154
7. Other real estate owned. . . . . . . . . . . . . . . . . . . 2,876
8. Investments in unconsolidated subsidiaries and
associated companies . . . . . . . . . . . . . . . . . . . . 0
9. Customers' liability to this bank on acceptances
outstanding. . . . . . . . . . . . . . . . . . . . . . . . . 0
10. Intangible assets. . . . . . . . . . . . . . . . . . . . . . 3,879
11. Other assets . . . . . . . . . . . . . . . . . . . . . . . . 111,249
12. Total assets . . . . . . . . . . . . . . . . . . . . . . . . 1,434,206
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
Legal Title of Bank: Columbus Bank and Trust Company Call Date: 9/30/94
Address: PO Box 120 ST-BK: 13-0890
City, State, Zip: Columbus, GA 31902Page RC-2
FDIC Certificate No: 00873
Schedule RC -- Continued
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------
LIABILITIES
13. Deposits:
a. In domestic offices. . . . . . . . . . . . . . . . . . . 1,024,444
(1) Noninterest-bearing(1) . . . . . . . . . . . 205,621
(2) Interest-bearing . . . . . . . . . . . . . . 818,823
b. In foreign offices, Edge and Agreement subsidiaries and IBF's
(1) Noninterest-bearing. . . . . . . . . . . . . . . . . /////////
(2) Interest-bearing . . . . . . . . . . . . . . . . . . /////////
14. Federal Funds purchased and securities sold under
agreements to repurchase:
a. Federal funds purchased . . . . . . . . . . . . . . . . 130,330
b. Securities sold under agreements to repurchase. . . . . 8,025
15. a. Demand notes issued to the U.S. Treasury . . . . . . . 5,835
b. Trading liabilities. . . . . . . . . . . . . . . . . . . 0
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . 18,556
b. With original maturity of more than one year . . . . . . 426
17. Mortgage indebtedness and obligations under
capitalized leases . . . . . . . . . . . . . . . . . . . . 615
18. Bank's liability on acceptances executed and outstanding . 0
19. Subordinated notes and debentures. . . . . . . . . . . . . 0
20. Other liabilities. . . . . . . . . . . . . . . . . . . . . 63,295
21. Total liabilities (sum of items 13 through 20) . . . . . . 1,251,526
22. Limited-life preferred stock and related surplus . . . . . 0
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus. . . . . . . 0
24. Common Stock . . . . . . . . . . . . . . . . . . . . . . . 3,154
25. Surplus (exclude all surplus related to preferred stock) . 64,106
26. a. Undivided profits and capital reserves. . . . . . . . . 119,468
b. Net unrealized holding gains (losses) on.
available-for-sale securities(4,048)
27. Cumulative foreign currency translation adjustments. . . . /////////
28. Total equity capital (sum of items 23 through 27). . . . . 182,680
29. Total liabilities, limited-life preferred stock,
and equity capital . . . . . . . . . . . . . . . . . . . . 1,434,206
- ----------
(1) Includes total demand deposits and noninterest-bearing time
and savings deposits.
<PAGE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work
performed for the bank by independent external auditors as of any
date during 1993 . . . . . . . . . . . . . . . . . . . . N/A
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm
which submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public
accounting firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external
auditors (may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
<PAGE>
<PAGE>
Exhibit 10(e)
SEVENTH AMENDMENT TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT
THIS SEVENTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT ("Seventh
Amendment"), dated as of June 20, 1994, among 1st FRANKLIN FINANCIAL
CORPORATION (formerly called "FRANKLIN DISCOUNT COMPANY"), a Georgia
corporation, as Borrower (the "Company"), CORESTATES BANK, N.A.*, a national
banking association (formerly called the Philadephia National Bank) ("PNB"),
NATIONAL WESTMINSTER BANK USA, a national banking association ("NatWest"),
SOUTHTRUST BANK OF GEORGIA, N.A., a national banking association , as
assignee of First American Bank of Georgia, N.A. ("SouthTrust"), and HARRIS
TRUST AND SAVINGS BANK, an Illinois banking corporation ("Harris"), as
lenders (collectively, the "Banks"), and CORESTATES BANK, N.A., a national
banking association, as Agent for the Banks (in such capacity, the "Agent"),
W I T N E S S E T H:
WHEREAS the Company, PNB, NatWest, United States Trust Company of New York,
a New York banking corporation ("U.S. Trust") and the Agent entered into a
Revolving Credit and Term Loan Agreement dated as of October 1, 1985, as
amended, by an Amendment to Revolving Credit and Term Loan Agreement dated as
of November 10, 1986 pursuant to which each said bank agreed to make Loans to
the Company as set forth therein; and
WHEREAS, U.S. Trust sold and assigned all of its right, title and interest in
and to its Loans under said Credit Agreement as so amended to Dai-Ichi Kangyo
Bank, Ltd. which, pursuant to the Second Amendment, Assignment and Assumption
Agreement dated March 1, 1988 to said Revolving Credit and Term Loan
Agreement, sold, assigned and transferred all of its right, title and
