Exhibit 10d (cont.)
EXHIBIT I
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and
entered into as of February 1, 1996 by C.I.S. TECHNOLOGIES,
INC., a Delaware corporation ("Pledgor), in favor of GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation
(together with its successors and assigns in such capacity,
"Lender").
W I T N E S S E T H:
WHEREAS, Pledgor is the legal and beneficial owner
of the outstanding shares of stock set forth on Schedule I
hereto (the "Pledged Shares") and issued by C.I.S., Inc., an
Oklahoma corporation ("Borrower");
WHEREAS, Pledgor, Lender and Borrower have entered
into the Amended and Restated Credit Agreement dated as of
February 1, 1996 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit
Agreement"), providing for the extension of credit by Lender
to Borrower to, among other things, refinance certain
indebtedness of Borrower and to provide for ordinary working
capital needs of Borrower, upon the terms and subject to the
conditions set forth therein. Capitalized terms used herein
and not otherwise defined herein shall have the meanings
given to such terms in the Credit Agreement;
WHEREAS, Pledgor is and shall be the corporate
parent of Borrower, and it is to the advantage of Pledgor
that Lender enter into the Credit Agreement;
WHEREAS, Pledgor has entered into a Guaranty, dated
as of October 15, 1994, in favor of Lender (as amended,
supplemented or otherwise modified from time to time, the
"Parent Guaranty"), providing for the guarantee by Pledgor
of Borrower's Obligations under the Credit Agreement; and
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WHEREAS, Lender has required, as a condition to
entering into the Credit Agreement, that Pledgor pledge and
grant to Lender, a security interest in the Pledged
Collateral (as defined herein) to secure the payment and
performance by Pledgor of its obligations under the Parent
Guaranty;
NOW, THEREFORE, in consideration of the premises and
in order to induce Lender to extend credit under the Credit
Agreement, Pledgor hereby agrees with the Lender, as
follows:
SECTION 1. PLEDGE. Pledgor hereby pledges and
grants to Lender a continuing security interest in all of
the following property now owned or at any time hereafter
acquired by Pledgor or in which Pledgor now has, or may
acquire in the future, any right, title or interest thereto
(collectively, the "Pledged Collateral"):
(a) the Pledged Shares of Pledgor; and
(b) all additional shares of Stock of Borrower
hereafter acquired, received or owned by Pledgor (the
"Additional Shares"); and
(c) the certificates representing the Pledged
Shares and the Additional Shares (all of which shall be
deemed to be part of the Pledged Shares), and all products
and Proceeds of any of such Pledged Shares, including,
without limitation, all dividends, cash, instruments,
subscriptions, warrants and any other rights and options and
other property from time to time received, receivable or
otherwise distributed to Pledgor in respect of or in
exchange for any or all of such Pledged Shares.
SECTION 2. SECURITY FOR OBLIGATIONS. This
Agreement secures, and the Pledged Collateral is security
for, the prompt payment in full when due, whether at stated
maturity, by acceleration or otherwise, and performance of
all of Pledgor's obligations under the Parent Guaranty,
whether now existing or hereafter incurred, (collectively,
the "Secured Obligations").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All
certificates or instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on
behalf of Lender pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by
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duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor
represents and warrants to Lender as follows:
(a) The Pledged Shares have been duly authorized
and validly issued and are fully paid and non-assessable.
There are no existing options, warrants, calls or
commitments of any character whatsoever relating to any of
the Pledged Shares. None of the Pledged Shares is subject
to any shareholder agreement, voting trust agreement or any
other agreement in respect of the rights of shareholders.
(b) Pledgor is the sole legal and beneficial owner
of the Pledged Collateral, free and clear of any Lien or
claims of any Person except for the security interest
created by this Agreement. None of the Pledged Shares has
been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any
applicable jurisdiction.
(c) This Agreement has been duly authorized,
executed and delivered by Pledgor and constitutes a legal,
valid and binding obligation of Pledgor enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, or other similar laws
affecting the rights of creditors generally or by the
application of general equity principles.
(d) The pledge and delivery of the Pledged
Collateral pursuant to this Agreement creates a valid first
priority perfected security interest in the Pledged
Collateral pledged by Pledgor, securing the payment of the
Secured Obligations.
