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Exhibit f.17
EXECUTION COPY
FEE AGREEMENT
THIS FEE AGREEMENT (the "Agreement") is dated as of December
31, 1996 among SIRROM CAPITAL CORPORATION ("Sirrom"), SIRROM FUNDING CORPORATION
(the "Issuer), a Delaware corporation, HOLLAND LIMITED SECURITIZATION, INC.
("HLS") and ING BARING (U.S.) CAPITAL MARKETS, INC. ("ING Capital"), in its
capacity as agent for HLS in respect of the "Notes" referred to below (in such
capacity, the "Program Agent"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the "Indenture"
referred to below.
PRELIMINARY STATEMENT
A. The Issuer, Sirrom, as Servicer (in such capacity, the
"Servicer") and First Trust National Association, as Trustee are parties to that
certain Master Trust Indenture and Security Agreement of even date herewith
(together with all "Supplements" thereto, as each may be amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), pursuant
to which the Issuer may from time to time authorize the issuance of Series of
Notes.
B. The Issuer, the Servicer, HLS and the Program Agent are
parties to that certain Note Purchase Agreement of even date herewith (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the "Note Purchase Agreement"), pursuant to which HLS has agreed to
purchase and the Issuer has agreed to sell all of the Revolving Notes, Series
1996-1 (the "Revolving Notes") issued under the Indenture.
C. To induce HLS to enter into the Note Purchase Agreement,
and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Fees. Sirrom and the Issuer hereby agree to
pay to HLS certain fees as follows:
(a) Facility Increase Fee. After the Closing Date of the Note
Purchase Agreement, on the effective date of each increase in the Stated Amount
(as defined in the Indenture) of the Revolving Notes, Sirrom shall pay to HLS a
Facility Increase Fee in an amount equal to the product of (i) 0.75% and (ii)
the
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amount of such increase in the Stated Amount of the Revolving Notes.
(b) Program Fees. After the Effective Date of the Note
Purchase Agreement, the Issuer shall pay to the Program Agent each of the
following fees (collectively for each Computation Period, the "Program Fees"),
payable in arrears on each Monthly Payment Date (as defined in the Indenture),
commencing with the Monthly Payment Date immediately succeeding the Effective
Date and on the last day of the Revolving Period (as defined in the Indenture):
(i) a program fee, for the account of HLS, in an amount equal
to the product of (i) a per annum rate of 2.25% and (ii) the Fee Basis
(as defined below) during the immediately preceding Computation Period
(as defined below); and
(ii) an unused facility fee, for the account of HLS, in an
amount equal to the product of (i) a per annum rate of 0.50% and (ii)
an amount equal to the excess of the average Stated Amount of the
Revolving Notes owned by HLS, ING Capital and/or their respective
Affiliates during the immediately preceding Computation Period and the
Fee Basis during the immediately preceding Computation Period.
For the purposes of this Agreement "Effective Date" shall mean
the date on which HLS shall have received written confirmation from Sirrom on
behalf of the Issuer, in form and substance satisfactory to HLS, that all
consents and approvals necessary for the consummation of the transactions
contemplated by the Note Purchase Agreement, the Indenture and the Series 1996-1
Supplement (including, without limitation, approval of the Securities and
Exchange Commission pursuant to the Investment Company Act of 1940) have been
obtained. For the purposes of this Agreement "Fee Basis" shall mean the average
Outstanding Principal Balance (as defined in the Series 1996-1 Supplement) of
Revolving Notes during the Computation Period, calculated on the basis of a
360-day year and the number of actual days elapsed. For the purposes of this
Agreement "Computation Period" shall mean (i) with respect to any Monthly
Payment Date, the calendar month (or, in the case of the calendar month in which
the Effective Date occurs, the portion of such calendar month following the
Effective Date) immediately preceding the calendar month in which such Monthly
Payment Date occurs, and (ii) with respect to any payment due on the last day of
the Revolving Period, the period commencing on the first day of the calendar
month in which the Revolving Period ends and ending on the last day of the
Revolving Period.
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In the event that the day upon which the Program Fee would
otherwise be due and payable occurs on a day which is not a Business Day, then
such payment shall be deemed to be due and payable on the Business Day
immediately succeeding such day.
SECTION 2. Restriction on Certain Indebtedness.
(a) Sirrom agrees that, prior to the Scheduled Pay-Out
Commencement Date (as defined in the Supplement for the Revolving Notes), so
long as both
(x) HLS, ING Capital and/or their respective Affiliates
(collectively, the "Purchasers") have not denied a request by Sirrom or
the Issuer to increase the Stated Amount of any Revolving Note owned by
the Purchasers such that after giving effect to such increase the
aggregate Outstanding Principal Balance of the Revolving Notes and
Fixed Principal Notes (collectively, the "Notes") owned by the
Purchasers would be in an amount in excess of $100,000,000, but less
than or equal to $200,000,000, and
(y) the aggregate Outstanding Principal Balance of the Notes
owned by the Purchasers is less than $180,000,000,
are true, it will not incur, nor will it allow any of its Subsidiaries (as
hereinafter defined) to incur, without the prior written consent of ING Capital,
any Indebtedness (as hereinafter defined) other than Permitted Indebtedness (as
hereinafter defined). For the purposes of this Agreement "Subsidiary " shall
mean any corporation, partnership or other entity of which more than fifty
percent (50%) of the outstanding capital stock or other interests having
ordinary voting power to elect a majority of the board of directors (if a
corporation) or to appoint the general partner (if a partnership) or otherwise
direct the management of such corporation, partnership or other entity
(irrespective of whether at the time stock or other interests of any other class
or classes of such corporation, partnership or other entity shall have or might
have voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned by Sirrom.