interest in its Loans under said Revolving Credit and Term Loan Agreement to
First American Bank of Georgia, N.A. ("FAB Georgia"); and
WHEREAS, SouthTrust is the assignee of FAB Georgia's right, title and
interest in its Loans under said Revolving Credit and Term Loan Agreement;
and
WHEREAS, said Revolving Credit and Term Loan Agreement was further amended
and extended by a Third Amendment to Revolving Credit and Term Loan Agreement
dated as of August 31, 1989, a Fourth Amendment to Revolving Credit and Term
Loan Agreement dated as of May 1, 1990, a Fifth Amendment and Extension
Agreement dated as of April 23, 1992 and a Sixth Amendment to Revolving
Credit and Term Loan Agreement dated as of July 20, 1992 (the "Sixth
Amendment"); and
WHEREAS, Harris was added as a lender under said Revolving Credit and Term
Loan Agreement pursuant to the Sixth Amendment (said Revolving Credit and
Term Loan Agreement as amended and extended, being referred to herein as the
"Credit Agreement"); and
* CoreStates Bank, N.A. also conducts business as Philadelphia National
Bank, as CoreStates First Pennsylvania Bank and as CoreStates Hamilton Bank
<PAGE>
WHEREAS, the Company, the Banks and the Agent desire to make certain
amendments to the Credit Agreement to extend the final termination date of
the Credit Agreement and the Banks' Commitments to December 31, 1999 and to
add an agreement relating to waiver of jury trial, all as more particularly
set forth herein;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the Company, the Banks and the Agent hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined
herein shall have the meanings given such terms in the Credit
Agreement.
2. The Company, the Banks and the Agent agree that, unless the
Banks' Commitments are terminated sooner in accordance with
Section 2.07 of the Credit Agreement, the termination date of the
Credit Agreement and of all of the Banks' Commitments thereunder
is hereby extended to be December 31, 1999. To that end, the
Credit Agreement is hereby amended as follows:
(a) The defined term "Commitment Termination Date" set forth in
Section 1.01 of the Credit Agreement, relating to Certain
Defined Terms, is hereby amended to read in its entirety
as follows:
"Commitment Termination Date" shall mean June 30 in
any year in which a written notice of termination is
given as provided in Section 2.07, but if no such
notice is given, then December 31, 1999.
(b) Section 2.07(c) of the Credit Agreement is hereby amended
to read in its entirety as follows:
(c) Termination of Commitment. Notwithstanding anything herein
contained to the contrary, unless the Banks and the Company
otherwise agree in writing, the Company's right to borrow
funds hereunder shall terminate, and the outstanding
balance of the Loans shall be paid in full, on December 31,
1999.
3. The Company hereby agrees to execute and deliver to the Agent a
Third Amended and Restated Revolving Credit Note substantially in
the form of Exhibit A-1 hereto payable to the order of each of
PNB, NatWest and SouthTrust and a First Amended and Restated
Revolving Credit Note substantially in the form of Exhibit A-2
hereto payable to the order of Harris, evidencing the Loans to be
made by the Banks to the Company in the amount of the Commitment
of each Bank and Harris, as amended hereby. The term "Notes" as
defined and used in the Agreement and as used herein shall, from
and after the date hereof, mean said Third Amended and Restated
Revolving Credit Notes and said First Amended and Restated
Revolving Credit Note, as said Notes may from time to time be
issued, amended, extended or supplemented.
<PAGE>
4. To induce the Banks and the Agent to enter into this Seventh
Amendment, the Company represents and warrants to each Bank and
to the Agent as follows:
(a) The Company has taken all corporate action necessary to
authorize the execution, delivery and performance of this
Seventh Amendment, the Third Amended Revolving Credit Notes
payable to the order of PNB, NatWest and SouthTrust and the
First Amended and Restated Revolving Credit Note payable to
the order of Harris. This Seventh Amendment and said Notes
are, or when executed by the Company and delivered to the
Agent will be, duly executed and constitute the valid and
legally binding obligations of the Company, enforceable
against the Company in accordance with their respective
terms. The Company hereby ratifies and confirms the
representations and warranties of the Company set forth in
Article 3 of the Credit Agreement as being true and correct
on the date hereof, as brought current pursuant to Section
10(a) of the Sixth Amendment; provided that the
representations and warranties which refer to the Form 10-K
shall be deemed to refer to the Company's most recent Form
10-K filed by the Company with the Security and Exchange
Commission and the representations and warranties which
refer to financial statements of the Company and the Parent
shall be deemed to refer to the most recent financial
statements furnished by the Company and the Parent to the
Banks.