(e) No authorization, approval, or other action by,
and no notice to or filing with, any Governmental Authority
or any other Person is required either (i) for the pledge by
Pledgor of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this
Agreement by Pledgor or (ii) for the exercise by Lender of
the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral of Pledgor
pursuant to this Agreement (except as may be required in
connection with the disposition of the Pledged Collateral by
laws affecting the offering and sale of securities
generally).
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(f) Pledgor has full power, authority and legal
right to pledge all the Pledged Collateral pledged by
Pledgor pursuant to this Agreement.
(g) The Pledged Shares constitute 100% of the
issued and outstanding capital stock of all classes of
Borrower as set forth on Schedule I hereto.
The foregoing representations and warranties shall
be deemed to have been made by Pledgor on each date of each
extension of credit by Lenders under the Credit Agreement.
SECTION 5. FURTHER ASSURANCES; ADDITIONAL SHARES.
(a) Pledgor agrees that at any time and from time
to time, at Pledgor's expense, Pledgor will promptly execute
and deliver, or cause to be executed and delivered, all
stock powers, proxies, assignments, instruments and
documents and take all further action, at Lender's request,
that is reasonably necessary, in order to perfect, or
maintain perfection of, any security interest granted or
purported to be granted hereby or to enable Lender to
exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral pledged by Pledgor and to
carry out the provisions and purposes hereof.
(b) Pledgor further agrees that it will, upon
obtaining any Additional Shares pledge such Additional
Shares to Lender and promptly (and in any event within three
(3) Business Days) deliver to Lender a duly executed Pledge
Agreement Supplement in substantially the form of Schedule
II hereto (a "Pledge Agreement Supplement") identifying the
Additional Shares which are pledged by Pledgor pursuant to
this Agreement. Pledgor hereby authorizes Lender to attach
each executed Pledge Agreement Supplement to this Agreement
and agrees that all Additional Shares listed on any Pledge
Agreement Supplement delivered to Lender shall for all
purposes hereunder constitute Pledged Shares and Pledged
Collateral.
(c) Pledgor agrees to defend the title to the
Pledged Collateral pledged by Pledgor and the security
interest therein of Lender under this Agreement against the
Lien or claim of any Person and to maintain and preserve
such security interest until the Termination Date.
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SECTION 6. VOTING RIGHTS; DIVIDENDS; ETC.
(a) Subject to Section 6(d) hereof, Pledgor shall
be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Shares or any
part thereof; provided, however, that Pledgor shall not
exercise or shall refrain from exercising any such right if
such action or inaction could have a material adverse effect
on the value of the Pledged Collateral or any part thereof
or affect the priority or perfection of Lender's Lien
thereon or be inconsistent with or violate any provisions of
this Agreement (including without limitation, Section 11
hereof), the Parent Guaranty, the Credit Agreement or any of
the other Loan Documents. Lender shall execute and deliver
(or cause to be executed and delivered) to Pledgor all such
proxies and other instruments as Pledgor may reasonably
request for the purpose of enabling Pledgor to exercise the
voting and other rights which it is entitled to exercise
pursuant to this Section 6(a).
(b) Subject to Section 6(d) hereof, and to the
extent permitted by the Credit Agreement, Pledgor shall be
entitled to receive all cash dividends paid from time to
time in respect of the Pledged Shares in the normal course
of business of Borrower and consistent with past practice
and which are permitted under the Credit Agreement.
(c) Any and all (i) dividends or other
distributions paid or payable in the form of instruments and
other property (other than cash dividends permitted under
Section 6(b) hereof) received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged
Collateral, (ii) dividends and other distributions paid or
payable in cash in respect of any Pledged Shares in
connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and (iii) cash paid,
payable or otherwise distributed in redemption of, or in
exchange for, any Pledged Shares, shall be in each case
forthwith delivered to Lender to hold as Pledged Collateral
for the benefit of Lender and shall, if received by Pledgor,
be received in trust for the benefit of Lender, be
segregated from the other property or funds of Pledgor, and
be forthwith delivered to Lender as Pledged Collateral in
the same form as so received (with any necessary
endorsements).
