Exhibit 2.2
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated September 23, 1997, by and between
Xxxxxx Xxxxx (the "Pledgor") and Physician Computer Network,
Inc., a Delaware corporation (the "Pledgee").
WHEREAS, Printed Products Group, Inc. (the "Company"), the
Pledgor, the Pledgee and Solion Corp., a Delaware corporation
(the "Merger Sub") are parties to an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"),
pursuant to which, contemporaneously with the execution and
delivery of this Agreement by the parties hereto, the Company is
being merged with and into the Merger Sub, with the Merger Sub as
the surviving corporation of such merger (the "Merger");
WHEREAS, as a result of the Merger, the Pledgee will own
all of the issued and outstanding shares of common stock, par
value $.01 per share, of the Company (the "Company Securities");
WHEREAS, in connection with the Merger and as part of the
consideration therefor, the Pledgee is issuing to the Pledgor
450,990 shares of the common stock, par value $.01 per share, of
the Pledgee (the "PCN Stock");
WHEREAS, pursuant to the terms of the Merger Agreement, the
Pledgor has agreed to pledge and assign to Pledgee, in order to
secure his indemnification obligations under Article VIII of the
Merger Agreement, 144,316 shares of PCN Stock (the "Pledged
Shares").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements set forth herein and in the
Merger Agreement and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto desiring to be legally bound do hereby agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the meanings ascribed to such term
below, which meanings shall be applicable equally to the singular
and plural forms of the terms so defined:
"Code" shall mean the Uniform Commercial Code as
adopted and in force in the State of New York, as from time to
time in effect.
"Event of Default" shall mean the failure of the
Pledgor to pay to Pledgee within seven (7) business days of
written notice and demand from Pledgee therefor any of the
Secured Obligations (as hereinafter defined); provided, however,
that, in the event that, within such seven (7) business day
period, Pledgor provides Pledgee with written notice that Pledgor
disputes the existence of such Secured Obligation or disputes the
amount demanded by Pledgee in its written notice to Pledgor (in
either event, a "Disputed Claim"), then "Event of Default" shall
mean the failure of the Pledgor to pay to Pledgee within five (5)
business days of written notice and demand from Pledgee all
amounts due to Pledgee pursuant to a final, non-appealable
judgement of a court of competent jurisdiction entered in any
action brought by Pledgee against Pledgor with respect to the
Disputed Claim.
"Person" shall mean any individual, corporation, trust,
partnership, limited partnership, limited liability company or
other business entity.
2. Pledge.
(a) As collateral security for all of his indemnification
obligations under Article VIII of the Merger Agreement (the
"Secured Obligations"), the Pledgor hereby grants to the Pledgee
a continuing security interest in and a lien upon, and hereby
assigns, transfers, pledges and sets over to the Pledgee (i) the
Pledged Shares and the certificates representing the Pledged
Shares, (ii) all distributions or payments, whether in cash or in
kind, upon or in connection with the Pledged Shares, whether such
distributions or payments are by reason of any stock dividend,
stock split, spinoff, merger or in partial or complete
liquidation, or the result of reclassification, readjustment or
any other changes in the capital structure of the Pledgee or
otherwise, (iii) all subscriptions, warrants, options and any
other rights issued upon or in connection with the Pledged
Shares, and (iv) all proceeds of the foregoing (collectively, the
"Collateral") .
(b) All certificates or instruments representing or
evidencing the Collateral shall be delivered to, and held by or
on behalf of, the Pledgee pursuant to the terms of this Pledge
Agreement and shall be accompanied by undated stock powers duly
executed in blank or by other instruments of transfer or
assignment, all in form and substance satisfactory to the
Pledgee.
(c) The Pledgee shall not have any duty with respect to any
of the Collateral other than the duty to use reasonable care in
the safe custody of the Collateral in its possession and shall
not incur any liability whatsoever so long as it has acted in
good faith, except for willful misconduct or gross negligence.
