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Exhibit 7.8
AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT
THIS AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT (the "Pledge
Agreement"), dated as of August __, 1996, is made by SIRROM INVESTMENTS, INC.,
a corporation organized under the laws of Tennessee (the "Pledgor"), in favor
of FIRST UNION NATIONAL BANK OF TENNESSEE, a national banking association, as
Agent (the "Agent") for the ratable benefit of itself and the financial
institutions (the "Lenders") as are, or may from time to time become, parties
to the Loan Agreement (as hereinafter defined).
STATEMENT OF PURPOSE
Pursuant to the Assignment and Assumption Agreement dated as of
__________, 1996 between the Sirrom Capital Corporation (the "Parent") and the
Borrower, the Parent has transferred all of its rights and obligations under
the Third Amended and Restated Loan Agreement dated as of December 27, 1995, as
amended, by and among the Parent, as borrower, the Lenders party thereto, and
the Agent (the "Existing Loan Agreement"), and the documents executed in
connection therewith, to the Borrower, and the Borrower has assumed all of such
rights and obligations.
Pursuant to the terms of the Fourth Amended and Restated Loan
Agreement of even date among the Pledgor, as Borrower, the Parent, as
Guarantor, the Lenders, and the Agent (as amended, restated, modified or
otherwise supplemented from time to time, the "Loan Agreement"), the Lenders
have agreed to amend and restate the Existing Loan Agreement in order to
transfer the rights and obligations of the Guarantor, as borrower, to the
Pledgor and to extend a certain revolving credit facility to the Pledgor as
more particularly described therein.
The Pledgor is the legal and beneficial owner of (a) the Pledged
Securities of the issuers (the "Issuers") listed on Schedule I hereto and (b)
the indebtedness (the "Pledged Debt") described on Schedule I and issued by the
obligors named therein.
In connection with the transactions contemplated by the Loan Agreement
and as a condition precedent to the extensions of credit thereunder, the
Lenders have requested, and the Pledgor has agreed to execute and deliver, this
Pledge Agreement with the Pledged Securities and the Pledged Debt in order to
amend and restate the terms and conditions of the Pledge Agreement dated as of
December 27, 1995 made by the Guarantor, as pledgor, in favor of the Agent, for
the ratable benefit of itself and the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to execute the Loan Agreement and accept the security
contemplated hereby and the Lenders to make extensions of credit under the Loan
Agreement, the Pledgor hereby agrees with
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the Agent for the ratable benefit of the Agent and Lenders as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Loan Agreement and used herein (including the preamble and
statement of purpose) are so used as so defined, and the following terms shall
have the following meanings:
"Bailment Agreement" means the Amended and Restated Agreement
for Bailment of Collateral and Remittance of Collateral Funds of even
date between the Custodian and the Agent, for the ratable benefit of
itself and the Lenders.
"Code" means the Uniform Commercial Code from time to time in
effect in the State of Tennessee.
"Collateral" means the Securities Collateral and the Pledged
Debt.
"Custodian" means First American Trust Company, as Custodian
for the Agent and the Lenders, pursuant to the terms and conditions of
the Bailment Agreement.
"Pledge Agreement" means this Pledge Agreement, as amended or
modified.
"Pledged Debt" means the indebtedness described on Schedule I
and issued by the obligors named therein and the instruments
evidencing such indebtedness, and all principal, interest, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; all additional indebtedness (to the extent not
effectively pledged to the Lender pursuant to another Loan Document)
from time to time owed to the Pledgor by any obligor and the
instruments evidencing such indebtedness, and all principal, interest,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such additional indebtedness.
"Pledged Securities" means the shares of capital stock and
warrants listed on Schedule I hereto, together with all stock
certificates, warrants, options or rights of any nature whatsoever
that may be issued or granted to the Pledgor while this Pledge
Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any event,
shall include, without limi-
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tation, all dividends or other income from the Pledged Securities,
collections thereon, proceeds of sale thereof or distributions with
respect thereto.
