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Exhibit 7.7
THIRD AMENDED AND RESTATED SECURITY AGREEMENT
THIS THIRD AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement")
is made and entered into as of the ____ day of August, 1996, by and among
SIRROM INVESTMENTS, INC., a Tennessee corporation (the "Grantor"), and FIRST
UNION NATIONAL BANK OF TENNESSEE, a national banking association organized
under the laws of the United States ("First Union"), as agent (in such
capacity, the "Agent") for the benefit of itself and the financial institutions
(the "Lenders") who are or may become party to the Loan Agreement (as
hereinafter defined).
STATEMENT OF PURPOSE
Pursuant to the Assignment and Assumption Agreement dated as of
__________, 1996 between the Guarantor and the Borrower, the Guarantor 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 Guarantor, 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 herewith by and among the Grantor, as Borrower, Sirrom
Capital Corporation, as Guarantor, the Lenders, and the Agent (as amended,
modified, or otherwise supplemented, 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 Grantor and to
extend Loans to the Grantor in the principal amount of up to $50,000,000 (as
may be increased pursuant to Section 2.8 of the Loan Agreement, the "Loans").
The Agent and the Lenders, as a condition precedent to making the
Loans and an inducement therefor, have required the execution of this Agreement
in order to amend and restate the terms and conditions of the Security
Agreement dated December 23, 1994 between the Guarantor and First Union, as
amended and restated by the Amended and Restated Security Agreement dated
February 1, 1995, the First Amendment to Amended and Restated Security
Agreement dated June 13, 1995 and the Second Amended and Restated Security
Agreement dated December 27, 1995 (the "Existing Security Agreement").
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and promises herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
each to the other, the parties do hereby agree to amend and restate the
Existing Security Agreement in its entirety as follows:
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1. Definitions. Terms defined in the Loan Agreement and not
otherwise defined herein, when used in this Agreement, including its preamble
and recitals, shall have the respective meanings provided for in the Loan
Agreement. The following additional terms, when used in this Agreement, shall
have the following meanings:
"Accounts" means all "accounts" (as defined in the UCC) of the
Grantor, including without limitation all present or future accounts
receivable, all rights to payment for goods sold or leased or to be sold or
leased or for services rendered or to be rendered, whether or not earned by
performance, all rights in any merchandise or goods which any of the same may
represent, all notes receivable, book debts, notes, bills, drafts, acceptances,
choses in action, contract rights, instruments and documents and all sums of
money due or to become due thereon and all proceeds thereof and all rights,
title, security interests and guarantees with respect to each of the foregoing.
"Collateral" shall have the meaning given thereto in Section 3 hereof.
"Copyright License" means any written agreement now or hereafter in
existence granting to the Grantor any right to use any Copyright.
"Copyrights" means, collectively, all of the following of the Grantor:
(a) all copyrights, rights and interests in copyrights, works protectable by
copyright, copyright registrations and copyright applications; (b) all renewals
of any of the foregoing; (c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing or with respect to any
of the foregoing, including, without limitation, damages or payments for past
or future infringements of any of the foregoing; (d) the right to xxx for past,
present and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
"Documents" means all "documents" (as defined in the UCC) or other
receipts of the Grantor covering, evidencing or representing goods.
"Equipment" means all "equipment" (as defined in the UCC) of the
Grantor and all other machinery, equipment and goods (other than Inventory) of
the Grantor used or bought for use primarily in the business of the Grantor,
including all accessions, additions, attachments, improvements, substitutions
and replacements thereto and therefor.
"Fixtures" shall mean all "fixtures" (as defined in the UCC) of the
Grantor.
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"General Intangibles" means all "general intangibles" (as defined in
the UCC) of the Grantor, including, without limitation, all rights to
indemnification, and all rights, title and interest which the Grantor may now
or hereafter have in or under all contracts (other than contracts described in
the definition of Accounts), agreements, permits, licenses, causes of action,
franchises, tax refund claims, customer lists, Intellectual Property, license
royalties, goodwill, trade secrets, data bases, business records, and all other
intangible property of every kind and nature.