Without limiting the generality of the foregoing, the Pledgee
shall not be under any obligation to take any steps necessary to
preserve the value of any of the Collateral or to preserve its or
Pledgor's rights in the Collateral or against any other Persons,
but may do so at its option, and all expenses incurred in
connection therewith shall be for the sole account of the
Pledgor.
(d) If necessary, in the opinion of the Pledgee, for the
better protection of the Pledgee's rights in and to the
Collateral and to facilitate the implementation of such rights,
the Pledgor shall, upon the request of the Pledgee made at any
time following delivery of the Collateral to the Pledgee, cause
all the Collateral to be transferred, registered or otherwise put
into the name of Pledgee or such nominee or nominees as the
Pledgee shall from time to time direct. To that end, if the
Pledgee transfers all or a portion of the Collateral into its
name or the name of its nominee or nominees, the Pledgee shall,
upon the request of the Pledgor, unless an Event of Default (as
defined below) shall have occurred and be continuing, execute and
deliver or cause to be executed and delivered to the Pledgor,
proxies with respect to the Collateral.
3. Voting Rights. During the term of this Agreement and
so long as an Event of Default shall not have occurred and be
continuing, the Pledgor shall have the right to exercise all
voting power with respect to the Collateral pledged by him for
any purpose not in violation, or which will not result in a
violation, of the terms of this Agreement, and the Pledgee shall
execute or cause to be executed from time to time such proxies or
other instruments, if any, in favor of the Pledgor or its
nominee, in such form and for such purposes as shall be
reasonably required by the Pledgor and as shall be specified in a
written request therefor, to enable the Pledgor to exercise such
voting power with respect to the Collateral.
4. Dividend Payments. During the term of this Agreement
and so long as an Event of Default shall not have occurred and be
continuing, the Pledgor shall have the right to receive and
retain for its own account any and all cash dividends at any time
and from time to time declared or paid upon any of the Collateral
pledged by him.
5. Representations and Warranties of Pledgor. The
Pledgor represents and warrants to the Pledgee as follows:
(a) Pledgor is the record and beneficial owner of the
Collateral;
(b) Pledgor has full power and legal right to pledge all of
the Collateral pursuant to this Pledge Agreement;
(c) No consent of any Person and, to the best of Pledgor's
knowledge, no consent, 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 the
Pledgor of the Collateral pursuant to this Pledge Agreement or
the execution, delivery or performance of this Pledge Agreement
by the Pledgor or (ii) for the exercise by the Pledgee of the
voting or other rights provided for in this Pledge Agreement or
the remedies in respect of the Collateral pursuant to this
Agreement;
(d) All of the Collateral is owned by the Pledgor free and
clear of any liens, claims, security interests, options or other
charges or encumbrances (other than Pledgee's security interest
hereunder);
(e) the pledge of the Collateral pursuant to this Agreement
creates a valid and perfected first security interest in the
Collateral, securing the payment and performance of the Secured
Obligations, and is effective to vest in Pledgee the rights of
Pledgor in the Collateral as set forth herein.
6. Affirmative Covenants of the Pledgor. The Pledgor
covenants and agrees that he will:
(a) warrant and defend, at his own expense, the Pledgee's
right, title and security interest in and to the Collateral
against the claims of all persons;
(b) at any time and from time to time on and after the date
of this Agreement, at his own expense, promptly execute and
deliver all further instruments and documents (including, without
limitation, financing statements), and take all further actions,
that may be reasonably necessary or desirable, or that the
Pledgee may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby
or to enable the Pledgee to exercise and enforce its rights and
remedies with respect to the Collateral or any portion thereof;
and
(c) promptly notify the Pledgee of any lien, security
interest, encumbrance or claim made or threatened against the
Collateral.