For the purposes of this Agreement "Indebtedness" of any Person shall mean:
(i) indebtedness of such Person for borrowed money other
than intercompany loans,
(ii) obligations of such Person evidenced by bonds,
debentures, Notes or other similar instruments,
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(iii) any other financing, whether or not treated as indebtedness for
generally accepted accounting principles, including the sale or other
transfer of Eligible Loans in a securitization transaction.
For purposes of this Agreement "Permitted Indebtedness" shall mean:
(i) any Indebtedness under the Notes owned by Purchasers,
(ii) any Indebtedness incurred by Sirrom Investments, Inc. or its
successors guaranteed by the U.S. Small Business Administration and any
Indebtedness incurred under the Fourth Amended and Restated Loan
Agreement dated as of August 16, 1996 by and among First Union National
Bank of Tennessee, Sirrom Investments, Inc. and the other Lenders named
therein (including any Add-On Loans thereunder) (as such term is
defined in the Loan Purchase Agreement), as it may be amended (or
replaced in whole or in part with a similar facility) or increased from
time to time hereafter, so long as each such increase is approved by
the U.S. Small Business Administration,
(iii) any Indebtedness incurred by any Subsidiary of Sirrom guaranteed
by the Federal Home Loan Bank and any Indebtedness incurred under a
loan agreement with a third party lender in connection with
Indebtedness guaranteed by the Federal Home Loan Bank,
(iv) any Indebtedness that is used to finance and/or is secured by
Loans that are not Eligible Loans,
(v) any Indebtedness that is used to finance and/or is secured by
convertible debt instruments,
(vi) any Indebtedness that is used to finance and/or is secured by any
other investments that are not Eligible Loans,
(vii) any convertible debt financing,
(viii) any Indebtedness incurred while the Outstanding Principal
Balance of the Notes owned by Purchasers is greater than or equal to
(x) $180,000,000, or (y) after a denial of a Requested Increase, 90% of
the Stated Amount of the Notes on the date of such denial,
(ix) any Indebtedness incurred while the Outstanding
Principal Balance of the Notes owned by Purchasers is less
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than $180,000,000 (or after a denial of a Requested Increase, 90% of
the Stated Amount of the Notes on the date of such denial), but was
greater than $180,000,000 (or after a denial of a Requested Increase,
90% of the Stated Amount of the Notes on the date of such denial)
during the immediately preceding 15 days,
(x) High Cost Indebtedness (as defined below).
For purposes of this Agreement "High Cost Indebtedness" shall mean any
Indebtedness other than the types described in clauses (i) through (ix) of the
defined term "Permitted Indebtedness" which is incurred by Sirrom or any of its
Subsidiaries after the Amortization Date having a Comparison Percentage (as
defined below) in excess of 2.50%. For the purposes of this Agreement
"Comparison Percentage" shall mean, with respect to any Indebtedness, the spread
(expressed as a percentage) charged by the lender thereof, in excess of such
lenders cost of funds (expressed as a percentage), multiplied by a fraction, the
numerator of which is 70%, and the denominator of which is the advance
(expressed as a percentage) against Eligible Loans offered to Sirrom, or such
Subsidiary, with respect to such Indebtedness.
(b) Upon the occurrence of any breach of the covenant
described in clause (a) above, Sirrom shall pay to the Program Agent on each
Monthly Payment Date, for the account of HLS, an amount equal to the product of
(x) the per annum rate of 2.25% and (y) the weighted average amount of the
Indebtedness that does not constitute Permitted Indebtedness during the
Collection Period for such Monthly Payment Date (the "Incremental Fee Amount"),
such product to be calculated until the earlier to occur of the Scheduled
Pay-Out Commencement Date for the Revolving Notes (as defined in the Supplement
in respect of the Revolving Notes) owned by the Purchasers or the Take Out Date
(as defined below). For the purposes of this Agreement "Take Out Date" shall
mean the date following the Amortization Date when both (i) Holders of the
Revolving Notes have been paid in full and (ii) Sirrom shall have paid the Make
Whole Fee to the Program Agent (as defined below).
