UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.1)*
Wismer-Martin, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
(CUSIP Number)
Jonathan Klein, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 21st Floor
New York, New York 10036
(212) 626-0879
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 20, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box //.
Check the following box if a fee is being paid with the statement
//. (A fee is not required only if the reporting person: (1) has
a previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (See
Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No.
1 NAME OF REPORTING PERSON
Physician Computer Network, Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) //
(b) /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
11,633,749
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
11,633,749
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,633,749
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
71%
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No.
1 NAME OF REPORTING PERSON
Jeffry M. Picower
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) //
(b) /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
0
8 SHARED VOTING POWER
11,633,749
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
11,633,749
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,633,749
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
71%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
<PAGE>
Item 1. Security and Issuer
Item 1 is hereby amended in its entirety to read as follows:
This Schedule 13D relates to options (the "Options")
granted to Physician Computer Network, Inc. ("PCN") to acquire
certain shares of common stock, par value $.001 per share
("Shares"), of Wismer-Martin, Inc. (the "Issuer" or "Wismer"), a
Washington corporation. The address of the principal executive
office of the Issuer is N. 12828 Newport Highway, Mead, Washington,
99021-9988.
Item 4. Purpose of Transaction
Item 4 is hereby amended to add the following:
PCN acquired an option (the "Original Option") to
purchase Shares from Ronald Holden, Chairman of the Board, Chief
Executive Officer and the largest single stockholder of the Issuer,
on May 28, 1996. The Original Option was terminated in accordance
with its terms upon the execution of the Agreement and Plan of
Merger (the "Merger Agreement"), which is described more fully in
Item 6 of this 13D, entered into by and among the Issuer, PCN and
Northwest Acquisition Corp on June 20, 1996. In connection with
the execution and delivery of the Merger Agreement, PCN acquired
certain other options (the "Options") from Ronald Holden, Stanley
T. and Beverly J. Hatch, Georgia L. Knazap, Gertrude L. Holden,
John F. Perez, Ivory & Sime Enterprise Capital, Glen E. and Judith
L. Martin, Thomas E. and Maureen T. Holden, Harry D. Holden and
James F. Etter on June 20, 1996 (each a "Stockholder" and
collectively "Stockholders"). The Stockholders granted PCN the
Options in consideration for PCN entering into the Merger
Agreement, dated June 20, 1996, regarding the acquisition by PCN of
the Issuer. As described in the Merger Agreement, PCN proposes to
acquire the Issuer through the merger of a wholly-owned subsidiary
of PCN with and into the Issuer (the "Merger"). As a result of the
Merger, the Issuer would become a wholly-owned subsidiary of PCN.
Item 5. Interest in the Securities of the Issuer
Item 5 is hereby amended to add the following:
As of the close of business on June 20, 1996, as a result
of its ownership of the Options, PCN may be deemed to beneficially
own in the aggregate 11,633,749 Shares, representing approximately
71% of the Issuer's outstanding Shares (based upon the 16,325,461
Shares stated to be outstanding in the Issuer's filing with the<PAGE>
<PAGE>
Securities and Exchange Commission (the "SEC") on Form 10-QSB for
the quarter ended March 31, 1996). As beneficial owner and holder
of approximately 44% of PCN's common stock and Chairman of the
Board and a Director of PCN, Picower may be deemed to have
investment and voting power over the Shares. However, as provided
by Rule 13d-4 of the Securities Exchange Act of 1934, as amended,
Picower disclaims beneficial ownership of all Shares of the Issuer
beneficially owned by PCN.
PCN has sole voting power and sole dispositive power with
regard to 11,633,749 Shares. In addition, Picower through his
association with PCN, may be deemed to have shared voting power and
shared dispositive power with regard to the 11,633,749 Shares.
