EXHIBIT 10.n
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 First Financial Management Corporation, a Georgia corporation
("Lender").
SECTION 1. DEFINED TERMS. The following terms, as used herein, have the
meanings set forth below:
"Additional Shares" shall have the meaning assigned to such term in Section
2 hereof.
"Event of Default" shall have the meaning assigned to such term in the
Note.
"GECC" shall mean General Electric Capital Corporation, a New York
corporation.
"GECC Pledge Agreement" shall mean that certain Pledge Agreement dated of
even date herewith, made by Pledgor in favor of GECC.
"Guaranty" shall mean that certain Corporate Guaranty of even date
herewith, made by Pledgor in favor of Lender, as amended, supplemented and
restated from time to time.
"HCCI" shall mean Hospital Cost Consultants, Inc., a California
corporation.
"Intercreditor Agreement" shall mean that certain Intercreditor Agreement
of even date herewith, between Lender and GECC, as amended, supplemented or
restated from time to time.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Note" shall mean that certain Promissory Note of even date herewith, in
the principal amount of $5,000,000, made by HCCI and payable to the order of
Lender, as amended, supplemented and restated from time to time, and together
with all replacement notes issued in substitution therefor.
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"Note Payment Date" shall have the meaning assigned to such term in Section
6(c) hereof.
"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Pledge Agreement Supplement" shall have the meaning assigned to such term
in Section 6(b) hereof.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
"Pledged Shares" shall mean the outstanding shares of stock set forth on
Schedule I hereto and issued by HCCI.
"Secured Obligations" shall mean and include all indebtedness, liabilities
and obligations of Pledgor under the Guaranty.
SECTION 2. 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 3. 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 Secured
Obligations.
SECTION 4. DELIVERY OF PLEDGED COLLATERAL. All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by Lender pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be
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accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Lender.
SECTION 5. 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.
(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 GECC Pledge Agreement.
(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 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.
SECTION 6. 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
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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 date of the payment in full of the Note (the "Note Payment
Date").
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) Subject to Section 7(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; 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. 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 7(a).
(b) Subject to Section 7(d) hereof, 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.
(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 7(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 and shall, if received by Pledgor, be
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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 Pledgor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 7(a) 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 and Pledgor's right to receive such
payments and distributions pursuant to Section 7(b) hereof shall immediately
cease.
(e) All dividends or other distributions which are received by Pledgor
contrary to the provisions of this Section 7 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 in the same form as so
received (with any necessary endorsements).
SECTION 8. 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 GECC Pledge 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 9. 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 10. 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 11. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and powers
granted to Lender hereunder are being granted in order to preserve and protect
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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 12. 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 GECC Pledge
Agreement.
SECTION 13. 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 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 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 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
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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 13 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 13 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 13, and
(ii) the amount required to pay in full the Secured Obligations.
(d) In addition to remedies set forth in Section 13 above, Lender may, in
its discretion (subject only to 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 13, 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 13, 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
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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 Securities Act of 1933, as amended, and all applicable state
securities laws.
SECTION 14. 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 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;
Second, to the payment of accrued but unpaid interest on the Secured
Obligations;
Third, to the payment of unpaid principal of the Secured Obligations;
Fourth, to the payment of all other Secured Obligations until all
other Obligations shall have been paid in full; and
Finally, subject to Lender's obligations under the Intercreditor
Agreement, 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 15. 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,
without any other or further instructions from Pledgor, and Pledgor agrees that
HCCI shall be fully protected in so complying.
SECTION 16. MISCELLANEOUS PROVISIONS.
SECTION 16.1 No Waiver; Cumulative Remedies. Except by a written instrument
pursuant to Section 16.5 hereof, Lender shall not, by any act, delay,
indulgence,
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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 16.2 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 Pledgor addressed to it at C.I.S. Technologies,
Inc., One Warren Place, 6100 South Yale, Suite 1900, Tulsa, Oklahoma 74136-1903,
Attention: Richard A. Evans, Telecopy No. (918) 481-4281, or Lender, at First
Financial Management Corporation, 3 Corporate Square, Suite 700, Atlanta,
Georgia 30329, Attention: Legal Department, Telecopy No.: (404) 636-7632, or by
facsimile transmission, promptly confirmed in writing sent by first class mail,
to the telecopy number set forth above, or such other address or telecopy number
as such party may hereafter specify by notice to Lender and Pledgor. 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 set forth above or when delivery is refused and (iii) if sent by
facsimile transmission, when receipt of such transmission is acknowledged.
SECTION 16.3 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 16.4 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 16.5 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 16.6 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 shall have the meaning set forth in the applicable Uniform Commercial
Code, except where the context
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otherwise requires. 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 16.7 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 16.8 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 16.9 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 Note, the Guaranty 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 Note, the Guaranty 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 16.10 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
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Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
SECTION 16.11 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.
SECTION 16.12 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 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 16.13 Release; Termination of Agreement. This Agreement shall
terminate on the Note Payment Date. At such time, Lender shall, at the request
of Pledgor, but subject to Lender's obligations under the Intercreditor
Agreement, 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 16.14 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.
SECTION 16.15 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.
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SECTION 16.16 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,
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
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 16.17 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.
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SECTION 16.18 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 AGREEMENT OR THE TRANSACTIONS RELATED
HERETO.
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/ Phillip D. Kurtz
---------------------------
Name: Phillip D. Kurtz
Title: CEO
Accepted and Acknowledged by:
FIRST FINANCIAL MANAGEMENT
CORPORATION, as Lender
By: /s/ Stephen D. Kane
----------------------
Name:
Title: Vice Chairman
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