EXHIBIT 10.s
ACCOUNTS SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of May 31, 1995, made by Hospital Cost
Consultants, Inc., a California corporation, having its chief executive offices
at 5000 Hopyard Road, # 300, Pleasanton, California 94588 ("Grantor"), in favor
of GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation having an office
at 501 Merritt Seven, Norwalk, Connecticut 06851 ("Lender").
W I T N E S S E T H:
WHEREAS, pursuant to and subject to the terms and conditions of that
certain Credit Agreement dated as of October 15, 1994 by and among C.I.S., Inc.,
an Oklahoma corporation ("CIS, Inc."), Hospital Billing Analysis, Inc., a
California corporation (and together with CIS, Inc., collectively, "Borrowers"),
C.I.S. Technologies, Inc., a Delaware corporation ("Parent"), and Lender (as
amended by the First Amendment referred to below and as the same from time to
time may be further amended, restated, supplemented or otherwise modified, the
"Credit Agreement"), Lender has agreed, among other things, to make a Term Loan
and Revolving Credit Advances to Borrowers (except as otherwise defined herein,
all capitalized terms used in these recitals having the respective meanings
referred to in Section 1 hereof);
WHEREAS, Borrowers, Parent and Lender have entered into the First
Amendment to Credit Agreement (the "First Amendment"), dated as of May 31, 1995;
WHEREAS, Lender has required, as a condition to the effectiveness of
the First Amendment, that Grantor enter into this Security Agreement; and
WHEREAS, Grantor is a wholly-owned Subsidiary of Parent;
NOW, THEREFORE, in consideration of the premises and in order to
induce Lender to continue to extend credit under the Credit Agreement and to
enter into the First Amendment and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS. Unless otherwise defined herein, all capitalized
terms used herein have the respective meanings set forth or referred to in the
Credit Agreement.
74
2. GRANT OF SECURITY INTEREST. To secure the prompt and complete
payment, performance and observance of all of the Obligations, and to induce
Lender to enter into the First Amendment and to continue to make extensions of
credit under the Credit Agreement in accordance with the terms thereof, Grantor
hereby grants to Lender a security interest in all of Grantor's right, title and
interest in, to and under the following, whether now owned by or owing to, or
hereafter acquired by or arising in favor of Grantor (including, without
limitation, under any trade names, styles or divisions thereof), and whether
owned, leased or consigned by or to Grantor, and regardless of where located
(all of which being hereinafter collectively referred to as the "Collateral"):
(i) all Accounts;
(ii) all Lock Box Accounts, the Concentration Account, the
Disbursement Account and all other lockbox, deposit and other bank accounts
of Grantor and all deposits therein and investments made with the funds
therein;
(iii) all money, cash or cash equivalents of Grantor; and
(iv) to the extent not otherwise included, all Proceeds of any
of the foregoing and all accessions to, substitutions and replacements for,
and rents, profits and products of, each of the foregoing.
3. RIGHTS OF LENDER. (a) Lender may at any time after the
occurrence of an Event of Default and without prior notice to Grantor, notify
Account Debtors, that the Accounts have been assigned to Lender and that
payments shall be made directly to Lender. Upon the request of Lender, Grantor
shall so notify such Account Debtors.
(b) Lender may at any time in Lender's own name or in the name
of Grantor communicate with Account Debtors to verify with such Person, to
Lender's satisfaction, the existence, amount and terms of any Accounts.
4. REPRESENTATIONS AND WARRANTIES. Grantor hereby represents
and warrants that:
(a) Grantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of California; (ii)
is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where qualification or licensing is required by the
nature of its business except where the absence of such qualification or
licensing has no reasonable likelihood of having a materially adverse effect
(A) on the business, properties, assets or financial condition of Grantor or
(B) on the Collateral; (iii) has all requisite corporate power and authority
to operate its properties, and to conduct its business as now or currently
proposed to be conducted; (iv) is in compliance with its certificate of
incorporation and by-laws; and (v) is in compliance with all applicable laws
except if such non-compliance has no reasonable likelihood of having a
material adverse effect on the business, operations, properties, assets or
financial condition of Grantor or the ability of Grantor to perform its
obligations under this Agreement or on the Collateral.