The only transaction in the Shares by any of the
Registrants effected during the past sixty days was PCN's
acquisition of the Original Option on May 28, 1996 and PCN's
acquisition of the Options to purchase 11,633,749 Shares from the
Stockholders, which was effected by execution of the Option and
Voting Agreements on June 20, 1996.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Item 6 is hereby amended to add the following:
The Option and Voting Agreements were entered into on
June 20, 1996, between the Stockholders and PCN in order to induce
PCN to enter into the Merger Agreement regarding the proposed
acquisition of the Issuer by PCN. Under the Option and Voting
Agreements, Ronald Holden granted to PCN an option to purchase: (i)
1,795,750 of the Shares; (ii) 5,468,875 of the Shares; or (iii) all
7,679,916 Shares for a purchase price equal to the agreed upon
merger consideration (as defined below) at any time from and after
the Trigger Date (as defined below) and on or prior to the
Expiration Date (as defined below). All other Stockholders granted
PCN the option to acquire not less than all of their Shares for a
purchase price equal to the agreed upon merger consideration at any
time from and after the Trigger Date (as defined below) and on or
prior to the Expiration Date (as defined below). "Merger
consideration" means the amount and type of consideration payable,
with respect to each share upon consummation of the Merger, as
described below, assuming for such purpose that the date on which
the option is exercised is the date on which the Merger is
consummated, agreed upon to consummate the merger consisting of
common stock. "Trigger Date" means the first date on which any one
or more of the following events occur: (i) any material breach by<PAGE>
<PAGE>
the Issuer of any representation, warranty, covenant or agreement
contained in the Merger Agreement, including, without limitation,
the failure (x) of the Issuer to properly convene a meeting of its
stockholders for the purpose of voting on the approval of the
Merger Agreement and the transactions contemplated thereby (a
"Stockholders' Meeting") and (y) of the Issuer's Board of
Directors, for any reason, to recommend to its stockholders the
approval of the Merger Agreement and the transactions contemplated
thereby; (ii) the failure by the Issuer at a Stockholders Meeting
to obtain the affirmative vote of the holders of two-thirds of the
outstanding shares of the Common Stock entitled to vote thereon, to
consummate the Merger; and (iii) the termination of the Merger
Agreement as a result of a breach by any of the Stockholders of any
of the Options. "Expiration Date" means the first to occur of: (i)
in the event that the Merger is not consummated in accordance with
the terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Issuer of any provision of the Merger Agreement or (y) as a result
of a material breach by PCN of any representation, warranty,
covenant or agreement contained therein; (ii) consummation of the
Merger; and (iii) the later to occur of (x) the termination of the
Merger Agreement in accordance with its terms as a result of a
breach by any of the Stockholders of the any of the Options or (y)
October 15, 1996. The Option and Voting Agreements provide that
the Options shall be exercisable by PCN upon delivery to
Stockholders of a written notice indicating the number of shares
PCN wishes to acquire. Additionally, the Option and Voting
Agreements set forth certain restrictions, which include, among
other things, (1) the Stockholders' agreement not to enter into
certain agreements and/or transactions with respect to the Shares;
and (2) the Stockholders' agreement to vote the Shares for approval
of the terms contemplated in the Merger Agreement with regard to
the consummation of the Merger Agreement. The Option and Voting
Agreements also provide for the terms of payment for the Shares, as
well as customary anti-dilution protection including, among other
things, as a result of stock splits or the reorganization,
dissolution, liquidation or merger of the Issuer into another
company prior to the Expiration Date. The foregoing summary of the
Option and Voting Agreements is qualified in its entirety by
reference to the text of such agreements, which are attached hereto
as Exhibits 1 through 10 and incorporated herein by reference.
The Merger Agreement provides that, in connection with
the Transaction, PCN would pay to the shareholders of the Issuer an
aggregate of (x) $1,980,000 in cash and (y) 935,000 shares of
common stock of PCN, subject to adjustment based upon the market<PAGE>
<PAGE>
price of PCN's common stock prior to the consummation of the
Transaction. The Transaction is subject to, among other things,
approval of the Transaction by the Issuer's shareholders.
Item 7. Material to be Filed as Exhibits
Exhibit 1 Option Agreement between Ronald Holden
and PCN dated June 20, 1996.
Exhibit 2 Option Agreement between Stanley T. and
Beverly J. Hatch and PCN dated June 20,
1996.
Exhibit 3 Option Agreement between Georgia L.
Knazap and PCN dated June 20, 1996.
Exhibit 4 Option Agreement between Gertrude L.
Holden and PCN dated June 20, 1996.
Exhibit 5 Option Agreement between John F. Perez
and PCN dated June 20, 1996.
Exhibit 6 Option Agreement between Ivory & Sime
Enterprise Capital and PCN dated June 20,
1996.
Exhibit 7 Option Agreement between Glen E. and
Judith L. Martin and PCN dated June 20,
1996.
Exhibit 8 Option Agreement between Thomas E. and
Maureen T. Holden and PCN dated June 20,
1996.
Exhibit 9 Option Agreement between Harry D. Holden
and PCN dated June 20, 1996.
Exhibit 10 Option Agreement between James F. Etter
and PCN dated June 20, 1996.
Exhibit 11 Merger Agreement between PCN and the
Issuer dated June 20, 1996.<PAGE>
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: June 28, 1996
PHYSICIAN COMPUTER NETWORK, INC.
