1
Exhibit 10.12 (vii)
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Agreement") dated as of January 14, 1997 is
made by CSl Investment Partners II, LP. ("Pledgor"), in favor of LASALLE
NATIONAL BANK ("Pledgor"). Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the "Credit Agreement" (as defined
below)
Recitals:
A. Credentials Services International, Inc., a Delaware corporation
("Borrower"), and Pledgee have entered into a certain Credit Agreement of even
date herewith (as amended, restated or otherwise modified from time to time,
the "Credit Agreement"), pursuant to which Pledgee has agreed, subject to
certain conditions precedent, to make loans and other financial accommodations
to Borrower from time to time.
B. Pledgor owns all of the issued and outstanding preferred stock
of Borrower and will derive direct and indirect economic benefit from the loans
and other financial accommodations made to Borrower under the Credit Agreement.
C. Pledgee has required, as a condition to its entering into the
Credit Agreement, that Pledgor execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the premises and to induce Pledgee
to enter into the Credit Agreement and to make loans and financial
accommodations to Borrower thereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Pledgor hereby agrees with Pledgee as follows:
1. Definitions. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings set forth in the Credit Agreement.
2. Pledge. Pledgor hereby pledges, assigns, transfers, delivers
and grants to Pledgee a first lien on and first security interest in (a) all of
the capital stock of Borrower now owned or hereafter acquired by Pledgor
(collectively, the "Pledged Shares"), (b) all other property hereafter
delivered to, or in the possession or in the custody of, Pledgee in
substitution for or in addition to the Pledged Shares, (c) any other property
of Pledgor, as described in Section 5 below or otherwise, now or hereafter
delivered to, or in the possession or custody of Pledgor, and (d) all proceeds
of the foregoing (all of the foregoing being referred to herein collectively as
the "Pledged Collateral"). All of the Pledged Shares now owned by Pledgor which
are presently represented by stock certificates are listed on Exhibit A hereto
and such stock certificates, with undated stock powers duly executed in blank
by Pledgor, are being delivered to Pledgee simultaneously herewith. Pledgee
shall maintain possession and custody of the certificates representing the
Pledged Shares and any additional Pledged Collateral.
3. Security for Liabilities. The Pledged Collateral secures the
prompt payment, performance and observance of (I) all of the Obligations; and
(b) Pledgor's obligations and liabilities under this Agreement and each
agreement, document or instrument executed pursuant to or in connection with
this Agreement (all of the foregoing being referred to herein collectively as
the "Liabilities").
4. Representations, Warranties and Covenants of Pledgor. Pledgor
represents and warrants to Pledgee, and covenants with Pledgee, as follows:
(a) Pledgor is the record and beneficial owner of, and has legal
title to, the Pledged Shares listed on Exhibit A and such shares are, and all
other shares of stock constituting Pledged Collateral will be, free and clear
of all Liens except the Liens created by this Agreement.
(b) Pledgor has full power, authority and legal right to execute
the pledge provided for herein and to pledge the Pledged Shares and any
additional Pledged Collateral to Pledgee.
2
(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 such enforceability
may be limited by applicable bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally or by the availability
of equitable remedies.
(d) There are no outstanding options, warrants or other agreements
with respect to the Pledged Shares and there will be no outstanding options,
warrants or other agreements with respect to any Pledged Collateral, other than
as set forth on Exhibit A.
(e) No consent, approval or authorization of or designation or
filing with any governmental authority on the part of Pledgor is required in
connection with the pledge and security interest granted under this Agreement
or the exercise by Pledgee of the voting and other rights provided for in this
Agreement.
(f) The execution, delivery and performance of this Agreement by
Pledgor will not violate any provision of any applicable law or regulation or
of any order, judgment, writ, award or decree of any court, arbitrator or
governmental authority applicable to Pledgor, or of the agreement of limited
partnership of Pledgor or of any mortgage, indenture, lease, contract or other
agreement, instrument or undertaking to which Pledgor is a party or which is
binding upon Pledgor or upon any of its property, and will not result in the
creation or imposition of any Lien on any of the assets of Pledgor except as
contemplated by this Agreement.