7. Negative Covenants of Pledgor. The Pledgor covenants
and agrees that he will not:
(a) sell, convey or otherwise dispose of, or grant any
option with respect to, any of the Collateral; or
(b) create or permit to exist any lien, security interest,
or other charge or encumbrance upon or with respect to any of the
Collateral, except for any lien, security interest, option or
other charge or encumbrance which, by its express written terms,
is subordinated to the lien and security interest hereby created
by specific reference to the lien and security interest hereby
created.
8. Subsequent Changes Affecting Collateral. The Pledgee
may, at any time during the continuance of an Event of Default,
at its option and without notice to the Pledgor, transfer or
register the Collateral or any portion thereof into its name or
the names of its nominee or nominees with or without any
indication that the Collateral is subject to the security
interest hereunder.
9. Stock Adjustments. If during the term of this
Agreement any stock dividend, reclassification, readjustment or
other change is declared or made in the capital structure of
Pledgee or any additional stock of Pledgee is issued to the
Pledgor, or any subscription, warrant, option or any other right
issued upon or in connection with the Stock and included within
the Collateral is exercised, all new, substituted and additional
shares, or other securities, issued by reason of any such change
or exercise shall be delivered to and held by the Pledgee under
the terms of this Agreement in the same manner as the Collateral
originally pledged hereunder.
10. Warrants, Options and Rights. If during the term of
this Agreement any warrants, options or any other rights shall be
issued or exercised in connection with the Collateral, then such
warrants, options and rights shall be immediately assigned by the
Pledgor to the Pledgee and all new stock or other security so
acquired by the Pledgor shall be immediately assigned to the
Pledgee to be held under the terms of this Agreement in the same
manner as the Collateral originally pledged hereunder.
11. Pledgee May Perform. If Pledgor fails to perform any
agreement contained herein, the Pledgee may (but shall not be
obligated to) perform, or cause performance of, such agreement,
and the expenses of the Pledgee incurred in connection therewith
shall be payable by the Pledgor.
12. Reasonable Care. The Pledgee shall be conclusively
deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equivalent to that
which the Pledgee accords its own property consisting of
negotiable securities, it being understood that the Pledgee shall
not have responsibility for (a) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to the Collateral, whether or
not the Pledgee has or is deemed to have knowledge of such
matters, or (b) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to
maintain possession of the Collateral) to preserve rights against
any Person with respect to any Collateral.
13. Remedies Upon Default. Upon the occurrence and during
the continuance of an Event of Default.
(a) The Pledgee may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or
otherwise available to it at law or in equity, all the rights and
remedies of a secured party on default under the Code at that
time, and the Pledgee may also, in its discretion, without
notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any
exchange, broker's board or of the Pledgee's offices or
elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Pledgee may
deem commercially reasonable, irrespective of the impact of any
such sales on the market price of the Collateral. Each purchaser
at any such sale shall hold the property sold absolutely free
from any claim or right on the part of the Pledgor, and the
Pledgor hereby waives (to the extent permitted by law) all rights
of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least five (5)
days' notice to the Pledgor of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Pledgee shall not be
obligated to make any sale of Collateral regardless of notice of
sale having been given. The Pledgee may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice,
be made at the time and place to which so adjourned. At any
public sale pursuant to this Section 13, Pledgee may bid for or
purchase the Collateral or any part thereof offered for sale and
may make payment therefore in lieu of cash by crediting the
Secured Obligations. The Pledgor hereby waives and agrees not to
assert any rights or privileges it may acquire under the Code and
any claims against the Pledgee arising by reason of the fact that
the price at which any Collateral may have been sold at such
private sale was less than the price which might have been
obtained at a public sale, even if the Pledgee accepts the first
offer received and does not offer the Collateral to more than one
offeree. Any sale of the Collateral conducted in conformity with
reasonable commercial practices of banks, insurance companies or
other financial institutions disposing of property similar to the
Collateral shall be deemed to be commercially reasonable.