"Securities Collateral" means the Pledged Securities and all
Proceeds therefrom.
2. Pledge and Grant of Security Interest. The Pledgor hereby
delivers to the Agent, for the ratable benefit of the Agent and Lenders, all
the Pledged Securities and Pledged Debt (endorsed in blank) and hereby grants
to the Agent, for the ratable benefit of the Agent and Lenders, a first
priority security interest in the Collateral, as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations. The Pledgor and
the Agent hereby acknowledge that the Pledged Securities and Pledged Debt have
been delivered and shall be held by the Custodian, for the benefit of the Agent
and the Lenders, pursuant to the terms and conditions of the Bailment
Agreement.
3. Transfer Powers and Proxies. Concurrently with the delivery to
the Custodian of each certificate and original document representing the
Pledged Securities, the Pledgor shall deliver an undated transfer power and
irrevocable proxy covering such certificate or document, duly executed in blank
by the Pledgor with, if the Agent so requests, signature guaranteed.
4. Representations and Warranties. To induce the Agent and Lenders
to execute the Loan Agreement and to accept the security contemplated hereby
and the Lenders to make extensions of credit under the Loan Agreement, the
Pledgor hereby represents and warrants that:
(a) the Pledgor has the corporate power, authority and
legal right to execute and deliver, to perform its obligations under,
and to grant the Lien on the Collateral pursuant to, this Pledge
Agreement and has taken all necessary corporate action to authorize
its execution, delivery and performance of, and grant of the Lien on
the Collateral pursuant to, this Pledge Agreement;
(b) this Pledge Agreement constitutes a legal, valid and
binding obligation of the Pledgor enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(c) the execution, delivery and performance of this
Pledge Agreement will not violate any provision of any Applicable Law
(including without limitation the SBIC Regulation or the Investment
Company Act) or contractual obligation
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of the Pledgor and will not result in the creation or imposition of
any Lien on any of the properties or revenues of the Pledgor pursuant
to any Applicable Law or contractual obligation, except as
contemplated hereby;
(d) no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or Governmental Authority
(other than approval by the SBA which approval has been obtained and
is in full force and effect) and no consent of any other Person
(including, without limitation, any stockholder or creditor of the
Pledgor or any Issuer), is required in connection with the execution,
delivery, performance, validity or enforceability of this Pledge
Agreement except those which have been obtained, except as may be
required in connection with the disposition of the Pledged Securities
by laws affecting the offering and sale of securities generally;
(e) no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority (including without
limitation, the SBA) is pending or, to the knowledge of the Pledgor,
are threatened by or against or in any other way relate adversely to
or affect the Pledgor or any of its properties or revenues with
respect to this Pledge Agreement or any of the transactions
contemplated hereby in any court or before any arbitrator of any kind
or before or by any Governmental Authority (including without
limitation, the SBA);
(f) the Pledged Securities listed on Schedule I
constitute all of the shares of capital stock, warrants, options and
similar rights of any kind owned by the Pledgor;
(g) to the best of Pledgor's knowledge, all the Pledged
Securities have been duly and validly issued and are fully paid and
nonassessable;
(h) to the best of Pledgor's knowledge, the Pledged Debt has
been duly authorized, authenticated, issued and delivered, and is the
legal, valid and binding obligation of the obligors thereof, and is
not in default;
(i) the Pledged Debt constitutes all of the outstanding
indebtedness owed to the Pledgor and is outstanding in the principal
amount indicated on Schedule I; the Pledgor has not agreed, and no
holder of any Pledged Debt shall be obligated, to remit any payments
made under the Pledged Debt for the account of any other Person; none
of the Pledged Debt is subject to any defense or setoff;
(j) the Pledgor is the record and beneficial owner of,
and has good and marketable title to, the Collateral listed on
Schedule I, free of any and all Liens or options in favor of,
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or claims of, any other Person, except the Lien created by this Pledge
Agreement or Liens permitted under Section 9.3 of the Loan Agreement;
(k) the jurisdiction in which Pledgor is located for
purposes of Section 9-103 of the UCC is the address set forth on
Schedule II;