(g) The pledge, assignment and delivery to Pledgee of the Pledged
Shares pursuant to this Agreement creates a valid first perfected security
interest in the Pledged Shares and the proceeds thereof in favor of Pledgee,
subject to no prior Lien or to any agreement purporting to grant to any third
party a security interest in the property or assets of Pledgor which would
include the Pledged Shares.
(h) Pledgor agrees that it will defend Pledgee's security interest
in the Pledged Collateral and the proceeds thereof against the claims and
demands of all Persons.
5. Stock Dividends, Distributions, Etc. If, while this Agreement
is in effect, Pledgor shall become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate representing
a stock dividend or a stock distribution in connection with any
reclassification, increase or reduction of capital or issued in connection with
any reorganization), or any options or rights, whether as an addition to, in
substitution for, or in exchange for any of the Pledged Shares, or otherwise,
Pledgor agrees to accept the same as Pledgee's agent and to hold the same in
trust for Pledgee, and to deliver the same forthwith to Pledgee in the exact
form received, with the endorsement of Pledgor when necessary or appropriate
undated stock powers duly executed in blank, to be held by Pledgee, subject to
the terms hereof, as additional Pledged Collateral. If any distribution of
capital shall be made on or in respect of the Pledged Shares or any property
shall be distributed upon or with respect to the Pledged Shares pursuant to the
recapitalization or reclassification of the capital of the issuer thereof or
pursuant to the reorganization thereof, the property so distributed shall be
delivered to Pledgee to be held as additional Pledged Collateral. Except as
provided in Section 6(a)(ii) below, all sums of money and property so paid or
distributed in respect of the Pledged Shares which are received by Pledgor
shall, until paid or delivered by Pledgee, be held by Pledgor in trust as
additional Pledged Collateral.
6. Dividends and Voting Rights.
(a) So long as no Event of Default has occurred and is continuing,
Pledgor shall be entitled, subject to the other provisions of this Agreement,
including, without limitation, Section 9 below:
(i) to vote or consent with respect to the Pledged Shares
in any manner not inconsistent with this Agreement, the Credit
Agreement and the other Loan Documents; and
(ii) to receive cash dividends or other cash distribution
in the ordinary course made in respect of the Pledged Shares, to the
extent permitted to be paid pursuant to the Credit Agreement.
-2-
3
(b) Upon the occurrence and during the continuance of an Event of
Default, Pledgor's right to exercise any of the voting or other privileges in
respect of the Pledged Shares shall immediately become suspended and all such
rights shall thereupon become vested in Pledgee, who shall thereupon have the
sole right to exercise such voting and other privileges in respect of such
Pledged Shares. To effect such transfer of rights, at any time during the
continuance of an Event of Default, Pledgee shall have the right to date and to
present to the issuer of the Pledged Shares the irrevocable proxy executed by
Pledgor substantially in the form of Exhibit B hereto.
(c) Upon the occurrence and during the continuance of an Event of
Default, if Pledgor, as record and beneficial owner of the Pledged Shares,
shall have received or shall have become entitled to receive, any cash
dividends or other cash distribution, Pledgor shall deliver to Pledgee, all
such cash or other distributions as additional Pledged Collateral.
7. Rights of Pledgee. Pledgee shall not be liable for any failure
to collect or realize upon the Obligations or any collateral security or
guaranty therefor, or any part thereof, or for any delay in so doing, nor shall
Pledgee be under any obligation to take any action whatsoever with regard
thereto. Any or all of the Pledged Shares held by Pledgee hereunder may, if an
Event of Default has occurred and is continuing, with prompt subsequent notice
to Pledgor, be registered in the name of Pledgee or its nominee and Pledgee or
its nominee may thereafter without notice exercise all voting and corporate
rights at any meeting with respect to Borrower and exercise any and all rights
of conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Shares as if it were the absolute
owner thereof, including, without limitation, the right to vote in favor of,
and to exchange at its discretion any and all of the Pledged Shares upon, the
merger, consolidation, reorganization, recapitalization or other readjustment
with respect to Borrower or upon the exercise by Pledgor or Pledgee of any
right, privilege or option pertaining to any of the Pledged Shares, and in
connection therewith, to deposit and deliver any and all of the Pledged Shares
with any committee, depository, transfer agent, registrar or other designated
agency upon such terms and conditions as Pledgee may determine, all without
liability except to account for property actually received by Pledgee, but
Pledgee shall have no duty to exercise any of such rights, privileges or
options and shall not be responsible for any failure to do so or delay in so
doing.
