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Exhibit 7.10
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement") is made
and entered into as of the day of August, 1996, by and between SIRROM
INVESTMENTS, INC., a Tennessee corporation (the "Grantor"), and the U.S. SMALL
BUSINESS ADMINISTRATION ("SBA").
STATEMENT OF PURPOSE
WHEREAS, the Grantor is licensed by SBA as a small business investment
company pursuant to the Small Business Investment Act of 1958, as amended (the
"Act") and the regulations promulgated thereunder (the "Regulations"); and
WHEREAS, SEA has previously guaranteed certain debentures issued pursuant
to the Act and the Regulations (the "Existing Debentures") by Sirrom Capital
Corporation, a Tennessee corporation (the "Parent"), who, pursuant to a
corporate reorganization, assigned the Existing Debentures and other
liabilities and a majority of its assets to Grantor (the "Restructuring"); and
WHEREAS, from time to time, SBA may purchase or guarantee new or
replacement debentures issued by the Grantor (such debentures, together with
the Existing Debentures, the "Debentures"); and
WHEREAS, as a condition to approving the Restructuring and as an
inducement therefor, SBA has required the Grantor (i) to grant to SBA a
security interest in all of the Grantor's assets to secure obligations now or
hereafter owed or contingently owed by the Grantor to SBA, and (ii) to amend
and restate the terms and conditions of the Security Agreement, dated as of
December 27, 1995, by and between the Parent and SBA (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:
1. Definitions. The following 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.
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"Business Day" means any day other than a Saturday, Sunday or other day on
which the Federal government or banks in Nashville, Tennessee and Charlotte,
North Carolina is closed.
"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 ▇▇▇ 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.
"Event of Default" means (i) any payment Event of Default under the
Lending Facility Agreement which has not been waived by the applicable Lenders
(as defined in the Lending Facility Agreement) within thirty (30) days of
notice to the Borrower of the occurrence of such an Event of Default by the
Lenders or cured by the Grantor, as Borrower, within such thirty (30) day
period, (ii) any other Event of Default under the Lending Facility Agreement
which has not been waived by the applicable Lenders (as defined in the Lending
Facility Agreement) within sixty (60) days of notice to the Borrower of the
occurrence of such an Event of Default by the Lenders or cured by the Grantor,
as Borrower, within such sixty(60)day period, (iii) any acceleration of the
Lending Facility, (iv) the transfer of the Grantor to the SBA's Office of
Liquidation, or (v) the concurrent occurrence of (A) a mandatory repayment of
the Lending Facility under Section 2.4(b) of the Lending Facility Agreement
which (1) is in excess of (X) $2, 000, 000 at any one time or (Y) 15-06 of the
outstanding balance of the Lending Facility at the beginning of the period in
any ninety (90) day period and (2) is not paid from the Grantor's cash flow
from operations, net operating income of the Grantor, repayments of loans by
borrowers of the Grantor, a sale of loans, warrants or other equity positions
by the Grantor that occurs in the ordinary course of the Borrower's business,
or raising of new debt (subject to the approval of SBA) or equity capital by
the Grantor (including without limitation loans or advances from any affiliates
of the Grantor) and (B) a violation of Section 8.4 of the Lending Facility
Agreement (provided that, for the purposes
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of this definition only, in determining whether a violation of Section 8.4
shall have occurred-, all loans made by the Grantor that are not considered to
be "Eligible Loans" under the Borrowing Base Certificate (as defined in the
Lending Facility Agreement) shall be deemed to be loans "which have payments
more than thirty (30) days past due or which are on a non-accrual basis" for
the purposes of such Section 8.4). Notwithstanding any term, condition or
agreement to the contrary, this definition shall not be amended, modified or
otherwise supplemented without the approval of the Required Lenders (as defined
in the Lending Facility Agreement) ; said consent of the Required Lenders shall
not be unreasonably withheld and shall be deemed to have been given if the
Agent on behalf of the Lenders fails to respond to a written request for
amendment to this definition delivered by the SBA within thirty (30) days after
receipt by the Agent of such written request for amendment.
"Fixtures" shall mean all "fixtures" (as defined in the UCC) of the
Grantor.
