EXHIBIT 10.u
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as
of May 31, 1995 by C.I.S. Technologies, Inc., a Delaware corporation ("Pledgor),
in favor of GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("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 Hospital Cost Consultants, Inc., a California corporation ("HCCI");
WHEREAS, C.I.S., Inc., an Oklahoma corporation ("CIS, Inc."), and
Hospital Billing Analysis Inc., a California corporation ("HBA", and together
with CIS, Inc., collectively, "Borrowers"), Pledgor and Lender have entered into
the Credit Agreement dated as of October 15, 1994 (as amended by the First
Amendment referred to below and as further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings given to such
terms in the Credit Agreement;
WHEREAS, Borrowers, Pledgor and Lender have entered into the First
Amendment to Credit Agreement (the "First Amendment"), dated as of May 31, 1995;
and
WHEREAS, Lender has required, as a condition to the effectiveness of
the First Amendment, that Pledgor pledges and grants to Lender, a security
interest in the Pledged Collateral (as defined herein) to secure the payment and
performance by Pledgor of the Secured Obligations (as defined herein);
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, Pledgor hereby agrees with Lender, for its
benefit as follows:
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SECTION 1. PLEDGE. Pledgor hereby pledges and grants to Lender, for
its benefit, a continuing security interest in all of the following
(collectively, the "Pledged Collateral"):
(a) the Pledged Shares of Pledgor; and
(b) all additional shares of Stock of HCCI 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 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 the
Obligations, whether now existing or hereafter incurred, whether arising under
the Credit Agreement, this Agreement, the other Loan Documents or otherwise
(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 FFMC on behalf of Lender pursuant hereto and the terms of the
Intercreditor Agreement and shall be in suitable form for transfer by delivery,
or shall be accompanied by 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) All of the Pledged Shares of Pledgor 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 of Pledgor. 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.
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(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 and the security interest created by
the FFMC Pledge Agreement. The transfer of the Pledged Shares from FFMC to
Pledgor pursuant to the HCCI Acquisition Documents was not 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 and the Intercreditor Agreement creates a valid second 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 regulatory body is required either
(i) for the pledge by Pledgor of the Pledged Collateral of Pledgor 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).
(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 of Pledgor constitute the percentage of the
authorized, issued and outstanding capital stock of HCCI 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 Lender under
the Credit Agreement.
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SECTION 5. FURTHER ASSURANCES; ADDITIONAL SHARES.
(a) Pledgor agrees that at any time and from time to time, at
Pledgor's expense, Pledgor will, subject to the terms of the Intercreditor
Agreement, 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 FFMC
for the benefit of FFMC and Lender pursuant to the terms of the Intercreditor
Agreement 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 date the FFMC Note is indefeasibly paid in full
(the "Note Payment Date").
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 for any purpose not inconsistent with the
terms of this Agreement or the Credit Agreement; provided, however, that Pledgor
shall not exercise or shall refrain from exercising any such right if such
action would have a material adverse effect on the value of the Pledged
Collateral or any part thereof or be inconsistent with or violate any provisions
of this Agreement, the Credit Agreement or any of the other Loan Documents.
Lender shall execute and deliver (or cause to be executed and delivered)
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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 HCCI 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 FFMC for the benefit of FFMC and Lender in accordance with the
terms of the Intercreditor Agreement to hold as Pledged Collateral and shall, if
received by Pledgor, be received in trust for the benefit of FFMC and Lender in
accordance with the terms of the Intercreditor Agreement, be segregated from the
other property or funds of Pledgor, and be forthwith delivered to FFMC for the
benefit of FFMC and Lender in accordance with the terms of the Intercreditor
Agreement 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 Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section 6(a)
hereof shall cease, and all such rights shall, subject to the terms of the
Intercreditor Agreement, 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 FFMC for the benefit of FFMC and Lender in accordance
with the terms of the Intercreditor Agreement and Pledgor's right to receive
such payments and distributions pursuant to Section 6(b) hereof shall
immediately cease.