(l) upon delivery to the Custodian, for the benefit of
the Agent and the Lenders pursuant to the terms and conditions of the
Bailment Agreement, of the stock certificates and other original
documents evidencing the Pledged Securities and the agreements
evidencing the Pledged Debt and the filing of properly completed
financing or other statements in all necessary jurisdictions, the Lien
on the Collateral granted pursuant to this Pledge Agreement will
constitute a valid, perfected first priority Lien on the Collateral,
enforceable as such against all creditors of the Pledgor;
(m) the Pledgor has acquired all the Collateral by
purchases in the ordinary course of business from sellers in the
business of selling such property in the ordinary course of business
and none of the Collateral has been purchased in a bulk sale or other
purchase of a business or investment portfolio; and
(n) the Pledgor has no knowledge of any facts or
circumstances that would preclude, upon delivery of the Pledged
Securities, with the transfer power executed in blank, and the Pledged
Debt, endorsed in blank, to the Custodian, the Agent from being a
"bona fide purchaser" of the Pledge Securities under Article 8 of the
UCC or a "holder in due course" of the Pledged Debt under Article 3 of
the UCC.
5. Certain Covenants. The Pledgor covenants and agrees with the
Agent for the ratable benefit of the Agent and Lenders that, from and after the
date of this Pledge Agreement until the Obligations are paid in full and the
Commitments are terminated:
(a) The Pledgor will not change its name, identity or
corporate structure so as to make any financing or other statement
filed as provided herein become seriously misleading. The Pledgor
will, upon request of the Agent, execute such financing statements,
notices of lien, notices of assignment and continuations or amendments
to any of the foregoing, and other documents (and pay the costs of
filing or recording the same in all public offices deemed necessary by
the Agent) and do such other acts and things, all as the Agent may
from time to time request to establish and maintain a valid perfected
pledge and security interest in the Collateral. Pledgor hereby
constitutes and appoints the Agent (and any of its officers) as its
attorney-in-fact with full power
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and authority to execute and deliver all documents necessary to
perfect and keep perfected the security interests created hereby.
This power of attorney hereby granted is a special power of attorney
coupled with an interest and shall be irrevocable by Pledgor.
(b) The Pledgor will pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all
additional indebtedness owed to the Pledgor by any obligor and deliver
the same forthwith (endorsed in blank) to the Custodian (with copies
to the Agent).
(c) If the Pledgor shall, as a result of its ownership of
the Collateral, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), warrant, option or
rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for any of the Collateral, or otherwise in respect
thereof, the Pledgor shall accept the same as the agent of the Agent,
hold the same in trust for the Agent and deliver the same forthwith to
the Custodian (with copies to the Agent) in the exact form received,
duly indorsed by the Pledgor to the Agent, if required, together with
an undated transfer power and irrevocable proxy covering such
certificate or other instrument duly executed in blank by the Pledgor
and with, if the Agent so requests, signature guaranteed, to be held
by the Custodian, for the benefit of the Agent and the Lenders,
subject to the terms hereof and the Bailment Agreement, as additional
collateral security for the Obligations. In addition, any sums paid
upon or in respect of any Collateral upon the liquidation or
dissolution of any Issuer shall be paid over to the Custodian, for the
benefit of the Agent and the Lenders, to be held by it hereunder and
under the Bailment Agreement as additional collateral security for the
Obligations, and in case any distribution of capital shall be made on
or in respect of any Collateral or any property shall be distributed
upon or with respect to any Collateral pursuant to the
recapitalization or reclassification of the capital of any Issuer or
pursuant to the reorganization thereof, the property so distributed
shall be delivered to the Custodian, for the benefit of the Agent and
the Lenders, to be held by it hereunder and under the Bailment
Agreement as additional collateral security for the Obligations. If
any sums of money or property so paid or distributed in respect of any
Collateral shall be received by the Pledgor, the Pledgor shall, until
such money or property is paid or delivered to the Custodian, hold
such money or property in trust for the Agent, segregated from other
funds of the Pledgor, as additional collateral security for the
Obligations.