"Instruments" means all "instruments", "chattel paper" or "letters of
credit" (each as defined in the UCC) of the Grantor, including, without
limitation, instruments, chattel paper and letters of credit evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Accounts, including (but not
limited to) promissory notes, drafts, bills of exchange and trade acceptances.
"Intellectual Property" means, collectively, all of the following of
the Grantor: (a) all systems software and applications software, including,
but not limited to, screen displays and formats, program structures, sequence
and organization, all documentation for such software, including, but not
limited to, user manuals, flowcharts, programmer's notes, functional
specifications, and operations manuals, all formulas, processes, ideas and
know-how embodied in any of the foregoing, and all program materials,
flowcharts, notes and outlines created in connection with any of the foregoing,
whether or not patentable or copyrightable, (b) concepts, discoveries,
improvements and ideas, (c) any useful information relating to the items
described in clause (a) or (b), including know-how, technology, engineering
drawings, reports, design information, trade secrets, practices, laboratory
notebooks, specifications, test procedures, maintenance manuals, research,
development, manufacturing, marketing, merchandising, selling, purchasing and
accounting, (d) Patents, Patent rights and Patent applications, Copyrights and
Copyright applications, Trademarks, Trademark rights, trade names, trade name
rights, service marks, service xxxx rights, applications for registration of
Trademarks, trade names and service marks, and Trademark, trade name and
service xxxx registrations and Patent Licenses, Trademark Licenses, Copyright
Licenses, and (e) other licenses to use any of the items described in the
foregoing clauses (a), (b), (c) and (d) or any other similar items of the
Grantor necessary for the conduct of its business.
"Inventory" means all "inventory" (as defined in the UCC) of the
Grantor, including without limitation, all raw materials, inventory and other
materials and supplies, work-in-process, finished goods, all accessions
thereto, documents therefor and any
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products made or processed therefrom and all substances, if any, commingled
therewith or added thereto.
"Patent License" means any written agreement now or hereafter in
existence granting to the Grantor any right to use any invention on which a
Patent is in existence.
"Patents" means, collectively, all of the following of the Grantor:
(a) all patents and patent applications including all patentable inventions;
(b) all reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the foregoing; (c) all income, royalties,
damages or payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of the
foregoing; (d) the right to xxx for past, present and future infringements of
any of the foregoing; and (e) all rights corresponding to any of the foregoing
throughout the world.
"Proceeds" means all proceeds (as defined by the UCC) of, and all
other profits, rentals or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or realization upon, Collateral, including, without limitation, all claims
of the Grantor against third parties for loss of, damage to or destruction of,
or for proceeds payable under, or unearned premiums with respect to, policies
of insurance in respect of, any Collateral, and any condemnation or requisition
payments with respect to any Collateral and the following types of property
acquired with cash proceeds: Accounts, Inventory, Documents, Fixtures,
Instruments, General Intangibles, Equipment and Vehicles.
"Security Interests" means the security interests granted pursuant to
Section 2 hereof, as well as all other security interests created or assigned
as additional security for the Secured Obligations pursuant to the provisions
of this Agreement.
"Trademark License" means any written agreement now or hereafter in
existence granting to the Grantor any right to use any Trademark.
"Trademarks" means, collectively, all of the following of the Grantor:
(a) all Trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos, other
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state thereof or any other country
or any political subdivision of any thereof; (b) all reissues, extensions and
renewals of any of the
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foregoing; (c) all income, royalties, damages and payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages or payments for past or
future infringements of any of the foregoing; (d) the right to xxx for past,
present and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of North Carolina; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than North Carolina, "UCC"
means the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
"Vehicles" means all cars, trucks, trailers, construction and earth
moving equipment of the Grantor and other vehicles covered by a certificate of
title law of any state, and all tires and other appurtenances to any of the
foregoing.
2. Creation of Security Interests. As collateral security for
the due and punctual payment and performance by the Grantor of the Obligations
under the Loan Agreement (the "Secured Obligations"), the Grantor hereby sets
over, transfers, hypothecates, grants, assigns, pledges and conveys to the
Agent, for the ratable benefit of itself and the Lenders, a continuing first
priority security interest in and to and assigns to the Agent, for the ratable
benefit of itself and the Lenders, the Collateral more particularly described
and defined in Section 3 hereof.