(d) Upon the occurrence and during the continuance
of an Event of Default, (i) all rights of
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Pledgor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to
this Section 6 hereof shall cease, and all such rights shall
thereupon become vested in Lender which shall thereupon have
the sole right to exercise such voting and other consensual
rights and (ii) all cash dividends or other distributions
payable in respect of the Pledged Shares shall be paid to
Lender for its benefit and Pledgor's right to receive such
payments and distributions pursuant to Section 6(b) hereof
shall immediately cease.
(e) All dividends or other distributions which are
received by Pledgor contrary to the provisions of this
Section 6 shall be received in trust for the benefit of
Lender, shall be segregated from other funds of Pledgor and
shall be forthwith paid over to Lender as Pledged Collateral
for the benefit of Lender in the same form as so received
(with any necessary endorsements).
SECTION 7. COVENANTS. Pledgor covenants and agrees
with Lender from and after the date of this Agreement until
the Termination Date that Pledgor will not (a) sell,
transfer or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral pledged by Pledgor
without the prior written consent of Lender, (b) create or
permit to exist any Lien upon or with respect to any of the
Pledged Collateral pledged by Pledgor, except for the
security interest granted under this Agreement, and
(c) enter into any agreement or understanding that purports
to or may restrict or inhibit Lender's rights or remedies
hereunder, including, without limitation, Lender's right to
sell or otherwise dispose of the Pledged Collateral pledged
by Pledgor.
SECTION 8. LENDER APPOINTED ATTORNEY-IN-FACT.
Pledgor hereby irrevocably appoints Lender Pledgor's true
and lawful attorney-in-fact, coupled with an interest, with
full authority in the place and stead of Pledgor and in the
name of Pledgor or otherwise, from time to time in Lender's
discretion, for the purpose of carrying out the terms of
this Agreement, to take any action and to execute any
instrument which Lender may deem necessary or advisable to
further perfect and protect the security interest granted
hereby, including, without limitation, to receive, endorse
and collect all instruments made payable to Pledgor
representing any dividend, interest or principal payment or
other distribution in respect of the Pledged Collateral
pledged by Pledgor or any part thereof and to give full
discharge for the same.
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SECTION 9. LENDER MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Lender may itself
perform, or cause performance of, such agreement, and the
reasonable expenses of Lender incurred in connection
therewith shall be payable by Pledgor.
SECTION 10. NO ASSUMPTION OF DUTIES; REASONABLE
CARE. The rights and powers granted to Lender hereunder are
being granted in order to preserve and protect Lender's
security interest in and to the Pledged Collateral granted
hereby and shall not be interpreted to, and shall not,
impose any duties on Lender in connection therewith. Lender
shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment
substantially equal to that which Lender accords its own
property, it being understood that Lender shall not have any
responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, tenders or other
matters relative to any Pledged Collateral, whether or not
Lender has or is deemed to have knowledge of such matters,
or (b) taking any necessary steps to preserve rights against
any parties with respect to any Pledged Collateral.
SECTION 11. SUBSEQUENT CHANGES AFFECTING
COLLATERAL. Pledgor represents to Lender that Pledgor has
made its own arrangements for keeping informed of changes or
potential changes affecting the Pledged Collateral pledged
by Pledgor (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends,
reorganization or other exchanges, tender offers and voting
rights), and Pledgor agrees that Lender shall have no
responsibility or liability for informing Pledgor of any
such changes or potential changes or for taking any action
or omitting to take any action with respect thereto.
Pledgor covenants that it will not, without the prior
written consent of Lender, vote to enable, or take any other
action to permit, Borrower to issue any capital stock or to
sell or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral pledged by Pledgor
or create or permit to exist any Lien upon or with respect
to any of the Pledged Collateral pledged by Pledgor, except
for the security interests granted under this Agreement.
SECTION 12. DEFAULTS AND REMEDIES.