(b) Grantor is the sole owner of each item of the Collateral in
which it purports to grant a security interest hereunder, having good and
marketable title thereto free and clear of any and all Liens except (i) the
security interest granted to Lender under this Security Agreement, (ii)
Permitted Encumbrances and (iii) the second priority security interest
granted to FFMC under the FFMC Security Agreement. Grantor will warrant and
defend such Collateral against all claims and demands of all persons at any
time claiming the same or any interest thereon.
75
(c) No effective security agreement, financing statement,
equivalent security or Lien instrument or continuation statement covering all or
any part of the Collateral is on file or of record in any public office, except
(i) such as have been filed in favor of Lender pursuant to this Security
Agreement, (ii) such as relate to Permitted Encumbrances or (iii) such as have
been filed in favor of FFMC pursuant to the FFMC Security Agreement.
(d) As a result of the filing of appropriate financing
statements in the jurisdictions listed on Schedule I hereto, this Security
Agreement is effective to create a valid and continuing Lien on and perfected
security interest in favor of Lender in the Collateral with respect to which a
security interest may be perfected by filing pursuant to the Code, which lien
and security interest is prior to all other Liens except those Liens
specifically designated on Schedule 6.7 to the Credit Agreement as being prior
to the Lien of this Security Agreement, and is enforceable as such as against
creditors of and purchasers from Grantor. All action (including, without
limitation, all filings, registrations and recordings) necessary or desirable to
create, protect and perfect the security interest granted to Lender hereby in
respect of each item of the Collateral has been duly accomplished.
(e) Grantor's chief executive office, principal place of
business, corporate offices, and the locations of all of its records concerning
the Collateral are set forth on Schedule I. Grantor shall not change its chief
executive office, principal place of business, corporate offices, or the
location of its records concerning the Collateral without giving thirty (30)
days prior written notice thereof to Lender and taking all actions deemed by
Lender necessary or appropriate to protect and perfect Lender's interest in the
Collateral.
(f) Unless otherwise disclosed in writing to Lender by Grantor
(i) each Account represents a bona fide sale of services or Inventory to
customers in the ordinary course of Grantor's business completed in accordance
with the terms and provisions contained in the documents available to Lender
with respect thereto; and no Account is evidenced by a Document, Instrument or
Chattel Paper; (ii) the amounts shown on any aged receivable trial balance
delivered by Grantor to Lender pursuant to the terms of this Security Agreement
or the Credit Agreement and on Grantor's books and records and all invoices and
statements which may be delivered to Lender with respect thereto are actually
and absolutely owing to Grantor and are not in any way contingent other than in
connection with Grantor's performance of its obligations under contracts
relating to its Accounts which obligations have been disclosed to Lender; (iii)
no payments have been or shall be made on any Account except payments pursuant
to the terms of Annex B to the Credit Agreement; (iv) there are no setoffs,
claims or disputes existing or asserted with respect to any Eligible Account and
Grantor represents and warrants that it has not made any agreement with any
Account Debtor for any deduction therefrom except a discount or allowance
allowed by Grantor in the ordinary course of its business for prompt payment;
(v) to the best of Grantor's knowledge, there are no facts, events or
occurrences which in any way impair the validity or enforceability of any
Account as shown on the respective aged receivable trial balances, Grantor's
books and records and all invoices and statements delivered to Lender with
respect thereto; (vi) to the best of Grantor's knowledge, all Account Debtors
have the capacity to contract; (vii) Grantor has received no notice of
proceedings or actions which are threatened or pending against any Account
Debtor which might result in any material adverse change in such Account
Debtor's financial condition; and (viii) Grantor has no knowledge that any
Account Debtor is unable generally to pay its debts as they become due.