3. Collateral. The collateral (collectively, the "Collateral")
of this Agreement consists of:
(i) Accounts;
(ii) Inventory;
(iii) Documents;
(iv) Equipment;
(v) Fixtures;
(vi) Instruments;
(vii) General Intangibles;
(viii) Vehicles
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(ix) All books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other
computer materials and records) of the Grantor pertaining to any of
the Collateral;
(x) All other goods and personal property of the Grantor,
whether tangible or intangible; and
(xi) All products and Proceeds of all or any of the
Collateral described in clauses (i) through (x) hereof.
together, in each instance, with all accessions and additions thereto,
substitutions therefor, and replacements, proceeds and products thereof.
4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent or any
Lender of any of their rights hereunder shall not release the Grantor from any
of its duties or obligations under the contracts and agreements included in the
Collateral, and (c) neither the Agent nor any Lender shall have any obligation
or liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Agent or any Lender be obligated to
perform any of the obligations or duties of the Grantor thereunder, to make any
payment, to make any inquiry as to the nature or sufficiency of any payment
received by the Grantor or the sufficiency of any performance by any party
under any such contract or agreement or to take any action to collect or
enforce any claim for payment assigned hereunder.
5. Protection of Security Interest.
(a) The Grantor will, upon request of the Agent or the Required
Lenders, 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 or the Required Lenders) and do such
other acts and things, all as the Agent or the Required Lenders may from time
to time request to establish and maintain valid perfected security interests in
the Collateral to secure the payment of the Secured Obligations. The Grantor
hereby constitutes and appoints the Agent (and the president, any vice
president or any assistant vice president of the Agent from time to time) as
its attorney-in-fact with full power 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
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power of attorney coupled with an interest and shall be irrevocable by the
Grantor.
(b) There is no financing statement now on file in any public
office relating to all or any portion of the Collateral, and so long as any
amount remains unpaid on any of the Secured Obligations, the Grantor shall not
execute and there shall not be on file in any public office any financing
statement or statements describing or attempting to describe the Collateral
secured herein, except for financing statements describing Liens permitted by
Section 9.3 of the Loan Agreement. The Grantor shall, at the request of the
Agent or the Required Lenders, execute financing statements, continuation
statements, or statements of change pursuant to the Uniform Commercial Code as
in effect in the applicable jurisdictions of the United States (the "UCC") or
such other documents as may be required under any other Applicable Law, and pay
the fee for filing the same in all public offices where filing may be deemed
necessary by the Agent or the Required Lenders.
(c) The Grantor will furnish the Agent and each Lender such
information concerning the Grantor and the Collateral as the Agent or the
Required Lenders may from time to time reasonably request.
(d) The Grantor will, concurrently with the granting of this
security interest in the Collateral, place notations on its books and records
disclosing the security interest of the Agent and the Lenders in such
Collateral.
(e) The Grantor will reimburse the Agent or any Lender for all
out-of-pocket expenses, including reasonable attorneys' fees and disbursements,
incurred by the Agent or any Lender in seeking to collect or enforce any rights
hereunder, and, in case of any Event of Default (as defined in the Loan
Agreement) incurred by the Agent or any Lender in seeking to enforce its rights
hereunder.
6. As to Equipment and Inventory; Place of Business. The Grantor
shall:
(a) Deliver written notice to the Agent at least thirty (30) days
prior to (i) establishing any location of Equipment or Inventory (other than
the places specified in Section 9(a) hereof) outside the state in which such
Equipment and Inventory are located and at which it reasonably expects to
maintain Inventory and/or Equipment or (ii) establishing any chief place of
business or other chief executive office (other than the address specified in
Section 9(a) hereof), in which jurisdictions all action required by Section
5(a) hereof shall have been taken.
(b) Subject to the provisions of the Loan Agreement (i) maintain
or cause to be maintained in good repair, working order and condition,
excepting ordinary wear and tear and damage due to
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casualty, all of the Equipment material to its operations, and make or cause to
be made all appropriate repairs, renewals and replacements thereof, to the
extent not obsolete, and consistent with past practice of the Grantor, as
quickly as practicable after the occurrence of any loss or damage thereto which
are necessary or desirable to such end, and (ii) promptly furnish to the Agent,
with a copy for each Lender, a statement respecting any material loss or damage
as a result of a single occurrence to any of the Equipment or Inventory.