(a) Upon the occurrence of an Event of Default and
during the continuation of such Event of Default, Lender
(personally or through an agent) is hereby authorized and
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empowered to transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments
representing or evidencing the Pledged Collateral for
certificates or instruments of smaller or larger denomina-
tions, to exercise the voting rights with respect thereto,
to collect and receive all cash dividends and other
distributions made thereon, to sell in one or more sales
after five (5) days' notice of the time and place of any
public sale or of the time after which a private sale is to
take place (which notice Pledgor agrees is commercially
reasonable), but without any previous notice or
advertisement, the whole or any part of the Pledged
Collateral and to otherwise act with respect to the Pledged
Collateral as though Lender were the outright owner thereof,
but in each case in accordance with applicable law;
provided, however, Lender shall not have any duty to
exercise any such right or to preserve the same and shall
not be liable for any failure to do so or for any delay in
doing so. Any sale shall be made at a public or private
sale at Lender's place of business, or at any public
building in the City of New York or elsewhere to be named in
the notice of sale, either for cash or upon credit or for
future delivery at such price as Lender may deem fair, and
Lender may be the purchaser of the whole or any part of the
Pledged Collateral so sold and hold the same thereafter in
its own right free from any claim of Pledgor or any right of
redemption. Each sale shall be made to the highest bidder,
but Lender reserves the right to reject any and all bids at
such sale which, in its discretion, it shall deem
inadequate. Demands of performance, except as otherwise
herein specifically provided for, notices of sale,
advertisements and the presence of property at sale are
hereby waived and any sale hereunder may be conducted by an
auctioneer or any officer, employee or agent of Lender.
(b) If, at the original time or times appointed for
the sale of the whole or any part of the Pledged Collateral,
the highest bid, if there be but one sale, shall be
inadequate to discharge in full all the Secured Obligations,
or the Pledged Collateral be offered for sale in lots, if at
any of such sales, the highest bid for the lot offered for
sale would indicate to Lender, in its discretion, the
unlikelihood of the proceeds of the sales of the whole of
the Pledged Collateral being sufficient to discharge all the
Secured Obligations, Lender may, on one or more occasions
and in its discretion, postpone any of said sales by public
announcement at the time of sale or the time of previous
postponement of sale, and no other notice of
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such postponement or postponements of sale need be given,
any other notice being hereby waived; provided, however,
that any sale or sales made after such postponement be after
five (5) days' notice to Pledgor.
(c) If, at any time when Lender in its sole
discretion determines, following the occurrence and during
the continuance of an Event of Default, that, in connection
with any actual or contemplated exercise of its rights (when
permitted under this Section 12) to sell the whole or any
part of the Pledged Collateral hereunder, it is necessary or
advisable to effect a public registration of all or part of
the Pledged Collateral pursuant to the Securities Act of
1933, as amended (or any similar statute then in effect)
(the "Act"), Pledgor shall, in an expeditious manner, cause
Borrower to:
(i) Prepare and file with the Securities and
Exchange Commission (the "Commission") a registration
statement with respect to the Pledged Collateral and use its
best efforts to cause such registration statement to become
and remain effective.
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and
to comply with the provisions of the Act with respect to the
sale or other disposition of the Pledged Collateral covered
by such registration statement whenever Lender shall desire
to sell or otherwise dispose of the Pledged Collateral.
(iii) Furnish to Lender such number of copies
on a prospectus and a preliminary prospectus, in conformity
with the requirements of the Act, and such other documents
as Lender may request in order to facilitate the public sale
or other disposition of the Pledged Collateral by Lender.
(iv) Use its best efforts to register or
qualify the Pledged Collateral covered by such registration
statement under such other securities or blue sky laws of
such jurisdictions within the United States and Puerto Rico
as Lender shall request, and do such other reasonable acts
and things as may be required of it to enable Lender to
consummate the public sale or other disposition in such
jurisdictions of the Pledged Collateral by Lender.