5. To further induce the Banks and the Agent to enter in to this
Seventh Amendment, the Company agrees with the Banks and the
Agent as follows:
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR
RELATED TO THE CREDIT AGREEMENT AS AMENDED BY THIS SEVENTH
AMENDMENT, THE NOTES OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
6. The effectiveness of this Seventh Amendment is subject to the
fulfillment of the conditions precedent to all Loans set forth in
Section 4.02 of the Credit Agreement and to the following
conditions precedent:
(a) The Agent shall have received from Messrs. Jones, Day,
Reavis and Pogue, counsel to the Company, five executed
copies of their opinion dated the date of this Seventh
Amendment, addressed to each of the Banks in care of the
Agent and substantially in the form annexed hereto as
Exhibit B;
(b) The Agent shall have received one Note (in the form of
Exhibit A-1 hereto annexed) for each Bank except Harris and
one Note (in the form of Exhibit A-2 hereto annexed) for
Harris, all dated the date of this Seventh Amendment and
duly executed by the Company;
(c) The Agent shall have received five copies of a Confirmation
of Guaranty substantially in the form of Exhibit C hereto
annexed (the "Confirmation") each dated the date of this
Seventh Amendment and duly executed by the Parent;
<PAGE>
(d) The Agent shall have received five certified copies of
resolutions of the Boards of Directors of the Parent and
the Company, respectively, authorizing the execution,
delivery and performance by the Parent of the Confirmation
and by the Company of this Seventh Amendment and the Notes
and the borrowings hereunder, which certificates shall
state that said resolutions are in full force and effect
without modification on the date of such certification.
7. All other terms and conditions of the Credit Agreement shall
remain unchanged and are hereby ratified and confirmed.
IN WITNESS WHEREOF, the undersigned have caused this Seventh Amendment to be
executed by their respective officers thereunto duly authorized as of the
date first above written in several counterparts, each of which is an
original and all of which are identical, and each of the counterparts hereof
so executed shall for all purposes be deemed to be an original.
1st FRANKLIN FINANCIAL CORPORATION
By: A. Roger Guimond
----------------------
Vice President and CFO
CORESTATES BANK, N.A. as SOUTHTRUST BANK OF GEORGIA, N.A.
a Bank and as Agent
By William E. Musselman By Kenneth E. Davis
-------------------- ----------------
A.V.P V.P.
NATIONAL WESTMINSTER BANK HARRIS TRUST AND SAVINGS BANK
USA
By Mark Sicinski By Jerome P. Crokin
------------- ----------------
A.V.P V.P.
<PAGE>
EXHIBIT A-1
Third Amended and Restated
Revolving Credit Note
$___________________ Philadelphia, Pennsylvania
June 20, 1994
FOR VALUE RECEIVED, 1st FRANKLIN FINANCIAL CORPORATION, a Georgia
corporation (the "Company"), promises to pay to the order of
[_______________________] (the "Bank"), at the office of CoreStates Bank,
N.A., as Agent, at Broad and Chestnut Streets, Philadelphia, Pennsylvania
19107 in lawful money of the United States of America, in Immediately
Available Funds, on the first to occur of December 31, 1999 or the January
1 following a "Commitment Termination Date" as defined in the Agreement
hereinafter referred to, the sum of ____________ Million Dollars
($_______________) or the amount outstanding on said date of all Loans made
by the Bank to the Company pursuant to Section 2.01 of the Agreement
hereinafter referred to, as conclusively evidenced by written endorsement
with respect thereto by an officer of the Bank upon the Schedule hereto
annexed, whichever is less.
The Company shall also pay to the Bank interest (computed on the basis of
the actual number of days elapsed in a year of 360 days) on the unpaid
principal amount hereof in like money, on the last business day of each
June, September, December and March, in each year, commencing on the first
of such dates after the date hereof, and at maturity until payment in full
at a rate per annum, determined daily, equal to one quarter of one
percentage point above the rate of interest for loans established and
publicly announced in Philadelphia from time to time by CoreStates Bank,
N.A. as its "Prime Rate" (the "Prime Rate"). Interest shall be payable on
any overdue amount of principal at a rate per annum equal to two percentage
points above the Prime Rate. Each change in the rate of interest hereon
due to a change in the Prime Rate shall be effective on the effective date
of such change in the Prime Rate, but in no event shall interest be payable
at a rate higher than that permitted by applicable law. The undersigned
also agrees to pay the Facility Service Fee and the Agents's fee described
in the Agreement hereinafter referred to.