7. As to Accounts.
(a) The Grantor shall keep its chief executive office and the
office where it keeps its records concerning the Accounts, and the offices
where it keeps all originals of all chattel paper which evidence Accounts, at
the locations therefore specified in Section 9(a) hereof or, upon thirty (30)
days prior written notice to the Agent, at such other locations in a
jurisdiction where all actions required by Section 5(a) hereof shall have been
taken with respect to the Accounts. The Grantor shall hold and preserve such
records and chattel paper and shall permit representatives of the Agent to
inspect and make abstracts from such records and chattel paper in accordance
with the terms of the Loan Agreement.
(b) Except as otherwise provided in this subsection (b), the
Grantor shall continue to collect in accordance with its customary practice, at
its own expense, all amounts due or to become due to the Grantor under the
Accounts and, prior to the occurrence of an Event of Default, the Grantor shall
have the right to adjust, settle or compromise the amount or payment of any
Account, or release wholly or partly any account debtor or obligor thereof, or
allow any credit or discount thereon, all in accordance with its customary
practices. In connection with such collections, upon the occurrence and during
the continuation of an Event of Default, the Grantor shall take such action as
the Agent or the Required Lenders may deem necessary or advisable to enforce
collection of the Accounts; provided, that upon the occurrence and during the
continuance of an Event of Default, and upon written notice by the Agent or the
Required Lenders to the Grantor of its intention so to do, the Agent or its
designee shall have the right to notify the account debtors or obligors under
any Accounts of the assignment of such Accounts to the Agent and the Lenders
and to direct such account debtors or obligors to make payment of all amounts
due or to become due to the Grantor thereunder directly to the Agent, for the
ratable benefit of itself and the Lenders, and, upon such notification and at
the expense of the Grantor, to enforce collection of any such Accounts, and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as the Grantor might have done. After receipt by the
Grantor of the notice referred to in the proviso to the preceding sentence, (i)
all amounts and proceeds (including instruments) received by the Grantor in
respect of the Accounts shall be
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received in trust for the benefit of the Agent and the Lenders hereunder, shall
be segregated from other funds of the Grantor and shall be forthwith paid over
to the Agent, for the ratable benefit of itself and the Lenders, in the same
form as so received (with any necessary endorsement) to be applied as provided
by Section 3.5 of the Loan Agreement hereof, and (ii) the Grantor shall not
adjust, settle or compromise the amount or payment of any Account, or release
wholly or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.
8. Agent's and Lenders' Rights and Remedies Upon Default. Upon
the occurrence of any Event of Default:
(a) The Agent may, and upon the request of the Required Lenders, the
Agent shall, declare all of the Secured Obligations, whether evidenced herein
or secured hereby, to be due and payable, without notice (except as otherwise
provided for in the Loan Agreement).
(b) The Agent may, and upon the request of the Required Lenders, the
Agent shall, exercise on behalf of itself and the Lenders all of the rights
granted by this Agreement and all of the rights and remedies of a secured party
under the UCC and under any other Applicable Law and also may (i) require the
Grantor to, and the Grantor hereby agrees that it will at its expense and upon
request of the Agent forthwith, assemble all or any part of the Collateral as
directed by the Agent and make it available to the Agent and the Lenders at a
place to be designated by the Agent which is reasonably convenient to the
parties and (ii) without notice except as specified below, sell, lease, assign,
grant an option or options to purchase or otherwise dispose of the Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at the Agent's office or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Agent may deem
commercially reasonable. The Agent or any Lender may be the purchaser of any
or all of the Collateral so sold at any public sale (or, if the Collateral is
of a type customarily sold in a recognized market or is of a type which is the
subject of widely distributed standard price quotations, at any private sale)
and thereafter hold the same, absolutely, free from any right or claim of
whatsoever kind. The Agent is authorized, at any such sale, if it deems it
advisable so to do, to restrict the prospective bidders or purchasers of any
instrument included in the Collateral to parties who will represent and agree
that they are purchasing for their own account for investment, and not with a
view to the distribution or sale of any such Collateral. To the extent
permitted by law, the Grantor hereby specifically waives all rights of
redemption, stay or appraisal which it has or may have under any rule of law or
statute now existing or hereafter in force. The Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days' written
notice to the Grantor of the time and place of any public sale or the time
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after which any private sale is to be made shall constitute reasonable
notification. The Agent shall not be obligated to make any sale of the
Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(c) Any cash held by the Agent as Collateral and all cash proceeds
received by the Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
the Agent, be held by the Agent as Collateral for, and then or at any time
thereafter applied in whole or in part by the Agent against all or any part of
the Secured Obligations in such order as is provided in Section 3.5 of the Loan
Agreement.