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(v) Furnish, at the request of Lender, on the
date that the Pledged Collateral is delivered to the
underwriters for sale pursuant to such registration or, if
the Pledged Collateral is not being sold through
underwriters, on the date that the registration statement
with respect to such Pledged Collateral becomes effective,
(A) an opinion, dated such date, of the independent counsel
representing such registrant for the purposes of such
registration, addressed to the underwriters, if any, and in
the event the Pledged Collateral is not being sold through
underwriters, then to Lender, in customary form and covering
matters of the type customarily covered in such legal
opinions; and (B) a comfort letter, dated such date, from
the independent certified public accountants of such
registrant, addressed to the underwriters, if any, and in
the event the Pledged Collateral is not being sold through
underwriters, then to Lender, in a customary form and
covering matters of the type customarily covered by such
comfort letters and as the underwriters or Lender shall
reasonably request. The opinion of counsel referred to
above shall additionally cover such other legal matters with
respect to the registration in respect of which such opinion
is being given as Lender may reasonably request. The letter
referred to above from the independent certified public
accounts shall additionally cover such other financial
matters (including information as to the period ending not
more than five (5) Business Days prior to the date of such
letter) with respect to the registration in respect of which
such letter is being given as Lender may reasonably request.
(vi) Otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission,
and make available to its security holders, as soon as
reasonably practicable, but not later than 18 months after
the effective date of the registration statement, an
earnings statement covering the period of at least 12 months
beginning with the first full month after the effective date
of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Act.
(d) All expenses incurred in complying with Section
12 hereof, including, without limitation, all registration
and filing fees (including all expenses incident to filing
with the National Association of Securities Dealers, Inc.),
printing expenses, fees and disbursements of counsel for the
registrant, the fees and expenses of counsel for Lender,
expenses of the independent certified public accounts
(including any special audits incident to or required by any
such registration) and
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expenses of complying with the securities or blue sky laws
of any jurisdictions, shall be part of the Secured
Obligations.
(e) Pledgor acknowledges that notwithstanding the
legal availability of a private sale or a sale subject to
the restrictions described below in paragraph (g), Lender
may, in its discretion, elect to register any or all the
Pledged Collateral under the Act (or any applicable state
securities law) in accordance with its rights hereunder.
Pledgor, however, recognizes that Lender may be unable to
effect a public sale of any or all the Pledged Collateral
and may be compelled to resort to one or more private sales
thereof. Pledgor also acknowledges that any such private
sale may result in prices and other terms less favorable to
the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a
commercially reasonable manner. Lender shall be under no
obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit the registrant to
register such securities for public sale under the Act, or
under applicable state securities laws, even if Pledgor
would agree to do so.
(f) Pledgor further agrees that a breach of any of
the covenants contained in this Section 12 will cause
irreparable injury to Lender, that Lender has no adequate
remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained
in this Section 12 shall be specifically enforceable against
Pledgor, and Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of
such covenants except for a defense that the Secured
Obligations are not then due and payable in accordance with
the agreements and instruments governing and evidencing such
obligations. Pledgor further acknowledges the impossibility
of ascertaining the amount of damages which would be
suffered by Lender by reason of a breach of any of such
covenants and, consequently, agrees that, if Lender shall
sue for damages for breach, it shall pay, as liquidated
damages and not as a penalty, an amount equal to the lesser
of (i) the value of the Pledged Collateral pledged by
Pledgor on the date Lender shall demand compliance with this
Section 12, and (ii) the amount required to pay in full the
Secured Obligations.
(g) In addition to remedies set forth in Section 12
above, Lender may, in its discretion (subject only to
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applicable requirements of law), sell such Pledged
Collateral or a part thereof by private sale in such manner
and under such circumstances as Lender may deem necessary or
advisable. Without limiting the generality of the
foregoing, in any such event, Lender may, in its discretion,
(x) in accordance with applicable securities laws, proceed
to make such private sales, (y) approach and negotiate with
a single possible purchaser to effect such sale, and (z)
restrict such sale to a purchaser who will represent and
agree that such purchaser is purchasing for its own account,
for investment and not with a view to the distribution or
sale of such Pledged Collateral or part thereof. In
addition to a private sale as provided above in this Section
12, if any of the Pledged Collateral shall not be freely
distributable to the public without registration under the
Act at the time of any proposed sale pursuant to this
Section 12, then Lender shall not be required to effect such
registration or cause the same to be effected but, in its
discretion (subject only to applicable requirements of law),
may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions (i) as to the
financial sophistication and ability of any Person permitted
to bid or purchase at any such sale, (ii) as to the content
of legends to be placed upon any certificates representing
the Pledged Collateral sold in such sale, including
restrictions on future transfer thereof, (iii) as to the
representations required to be made by each Person, bidding
or purchasing at such sale relating to that Person's access
to financial information about Pledgor and such Person's
intentions as to the holding of the Pledged Collateral so
sold for investment, for its own account, and not with a
view to the distribution thereof, and (iv) as to such other
matters as Lender may, in its discretion, deem necessary or
appropriate in order that such sale (notwithstanding any
failure to so register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement
of creditors' rights and the Act and all applicable state
securities laws.