5. COVENANTS. Grantor covenants and agrees with Lender that
from and after the date of this Security Agreement and until the Termination
Date:
(a) Further Assurances; Pledge of Instruments. At any time and
from time to time, upon the written request of Lender and at the sole expense of
Grantor, Grantor shall promptly and
76
duly execute and deliver any and all such further instruments and documents
and take such further action as Lender may reasonably deem desirable to obtain
the full benefits of this Security Agreement and of the rights and powers herein
granted, including filing any financing or continuation statements under the
Code with respect to the liens and security interests granted hereunder or under
any other Loan Document. Grantor also hereby authorizes Lender to file any such
financing or continuation statement without the signature of Grantor to the
extent permitted by applicable law. If any amount payable under or in connection
with any of the Collateral is or shall become evidenced by any Instrument having
an outstanding principal balance of greater than $50,000, such Instrument, other
than checks and notes received in the ordinary course of business, shall be duly
endorsed in a manner satisfactory to Lender immediately upon Grantor's receipt
thereof and promptly delivered to Lender. Grantor will warrant and defend the
Collateral against all claims and demands of all persons at any time claiming
the same or any interest thereon.
(b) Maintenance of Records. Grantor shall keep and maintain,
at its own cost and expense, satisfactory and complete records of the
Collateral, including a record of any and all payments received and any and all
credits granted with respect to the Collateral and all other dealings with the
Collateral. Grantor shall mark its books and records pertaining to the
Collateral to evidence this Security Agreement and the security interests
granted hereby. Upon the occurrence and during the continuation of any Event of
Default, Grantor shall deliver and turn over all of Grantor's books and records
pertaining to the Collateral to Lender or to Lender's representatives at any
time on demand of Lender. Prior to the occurrence of an Event of Default, upon
reasonable notice from Lender, Grantor shall permit any representative of Lender
to inspect such books and records and shall provide photocopies thereof to
Lender as more specifically set forth in Section 1.13 of the Credit Agreement.
(c) Continuous Perfection. Grantor shall not change its name,
identity or corporate structure in any manner which might make any financing or
continuation statement filed in connection herewith seriously misleading within
the meaning of Section 9-402(7) of the Code or any other then applicable
provision of the Code unless Grantor shall have given Lender at least thirty
(30) days' prior written notice thereof and shall have taken all action (or made
arrangements satisfactory to Lender to take such action substantially
simultaneously with such change if it is impossible to take such action in
advance) necessary or reasonably requested by Lender to amend such financing
statement or continuation statement so that it is not seriously misleading.
(d) Provisions Regarding Accounts.
(i) Grantor shall not re-date any invoice or sale or make
sales on extended dating beyond that customary in Grantor's business, or extend
or modify any Account (other than correction of errors in the ordinary course).
If Grantor becomes aware of any matter materially affecting any Account,
including information regarding such Account Debtor's creditworthiness, Grantor
will promptly so advise Lender.
(e) Except as provided in the Credit Agreement, Grantor shall
not grant any discount, credit or allowance to any Account Debtor without
Lender's consent, except for discounts, credits and allowances for returns,
rejections and damaged goods made or given in the ordinary course of Grantor's
business consistent with past practices.
6. LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT. (a) Grantor hereby
irrevocably constitutes and appoints Lender and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of Grantor and in
the name of Grantor or in its own name, from time to time in Lender's
77
reasonable discretion, for the purpose of carrying out the terms of this
Security Agreement, to take any and all appropriate action and to execute and
deliver any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby grants to Lender the power and
right, on behalf of Grantor, without notice to or assent by Grantor, and at any
time, to do the following:
(i) in the name of Grantor, in its own name or otherwise,
take possession of, endorse and receive payment of any checks, drafts,
notes, acceptances, or other Instruments for the payment of monies due
under any Collateral;
(ii) if Grantor fails or refuses to do so, continue any
insurance existing pursuant to the terms of the Loan Documents, and pay
all or any part of the premiums therefor and the costs thereof; and
(iii) receive payment of any and all monies, claims, and
other amounts due or to become due at any time arising out of or in
respect of any Collateral.