8. Remedies.
(a) Upon the occurrence and during the continuance of an Event of
Default, Pledgee may exercise from time to time any rights and remedies
available to it under law or otherwise. If any notification of intended
disposition of any of the Collateral is required by law, such notification, if
mailed, shall be deemed reasonable and properly given if mailed, at least ten
days before such disposition, postage prepaid, addressed to Pledgor at the
address of Pledgor set forth in Section 19. Any proceeds of any disposition of
Collateral may be applied by Pledgee to the payment of expenses in connection
with the Collateral, including reasonable attorneys' fees and legal expenses
and any balance of such proceeds may be applied by Pledgee toward the payment
of the Liabilities in the order of application set forth in the Security
Agreement. All rights and remedies of Pledgee expressed hereunder are in
addition to all other rights and remedies possessed by it, including those
under any other agreement or instrument relating to any of the Liabilities or
any security therefor. No delay on the part of Pledgee in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by Pledgee of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action of
Pledgee permitted hereunder shall impair or affect the rights of Pledgee in and
to the Collateral.
(b) Pledgor agrees that in any sale of any of the Collateral
whenever an Event of Default shall have occurred and be continuing, Pledgee is
hereby authorized to comply with any limitation or restriction in connection
with such sale as it may be advised by counsel is necessary in order to avoid
any violation of applicable law (including, without limitation, compliance with
such procedures as may restrict the number of prospective bidders and
purchasers, require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale of the
purchaser by any governmental regulatory authority or official, and Pledgor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a
-3-
4
commercially reasonable manner, nor shall Pledgee be liable or accountable to
Pledgor for any discount allowed by the reason of the fact that such Collateral
is sold in compliance with any such limitation or restriction.
(c) Pledgor agrees to do or cause to be done all such other acts
and things as may be necessary to make such sale or dispositions of any portion
or all of the Pledged Collateral valid and binding and in compliance with all
applicable laws, regulations, orders, injunctions, decrees or any court,
arbitrator or governmental authority having jurisdiction over any such sale or
disposition, all at Pledgor's expense.
9. No Disposition. Without the prior written consent of Pledgee,
Pledgor agrees that Pledgor will not sell, assign, transfer, exchange or
otherwise dispose of, or grant any option with respect to, the Pledged Shares
or any other Pledged Collateral, nor will Pledgor create, incur or permit to
exist any Lien with respect to any of the Pledged Shares, any other Pledged
Collateral or any interest therein, or any proceeds thereof, except for the
Lien provided for by this Agreement. Without the prior written consent of
Pledgor, Pledgee agrees that it will not vote to enable, and will not otherwise
permit, Borrower to issue any stock or other securities of any nature in
addition to or in exchange or substitution for the Pledged Shares.
10. Further Assurances. At any time and from time to time, upon
the written request of Pledgee, Pledgor shall execute and deliver all stock
powers, financing statements and such further documents and do such further
acts and things as Pledgee may reasonably request consistent with the
provisions hereof in order to effect the purposes of this Agreement.
11. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
12. No Waiver; Cumulative Remedies. Pledgee shall not by any act,
delay, omission or otherwise be deemed to have waived any of its remedies
hereunder, and no waiver by Pledgee shall be valid unless in writing and signed
by Pledgee and then only to the extent therein set forth. A waiver by Pledgee
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which Pledgee would otherwise have on any further
occasion. No course of dealing between Pledgor Pledgee and no failure to
exercise, nor any delay in exercising on the part of Pledgee of any right,
power or privilege hereunder or under any other Loan Document shall impair such
right or remedy or operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
13. Binding Effect. This Agreement shall be binding on the
successors and assigns of Pledgor and shall inure to the benefit of Pledgee and
its successors and assigns, except that Pledgor shall not have any right to
assign its obligations under this Agreement or any interest herein without the
prior written consent of Pledgee.