"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 I 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 ▇▇▇▇ rights, applications for registration of Trademarks, trade names
and service marks, and Trademark, trade name and service ▇▇▇▇ registrations and
Patent Licenses, Trademark
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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 products made or processed therefrom and all
substances, if any, commingled therewith or added thereto.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Lending Facility" means the secured revolving line of credit extended to
the Grantor, as Borrower, under the Lending Facility Agreement.
"Lending Facility Agreement" means the Fourth Amended and Restated Loan
Agreement of even date herewith by and among the Grantor, as Borrower, the
Parent, as Guarantor, First Union National Bank of Tennessee, as Agent, and the
Lenders referred to therein.
"Obligations" means any indebtedness or liability of the Grantor to SBA,
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, including all Debentures which may be purchased or
guaranteed by SBA.
"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 ▇▇▇ 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.
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"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 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 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 ▇▇▇ f or
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 Tennessee; 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 Tennessee, "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, the Grantor
hereby sets over, transfers, hypothecates, grants, assigns, pledges and conveys
to SBA a continuing first priority security interest in and to and assigns to
SBA 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;
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(ii) Inventory;
(iii) Documents;
(iv) Equipment;
(v) Fixtures;
(vi) Instruments;
(vii) General Intangibles;
(viii) Vehicles;
(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 SBA of any of its
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) SBA shall have no obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
SBA 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.
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(a) The Grantor will, upon request of SBA, 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 SBA) and
do such other acts and things, all as SBA may from time to time request to
establish and maintain valid perfected security interests in the Collateral to
secure the payment of the Obligations. The Grantor hereby constitutes and
appoints SBA (and any designated official of SBA 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 power
of attorney coupled with an interest and shall be irrevocable by the Grantor.
(b) Except for financing statements showing First Union National Bank, as
Agent, as the secured party, and SBA, as the secured party, 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 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 approved by SEA ("Approved Liens"). The Grantor
shall, at the request of SEA, 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 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 SEA.
(c) The Grantor will furnish SEA such information concerning the Grantor
and the Collateral as SEA 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 SEA in such Collateral.
(e) The Grantor will reimburse SEA for all out-of-pocket expenses,
including reasonable attorneys, fees and disbursements, incurred by SEA in
seeking to collect or enforce any rights hereunder, and, in case of any Event
of Default, incurred by SEA in seeking to enforce its rights hereunder.
6. As to Equipment and Inventory; Place of Business. The Grantor shall:
(a) Deliver written notice to SEA 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.
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(b) (i) maintain or cause to be maintained in good repair, working order
and condition, excepting ordinary wear and tear and damage due to 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 SEA 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
therefor specified in Section 9(a) hereof or, upon thirty (30) days prior
written notice to the SBA, 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 SBA to inspect and make abstracts
from such records and chattel paper.
(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 SBA
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 SBA to the Grantor of its intention so to
do, SBA shall have the right to notify the account debtors or obligors under
any Accounts of the assignment of such Accounts to SBA 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 SBA 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 received in trust for the benefit of SBA
hereunder, shall be segregated from other funds of the Grantor and shall be
forthwith paid over to SBA in the same form as so received (with any necessary
endorsement), 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. SBA's Rights and Remedies Upon Default. Upon the occurrence of any
Event of Default:
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(a) SBA may declare all of the obligations, whether evidenced herein or
secured hereby, to be due and payable, without notice (except as otherwise
provided for in the Regulations).
(b) SEA may exercise 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 SEA forthwith, assemble
all or any part of the Collateral as directed by SEA and make it available to
SEA at a place to be designated by SEA 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 elsewhere, for cash, on credit or for future
delivery, and upon such other terms as SEA may deem commercially reasonable.
SEA 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. SEA 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 after which any private sale is to be made shall
constitute reasonable notification. SEA shall not be obligated to make any
sale of the Collateral regardless of notice of sale having been given. SEA 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 SEA as Collateral and all cash proceeds received by
SEA in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral may, in the discretion of SEA, be held by SEA as
Collateral for, and then or at any time thereafter applied in whole or in part
by SEA against all or any part of the obligations.
(d) In addition to the other rights of SEA hereunder, SEA 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 SEA, shall be
segregated from other funds of
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the Grantor and shall, forthwith upon receipt by the Grantor, be turned over to
SEA in the same form as received by the Grantor (duly endorsed to SEA, if
required).