(d) In addition to the other rights of the Agent hereunder, the
Agent is hereby granted a license or other right to use, without charge, the
Grantor's labels, copyrights, patents, rights of use of any name, trade names,
trademarks and advertising matter, or any property of a similar nature, in
advertising for sale and selling any Collateral.
(e) All payments received by the Grantor under or in connection
with any of the Collateral shall be held by the Grantor in trust for the Agent
and the Lenders, shall be segregated from other funds of the Grantor and shall,
forthwith upon receipt by the Grantor, be turned over to the Agent, for the
ratable benefit of itself and the Lenders, in the same form as received by the
Grantor (duly endorsed to the Agent, if required).
(f) To the extent permitted by Applicable Law, the Grantor waives
all claims, damages and demands against the Agent or any Lender arising out of
the repossession, retention or sale of the Collateral, or any part or parts
thereof, except to the extent any such claims, damages and awards arise out of
the gross negligence or willful misconduct of the Agent or any Lender. To the
extent permitted by Applicable Law, no claim may be made by the Grantor or any
other party against the Agent, any Lender, or the directors, officers,
employees, attorneys or agents of the Agent or any Lender for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and the Grantor hereby waives, releases and
agrees not to xxx upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
(g) The Grantor will, at the request of the Agent, take all
actions necessary under the Assignment of Claims Act, 31 U.S.C.
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Section 3727 and 41 U.S.C. Section 15 (the "Assignment of Claims Act"), to
permit the Agent to receive, for the ratable benefit of itself and the Lenders,
payments directly from the United States government.
(h) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently, and are not exclusive
of any other rights and remedies provided by law or equity.
9. Additional Agreements and Affirmations. The Grantor agrees,
affirms, represents and warrants that:
(a) As of the date of this Agreement, (i) the locations listed on
Schedule 1 attached hereto and incorporated herein by reference constitute all
locations at which Inventory, Equipment or chattel paper evidencing the
Collateral is located, except for Inventory and Equipment in transit; (ii) the
chief executive office of the Grantor, where the Grantor keeps its records
concerning the Collateral, is located at the address set forth in Section 12(h)
hereof for the Grantor; and (iii) all records concerning any Account and all
originals of all writings which evidence any Account are located at the
addresses listed on Schedule 2 attached hereto and incorporated herein by
reference;
(b) The Grantor is the legal and beneficial owner of the
Collateral free and clear of all Liens except for those permitted by Section
9.3 of the Loan Agreement (the "Permitted Liens"). As of the date of this
Agreement, the Grantor currently conducts business only under its own name.