The outstanding principal balance of this Note may be prepaid by the
Company, in whole or in part, at any time or from time to time, but any
partial prepayment shall not be less than the minimum amount provided in
Section 2.01(a) of the Agreement hereinafter referred to.
As used herein, the term "business day" shall mean a day other than a
Saturday, Sunday or legal bank holiday under the laws of the States of
Pennsylvania or New York, and the term "Immediately Available Funds" shall
mean funds which are available for immediate use by the Bank at the Bank's
office hereinabove set forth not later that the due date of such payment.
<PAGE>
This Note is one of the Notes issued pursuant to Paragraph 3 of a certain
Seventh Amendment to Revolving Credit and Term Loan Agreement dated as of
June 20, 1994 among the Company, CoreStates Bank, N.A., National Westminster
Bank USA, SouthTrust Bank of Georgia, N.A., Harris Trust and Savings Bank and
CoreStates Bank, N.A., as Agent, which amends a certain Credit Agreement
dated as of October 1, 1985 among the Company, CoreStates Bank, N.A.,
National Westminster Bank USA, United States Trust Company of New York
(predecessor by way of assignment to SouthTrust Bank of Georgia, N.A.) and
CoreStates Bank, N.A., as Agent, as amended (herein, together with said
Seventh Amendment, all other prior amendments thereto and any amendments
which may hereafter be made thereto, called the "Agreement"). Upon the
occurrence of any one or more of the Events of Default specified in the
Agreement, the amounts then remaining unpaid on this Note may be declared to
be immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, and the
Company shall be further obligated to reimburse the holder hereof for all
reasonable out-of-pocket expenses of the holder in enforcing or attempting to
enforce this Note, all as provided in the Agreement.
This Note replaces and supersedes but does not extinguish the Company's
liabilities and outstanding obligations under the Company's
$_______________________ Second Amended and Restated Revolving Credit Note
dated July 20, 1992 to the order of the Bank.
This Note and all rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
1st FRANKLIN FINANCIAL CORPORATION
By ______________________________
Title
<PAGE>
Schedule of Loans and Principal Payments
Name of
Unpaid Person
Amount of Amount of Principal Making
Date Loan Principal Paid Balance Notation
<PAGE>
EXHIBIT A-2
First Amended and Restated Revolving Credit Note
$5,000,000 Philadelphia, Pennsylvania
June 20, 1994
FOR VALUE RECEIVED, 1st FRANKLIN FINANCIAL CORPORATION, a Georgia
corporation (the "Company"), promises to pay to the order of HARRIS TRUST
AND SAVINGS BANK, an Illinois banking corporation (the "Bank"), at the
office of CoreStates Bank, N.A., as Agent, at Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19107 in lawful money of the United States of
America, in Immediately Available Funds, on the first to occur of December
31, 1999 or the January 1 following a "Commitment Termination Date" as
defined in the Agreement hereinafter referred to, the sum of Five Million
Dollars ($5,000,000) or the amount outstanding on said date of all Loans
made by the Bank to the Company pursuant to Section 2.01 of the Agreement
hereinafter referred to, as conclusively evidenced by written endorsement
with respect thereto by an officer of the Bank upon the Schedule hereto
annexed, whichever is less.
The Company shall also pay to the Bank interest (computed on the basis of
the actual number of days elapsed in a year of 360 days) on the unpaid
principal amount hereof in like money, on the last business day of each
June, September, December and March, in each year, commencing on the first
of such dates after the date hereof, and at maturity until payment in full
at a rate per annum, determined daily, equal to one quarter of one
percentage point above the rate of interest for loans established and
publicly announced in Philadelphia from time to time by CoreStates Bank,
N.A. as its "Prime Rate" (the "Prime Rate"). Interest shall be payable on
any overdue amount of principal at a rate per annum equal to two percentage
points above the Prime Rate. Each change in the rate of interest hereon
due to a change in the Prime Rate shall be effective on the effective date
of such change in the Prime Rate, but in no event shall interest be payable
at a rate higher than that permitted by applicable law. The undersigned
also agrees to pay the Facility Service Fee and the Agents's fee described
in the Agreement hereinafter referred to.
The outstanding principal balance of this Note may be prepaid by the
Company, in whole or in part, at any time or from time to time, but any
partial prepayment shall not be less than the minimum amount provided in
Section 2.01(a) of the Agreement hereinafter referred to.