(f) to the extent permitted by applicable law, the Grantor waives all
claims, damages and demands against SEA 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 SEA. To the extent permitted by applicable
law, no claim may be made by the Grantor or any other party against SEA, or the
representatives of SEA, 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 ▇▇▇ 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 SEA, take all actions necessary
under the Assignment of Claims Act, 31 U.S.C. Section 3727 and 41 U.S.C.
Section 15 (the "Assignment of Claims Act"), to permit SEA to receive 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, including but not limited to any
rights and remedies available under the Act or the Regulations.
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 10(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 Approved 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
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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
SBA;
(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 Obligations, subject only to the Approved Liens. All other actions
necessary or requested by SBA 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 SBA of any rights
or remedies in respect of the Collateral hereunder except as may be required
for SBA 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 SBA other than Approved 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 SEA, is and will be true and correct as of the date furnished.
10. Miscellaneous.
(a) SEA 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 its 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 no waiver or omission to act by SEA
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 SEA of any right or
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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 otherwise available to SEA in connection with the
indebtedness herein described. Nothing contained in this Agreement shall be
interpreted as restricting in any way SBA's ability to exercise the rights and
remedies available to it under the Act and the Regulations. Time is of the
essence in 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 Obligations, (ii) be binding upon the Grantor, its successors and
assigns and (iii) inure, together with the rights and remedies of SEA
hereunder, to the benefit of SEA. SEA may assign or otherwise transfer any
rights and obligations under the Debentures 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 SEA herein or otherwise.
Nothing set forth herein 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 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 Obligations, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
Grantor. In such event, SEA shall promptly return to the Grantor, at the
Grantor's expense, such of the Collateral held by SEA as shall not have been
sold or otherwise applied pursuant to the terms hereof. SEA 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.
(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 SEA shall inure to the benefit of its successors and assigns and such
successors and assigns shall have all privileges, rights and remedies afforded
SBA 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, Federal law and the
laws of the State of Tennessee.
(e) The Grantor hereby irrevocably consents to the service of a summons
and complaint and other process in any action, claim or proceeding brought by
SBA in connection with this Agreement or the Debentures, 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 10(h) hereof.
(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, SBA BY ITS ACCEPTANCE OF THIS AGREEMENT OR THE
BENEFITS HEREOF AND THE
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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) SBA 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 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, sequestration, garnishment, attachment, and
appointment of receiver, and (iv) when applicable, a judgment by confession of
judgment.
(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 FedEx (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.
5OO ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to SBA: U.S. Small Business Administration
Investment Division
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., Mail Code 7940
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief, Area II
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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 Amended
and Restated Intercreditor Agreement of even date by and among SBA, First Union
National Bank of Tennessee, as Agent for the Lenders designated therein, and
First American Trust Company.
(j) The Grantor agrees to deliver to the SBA, concurrently with its
delivery to First Union National Bank, the Borrowing Base Certificate required
to be delivered to First Union National Bank pursuant to the terms of the
Lending Facility Agreement, with changes that are at least lo-6 highlighted.
(k) The Grantor shall deliver written notice to the SBA within one
business day of any repayments made under the Lending Facility Agreement
pursuant to Section 2.4(b) thereof.
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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:________________________
Title:_______________________
___________________________
_______________ Secretary
U.S. SMALL BUSINESS ADMINISTRATION
By:________________________________
Name:___________________________
Title:__________________________
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SCHEDULE 1
TO
AMENDED AND RESTATED
SECURITY AGREEMENT
BETWEEN
SIRROM INVESTMENTS, INC.
AND
U.S. SMALL BUSINESS ADMINISTRATION
DATED AS OF AUGUST __, 1996
[Location of Inventory and Equipment]
1. Location of Inventory and Equipment:
(a) ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Location of Chattel Paper:
(a) First American Trust Company
First American Center
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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SCHEDULE 2
TO
AMENDED AND RESTATED
SECURITY AGREEMENT
BETWEEN
SIRROM INVESTMENTS, INC.
AND
U.S. SMALL BUSINESS ADMINISTRATION
DATED AS OF AUGUST __, 1996
[Location of Information on Accounts]
1. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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SCHEDULE 3
TO
AMENDED AND RESTATED
SECURITY AGREEMENT
BETWEEN
SIRROM INVESTMENTS, INC.
AND
U.S. SMALL BUSINESS ADMINISTRATION
DATED AS OF AUGUST __, 1996
[Prior Names]
1. Sirrom Capital, L.P.
2. Sirrom Capital Corporation
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