14. Termination. This Agreement and the Liens granted hereunder
shall terminate upon termination of the Credit Agreement and the full and
complete performance and satisfaction of the Liabilities and promptly upon such
termination and such full and complete performance and satisfaction, Pledgee
shall surrender the certificates evidencing any Pledged Collateral to Pledgor.
15. Possession of Pledged Collateral. Beyond the exercise of
reasonable care to assure the safe custody of the Pledged Collateral in the
physical possession of Pledgee pursuant hereto, neither Pledgee nor any nominee
of Pledgee shall have any duty or liability to collect any sums due in respect
thereof or to protect, preserve or exercise any rights pertaining thereto and
shall be relieved of all responsibility for the Pledged Collateral upon
surrender thereof to Pledgor.
16. Survival. All representations and warranties of Pledgor
contained in this Agreement shall survive the execution and delivery of this
Agreement.
-4-
5
17. Taxes and Expenses. To the extent not paid by Borrower,
Pledgor shall upon demand pay to Pledgee all reasonable expenses, including the
reasonable fees and expenses of counsel for Pledgee and of any experts and
agents, that Pledgee may incur in connection with: (a) the custody or
preservation of, or the sale of, collection from, or other realization upon,
any of the Pledged Collateral; (b) the exercise or enforcement of any of the
rights of Pledgee hereunder; or (c) the failure of Pledgor to perform or
observe any of the provisions hereof.
18. Attorney-in-Fact. Pledgor hereby irrevocably appoints Pledgee
as Pledgor's attorney-in-fact, effective upon the occurrence and during the
continuance of an Event of Default, with full authority in the place and stead
of Pledgor and in the name of Pledgor or otherwise, from time to time in
Pledgee's discretion, to take any action and to exercise any instrument that
Pledgee deems reasonably necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, endorse and collect
all instruments made payable to Pledgor representing any dividend, interest
payment or other distribution in respect of any pledged collateral or any part
thereof and to give full discharge for the same, when and to the extent
permitted by this Agreement.
19. Notices. All notices, demands and other communications
hereunder shall be in writing and delivered personally or by nationally
recognized overnight courier, or sent by first class mail or by telecopy (with
such telecopy to be confirmed promptly in writing sent by first class mail,
sent:
(a) If to Pledgor, to:
CSI Investment Partners II, L.P.
c/o Lincolnshire Management, Inc.
780 Third Avenue
New York, NY 10017
Attention: Allan Weinstein
T.J. Maloney
Telephone: (212) 319-3633 Telecopier: (212) 319-5457
(b) If to Pledgee, to
LaSalle National Bank
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Andrew Kanfer
Telephone: (312)904-2771
Telecopier: (312)904-4605
or to such other address or telecopy number as any party hereto may most
recently have designated in writing to the other party by such notice. All
such communications shall be deemed to have been given or made (i) if delivered
in person, when delivered, (ii) if delivered by telecopy, on the date of
transmission if transmitted on a Business Day before 4:00 p.m. Chicago time,
otherwise on the next Business Day, (iii) if delivered by overnight courier,
one Business Day after delivery to the courier properly addressed and (iv) if
mailed, three Business Days after deposited in the United States mail,
certified or registered.
20. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
(a) PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND PLEDGOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF PLEDGEE TO
BRING PROCEEDINGS AGAINST PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY PLEDGOR AGAINST PLEDGEE OR ANY AFFILIATE THEREOF
INVOLVING,
-5-
6
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
(b) PLEDGOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY PLEDGOR WHICH IRREVOCABLY AGREE
IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY PLEDGOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO
PLEDGOR AT ITS ADDRESS PROVIDED IN SECTION 19 EXCEPT THAT, UNLESS OTHERWISE
PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE
VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY PLEDGOR REFUSES TO
ACCEPT SERVICE, PLEDGOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
21. WAIVER OF JURY TRIAL. PLEDGOR AND PLEDGEE EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO ITS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS OR OTHERWISE. PLEDGOR AND PLEDGEE EACH AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
23. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS.