As used herein, the term "business day" shall mean a day other than a
Saturday, Sunday or legal bank holiday under the laws of the States of
Pennsylvania or New York, and the term "Immediately Available Funds" shall
mean funds which are available for immediate use by the Bank at the Bank's
office hereinabove set forth not later that the due date of such payment.
<PAGE>
This Note is one of the Notes issued pursuant to Paragraph 3 of a certain
Seventh Amendment to Revolving Credit and Term Loan Agreement dated as of
June 20, 1994 among the Company, CoreStates Bank, N.A., National Westminster
Bank USA, SouthTrust Bank of Georgia, N.A., Harris Trust and Savings Bank and
CoreStates Bank, N.A., as Agent, which amends a certain Credit Agreement
dated as of October 1, 1985 among the Company, CoreStates Bank, N.A.,
National Westminster Bank USA, United States Trust Company of New York
(predecessor by way of assignment to SouthTrust Bank of Georgia, N.A.) and
CoreStates Bank, N.A., as Agent, as amended (herein, together with said
Seventh Amendment, all other prior amendments thereto and any amendments
which may hereafter be made thereto, called the "Agreement"). Upon the
occurrence of any one or more of the Events of Default specified in the
Agreement, the amounts then remaining unpaid on this Note may be declared to
be immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, and the
Company shall be further obligated to reimburse the holder hereof for all
reasonable out-of-pocket expenses of the holder in enforcing or attempting to
enforce this Note, all as provided in the Agreement.
This Note replaces and supersedes but does not extinguish the Company's
liabilities and outstanding obligations under the Company's $5,000,000
Revolving Credit Note dated July 20, 1992 to the order of the Bank.
This Note and all rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
1st FRANKLIN FINANCIAL CORPORATION
By ______________________________
Title
<PAGE>
Schedule of Loans and Principal Payments
Name of
Unpaid Person
Amount of Amount of Principal Making
Date Loan Principal Paid Balance Notation
<PAGE>
Third Amended and Restated
Revolving Credit Note
$6,000,000 Philadelphia, Pennsylvania
June 20, 1994
FOR VALUE RECEIVED, 1st FRANKLIN FINANCIAL CORPORATION, a Georgia
corporation (the "Company"), promises to pay to the order of CORESTATES
BANK, N.A., a national banking association (the "Bank"), at the office of
CoreStates Bank, N.A., as Agent, at Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19107 in lawful money of the United States of
America, in Immediately Available Funds, on the first to occur of December
31, 1999 or the January 1 following a "Commitment Termination Date" as
defined in the Agreement hereinafter referred to, the sum of Six Million
Dollars ($6,000,000) or the amount outstanding on said date of all Loans
made by the Bank to the Company pursuant to Section 2.01 of the Agreement
hereinafter referred to, as conclusively evidenced by written endorsement
with respect thereto by an officer of the Bank upon the Schedule hereto
annexed, whichever is less.
The Company shall also pay to the Bank interest (computed on the basis of
the actual number of days elapsed in a year of 360 days) on the unpaid
principal amount hereof in like money, on the last business day of each
June, September, December and March, in each year, commencing on the first
of such dates after the date hereof, and at maturity until payment in full
at a rate per annum, determined daily, equal to one quarter of one
percentage point above the rate of interest for loans established and
publicly announced in Philadelphia from time to time by CoreStates Bank,
N.A. as its "Prime Rate" (the "Prime Rate"). Interest shall be payable on
any overdue amount of principal at a rate per annum equal to two percentage
points above the Prime Rate. Each change in the rate of interest hereon
due to a change in the Prime Rate shall be effective on the effective date
of such change in the Prime Rate, but in no event shall interest be payable
at a rate higher than that permitted by applicable law. The undersigned
also agrees to pay the Facility Service Fee and the Agents's fee described
in the Agreement hereinafter referred to.
The outstanding principal balance of this Note may be prepaid by the
Company, in whole or in part, at any time or from time to time, but any
partial prepayment shall not be less than the minimum amount provided in
Section 2.01(a) of the Agreement hereinafter referred to.
As used herein, the term "business day" shall mean a day other than a
Saturday, Sunday or legal bank holiday under the laws of the States of
Pennsylvania or New York, and the term "Immediately Available Funds" shall
mean funds which are available for immediate use by the Bank at the Bank's
office hereinabove set forth not later that the due date of such payment.