SECTION 13. APPLICATION OF PROCEEDS. Any cash held
by Lender as Pledged Collateral and all cash proceeds
received by Lender in respect of any sale of, collection
from, or other realization upon all or any part of the
Pledged Collateral shall be applied by Lender in accordance
with the terms of the Parent Guaranty and the Credit
Agreement.
SECTION 14. IRREVOCABLE AUTHORIZATION AND
INSTRUCTION TO BORROWER. Pledgor hereby authorizes and
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instructs Borrower to comply with any instruction received
by Borrower from Lender in writing that (a) states that an
Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Agreement, without any
other or further instructions from Pledgor, and Pledgor
agrees that Borrower shall be fully protected in so
complying.
SECTION 15. MISCELLANEOUS PROVISIONS.
SECTION 15.1 No Waiver; Cumulative Remedies.
Except by a written instrument pursuant to Section 15.5
hereof, Lender shall not, by any act, delay, indulgence,
omission or otherwise, be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or in
any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the
part of Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver
by Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or
remedy which Lender would otherwise have on any future
occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
SECTION 15.2 Notices. All notices, approvals,
consents or other communications required or desired to be
given hereunder shall be in the form and manner, and
delivered in accordance with, Section 10.9 of the Credit
Agreement.
SECTION 15.3 Headings. The headings in this
Agreement are for purposes of reference only and shall not
affect the meaning or construction of any provision of this
Agreement.
SECTION 15.4 Severability. The provisions of this
Agreement are severable, and if any clause or provision
shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such
clause or provision, or part thereof, and shall not in any
manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
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SECTION 15.5 Amendments, Waivers and Consents. Any
amendment or waiver of any provision of this Agreement and
any consent to any departure by Pledgor from any provision
of this Agreement shall be effective only if made pursuant
to a written instrument executed by Pledgor and Lender (or
if a waiver or a consent, a written letter or agreement
executed by Lender).
SECTION 15.6 Interpretation of Agreement. Time is
of the essence in each provision of this Agreement of which
time is an element. All terms not defined herein or in the
Credit Agreement shall have the meaning set forth in the
applicable Uniform Commercial Code, except where the context
otherwise requires. To the extent a term or provision of
this Agreement conflicts with the Parent Guaranty or the
Credit Agreement, as the case may be, and is not dealt with
herein with more specificity, the Parent Guaranty or Credit
Agreement, as the case may be, shall control with respect to
the subject matter of such term or provision. Acceptance of
or acquiescence in a course of performance rendered under
this Agreement shall not be relevant to determine the
meaning of this Agreement even though the accepting or
acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
SECTION 15.7 Continuing Security Interest. This
Agreement shall create a continuing security interest in the
Pledged Collateral and shall (a) remain in full force and
effect until the Termination Date, (b) be binding upon
Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Lender hereunder, to the
benefit of Lender and its respective successors, transferees
and assigns.
SECTION 15.8 Survival of Provisions. All
representations, warranties and covenants of Pledgor
contained herein shall survive the execution and delivery of
this Agreement, and shall terminate only on the Termination
Date.
SECTION 15.9 Lien Absolute. All rights of Lender
hereunder, and all obligations of Pledgor hereunder, shall
be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the
Parent Guaranty, Credit Agreement, any other Loan Document
or any other agreement or instrument governing or evidencing
any Secured Obligations;
-14- STM-63734.1
(b) any change in the time, manner or place of
payment of, or in any other term of, all or any part of the
Secured Obligations, or any other amendment or waiver of or
any consent to any departure from the Parent Guaranty,
Credit Agreement, any other Loan Document or any other
agreement or instrument governing or evidencing any Secured
Obligations;
(c) any exchange, release or non-perfection of any
other collateral, or any release or amendment or waiver of
or consent to departure from any guaranty, for all or any of
the Secured Obligations; or
(d) any other circumstances which might otherwise
constitute a defense available to, or a discharge of,
Pledgor.