24. Modifications. No amendment, modification, termination or
waiver of any provision of this Agreement or consent to any departure by
Pledgor thereof from, shall be effective without the written agreement of
Pledgee and Pledgor and then only to the extent specifically set forth in such
writing.
25. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
26. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same
instrument and all of the parties hereto may execute this Agreement by signing
any such counterpart.
-6-
7
27. Entire Agreement. This Agreement embodies the entire agreement
and understanding between Pledgor and Pledgee with respect to the subject
matter hereof and supersedes all prior oral and written agreements and
understandings between Pledgor and Pledgee relating to the subject matter
hereof.
* * * * *
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to
be duly executed as of the day and year first written above
CSI INVESTMENT PARTNERS II, L.P.
By: Credentials II G.P.L.P.
By: Credentials II G.P., Inc.
By: /s/ T.J. Maloney
--------------------------------------
Name: T.J. Maloney
Title: President
LASALLE NATIONAL BANK
By: /s/ Andrew Kanfer
--------------------------------------
Name: Andrew Kanfer
Title: Loan Officer
-7-
8
ACKNOWLEDGMENT
The undersigned hereby (a) acknowledges receipt of a copy of the foregoing
Pledge Agreement, (b) waives any rights or requirement at any time hereafter to
receive a copy of such Pledge Agreement in connection with the registration of
any Pledged Shares or any other Pledged Collateral (as such terms are defined
therein) in the name of Pledgee or its nominee or the exercise of voting rights
by Pledgee, and fc) agrees promptly to note on its books and records the
transfer of the security interest in the stock of the undersigned as provided
in such Pledge Agreement, including the following legend:
PURSUANT TO THAT CERTAIN PLEDGE AGREEMENT DATED AS OF JANUARY 14, 1997
(AS FROM TIME TO TIME AMENDED, RESTATED OR OTHERWISE MODIFIED) CSI
INVESTMENT PARTNERS IL, LP, HAS UNDER AND SUBJECT TO THE TERMS OF
SECTION 6(b) OF SUCH PLEDGE AGREEMENT EMPOWERED LASALLE NATIONAL BANK
TO VOTE THE SHARES REPRESENTED BY THIS CERTIFICATE PURSUANT TO SUCH
PLEDGE AGREEMENT.
Dated: January 14, 1997
CREDENTIALS SERVICES INTERNATIONAL, INC.
By: /s/ T.J. Maloney
--------------------------------------
Name: T.J. Maloney
Title: Chairman
-8-
9
EXHIBIT A
TO
PLEDGE AGREEMENT (Preferred Stock)
Pledged Shares
1. 3,000 Shares of Series A Cumulative Preferred Stock ("Preferred
Stock"), par value $.01 per share, after giving effect to the issuance
by Borrower to Pledgor of 1,000 shares of Preferred Stock
simultaneously with the closing of the transactions contemplated under
the Credit Agreement between CSI and LaSalle National Bank.
2. There are no outstanding options, warrants or other agreements with
respect to issuance or acquisition of the pledged shares.
10
EXHIBIT B
To
Pledge Agreement
IRREVOCABLE PROXY
The undersigned hereby appoints LaSalle- NATIONAL BANK ("Lender"), as
proxy with full. power of substitution, and hereby authorizes Lender to
represent and vote all of the shares of the capital stock of Credentials
Services International, Inc. held of record by the undersigned on the date of
exercise hereof or at any meeting or at any other time chose by Lender in its
sole discretion. but only at the times provided in that certain Pledge
Agreement dated as of January 14, 1997 executed by the undersigned in favor of
Lender.
Date: ____________________
CSI INVESTMENT PARTNERS II, L.P.
By: Credentials II, GP. L.P.
By: Credentials II G.P., Inc.
By: /s/ T.J. Maloney
--------------------------------------
Name: T.J. Maloney
Title: President