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(d) Without the prior written consent of the Agent, the
Pledgor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of
any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any stock or other
equity securities of any nature of such Issuer, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, without the prior written consent of the
Required Lenders, which consent shall not be unreasonably withheld or
delayed; or (iii) create, incur or permit to exist any Lien or option
in favor of, or any claim of any Person with respect to, any of the
Collateral, or any interest therein, except for the Lien provided for
by this Pledge Agreement and Liens in favor of the SBA, subject to the
terms and conditions of the Intercreditor Agreement (as hereinafter
defined). The Pledgor will defend the right, title and interest of
the Agent in and to the Collateral against the claims and demands of
all Persons whomsoever.
(e) At any time and from time to time, upon the written
request of the Agent, and at the sole expense of the Pledgor, the
Pledgor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Agent
may reasonably request for the purposes of obtaining or preserving the
full benefits of this Pledge Agreement and of the rights and powers
herein granted. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note,
other instrument or chattel paper, such note, instrument or chattel
paper shall be immediately delivered to the Custodian, duly endorsed
in a manner satisfactory to the Agent, to be held as Collateral
pursuant to this Pledge Agreement.
(f) The Pledgor agrees to pay, and to save the Agent and
the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales
or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the
transactions contemplated by this Pledge Agreement.
6. Cash Dividends and Distributions; Voting Rights. Unless an Event
of Default shall have occurred and be continuing and the Agent shall have given
notice to the Pledgor of the Agent's intent to exercise its rights pursuant to
Section 7 below, the Pledgor shall be permitted to receive all cash dividends
in respect of the Collateral and to exercise all voting and corporate rights,
as applicable, with respect to the Collateral; provided, that no vote shall be
cast or corporate right exercised or other action taken which, in the Agent's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any
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violation of any provision of the Loan Agreement, the Notes, any other Loan
Documents or this Pledge Agreement.
7. Rights of the Agent.
(a) If an Event of Default shall occur and be continuing and the
Agent shall give notice of its intent to exercise such rights to the Pledgor,
(i) the Agent shall have the right to receive any and all cash dividends and
distributions paid in respect of the Collateral and make application thereof to
the Obligations in the order set forth in the Loan Agreement; (ii) all of the
Pledged Securities shall be registered in the name of the Agent or its nominee,
and the Agent or its nominee may thereafter exercise (A) all voting, corporate
and other rights pertaining to such Pledged Securities at any meeting of
shareholders of each Issuer or otherwise and (B) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such Pledged Securities as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of Pledged Securities upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by the Pledgor or the Agent of any right,
privilege or option pertaining to such Pledged Securities, and in connection
therewith, the right to deposit and deliver any and all of the Pledged
Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it, but
the Agent shall have no duty to the Pledgor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing; and (iii) the Agent shall have the right to (A) take
possession of any or all of the Collateral from the Custodian and (B) to notify
the Custodian to remit directly to the Agent, as received, all payments,
however characterized, received by the Custodian with respect to the
Collateral.
(b) The rights of the Agent and the Lenders hereunder shall not be
conditioned or contingent upon the pursuit by the Agent or any Lender of any
right or remedy against the Pledgor or against any other Person which may be or
become liable in respect of all or any part of the Obligations or against any
collateral security therefor, guarantee therefor or right of offset with
respect thereto. Neither the Agent nor any Lender shall be liable for any
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so, nor shall the Agent be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Pledgor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.
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8. Remedies.
