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Exhibit f.16
EXECUTION COPY
BACKUP SERVICING AGREEMENT
THIS BACKUP SERVICING AGREEMENT (the "Agreement") dated as of
December 31, 1996, is entered into among FIRST TRUST NATIONAL ASSOCIATION, a
national banking association ("First Trust"), as backup servicer (the "Backup
Servicer"), SIRROM CAPITAL CORPORATION, a Tennessee corporation ("Sirrom")(in
its capacity as initial Servicer under the Indenture referred to below, the
"Servicer"), and ING BARING (U.S.) CAPITAL MARKETS, INC., as agent for certain
Holders of Notes issued under the Indenture (the "Program Agent"). Capitalized
terms used herein which are not otherwise defined herein shall have the meanings
assigned to such terms in the Indenture.
PRELIMINARY STATEMENT
WHEREAS, Sirrom is the initial Servicer under that certain
Master Trust Indenture and Security Agreement of even date herewith (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
and together with any Supplement thereto, the "Indenture"), with Sirrom Funding
Corporation, a Delaware corporation, as the Issuer and First Trust as the
Trustee; and
WHEREAS, the parties hereto desire to set forth certain
agreements with respect to (i) the performance by the Backup Servicer of certain
services which relate to the servicing by Sirrom of the Issuer Loans pledged to
the Trustee under the Indenture (the "Pledged Loans") and (ii) the assumption of
certain responsibilities as Servicer under the Indenture under certain
circumstances;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Reconciliation Procedures. So long as the Backup
Servicer has not been appointed the "Servicer" pursuant to Section 2 hereof and
Section 10.02 of the Indenture:
(a) On or prior to the Determination Date with respect to each
Monthly Payment Date, the Servicer shall prepare and deliver to the Backup
Servicer, by overnight courier of national standing, a copy of the Settlement
Statement prepared by the Servicer pursuant to Section 3.05(b) of the Indenture
for the
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immediately preceding Collection Period and a computer tape or diskette, in a
format acceptable to the Program Agent and the Backup Servicer, containing all
information with respect to the Pledged Loans necessary to prepare the
Settlement Statement.
(b) On or before the Business Day preceding each Monthly
Payment Date in respect of the immediately preceding Collection Period, the
Backup Servicer shall (i) use the data received pursuant to subparagraph (a)
above to verify the amount of Principal Collections and Interest Collections
received with respect to the Pledged Loans during such Collection Period as set
forth in the applicable Settlement Statement and (ii) report to the Servicer the
nature and amount of any discrepancies identified as a result of such
verification process. The Servicer and the Backup Servicer shall use their best
efforts to reconcile any discrepancies identified to the Servicer pursuant to
the immediately preceding sentence prior to the related Monthly Payment Date;
provided that if the Servicer and the Backup Servicer are unable to reconcile
such discrepancies within two (2) Business Days after the such Monthly Payment
Date, the Servicer shall cause a firm of independent accountants to audit such
Settlement Statement and, prior to the seventh Business Day after such Monthly
Payment Date, reconcile such discrepancies. The effect, if any, of such
reconciliation shall be reflected in the next Daily Report delivered by the
Servicer to Trustee pursuant to the terms of the Indenture and the next
Settlement Statement for the immediately succeeding Monthly Payment Date.
(c) First Trust is hereby authorized and empowered, with the
prior written consent of the Program Agent, Sirrom and the Trustee, to
subcontract with or delegate to any other Person (at the Backup Servicer's
expense) for performance of its duties and obligations as Backup Servicer
described in this Agreement; provided that such other Person shall not become
the Backup Servicer hereunder and First Trust shall remain liable for the
performance of its duties and obligations as the Backup Servicer pursuant to the
terms hereof. The Program Agent, Sirrom and the Trustee hereby consent to the
appointment by First Trust of American Network Leasing Corporation as its
subcontractor for the performance of its duties described herein. Each
subcontracting agreement will be upon such terms and conditions as are not
inconsistent with this Agreement. All compensation payable to a subcontractor
under any subcontracting agreement shall be payable by the Backup Servicer from
the fee received by it pursuant to Section 4 hereof or otherwise from its own
funds, and neither the Trustee, Sirrom nor the Program Agent shall have any
obligations, duties or liabilities of any kind whatsoever under any such
subcontracting agreements.
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(d) The Backup Servicer shall have no obligations under this
Agreement other than those specifically set forth in this Section 1, and shall
not otherwise be obligated to supervise, verify, monitor or administer the
performance of the Servicer. The Backup Servicer shall have no liability for any
action or omission on the part of the Servicer.
SECTION 2. Assumption of Obligations. (a) The Backup Servicer
hereby agrees, on the date (the "Assumption Date") specified in the written
notice from the Backup Servicer to the Trustee pursuant to Section 10.02(a) of
the Indenture, and without any further notice, to assume the obligations of
Servicer, other than (i) the obligation, if any, of Sirrom to advance funds
pursuant to the Indenture, (ii) any obligation of the Servicer to make payments
with respect to any losses on investments made by or at the direction of the
Servicer, and (iii) any obligation of the Servicer to take any legal action
which the Backup Servicer in its reasonable opinion believes may subject it to
any liability in connection with such legal action. From and after the
Assumption Date, the Backup Servicer shall be entitled to all of the rights
granted to the Servicer by the terms and provisions of the Indenture. The Backup
Servicer shall not be obligated to assume the duties of the Servicer in the
event the Backup Servicer is determined to be incapable of performing such
duties as a matter of law in accordance with the provisions of Section 10.02 of
the Indenture.