Except as set forth on Schedule 3 attached hereto and incorporated herein by
reference, neither the Grantor nor any predecessor has, during the preceding
five (5) years, been known as or used any other corporate or fictitious name;
(c) The Grantor has exclusive possession and control of the
Equipment and Inventory except for (i) Equipment in the possession and control
of the Grantor's lessees and licensees under written lease and license
agreements entered into in the ordinary course of business and consistent with
past practice, (ii) Equipment and Inventory in transit with common or other
carriers, and (iii) Equipment and Inventory in the possession of a bailee,
which has been disclosed to and approved in writing by the Agent;
(d) Appropriate financing statements have been filed in the
necessary jurisdictions with respect to the Collateral as to which financing
statements are required to be filed, so that the security interest granted
pursuant to this Agreement, to the extent it may be perfected by filing
financing statements in the necessary jurisdictions, constitutes a valid,
continuing and perfected security interest in and lien on the Collateral to the
extent a security interest can be created therein under the UCC, securing the
payment of the Secured Obligations, subject only to the
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Permitted Liens. All other actions necessary or requested by the Agent to
perfect and protect such security interest in each item of Collateral have been
duly taken;
(e) No authorization, approval or other action by, and no notice
to or filing with, any Governmental Authority (other than such authorizations,
approvals and other actions as have already been taken and are in full force
and effect) is required (A) for the grant of the security interest in the
Collateral by the Grantor hereby or for the execution, delivery or performance
of this Agreement by the Grantor, or (B) for the exercise by the Agent or any
Lender of any rights or remedies in respect of the Collateral hereunder except
as may be required for the Agent to receive payments directly from the United
States government under the Assignment of Claims Act;
(f) Information supplied and statements made by the Grantor in any
financial, credit or accounting statement or application for credit prior to or
pursuant to this Agreement are true and correct in all material respects; and
(g) The Grantor is and will be the lawful owner of all Collateral;
the Grantor has full power and authority to execute this Agreement and to
perform its obligations hereunder; the Grantor has not made, nor will it at any
time make, any agreement which prohibits or restricts the pledging or creation
of Liens upon the Collateral, or which creates a Lien on the Collateral prior
to the security interest herein provided to the Agent other than Permitted
Liens; and all information with respect to the Collateral set forth in any
schedule, certificate or other writing at any time heretofore or hereafter
furnished by the Grantor to the Agent or any Lender, is and will be true and
correct as of the date furnished.
10. Concerning the Agent. The provisions of Article XII of the Loan
Agreement shall inure to the benefit of the Agent in respect of this Agreement
and shall be binding upon the parties to the Loan Agreement in such respect.
In furtherance and not in derogation of the rights, privileges and immunities
of the Agent therein set forth:
(a) The Agent is authorized to take all such action as is
provided to be taken by it as Agent hereunder and all other action
incidental thereto. As to any matters not expressly provided for
herein, the Agent may request instructions from the Lenders and shall
act or refrain from acting in accordance with written instructions
from the Required Lenders (or, when expressly required by this
Agreement or the Loan Agreement, all the Lenders) or, in the absence
of such instructions, in accordance with its discretion.
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(b) The Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests,
whether impaired by operation of law or by reason of any action or
omission to act on its part (other than any such action or inaction
constituting gross negligence or willful misconduct. The Agent shall
have no duty to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement by any Grantor.
12. Appointment of Collateral Agents. At any time or times, in order
to comply with any legal requirement in any jurisdiction or in order to
effectuate any provision of the Loan Documents, the Agent may appoint another
bank or trust company or one or more other Persons, either to act as collateral
agent or agents, jointly with the Agent or separately, on behalf of the Agent
and the Lenders with such power and authority as may be necessary for the
effectual operation of the provisions hereof and specified in the instrument of
appointment (which may, in the discretion of the Agent, include provisions for
the protection of such collateral agent similar to the provisions of Section 10
hereof).
11. Miscellaneous.
(a) The Agent and the Lenders shall have the right at all times to
enforce the provisions of this Agreement in strict accordance with the terms
hereof, notwithstanding any conduct or custom on their part in refraining from
so doing at any time. No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and made in
accordance with Section 13.12 of the Loan Agreement, and no waiver or omission
to act by the Agent or any Lender shall operate as a waiver of any other
default or Event of Default, or of the same default or Event of Default at a
future time, and no single or partial exercise by the Agent or any Lender of
any right or remedy shall preclude any other or future exercise of that or of
any other right or remedy. The provisions, rights and remedies hereof are
cumulative to and concurrent with those of all other agreements and documents
held by the Agent and the Lenders in connection with the indebtedness herein
described. Time is of the essence of this Agreement.
(b) This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until payment in
full of the Secured Obligations and the termination of the Loan Agreement, (ii)
be binding upon the Grantor, its successors and assigns and (iii) inure,
together with the rights and remedies of the Agent and the Lenders hereunder,
to the benefit of the Agent and the Lenders, subject to the terms and
conditions of the Loan Agreement. The Agent or any Lender may, in accordance
with the terms of the Loan Agreement, assign or otherwise transfer any rights
and obligations under the Loan
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Agreement or any rights in Collateral held by it to any other party, and such
other party shall thereupon become vested with all the benefits in respect
thereof granted to the Agent or the Lender, as applicable, herein or otherwise.