SECTION 15.10 Reinstatement. This Agreement shall
remain in full force and effect and continue to be effective
should any petition be filed by or against Pledgor for
liquidation or reorganization, should Pledgor become
insolvent or make an assignment for the benefit of creditors
or should a receiver or trustee be appointed for all or any
significant part of Pledgor's assets, and shall continue to
be effective or be reinstated, as the case may be, if at any
time payment and performance of the Secured Obligations, or
any part thereof, is, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether
as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced,
restored or returned.
SECTION 15.11 Waivers. Pledgor waives notice of
acceptance of this Agreement, and also presentment, demand,
protest and notice of dishonor or default of any and all of
the Secured Obligations, and all other notices to which
Pledgor might otherwise be entitled, except as otherwise
expressly provided herein or in the Parent Guaranty or in
the Credit Agreement.
SECTION 15.12 Authority of Lender. Lender shall
have and be entitled to exercise all powers hereunder which
are specifically granted to Lender by the terms hereof,
together with such powers as are reasonably incident
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thereto. Lender may exercise any of its duties hereunder or
in connection with the Pledged Collateral by or through
agents or employees and shall be entitled to retain counsel
and to act in reliance upon the advice of counsel concerning
all such matters. Neither Lender nor any Affiliate of
Lender or any director, officer, employee, attorney or agent
of Lender or such Affiliate shall be liable to Pledgor for
any action taken or omitted to be taken by it or them
hereunder, except for actions or inactions solely relating
to its or their own gross negligence or willful misconduct
as determined by a final judgment of a court of competent
jurisdiction, nor shall Lender be responsible for the
validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. Lender and
its Affiliates and their respective directors, officers,
employees, attorneys and agents shall be entitled to rely on
any communication, instrument or document believed by it or
them to be genuine and correct and to have been signed or
sent by the proper person or persons.
SECTION 15.13 Release; Termination of Agreement.
This Agreement shall terminate on the Termination Date. At
such time, Lender shall, at the request of Pledgor, reassign
and redeliver to Pledgor all of the Pledged Collateral
pledged by Pledgor hereunder which has not been sold,
disposed of, retained or applied by Lender in accordance
with the terms hereof, and execute and deliver to Pledgor
such documents as may reasonably be requested by Pledgor to
evidence the same. Such reassignment and redelivery shall
be without warranty by or recourse to Lender, except as to
the absence of any prior assignments by Lender of its
interest in the Pledged Collateral pledged by Pledgor, and
shall be at the expense of Pledgor.
SECTION 15.14 Final Expression. This Agreement,
together with any other agreement executed in connection
herewith, is intended by the parties as a final expression
of this Agreement and is intended as a complete and
exclusive statement of the terms and conditions thereof.
Acceptance of or acquiescence in a course of performance
rendered under this Agreement shall not be relevant to
determine the meaning of this Agreement even though the
accepting or acquiescing party had knowledge of the nature
of the performance and opportunity for objection.
SECTION 15.15 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original but all of which shall together
constitute one and the same agreement.
-16- STM-63734.1
SECTION 15.16 GOVERNING LAW; CONSENT TO
JURISDICTION AND VENUE. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN NEW YORK CITY SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN PLEDGOR AND LENDER PERTAINING TO THIS AGREEMENT OR
TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE PARENT GUARANTY, THE CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, PROVIDED, THAT LENDER AND PLEDGOR
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO
BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK CITY AND,
PROVIDED, FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE LENDER FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGEMENT OR OTHER COURT ORDER
IN FAVOR OF LENDER. PLEDGOR EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND PLEDGOR HEREBY WAIVES ANY
OBJECTION WHICH PLEDGOR MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS.
PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINTS AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO PLEDGOR AT THE ADDRESS SET FORTH IN SECTION
10.9 OF THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL
BE DEEMED COMPLETED UPON THE EARLIER OF PLEDGOR'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
SECTION 15.17 MUTUAL WAIVER OF JURY TRIAL. BECAUSE
DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY
AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES
BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES
HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
-17- STM-63734.1
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE
PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT, THE PARENT GUARANTY, THE
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
SECTION 15.18 Dating. Although this Agreement is
dated as of the date first written above for convenience,
the actual dates of execution hereof by the parties hereto
are respectively the dates set forth under the signatures
hereto, and this Agreement shall be effective on the latest
of such dates.
SECTION 15.19 ACKNOWLEDGMENTS. PLEDGOR HEREBY
ACKNOWLEDGES THAT:
(a) IT HAS BEEN ADVISED BY COUNSEL IN THE
NEGOTIATION, EXECUTION AND DELIVERY OF THIS AGREEMENT;
(b) LENDER HAS NO FIDUCIARY RELATIONSHIP TO
PLEDGOR, AND THE RELATIONSHIP BETWEEN LENDER, ON THE ONE
HAND, AND PLEDGOR, ON THE OTHER HAND, IS SOLELY THAT OF
CREDITOR AND DEBTOR, RESPECTIVELY; AND
(c) NO JOINT VENTURE EXISTS AMONG LENDER AND
PLEDGOR.
-18- STM-63734.1
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the date
first above written.
PLEDGOR:
C.I.S. TECHNOLOGIES, INC.
By: /s/ Richard A. Evans
Name: Richard A. Evans
Title:
Date:
Accepted and Acknowledged by:
LENDER:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Dan Pengue
Name:
Title: Authorized Signatory
Date:
-19- STM-63734.1
Schedule I
PLEDGED SHARES
Attached to and forming a part of that certain Pledge
Agreement, as amended, supplemented or otherwise modified,
dated as of February 1, 1996 made by C.I.S. TECHNOLOGIES,
INC. in favor of GENERAL ELECTRIC CAPITAL CORPORATION
relating to the shares of capital stock of C.I.S., Inc. set
forth below.
Stock
Class of Certificate Par Number Percentage
Stock Number Value of Shares Outstanding
100%
STM-63734.1
SCHEDULE II
PLEDGE AGREEMENT SUPPLEMENT
This Pledge Agreement Supplement, dated as of
_______, 19__, is delivered pursuant to Section 5 of the
Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Agreement Supplement may be attached
to the Pledge Agreement, dated as of February 1, 1996 (as
amended, restated, supplemented or otherwise modified from
time to time, the "Pledge Agreement"; the terms defined
therein and not otherwise defined herein being used as
therein defined), made by C.I.S. Technologies, Inc. to
General Electric Capital Corporation and that the shares
listed on this Pledge Agreement Supplement shall be and
become part of the Pledged Shares and Pledged Collateral
referred to in the Pledge Agreement and shall secure all
Secured Obligations.
The undersigned agrees that the shares listed below
shall for all purposes constitute Pledged Shares and Pledged
Collateral and shall be subject to the security interest
created by the Pledge Agreement.
The undersigned hereby certifies that the
representations and warranties set forth in Section 4 of the
Pledge Agreement of the undersigned are true and correct as
to the Pledged Collateral listed herein on and as of the
date hereof.
C.I.S. TECHNOLOGIES, INC.
By:
Name:
Title:
Stock
Class of Certificate Par Number
Stock Number(s) Value of Shares
STM-63734.1
ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the
Pledge Agreement dated as of February 1, 1996, made and entered into by
and between C.I.S. TECHNOLOGIES, INC. and GENERAL ELECTRIC CAPITAL
CORPORATION ("Lender") (the "Pledge Agreement"). The undersigned agrees
for the benefit of Lender as follows:
1. The undersigned will be bound by the terms of the
Pledge Agreement and will comply with such terms insofar as such terms
are applicable to the undersigned.
2. The undersigned will notify Lender promptly in writing
of the occurrence of any of the events described in Section 6(c) of the
Pledge Agreement.
3. The terms of Section 12(g) of the Pledge Agreement
shall apply to it, mutatis mutandis, with respect to all actions that
may be required of it under or pursuant to or arising out of Section 12
of the Pledge Agreement.
C.I.S., INC.
By: /s/ Richard A. Evans
Name: Richard A. Evans
Title: Treasurer
STM-63734.1