(b) Notwithstanding the Backup Servicer's assumption of, and
its agreement to perform and observe, all duties, responsibilities and
obligations of the Servicer under the Indenture arising on and after the
Assumption Date, the Backup Servicer shall not be deemed to have assumed or to
become liable for, or otherwise have any liability for, any duties,
responsibilities, obligations or liabilities of Sirrom or any predecessor
Servicer arising on the terms of the Indenture, arising by operation of law or
otherwise, including, without limitation, any liability for, any duties,
responsibilities, obligations or liabilities of Sirrom or any predecessor
Servicer arising on or before the Assumption Date under Article III of the
Indenture, regardless of when the liability, duty, responsibility or obligation
of Sirrom or any predecessor Servicer therefor arose, whether provided by the
terms of the Indenture, arising by operation of law or otherwise and in no case
will the Backup Servicer have any liability for any failure to perform its
duties as Servicer, or any loss or damages arising from such failure, that
results from the actions (or inaction) of any predecessor Servicer on or before
the Assumption Date.
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SECTION 3. Indemnity. Sirrom shall indemnify, defend, and hold
harmless the Backup Servicer from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out of, or was imposed upon the Backup
Servicer through, the negligence, willful misfeasance, or bad faith of Sirrom in
the performance of its duties under this Agreement or the Indenture or by reason
of reckless disregard of its obligations and duties under this Agreement or the
Indenture.
SECTION 4. Fees. The Backup Servicer shall be entitled to such
fees as are set forth in the fee agreement executed in connection herewith
between the Program Agent and the Backup Servicer.
SECTION 5. Further Assurances. The Backup Servicer agrees to
execute, acknowledge and deliver from time to time all such further instruments
and documents and to take all reasonable actions as the Program Agent may from
time to time reasonably request to preserve the rights and obligations created
hereunder; provided, however, that the Backup Servicer shall not be required to
take any action which is contrary to this Agreement or applicable law, or which
is not reasonably incidental to its duties and responsibilities under this
Agreement or is of a type unrelated to its business.
SECTION 6. Termination. This Agreement shall continue in full
force and effect until the earliest of the date (i) that the Backup Servicer has
assumed the obligations and responsibilities of the Servicer under the Indenture
pursuant to this Agreement, (ii) the satisfaction and discharge of the
obligations of the Issuer under the Indenture shall have occurred, (iii) that
the Backup Servicer resigns (which resignation may be made at any time by not
less than 120 days' prior written notice to the Servicer and the Program Agent)
and (iv) that the Backup Servicer is to be removed (which removal may be made at
any time without cause by the Program Agent by not less than 60 days' notice
then given in writing to the Backup Servicer and the Servicer). Notwithstanding
the foregoing, the provisions of Sections 2 and 3 of this Agreement shall be
continuing and shall survive the termination of this Agreement.
SECTION 7. Notice. All demands, notices and communications
under this Agreement shall be in writing, and delivered (a) personally, (b) by
certified mail, return receipt requested, (c) by Federal Express or similar
overnight carrier service or (d) by telecopy and shall be deemed to have been
duly given upon receipt, (i) in the case of the Backup Servicer, to First Trust
National Association, 000 Xxxx Xxxxx Xxxxxx,
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SPFT0210, Xx. Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance
Administration, (Telecopy: (000) 000-0000) with a copy to American Network
Leasing Corporation, 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxx 00000, Attention: Xxxxxxx
X. Xxxxxxx (Telecopy: 972-605- 3140), (ii) in the case of Sirrom, to Sirrom
Capital Corporation, 000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, Xxxxxxxxx 00000,
Attention: Chief Financial Officer (Telecopy: 615-726-1208) and (iii) in the
case of the Program Agent, to ING Baring (U.S.) Capital Markets, Inc., 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxx X. Xxxxxx
(Telecopy: 212-593-3362).
SECTION 9. Miscellaneous. This Agreement may not be assigned
by the Backup Servicer or Sirrom. This Agreement may be assigned by the Program
Agent only to a successor Program Agent appointed pursuant to the Indenture.
This Agreement shall be construed in accordance with the laws of the State of
New York and the obligations, rights, and remedies of the parties under this
Agreement shall be determined in accordance with such laws. This Agreement may
be executed in counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
SECTION 10. Conflict. The parties hereto acknowledge and agree
that to the extent the provisions of this Agreement conflict with the provisions
of the Indenture insofar as they relate to the Backup Servicer, the provisions
of this Agreement shall control.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
FIRST TRUST NATIONAL ASSOCIATION,
as Backup Servicer
By:
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Name:
Title:
SIRROM CAPITAL CORPORATION
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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