(b) Grantor hereby irrevocably constitutes and appoints Lender
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of Grantor and in the name of Grantor or in its own name, from
time to time in Lender's discretion, for the purpose of carrying out the terms
of this Security Agreement, to take any and all appropriate action and to
execute and deliver any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby grants to Lender the power and
right, on behalf of Grantor, without notice to or assent by Grantor, upon the
occurrence and during the continuation of a Default, to do the following:
(i) ask, demand, collect, receive and give acquittances and
receipts for any and all money due or to become due under any Collateral;
(ii) pay or discharge any taxes, Liens, security interests,
or other encumbrances levied or placed on or threatened against the
Collateral;
(iii) direct any party liable for any payment under or in
respect of any of the Collateral to make payment of any and all monies due
or to become due thereunder, directly to Lender or as Lender shall direct;
(iv) sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against Account
Debtors, assignments, verifications, and notices in connection with
accounts and other documents constituting or related to the Collateral;
(v) settle, compromise or adjust any suit, action, or
proceeding described above and, in connection therewith, give such
discharges or releases as Lender may deem appropriate;
(vi) file any claim or take or commence any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by
Lender for the purpose of collecting any and all such monies due under any
Collateral whenever payable;
78
(vii) commence and prosecute any suits, actions or
proceedings at law or in equity in any court to collect the Collateral or
any part thereof and to enforce any other right in respect of any
Collateral;
(viii) defend any suit, action or proceeding brought against
Grantor with respect to any Collateral if Grantor does not defend such
suit, action or proceeding or if Lender believes that Grantor is not
pursuing such defense in a manner that will maximize the recovery with
respect to such Collateral; and
(ix) sell, transfer, pledge, make any agreement with respect
to, or otherwise deal with any of the Collateral as fully and completely as
though Lender were the absolute owner thereof for all purposes, and to do,
at Lender's option and Grantor's expense, at any time, or from time to
time, all acts and other things which Lender reasonably deems necessary to
perfect, preserve, or realize upon the Collateral and Lender's Lien therein
in order to effect the intent of this Security Agreement, all as fully and
effectively as Grantor might do.
(c) Grantor hereby ratifies, to the extent permitted by law,
all that said attorneys shall lawfully do or cause to be done by virtue hereof.
The power of attorney granted pursuant to this Section 6 is a power coupled with
an interest and shall be irrevocable until the Termination Date.
(d) The powers conferred on Lender hereunder are solely to
protect Lender's security interests in the Collateral and shall not impose any
duty upon it to exercise any such powers. Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers and
none of its officers, directors, employees, agents or representatives shall be
responsible to Grantor for any act or failure to act, except for their own gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(e) Grantor also authorizes Lender, at any time and from time
to time, following the occurrence and during the continuance of an Event of
Default, to execute, in connection with the sale provided for in Section 8
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
7. PERFORMANCE BY LENDER OF GRANTOR'S OBLIGATIONS. If Grantor
fails to perform or comply with any of its agreements contained herein or in any
of the other Loan Documents, and Lender, as provided for by the terms of this
Security Agreement or any other Loan Documents, shall itself perform or comply,
or otherwise cause performance of or compliance with such agreement, the
reasonable expenses, including attorneys' fees, of Lender incurred in connection
with such performance or compliance, together with interest thereon at the
Default Rate shall be payable by Grantor to Lender on demand and shall
constitute part of the Obligations secured hereby.