(a) If an Event of Default shall occur and be continuing, with the
consent of the Required Lenders, the Agent may, and upon the request of the
Required Lenders, the Agent shall, exercise on behalf of itself and the
Lenders, all rights and remedies granted in this Pledge Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, and in addition thereto, all rights and remedies of a secured
party under the Code. Without limiting the generality of the foregoing with
regard to the scope of the Agent's remedies, the Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Pledgor, any Issuer or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, in the over-the-counter market, at
any exchange, broker's board or office of the Agent or any Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as
it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby waived or released. The Agent shall apply any
Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred in respect
thereof or incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel thereto, to the payment in whole or in part of the
Obligations, in the order set forth in the Loan Agreement, and only after such
application and after the payment by the Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Agent account for the surplus, if any, to the Pledgor. To the
extent permitted by applicable law, the Pledgor waives all claims, damages and
demands it may acquire against the Agent or any Lender arising out of the
exercise by them in good faith of any rights hereunder. Notice of a proposed
sale or other disposition of Collateral shall be deemed given to the Pledgor
and reasonable and proper if given at least 10 days before such sale or other
disposition. The Pledgor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of Collateral are
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insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Agent or any Lender to collect such deficiency.
(b) The Pledgor recognizes that the Agent may be unable to effect
a public sale of any or all the Pledged Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Agent shall
be under no obligation to delay a sale of any of the Pledged Securities for the
period of time necessary to permit such Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
9. Amendments, etc. With Respect to the Obligations. The Pledgor
shall remain obligated hereunder, and the Collateral shall remain subject to
the Lien granted hereby, notwithstanding that, without any reservation of
rights against the Pledgor, and without notice to or further assent by the
Pledgor, any demand for payment of any of the Obligations made by the Agent or
any Lender may be rescinded by the Agent or such Lender, and any of the
Obligations continued, and the Obligations, or the liability of the Pledgor or
any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered, or released by the Agent or any
Lender, and the Loan Agreement, the Notes, any other Loan Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or part, as the Lenders (or the
Required Lenders, as the case may be) may deem advisable from time to time, and
any guarantee, right of offset or other collateral security at any time held by
the Agent or any Lender for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any other Lien
at any time held by it as security for the Obligations or any property subject
thereto. The Pledgor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by the Agent or any Lender upon this Pledge Agreement; the
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred in reliance upon this Pledge Agreement; and all
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dealings between the Pledgor, on the one hand, and the Agent and the Lenders,
on the other, shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Pledge Agreement. The Pledgor waives
diligence, presentment, protest, demand for payment and notice (except as
required by the Loan Agreement) of default or nonpayment to or upon the Pledgor
with respect to the Obligations.
10. Limitation on Duties Regarding Collateral. The Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Agent deals with similar
securities and property for its own account. Neither the Agent, any Lender nor
any of their respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Pledgor or otherwise.
11. Irrevocable Authorization and Instruction to Issuers. The Pledgor
hereby authorizes and instructs each Issuer, and obligor under any Pledged Debt
to comply with any instruction received by it from the Agent in writing that
(a) states that an Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or
further instructions from the Pledgor, and the Pledgor agrees that each Issuer
and obligor under any Pledged Debt shall be fully protected in so complying.
12. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral constitute irrevocable powers
coupled with an interest.
13. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Paragraph Headings. The paragraph headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
15. No Waiver; Cumulative Remedies. Neither the Agent nor any Lender
shall by any act (except by a written instrument pursuant to Section 16 hereof)
be deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions
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hereof. No failure to exercise, nor any delay in exercising, on the part of
the Agent or any Lender, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Agent or any
Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Agent or such Lender would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive
of any other rights or remedies provided by law.
16. Waivers and Amendments; Successors and Assigns; Governing Law.
None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and Agent; provided that (a) any provision of this Pledge Agreement
may be waived by the Agent in a letter or agreement executed by the Agent or by
telex or facsimile transmission from the Agent and (b) any consent by the Agent
to any amendment, supplement or modification hereto shall be subject to
approval thereof by the Lenders or Required Lenders, as applicable, in
accordance with Section 12.12 of the Loan Agreement. This Pledge Agreement
shall be binding upon the successors and assigns of the Pledgor and shall inure
to the benefit of the Agent and the Lenders and their respective successors and
assigns.