(c) Notwithstanding anything to the contrary set forth in this
Section 2, (i) in the event that Sirrom shall request in writing an increase
(the "Requested Increase") in the Stated Amount of the Revolving Notes issued
under the Indenture in an amount such that after giving effect to such increase,
the sum of the Stated Amount thereof, plus the aggregate Outstanding Principal
Balance of any Fixed Principal Notes issued under the indenture would not exceed
$200,000,000 in the aggregate, and the
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Purchasers shall fail to increase such Stated Amount on the same terms and
conditions as set forth in the Indenture and the Series 1996-1 Supplement, the
amount in clause (y) in subsection (b) above shall be reduced to an amount equal
to 90% of the Stated Amount of the Notes then owned by the Purchasers, and (ii)
Sirrom and its Subsidiaries may issue common stock, preferred stock or other
Equity Securities or securities convertible into or representing the right to
acquire Equity Securities and utilize the net proceeds without restriction,
including using the net proceeds to fund Eligible Loans and loans that are not
Eligible Loans, to make any other investments, to engage in other activities and
to pay down any amounts owing on the Revolving Notes.
(d) The parties hereto agree that for the purposes of this
Agreement, neither Sirrom nor any of its Subsidiaries shall be deemed to have
incurred any Indebtedness solely upon entering into an agreement containing a
commitment or other agreement to extend Indebtedness to such Person, but rather
Indebtedness shall occur on the date and in the amount of any advance, draw or
other extension of credit with respect to any such agreement.
(e) Notwithstanding any provisions hereof to the contrary, the
Incremental Fee Amount shall be waived by the Program Agent upon the merger of
or sale of all or substantially all of the assets or equity of Sirrom to any
Person that is not an affiliate of Sirrom (the date of such event being
hereinafter referred to as the "Acquisition Date"); provided that Sirrom shall
have paid the Make Whole Fee (as defined below) to the Program Agent.
For the purposes of this Agreement, "Make Whole Fee" as of any date of
determination, shall mean an amount equal to the product of (a) the sum of (i)
the Fee Basis as of the end of the most recently ended Computation Period plus
(ii) the amount of Indebtedness that does not constitute Permitted Indebtedness
as of the end of such Computation Period, (b) 1.125% and (c) a fraction, the
numerator of which is the number of months (rounded to the nearest whole number)
remaining from the such date of determination to the Scheduled Pay-Out
Commencement Date, and the denominator of which is 12.
SECTION 3. Representations and Warranties of Sirrom. Sirrom
hereby represents and warrants to HLS and the Program Agent as follows:
(i) Sirrom is a corporation duly organized, validly existing
and in good standing under the applicable laws of its jurisdiction of
organization or
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incorporation and has, in all material respects, full corporate power
and authority to own its properties and conduct its business as such
properties are presently owned and as such business is presently
conducted, and to execute, deliver and perform its obligations under
this Agreement.
(ii) The execution and delivery of this Agreement by Sirrom
and the performance by Sirrom of this Agreement has been duly
authorized by all necessary corporate action on the part of the Sirrom.
(iii) This Agreement has been duly and validly executed and
delivered by Sirrom and constitutes a legal, valid and binding
obligation of Sirrom enforceable against it in accordance with its
terms except as such enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws now and hereafter in effect affecting creditors' rights generally,
and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity).
(iv) Sirrom's execution and delivery of this Agreement,
performance of the transactions contemplated by this Agreement, and
fulfillment of the terms hereof, do not conflict with or violate in any
material respects any material requirements of law applicable to
Sirrom, or conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any material indenture, contract,
agreement, mortgage, deed of trust or other instrument to which Sirrom
is a party or by which it or its properties are bound in any manner
which is likely to have a material adverse effect on Sirrom's ability
to perform its obligations hereunder.
(v) No authorization, consent, license, order or approval of
or registration or declaration with any Governmental Authority is
required to be obtained, effected or given by Sirrom in connection with
the execution and delivery of this Agreement or the performance of its
obligations hereunder.
SECTION 4. Amendments, Etc. No amendment or waiver of
any provision of this Agreement nor consent to any departure
therefrom, shall in any event be effective unless the same shall
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be in writing and signed by each party hereto, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 5. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telex communication and
communication by facsimile copy) and shall be delivered in accordance with the
terms of the Note Purchase Agreement.
SECTION 6. Binding Effect; Assignability; Term. This Agreement
shall be binding upon and inure to the benefit of Sirrom, HLS and the Program
Agent and their respective successors and permitted assigns. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
Scheduled Pay-Out Commencement Date (as defined in the Supplement in respect of
the Revolving Notes); provided, however, that the provisions of Section 2 shall
be continuing and shall survive the termination of the Indenture and the
repayment in full of the Notes.
SECTION 7. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws and decisions of the State of New
York.
SECTION 8. Execution in Counterparts; Severability. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
SIRROM CAPITAL CORPORATION
By:
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Name:
Title:
SIRROM FUNDING CORPORATION
By:
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Name:
Title:
HOLLAND LIMITED SECURITIZATION, INC.
By: ING Baring (U.S.) Capital Markets,
Inc., as its attorney-in-fact
By:
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Name:
Title:
ING BARING (U.S.) CAPITAL MARKETS, INC.,
as Program Agent
By:
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Name:
Title:
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