8. REMEDIES; RIGHTS UPON AN EVENT OF DEFAULT. (a) If any Event
of Default shall occur and be continuing, Lender may exercise in addition to all
other rights and remedies granted to it under this Security Agreement, the
Credit Agreement, the other Loan Documents and under any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Code. Without limiting the generality of
the foregoing, Grantor expressly agrees that in any such event Lender without
demand of performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private sale)
to or upon Grantor or any other Person (all and each of which demands,
advertisements and notices are hereby expressly waived to the maximum extent
permitted by the Code and other applicable law), may forthwith enter upon the
premises of Grantor where any Collateral is
79
located through self-help, without judicial process, without first obtaining a
final judgment or giving Grantor notice and opportunity for a hearing on
Lender's claim or action, and without paying rent to Grantor, and collect,
receive, assemble, process, appropriate and realize upon the Collateral, or any
part thereof, and may forthwith sell, lease, assign, give an option or options
to purchase, or sell or otherwise dispose of and deliver said Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
Lender shall have the right upon any such public sale or sales and, to the
extent permitted by law, upon any such private sale or sales, to purchase for
its benefit the whole or any part of said Collateral so sold, free of any right
or equity of redemption, which equity of redemption Grantor hereby releases.
Such sales may be adjourned or continued from time to time with or without
notice. Lender shall have the right to conduct such sales on Grantor's premises
or elsewhere and shall have the right to use Grantor's premises without charge
for such sales for such time or times as Lender deems necessary or advisable
except as otherwise provided in the applicable landlord's waiver.
Grantor further agrees, at Lender's request, to assemble the
Collateral and make it available to Lender at places which Lender shall
reasonably select, whether at Grantor's premises or elsewhere. Until Lender is
able to effect a sale, lease, or other disposition of the Collateral, Lender
shall have the right to hold or use the Collateral on behalf of Lender, or any
part thereof, to the extent that it deems appropriate for the purpose of
preserving the Collateral or its value or for any other purpose deemed
appropriate by Lender. Lender shall have no obligation to Grantor to maintain
or preserve the rights of Grantor as against third parties with respect to the
Collateral while the Collateral is in the possession of Lender. Lender may, if
it so elects, seek the appointment of a receiver or keeper to take possession of
the Collateral and to enforce any of Lender's remedies with respect to such
appointment without prior notice or hearing. Lender shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, as provided in Section 8(d) hereof, and only after so paying over such
net proceeds and after the payment by Lender of any other amount required by any
provision of law, including section 9504(1)(c) of the Code (but only after
Lender has received what Lender considers reasonable proof of a subordinate
party's security interest), need Lender account for the surplus, if any, to
Grantor. To the maximum extent permitted by applicable law, Grantor waives all
claims, damages, and demands against Lender arising out of the repossession,
retention or sale of the Collateral except such as arise out of the gross
negligence or willful misconduct of such party. Grantor agrees that ten (10)
days' prior notice by Lender of the time and place of any public sale or of the
time after which a private sale may take place is reasonable notification of
such matters. Grantor shall remain liable for any deficiency if the proceeds of
any sale or disposition of the Collateral are insufficient to pay all amounts to
which Lender is entitled, Grantor also being liable for any and all costs and
expenses incurred by Lender, including reasonable attorneys' fees, to collect
such deficiency.
(b) Grantor agrees to pay any and all costs of Lender,
including, without limitation, reasonable attorneys' fees, incurred in
connection with the enforcement of any of its rights and remedies hereunder.
(c) Except as otherwise specifically provided herein, to the
maximum extent permitted by applicable law, Grantor hereby waives presentment,
demand, protest or any notice (to the maximum extent permitted by applicable
law) of any kind in connection with this Security Agreement or any Collateral.
(d) The Proceeds of any sale, disposition or other realization
upon all or any part of the Collateral shall be distributed by Lender upon
receipt, in the following order of priorities:
80
First, the payment in full of reasonable expenses of Lender in
connection with such sale, disposition or other realization, including all
expenses, liabilities and advances incurred or made by Lender in connection
therewith, including reasonable attorney's fees and any other Obligations
owed to Lender;
Second, to the payment of accrued but unpaid interest on the
Obligations;
Third, to the payment of unpaid principal of the Obligations;
Fourth, to the payment of all other Obligations until all other
Obligations shall have been paid in full; and
Finally, to payment to Grantor, or its successors or assigns, or as
a court of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
9. LIMITATION ON LENDER'S DUTY IN RESPECT OF COLLATERAL. Lender shall
use reasonable care with respect to the Collateral in its possession or under
its control. Lender shall not have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
Lender, or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. Upon request of Grantor, Lender
shall promptly account for any monies received by Lender in respect of any
foreclosure on or disposition of the Collateral.