(b) appropriate and apply all proceeds of or held as part
of the Collateral to the Secured Obligations in accordance with
Section 14 hereof;
(c) retain all or such portion of the Collateral as shall
aggregate in value to an amount equal to the Secured Obligations,
in satisfaction of the Secured Obligations, whenever the
circumstances are such that the Pledgee are entitled to do so
under the UCC;
(d) reduce the Pledgee' claim to judgment, foreclose, or
otherwise enforce the security interest in all or any part of the
Collateral by any available judicial procedure; or
(e) apply (by appropriate judicial proceedings) for
appointment of a receiver for the Collateral or any part thereof,
and the Pledgor hereby consent to any such appointment.
Because of the Securities Act of 1933, as amended, and other
applicable securities laws and regulations (collectively, the
"Securities Laws"), there may be legal restrictions or
limitations affecting the Pledgee in attempts to dispose of all
or any portion of the Collateral in the enforcement of its rights
and remedies hereunder. For this reason, the Pledgee is hereby
authorized by Pledgor, upon the occurrence and continuance of any
Event of Default, to sell or otherwise dispose of the Collateral
at a private sale subject to investment letter or in any manner
which will not require that any of the Collateral be registered
under the Securities Laws. The Pledgor acknowledges and
understands that the sale under such circumstances may yield a
lower price for the Collateral, or any portion thereof, than
would otherwise be obtainable if the Collateral were registered
and sold in the open market. The Pledgor agrees that the
Pledgee's so selling the Collateral, or any portion thereof, at
such private sale or sales shall not be evidence that the Pledgee
acted in a manner that is not commercially reasonable under the
UCC.
14. Proceeds. All proceeds that the Pledgee shall receive,
in accordance with the provisions hereof, by sale, collection or
other realization of or upon the Collateral, shall be applied in
the following manner: First, to the payment of all costs and
expenses incurred in connection with the administration and
enforcement of, or the preservation of any rights under, this
Agreement or any of the reasonable expenses and disbursements of
the Pledgee (including, without limitation, the reasonable fees
and disbursements of counsel and agents; Second, to the
reimbursement of the Pledgee for all disbursements made by them
for taxes, assessments, or liens superior to the security
interest of the Pledgee which the Pledgee must pay and which are
not permitted under Section 3 hereof; Third, to the payment of
the Secured Obligations in such order as the Pledgee may
determine; and Fourth, the balance thereof, if any, shall be
delivered to the Pledgor. If the proceeds of the sale,
collection or other realization of or upon the Collateral are
insufficient to pay in full the Secured Obligations (after any
prior application of proceeds as described above in this Section
7), the Pledgor shall remain liable for any deficiency.
15. Absolute Security Interest. All rights of the Pledgee
and the security interest hereunder, and all obligations of each
of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any agreement
or instrument relating hereto;
(b) any change in the time, manner or place of, or in any
other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from
the terms of the Merger Agreement;
(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 circumstance which might otherwise constitute
a defense available to, or a discharge of, the Pledgor in respect
of the Secured Obligations.
16. Transfer of Collateral. Pledgor hereby irrevocably
appoint Pledgee as Pledgor's true and lawful attorney-in-fact,
with full power of substitution, to, in the name, place and stead
of the Pledgor, at any time and from time to time during the
existence of an Event of Default, in Pledgee's discretion, to
take any action and to execute any instrument which the Pledgee
deems reasonably necessary or advisable to carry out the
provisions of this Agreement including, without limitation, (a)
execute endorsements, assignments or other instruments of
conveyance or transfer with respect to all or any of the
Collateral, (b) demand, collect, xxx for, recover, receive and
give acquittance and receipt for monies due and to become due
under or with respect to any of the Collateral, (c) receive,
endorse, and collect any drafts or other instruments, documents,
and chattel paper in connection with the immediately preceding
clause (b) of this Section 16, and (d) exercise all rights and
remedies of the Pledgor, in the name of the Pledgor or otherwise,
with respect to the Collateral. The Pledgor agrees to indemnify
and hold the Pledgee harmless from and against any liability or
damage which the Pledgee may incur, other than as a result of
the Pledgee's willful misconduct or gross negligence, in the
exercise or performance of any of the Pledgee's powers and duties
specifically set forth herein.