17. Governing Law, etc. (a) This Pledge Agreement, unless otherwise
expressly set forth herein, shall be governed by, construed and enforced in
accordance with the laws of the State of North Carolina, without reference to
the conflicts or choice of law principles thereof.
(b) The Pledgor hereby irrevocably consents to the personal
jurisdiction of the state and federal courts located in Mecklenburg County,
North Carolina, in any action, claim or other proceeding arising out of any
dispute in connection with this Pledge Agreement, any rights or obligations
hereunder, or the performance of such rights and obligations. The Pledgor
hereby irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Agent in connection
with this Pledge Agreement or any rights or obligations hereunder, or the
performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 19. Nothing in this Section 17
shall affect the right of the Agent to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Agent to bring any
action or proceeding against the Pledgor or its properties in the courts of any
other jurisdictions.
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(c) TO THE EXTENT PERMITTED BY LAW, THE AGENT AND EACH LENDER BY
THEIR ACCEPTANCE OF THIS PLEDGE AGREEMENT OR THE BENEFITS HEREOF AND THE
PLEDGOR HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH
RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF OR ANY DISPUTE
IN CONNECTION WITH THIS PLEDGE AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER,
OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
18. Arbitration.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Pledge Agreement
("Disputes"), between or among parties to this Pledge Agreement shall be
resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions or claims concerning any aspect
of the past, present or future relationships arising out or connected with this
Pledge Agreement. Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of
the American Arbitration Association (the "AAA") and Title 9 of the U.S. Code.
All arbitration hearings shall be conducted in Nashville, Tennessee. The
expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest
court of general jurisdiction, state or federal, of the state where the hearing
will be conducted. The arbitrators shall be appointed as provided in the
Arbitration Rules.
(b) Preservation of Certain Remedies. Notwithstanding the
preceding binding arbitration provisions, the Agent and the Lenders preserve,
without diminution, certain remedies that the Agent and the Lenders may employ
or exercise freely, either alone, in conjunction with or during a Dispute. The
Agent and the Lenders shall have and hereby reserve the right to proceed in any
court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining
provisional or ancillary remedies including injunctive relief,
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sequestration, garnishment, attachment, appointment of receiver and in filing
an involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the
power of an arbitrator to grant similar remedies that may be requested by a
party in a Dispute.
19. Notices. All notices and communications hereunder shall be given
to the addresses and otherwise in accordance with Section 12.1 of the Loan
Agreement.
20. Authority of Agent. The Pledgor acknowledges that the rights and
responsibilities of the Agent under this Pledge Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement shall, as between
the Agent and the Lenders, be governed by the Loan Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Pledgor, the Agent shall be conclusively presumed
to be acting as agent for itself and the Lenders with full and valid authority
so to act or refrain from acting, and neither the Pledgor nor any Issuer, or
obligor under any Pledged Debt shall be under any obligation, or entitlement,
to make any inquiry respecting such authority.
21. Intercreditor Agreement. This Agreement is subject to the
terms and conditions of the Intercreditor Agreement of even date among the
Agent, the Custodian and the Small Business Administration (the "Intercreditor
Agreement").
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IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement
to be duly executed under seal and delivered as of the date first above
written.
[CORPORATE SEAL] SIRROM INVESTMENTS, INC.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
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SCHEDULE I
To Pledge
Agreement
DESCRIPTION OF PLEDGED SECURITIES
Class of Security No. of
Issuer Security Certificate No. Shares
------ -------- --------------- ------
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17
DESCRIPTION OF PLEDGED DEBT
ORIGINAL
DESCRIPTION PRINCIPAL
DEBTOR OF DEBT DATE AMOUNT
------ ----------- ---- ---------
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SCHEDULE II
To Pledge
Agreement
Address of the Pledgor
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