<PAGE>
This Note is one of the Notes issued pursuant to Paragraph 3 of a certain
Seventh Amendment to Revolving Credit and Term Loan Agreement dated as of
June 20, 1994 among the Company, CoreStates Bank, N.A., National Westminster
Bank USA, SouthTrust Bank of Georgia, N.A., Harris Trust and Savings Bank and
CoreStates Bank, N.A., as Agent, which amends a certain Credit Agreement
dated as of October 1, 1985 among the Company, CoreStates Bank, N.A.,
National Westminster Bank USA, United States Trust Company of New York
(predecessor by way of assignment to SouthTrust Bank of Georgia, N.A.) and
CoreStates Bank, N.A., as Agent, as amended (herein, together with said
Seventh Amendment, all other prior amendments thereto and any amendments
which may hereafter be made thereto, called the "Agreement"). Upon the
occurrence of any one or more of the Events of Default specified in the
Agreement, the amounts then remaining unpaid on this Note may be declared to
be immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, and the
Company shall be further obligated to reimburse the holder hereof for all
reasonable out-of-pocket expenses of the holder in enforcing or attempting to
enforce this Note, all as provided in the Agreement.
This Note replaces and supersedes but does not extinguish the Company's
liabilities and outstanding obligations under the Company's $6,000,000
Revolving Credit Note dated July 20, 1992 to the order of the Bank.
This Note and all rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
1st FRANKLIN FINANCIAL CORPORATION
By A. Roger Guimond
----------------------
Vice President and CFO
<PAGE>
Schedule of Loans and Principal Payments
Name of
Unpaid Person
Amount of Amount of Principal Making
Date Loan Principal Paid Balance Notation
<PAGE>
Third Amended and Restated
Revolving Credit Note
$5,000,000 Philadelphia, Pennsylvania
June 20, 1994
FOR VALUE RECEIVED, 1st FRANKLIN FINANCIAL CORPORATION, a Georgia
corporation (the "Company"), promises to pay to the order of SOUTHTRUST
BANK OF GEORGIA, N.A., a national banking association (as assignee of First
American Bank of Georgia, N.A.)(the "Bank"), at the office of CoreStates
Bank, N.A., as Agent, at Broad and Chestnut Streets, Philadelphia,
Pennsylvania 19107 in lawful money of the United States of America, in
Immediately Available Funds, on the first to occur of December 31, 1999 or
the January 1 following a "Commitment Termination Date" as defined in the
Agreement hereinafter referred to, the sum of Five Million Dollars
($5,000,000) or the amount outstanding on said date of all Loans made by
the Bank to the Company pursuant to Section 2.01 of the Agreement
hereinafter referred to, as conclusively evidenced by written endorsement
with respect thereto by an officer of the Bank upon the Schedule hereto
annexed, whichever is less.
The Company shall also pay to the Bank interest (computed on the basis of
the actual number of days elapsed in a year of 360 days) on the unpaid
principal amount hereof in like money, on the last business day of each
June, September, December and March, in each year, commencing on the first
of such dates after the date hereof, and at maturity until payment in full
at a rate per annum, determined daily, equal to one quarter of one
percentage point above the rate of interest for loans established and
publicly announced in Philadelphia from time to time by CoreStates Bank,
N.A. as its "Prime Rate" (the "Prime Rate"). Interest shall be payable on
any overdue amount of principal at a rate per annum equal to two percentage
points above the Prime Rate. Each change in the rate of interest hereon
due to a change in the Prime Rate shall be effective on the effective date
of such change in the Prime Rate, but in no event shall interest be payable
at a rate higher than that permitted by applicable law. The undersigned
also agrees to pay the Facility Service Fee and the Agents's fee described
in the Agreement hereinafter referred to.
The outstanding principal balance of this Note may be prepaid by the
Company, in whole or in part, at any time or from time to time, but any
partial prepayment shall not be less than the minimum amount provided in
Section 2.01(a) of the Agreement hereinafter referred to.
As used herein, the term "business day" shall mean a day other than a
Saturday, Sunday or legal bank holiday under the laws of the States of
Pennsylvania or New York, and the term "Immediately Available Funds" shall
mean funds which are available for immediate use by the Bank at the Bank's
office hereinabove set forth not later that the due date of such payment.
<PAGE>
This Note is one of the Notes issued pursuant to Paragraph 3 of a certain
Seventh Amendment to Revolving Credit and Term Loan Agreement dated as of
June 20, 1994 among the Company, CoreStates Bank, N.A., National Westminster
Bank USA, SouthTrust Bank of Georgia, N.A., Harris Trust and Savings Bank and
CoreStates Bank, N.A., as Agent, which amends a certain Credit Agreement
dated as of October 1, 1985 among the Company, CoreStates Bank, N.A.,
National Westminster Bank USA, United States Trust Company of New York
(predecessor by way of assignment to SouthTrust Bank of Georgia, N.A.) and
CoreStates Bank, N.A., as Agent, as amended (herein, together with said
Seventh Amendment, all other prior amendments thereto and any amendments
which may hereafter be made thereto, called the "Agreement"). Upon the
occurrence of any one or more of the Events of Default specified in the
Agreement, the amounts then remaining unpaid on this Note may be declared to
be immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, and the
Company shall be further obligated to reimburse the holder hereof for all
reasonable out-of-pocket expenses of the holder in enforcing or attempting to
enforce this Note, all as provided in the Agreement.