Nothing set forth herein or in any other Loan Documents is intended or shall be
construed to give to any other party any right, remedy or claim under, to or in
respect of this Agreement or any other Loan Documents or any Collateral. The
Grantor's successors and assigns shall include, without limitation, a receiver,
trustee or debtor-in-possession thereof or therefor. Upon the payment in full
of the Secured Obligations and the termination of the Loan Agreement, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Grantor. Upon the termination of any such
security interest, or upon the Agent's release of any of the Collateral in
accordance with the terms of the Loan Agreement, the Agent shall promptly
return to the Grantor, at the Grantor's expense, such of the Collateral (and,
in the case of a release, such of the released Collateral) held by the Agent as
shall not have been sold or otherwise applied pursuant to the terms hereof.
The Agent will, at the Grantor's expense, execute and deliver to the Grantor
such other documents as the Grantor shall reasonably request to evidence such
termination or release, as the case may be.
(c) Use of the neuter pronoun herein shall include the masculine
and feminine, and use of the singular pronoun shall include the plural. All
rights of the Agent and the Lenders shall inure to the benefit of their
respective successors and assigns and such successors and assigns shall have
all privileges, rights and remedies afforded the Agent and the Lenders
hereunder or as otherwise provided by law; and all obligations of the Grantor
shall bind its respective successors and assigns.
(d) This Agreement, unless otherwise expressly set forth herein,
shall be governed by and construed and enforced in accordance with, the laws
of the State of North Carolina.
(e) The Grantor 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 Agreement and the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such
rights and obligations. The Grantor 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 Agreement or the other Loan
Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 12(h) hereof. Nothing in this
Section 12(e) shall affect the right of the Agent or any Lender to serve legal
process in any other manner permitted by law or affect the right of the Agent
or any Lender to
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bring any action or proceeding against the Grantor or its property in the
courts of any other jurisdictions.
(f) NOTWITHSTANDING ANY OTHER PROVISION CONTAINED HEREIN, IN THE
EVENT ANY JUDICIAL PROCEEDING IS INSTITUTED IN CONNECTION WITH THIS AGREEMENT,
TO THE EXTENT PERMITTED BY LAW, THE AGENT AND EACH LENDER BY THEIR ACCEPTANCE
OF THIS AGREEMENT OR THE BENEFITS HEREOF AND THE GRANTOR EACH HEREBY
IRREVOCABLY WAIVES ITS 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 AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF
SUCH RIGHTS AND OBLIGATIONS.
(g) (i) 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 the Notes or any other Loan
Documents ("Disputes"), between or among parties to the Notes or any other Loan
Document 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, claims
arising from Loan Documents executed in the future, or claims concerning any
aspect of the past, present or future relationships arising out or connected
with the Loan Documents. 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.
(ii) 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
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property and collection of rents, set off, and peaceful possession of property,
(iii) obtaining provisional or ancillary remedies including injunctive relief,
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.
(h) Any notice shall be conclusively deemed to have been received
by a party hereto and be effective on the day on which delivered to such party
at the address set forth below (or at such other address as such party shall
specify to the other party in writing) or if sent prepaid by certified or
registered mail, on the third Business Day after the day on which mailed, or if
sent prepaid by Federal Express (or a comparable overnight delivery service),
on the first Business Day after the day on which mailed, addressed to such
party at such address:
The Grantor: Sirrom Investments, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: Xxxxxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx-Xxxx Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to First Union First Union National Bank of Tennessee
as Agent: 000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
First Union National Bank of North
Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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If to any Lender: To the Address set forth on Schedule 1 to
Loan Agreement
Any party may at any time change its address for such notices by delivering or
mailing to the other parties hereto, as aforesaid, a notice of such change.
(i) This Agreement is subject to the terms and conditions of the
Intercreditor Agreement of even date by and among the Agent, the Small Business
Administration and First American Trust Company.