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(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 FFMC and Lender, shall be segregated from other funds of
Pledgor and shall be forthwith paid over to FFMC for the benefit of FFMC and
Lender in accordance with the terms of the Intercreditor Agreement as Pledged
Collateral 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 Note Payment 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 the security interest granted
under the FFMC Pledge Agreement, (c) enter into any agreement or understanding
(other than the Intercreditor Agreement) 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, and (d) renounce or modify its rights under Section 9-505 of the Code
without the prior written consent of Lender.
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.
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.
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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, HCCI 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 and under the FFMC Pledge Agreement.
SECTION 12. DEFAULTS AND REMEDIES.
(a) Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, then or at any time after such
declaration (provided that such declaration is not rescinded by Lender) and
following written notice to Pledgor, Lender (personally or through an agent) is
hereby, subject in each case to the terms of the Intercreditor Agreement,
authorized and 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
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evidencing the Pledged Collateral for certificates or instruments of smaller or
larger denominations, 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; 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 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) Pledgor further agrees that a breach of any of the covenants
contained in this Section 12 will cause
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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.
(d) In addition to remedies set forth in Section 12 above, Lender
may, in its discretion (subject only to applicable requirements of law and the
terms of the Intercreditor Agreement), 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 Securities Act of 1933, as amended (or similar statute)
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
and (iii) as to the representations required to be made by each Person, bidding
or purchasing at such sale
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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. In addition, Lender may require that any sale hereunder (including a
sale at auction) be conducted subject to restrictions 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 Securities Act of 1993, as amended, and all applicable
state securities laws.
SECTION 13. APPLICATION OF PROCEEDS. Any cash held by or on behalf of
Lender as Pledged Collateral and all cash proceeds received by or on behalf of
Lender in respect of any sale of, collection from, or other realization upon all
or any part of the Pledged Collateral shall (subject to the terms of the
Intercreditor Agreement) be applied by Lender:
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 Pledgor, or its successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
SECTION 14. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO HCCI.
Pledgor hereby authorizes and instructs HCCI to comply with any instruction
received by HCCI 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
and the Intercreditor Agreement,
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without any other or further instructions from Pledgor, and Pledgor agrees that
HCCI 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, if to Pledgor, at its address as set forth on the
signature page hereof and, if to Lender, at its address as set forth in, and 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.
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
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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 Credit Agreement and is not dealt with herein with more specificity, the
Credit Agreement 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 (i) remain in
full force and effect until the Note Payment Date, (ii) be binding upon Pledgor,
its successors and assigns, and (iii) 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 Note Payment 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 Credit Agreement,
any other Loan Document or any other agreement or instrument governing or
evidencing any Secured Obligations;
(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 Credit
Agreement, any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
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(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 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 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 director, officer, employee, attorney or
agent of Lender shall be liable to Pledgor for any action taken or omitted to be
taken by it or them hereunder, except for 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
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hereof or of any document or security furnished pursuant hereto. Lender and its
directors, officers, employees, attorneys and agents shall be entitled to rely
on any written 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 Note Payment 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 (including, without limitation,
the Intercreditor Agreement), 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.
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.
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 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,
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THAT NOTHING IN THIS 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 PLEDGED 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 AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. 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 ITS
ADDRESS SET FORTH IN THE SIGNATURE PAGE HEREOF 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 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 and Pledgor, on the other hand, is solely that of
secured party and debtor, respectively; and
(c) no joint venture exists between Lender and Pledgor except as
contemplated by the Limited Liability Company Agreement, the Services Agreement
and the Technology Agreement, each dated as of October 31, 1994 among Pledgor,
Borrowers, GE Capital Commercial Finance, Inc. and SA Services, L.L.C.
SECTION 15.18 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
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PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT, THE
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.
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 V. Souders
-------------------------
Name: Richard V. Souders
Title: SR. Vice President
Address:
-------
One Warren Place
6100 South Yale, Suite 1900
Tulsa, Oklahoma 74136-1903
Attention: Richard A. Evans
Telephone:
Telecopy: (918) 481-4281
Accepted and Acknowledged by:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Lender
By: /s/ Dan Pengue
--------------------
Name:
Title:
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KEPT AS THE LAST PAGE OF THE DOCUMENT.
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