This Note replaces and supersedes but does not extinguish the Company's
liabilities and outstanding obligations under the Company's $5,000,000
Revolving Credit Note dated July 20, 1992 to the order of the Bank.
This Note and all rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
1st FRANKLIN FINANCIAL CORPORATION
By A. Roger Guimond
----------------------
Vice President and CFO
<PAGE>
Schedule of Loans and Principal Payments
Name of
Unpaid Person
Amount of Amount of Principal Making
Date Loan Principal Paid Balance Notation
<PAGE>
Third Amended and Restated
Revolving Credit Note
$5,000,000 Philadelphia, Pennsylvania
June 20, 1994
FOR VALUE RECEIVED, 1st FRANKLIN FINANCIAL CORPORATION, a Georgia
corporation (the "Company"), promises to pay to the order of NATIONAL
WESTMINSTER BANK USA, a national banking association (the "Bank"), at the
office of CoreStates Bank, N.A., as Agent, at Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19107 in lawful money of the United States of
America, in Immediately Available Funds, on the first to occur of December
31, 1999 or the January 1 following a "Commitment Termination Date" as
defined in the Agreement hereinafter referred to, the sum of Five Million
Dollars ($5,000,000) or the amount outstanding on said date of all Loans
made by the Bank to the Company pursuant to Section 2.01 of the Agreement
hereinafter referred to, as conclusively evidenced by written endorsement
with respect thereto by an officer of the Bank upon the Schedule hereto
annexed, whichever is less.
The Company shall also pay to the Bank interest (computed on the basis of
the actual number of days elapsed in a year of 360 days) on the unpaid
principal amount hereof in like money, on the last business day of each
June, September, December and March, in each year, commencing on the first
of such dates after the date hereof, and at maturity until payment in full
at a rate per annum, determined daily, equal to one quarter of one
percentage point above the rate of interest for loans established and
publicly announced in Philadelphia from time to time by CoreStates Bank,
N.A. as its "Prime Rate" (the "Prime Rate"). Interest shall be payable on
any overdue amount of principal at a rate per annum equal to two percentage
points above the Prime Rate. Each change in the rate of interest hereon
due to a change in the Prime Rate shall be effective on the effective date
of such change in the Prime Rate, but in no event shall interest be payable
at a rate higher than that permitted by applicable law. The undersigned
also agrees to pay the Facility Service Fee and the Agents's fee described
in the Agreement hereinafter referred to.
The outstanding principal balance of this Note may be prepaid by the
Company, in whole or in part, at any time or from time to time, but any
partial prepayment shall not be less than the minimum amount provided in
Section 2.01(a) of the Agreement hereinafter referred to.
As used herein, the term "business day" shall mean a day other than a
Saturday, Sunday or legal bank holiday under the laws of the States of
Pennsylvania or New York, and the term "Immediately Available Funds" shall
mean funds which are available for immediate use by the Bank at the Bank's
office hereinabove set forth not later that the due date of such payment.
<PAGE>
This Note is one of the Notes issued pursuant to Paragraph 3 of a certain
Seventh Amendment to Revolving Credit and Term Loan Agreement dated as of
June 20, 1994 among the Company, CoreStates Bank, N.A., National Westminster
Bank USA, SouthTrust Bank of Georgia, N.A., Harris Trust and Savings Bank and
CoreStates Bank, N.A., as Agent, which amends a certain Credit Agreement
dated as of October 1, 1985 among the Company, CoreStates Bank, N.A.,
National Westminster Bank USA, United States Trust Company of New York
(predecessor by way of assignment to SouthTrust Bank of Georgia, N.A.) and
CoreStates Bank, N.A., as Agent, as amended (herein, together with said
Seventh Amendment, all other prior amendments thereto and any amendments
which may hereafter be made thereto, called the "Agreement"). Upon the
occurrence of any one or more of the Events of Default specified in the
Agreement, the amounts then remaining unpaid on this Note may be declared to
be immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, and the
Company shall be further obligated to reimburse the holder hereof for all
reasonable out-of-pocket expenses of the holder in enforcing or attempting to
enforce this Note, all as provided in the Agreement.