10. REINSTATEMENT. This Security Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by or
against Grantor for liquidation or reorganization, should Grantor 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 Grantor'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 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 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
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
11. NOTICES. All notices, approvals, consents and other communications
to any party hereunder shall be in writing and sent by certified or registered
mail, return receipt requested, or by overnight delivery service, with all
charges prepaid, if to Grantor addressed to it at c/o C.I.S. Technologies, Inc.,
One Warren Place, 6100 South Yale, Suite 1900, Tulsa, Oklahoma 74136-1903,
Attention: Richard A. Evans, Telecopy No. (918) 481-4205, or Lender, at its
address set forth in Section 10.9 of the Credit Agreement, or by facsimile
transmission, promptly confirmed in writing sent by first class mail, to the
telecopy number set forth above or in Section 10.9 of the Credit Agreement, as
applicable, or such other address or telecopy number as such party may hereafter
specify by notice to Lender and Grantor. All such notices, approvals, consents
or other communications shall be deemed given (i) if sent by certified or
registered mail, (5) Business Days after being postmarked, (ii) if sent by
overnight delivery service, when received at the address specified on Schedule
10.9 to the Credit Agreement or when delivery is refused and (iii) if sent by
facsimile transmission, when receipt of such transmission is acknowledged.
12. SEVERABILITY. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent
81
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Security Agreement is to be read, construed and applied
together with the Credit Agreement and the other Loan Documents, which, taken
together, set forth the complete understanding and agreement of the Lender and
Grantor with respect to the matters referred to herein and therein.
13. NO WAIVER; CUMULATIVE REMEDIES. Lender shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
Lender and then only to the extent therein set forth. 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 had on any future
occasion. 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, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law. None of the
terms or provisions of this Security Agreement may be waived, altered, modified
or amended except by an instrument in writing, duly executed by Lender and
Grantor.
14. LIMITATION BY LAW. All rights remedies and powers provided in this
Security Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Security Agreement are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they do not render this Security Agreement invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered,
or filed under the provisions of any applicable law.
15. TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 10
hereof, this Security Agreement shall terminate upon the Termination Date.
16. SUCCESSOR AND ASSIGNS. This Security Agreement and all obligations
of Grantor hereunder shall be binding upon the successors and assigns of
Grantor, and shall, together with the rights and remedies of Lender hereunder,
inure to the benefit of Lender, all future holders of any instrument evidencing
any of the Obligations and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Obligations or any portion
thereof or interest therein shall in any manner affect the security interest
granted to Lender hereunder. Grantor may not assign, sell or otherwise transfer
an interest in this Security Agreement.
17. 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 SECURITY
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. GRANTOR 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 GRANTOR AND
LENDER PERTAINING TO THIS SECURITY AGREEMENT OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT, THE
82
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT LENDER AND
GRANTOR 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 SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE 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
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER. GRANTOR EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND GRANTOR HEREBY WAIVES ANY OBJECTION WHICH GRANTOR MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. GRANTOR 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 GRANTOR AT THE ADDRESS SET FORTH IN
SECTION 11 HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF GRANTOR'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE U.S. MAILS, PROPER POSTAGE PREPAID.
83
18. 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
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 SECURITY AGREEMENT, THE CREDIT AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be
executed and delivered by its duly authorized officer on the date first set
forth above.
HOSPITAL COST CONSULTANTS, INC.
By: /s/ Phillip D. Kurtz
----------------------------------------------
Name: Phillip D. Kurtz
Title: Vice President
ACCEPTED ON May 31, 1995.
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Dan Pengue
------------------------------------------------
Name:
Title:
84
THIS PAGE MUST BE KEPT AS THE LAST PAGE OF THE DOCUMENT.
85