17. No Waiver. No failure or delay on the part of the
Pledgee in exercising any of its rights, powers, or remedies, nor
any partial or single exercise thereof, shall constitute a waiver
thereof or shall preclude any other or future exercise thereof or
any exercise of any other right, power, or remedy. None of the
terms and conditions of this Agreement may be changed, waived,
modified or varied in any manner whatsoever unless in writing and
duly signed by the party against whom enforcement of such change
or waiver, modification, or variance is sought. Any waiver or
consent by the Pledgee shall be effective only in the specific
instance and for the specific purpose for which given.
18. Certain Events. The obligations of each of the Pledgor
hereunder shall remain in full force and effect without regard
to, and shall not be impaired by: (a) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition,
liquidation or the like of any of the Pledgor; (b) any exercise
or non-exercise, or any waiver, by the Pledgee of any of its
right under or in respect of the Secured Obligations or any
security for any of the Secured Obligations (other than to the
extent that the Pledgee terminates or waives any obligations of
any of the Pledgor under this Agreement) or (c) any amendment to
or modification of, the Secured Obligations or any security for
any of the Secured Obligations (other than to the extent that the
Pledgee agrees to amend or modify any obligation of the Pledgor
under this Agreement) whether or not the Pledgor shall have
notice or knowledge of any of the foregoing.
19. Term. This Agreement shall constitute a continuing
agreement and shall remain in full force and effect until the one
year anniversary of the date of this Agreement (the "Termination
Date"), at which time this Agreement shall terminate, and the
Pledgee shall, upon the request of the Pledgor, forthwith assign,
transfer and deliver, against receipt and without recourse to the
Pledgee (except that Pledgor shall have recourse against Pledgee
if Pledgee breaches its obligations hereunder), such of the
Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof to or on the order of the Pledgor;
provided, however, that if a PCN Indemnified Party (as defined in
the Merger Agreement) shall have, in good faith, asserted a claim
for indemnification pursuant to Section 8.1 of the Merger
Agreement on or prior to the Termination Date, this Agreement
shall remain in effect, and the Pledgor shall be entitled to
retain, in accordance with the terms hereof until final
resolution of such claim, such of the Collateral which, in the
sole and absolute determination of the Pledgee exercised in good
faith, shall be sufficient to satisfy such claim for
indemnification. Any amount of the Collateral not so retained
pursuant to the immediately preceding sentence, if any, shall be
returned to Pledgee on the Termination Date.
20. Successors and Assigns. This Agreement is binding upon
each of the Pledgor, the Pledgee and their respective executors,
administrators, successors and assigns and shall inure to the
benefit of the Pledgee and its successors and assigns.
21. Choice of Law. This Agreement and the rights and
obligations of the parties hereunder shall be construed in
accordance with and governed by the internal laws of the State of
New York, without giving effect to its principles of conflicts of
law.
22. 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 without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provisions in any other jurisdiction.
23. Notices. All notices, consents and approvals to be
given pursuant to this Agreement shall given and deemed received
as provided in the Merger Agreement.
24. Headings. All Section headings contained in this
Agreement are for convenience of reference only, do not form a
part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
25. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall constitute an
original hereof, and all of such counterparts, taken together,
shall constitute one and the same instrument.
26. Reinstatement. This Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time a
payment, or any part thereof, of the Secured Obligations to the
Pledgee is rescinded or must otherwise be restored or returned by
the Pledgee upon the insolvency, bankruptcy, or reorganization of
the Pledgor, or otherwise, all as though such payment had not
been made.
IN WITNESS WHEREOF, the Pledgor and the Pledgee have duly
executed and delivered this Agreement as of the date first above
written.
PHYSICIAN COMPUTER NETWORK, INC.
By:\s\ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Secretary
\s\ Xxxxxx Xxxxx
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XXXXXX XXXXX