This Note replaces and supersedes but does not extinguish the Company's
liabilities and outstanding obligations under the Company's $5,000,000
Revolving Credit Note dated July 20, 1992 to the order of the Bank.
This Note and all rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
1st FRANKLIN FINANCIAL CORPORATION
By A. Roger Guimond
----------------------
Vice President and CFO
<PAGE>
Schedule of Loans and Principal Payments
Name of
Unpaid Person
Amount of Amount of Principal Making
Date Loan Principal Paid Balance Notation
<PAGE>
First Amended and Restated Revolving Credit Note
$5,000,000 Philadelphia, Pennsylvania
June 20, 1994
FOR VALUE RECEIVED, 1st FRANKLIN FINANCIAL CORPORATION, a Georgia
corporation (the "Company"), promises to pay to the order of HARRIS TRUST
AND SAVINGS BANK, an Illinois banking corporation (the "Bank"), at the
office of CoreStates Bank, N.A., as Agent, at Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19107 in lawful money of the United States of
America, in Immediately Available Funds, on the first to occur of December
31, 1999 or the January 1 following a "Commitment Termination Date" as
defined in the Agreement hereinafter referred to, the sum of Five Million
Dollars ($5,000,000) or the amount outstanding on said date of all Loans
made by the Bank to the Company pursuant to Section 2.01 of the Agreement
hereinafter referred to, as conclusively evidenced by written endorsement
with respect thereto by an officer of the Bank upon the Schedule hereto
annexed, whichever is less.
The Company shall also pay to the Bank interest (computed on the basis of
the actual number of days elapsed in a year of 360 days) on the unpaid
principal amount hereof in like money, on the last business day of each
June, September, December and March, in each year, commencing on the first
of such dates after the date hereof, and at maturity until payment in full
at a rate per annum, determined daily, equal to one quarter of one
percentage point above the rate of interest for loans established and
publicly announced in Philadelphia from time to time by CoreStates Bank,
N.A. as its "Prime Rate" (the "Prime Rate"). Interest shall be payable on
any overdue amount of principal at a rate per annum equal to two percentage
points above the Prime Rate. Each change in the rate of interest hereon
due to a change in the Prime Rate shall be effective on the effective date
of such change in the Prime Rate, but in no event shall interest be payable
at a rate higher than that permitted by applicable law. The undersigned
also agrees to pay the Facility Service Fee and the Agents's fee described
in the Agreement hereinafter referred to.
The outstanding principal balance of this Note may be prepaid by the
Company, in whole or in part, at any time or from time to time, but any
partial prepayment shall not be less than the minimum amount provided in
Section 2.01(a) of the Agreement hereinafter referred to.
As used herein, the term "business day" shall mean a day other than a
Saturday, Sunday or legal bank holiday under the laws of the States of
Pennsylvania or New York, and the term "Immediately Available Funds" shall
mean funds which are available for immediate use by the Bank at the Bank's
office hereinabove set forth not later that the due date of such payment.
<PAGE>
This Note is one of the Notes issued pursuant to Paragraph 3 of a certain
Seventh Amendment to Revolving Credit and Term Loan Agreement dated as of
June 20, 1994 among the Company, CoreStates Bank, N.A., National Westminster
Bank USA, SouthTrust Bank of Georgia, N.A., Harris Trust and Savings Bank and
CoreStates Bank, N.A., as Agent, which amends a certain Credit Agreement
dated as of October 1, 1985 among the Company, CoreStates Bank, N.A.,
National Westminster Bank USA, United States Trust Company of New York
(predecessor by way of assignment to SouthTrust Bank of Georgia, N.A.) and
CoreStates Bank, N.A., as Agent, as amended (herein, together with said
Seventh Amendment, all other prior amendments thereto and any amendments
which may hereafter be made thereto, called the "Agreement"). Upon the
occurrence of any one or more of the Events of Default specified in the
Agreement, the amounts then remaining unpaid on this Note may be declared to
be immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company, and the
Company shall be further obligated to reimburse the holder hereof for all
reasonable out-of-pocket expenses of the holder in enforcing or attempting to
enforce this Note, all as provided in the Agreement.
This Note replaces and supersedes but does not extinguish the Company's
liabilities and outstanding obligations under the Company's $5,000,000
Revolving Credit Note dated July 20, 1992 to the order of the Bank.
This Note and all rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
1st FRANKLIN FINANCIAL CORPORATION
By A. Roger Guimond
----------------------
Vice President and CFO
<PAGE>
Schedule of Loans and Principal Payments
Name of
Unpaid Person
Amount of Amount of Principal Making
Date Loan Principal Paid Balance Notation
<PAGE>