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IN WITNESS WHEREOF, the Grantor has caused this Agreement to be
executed under seal by its duly authorized officers as of the day and year
first above written.
SIRROM INVESTMENTS, INC.,
a Tennessee corporation
[CORPORATE SEAL]
ATTEST:
By:
-----------------------------
---------------------- Name:
Secretary -----------------------
------- Title: President
-----------
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SCHEDULE 1
TO
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
BETWEEN
SIRROM INVESTMENTS, INC.
AND
FIRST UNION NATIONAL BANK OF TENNESSEE
DATED AS OF __________, 1996
[Location of Inventory and Equipment]
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SCHEDULE 2
TO
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
BETWEEN
SIRROM INVESTMENTS, INC.
AND
FIRST UNION NATIONAL BANK OF TENNESSEE
DATED AS OF __________, 1996
[Location of Information on Accounts]
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SCHEDULE 3
TO
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
BETWEEN
SIRROM INVESTMENTS, INC.
AND
FIRST UNION NATIONAL BANK OF TENNESSEE
DATED AS OF __________, 1996
[Prior Names]
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ANNEX I
(to Security Agreement)
SECURITY AGREEMENT SUPPLEMENT
SECURITY AGREEMENT SUPPLEMENT, dated as of __________, 19__, (the
"Supplement"), made by [INSERT NAME OF NEW SUBSIDIARY], a corporation organized
under the laws of __________ (the "New Grantor"), in favor of FIRST UNION
NATIONAL BANK OF TENNESSEE, as agent (in such capacity, the "Agent") under the
Loan Agreement (as defined in the Security Agreement referred to below) for the
ratable benefit of itself and the Lenders (as so defined).
1. Reference is hereby made to the Third Amended and Restated
Security Agreement dated as of __________, 1996 (as amended, supplemented or
otherwise modified as of the date hereof, the "Security Agreement"), made by
Sirrom Investments, Inc., a corporation organized under the laws of Tennessee,
as grantor, in favor of the Agent for the benefit of itself and the Lenders.
This Supplement supplements the Security Agreement, forms a part thereof and is
subject to the terms thereof. Capitalized terms used and not defined herein
shall have the meanings given thereto or referenced in the Security Agreement.
2. In order to secure the Loan Agreement in accordance with the
terms thereof, and to secure the payment and performance of all of the Secured
Obligations, the New Grantor hereby grants to the Agent, for the ratable
benefit of itself and the Lenders, a continuing security interest in and to all
of the Grantor's estate, right, title and interest in and to all Collateral
whether now or hereafter owned or acquired by the New Grantor or in which the
Grantor now have or hereafter have or acquire any rights, and wherever located
(the "New Collateral").
3. The Security Interests are granted as security only and shall
not subject the Agent or any Lender to, or transfer to the Agent or any Lender,
or in any way affect or modify, any obligation or liability of the Grantor with
respect to any of the New Collateral or any transaction in connection
therewith.
4. The New Grantor hereby agrees that it is a party to the
Security Agreement as if a signatory thereof on the Closing Date of the Loan
Agreement, and the New Grantor shall comply with all of the terms, covenants,
conditions and agreements and hereby makes each representation and warranty, in
each case set forth therein. The New Grantor agrees that "Collateral" as used
therein shall include all New Collateral pledged pursuant hereto and the
Security Agreement and "Security Agreement" or "Agreement" as used therein
shall mean the Security Agreement as supplemented hereby.
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5. Attached hereto are (i) a Perfection Certificate in the form
of the Perfection Certificate delivered to the Agent on the Closing Date and
(ii) updated Schedules 1, 2 and 3 to the Security Agreement revised to include
all required information with respect to the New Grantor.
6. The New Grantor hereby acknowledges it has received a copy of
the Security Agreement and that it has read and understands the terms thereof.
7. The New Grantor hereby agrees that it shall deliver to the
Agent such UCC Financing Statements and all other certificates or other
documents and take such action as the Agent shall reasonably request in order
to effectuate the terms hereof and the Security Agreement.
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IN WITNESS WHEREOF, the undersigned hereby causes this Supplement to
be executed and delivered as of the date first above written.
[CORPORATE SEAL] [INSERT NAME OF NEW SUBSIDIARY]
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
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