By: /s/ John F. Mortell
John F. Mortell
Its: Executive Vice President and
Chief Operating Officer
/s/ Jeffry Picower
Jeffry Picower
[Signature Page for Amendment No. 1
to Wismer-Martin Schedule 13D]
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase (i) 1,795,750 of the Shares; (ii)
5,468,875 of the Shares; or (iii) all of the Shares, in each
case for a purchase price per share equal to the Exercise Price
(as defined below), at any time or from time to time from and
after the Trigger Date (as defined below) and prior to the
Expiration Date (as defined below). The Option shall be
exercisable by PCN one time for the number of Shares specified
in clauses (i), (ii) or (iii), and no combination thereof. As
used herein, the "Exercise Price" shall mean the amount of cash
and number of shares of PCN common stock, par value $.01 per
share, into which each Share is convertible upon consummation
of the Merger in accordance with the terms of the Merger
Agreement, assuming for such purpose that the Trigger Date is
the Effective Time (as defined in the Merger Agreement) of the
Merger. As used herein, the "Trigger Date" shall mean the
first date on which any one or more of the following events
occur: (i) any material breach by the Company of any
representation, warranty, covenant or agreement contained in
the Merger Agreement, including, without limitation, the
failure (x) of the Company to properly convene a meeting of its
stockholders for the purpose of voting on the approval of the
Merger Agreement and the transactions contemplated thereby (a
"Stockholders' Meeting") and (y) of the Company's Board of
Directors, for any reason, to recommend to its stockholders the
approval of the Merger Agreement and the transactions
contemplated thereby; (ii) the failure by the Company at a
Stockholders Meeting to obtain the affirmative vote of the
holders of two-thirds of the outstanding shares of the Common
Stock entitled to vote thereon, to consummate the Merger; and
(iii) the termination of the Merger Agreement pursuant to
Section 7.1(f) thereof. As used herein, the "Expiration Date"
shall mean the first to occur of: (i) in the event that the
Merger is not consummated in accordance with the terms of the
Merger Agreement because (x) PCN fails or refuses to close the
Merger for any reason other than a breach by the Company of any
provision of the Merger Agreement or (y) as a result of a
material breach by PCN of any representation, warranty,
covenant or agreement contained therein; (ii) consummation of
the Merger; and (iii) the later to occur of (x) the termination
of the Merger Agreement in accordance with its terms (other
than termination pursuant to Section 7.1(f) of the Merger
Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/ Ronald L. Holden
Name:
Number of Shares: 7,679,916
Address: 622 Chesterfield
Birmingham. MI 48009
/s/ Linda R. Holden
622 Chesterfield
Birmingham. MI 48009
PHYSICIAN COMPUTER NETWORK,
INC.
By:________________________
Name:
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
853,500
Name:Stanley T. and Beverly J. Hatch
Number of Shares:
Address: 1619 N. West Point Road
Spokane, Washington 99201
By:/s/ Stanley T. Hatch
/s/ Beverly J. Hatch
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/Georgia L. Knazap
Name:
Number of Shares: 83,000
Address: 8900 Oakmeadow Dr. #26
Saginaw, Michigan 48609
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/Gertrude L. Holden
Name:
Number of Shares: 62,500
Address: 500 Park Blvd. #42
Venice, Florida 34285
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/John F. Perez
Name: John F. Perez
Number of Shares: 442,000
Address: 1124 E. Plateau Road
Spokane, WA 99203
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/
Name: Ivory & Sime Enterprises Capital
Plc.
Number of Shares: 1,045,000
Address: One Charlotte Square
Edinburgh, Scotland EH2 4DZ
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/Judith L. Martin
/s/ Glen E. Martin JTWROS
Name:
Number of Shares: 363,333
Address: 1406 W. Elmwood Court
Spokane, WA 99218-3015
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/Thomas E. Holden
/s/Maureen T. Holden
Name: Thomas & Maureen Holden
Number of Shares: 250,000
Address: 205 6th Street East
Tiszza, Fla. 33715
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/Harry D. Holden
Name: Harry D. Holden
Number of Shares: 217,000
Address: 6151 W. Long View Pla.
E. Lansing, MI 48823
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
OPTION AND VOTING AGREEMENT
OPTION AND VOTING AGREEMENT, dated June 20, 1996
between Physician Computer Network, Inc., a New Jersey
corporation ("PCN"), and the undersigned stockholder (the
"Stockholder") of Wismer-Martin, Inc., a Washington corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and
delivery of this Agreement, PCN, Northwest Acquisition Corp.,
a Washington corporation and a wholly-owned subsidiary of PCN
("Merger Sub"), and the Company are entering into an Agreement
and Plan of Merger, dated the date hereof (the "Agreement"),
pursuant to which PCN will acquire all of the capital stock of
the Company through the merger of Merger Sub with and into the
Company (the "Merger"); and
WHEREAS, approval of the Company Vote (as defined in
the Merger Agreement) by the stockholders of the Company is a
condition to the consummation of the Merger; and
WHEREAS, in order to induce PCN to enter into the
Agreement, Stockholder desires to enter into this Option and
Voting Agreement with respect to the number of outstanding
shares (the "Shares") of Common Stock, par value $.001 per
share, of the Company (the "Common Stock"), set forth below
Stockholder's name on the signature page hereto.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Option
(a) Stockholder hereby grants to PCN an option (the
"Option") to purchase not less than all of the Shares for a
purchase price per share equal to the Exercise Price (as
defined below), at any time or from time to time from and after
the Trigger Date (as defined below) and prior to the Expiration
Date (as defined below). As used herein, the "Exercise Price"
shall mean the amount of cash and number of shares of PCN
common stock, par value $.01 per share, into which each Share
is convertible upon consummation of the Merger in accordance
with the terms of the Merger Agreement, assuming for such
purpose that the Trigger Date is the Effective Time (as defined
in the Merger Agreement) of the Merger. As used herein, the
"Trigger Date" shall mean the first date on which any one or
more of the following events occur: (i) any material breach by
the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement, including, without
limitation, the failure (x) of the Company to properly convene
a meeting of its stockholders for the purpose of voting on the
approval of the Merger Agreement and the transactions
contemplated thereby (a "Stockholders' Meeting") and (y) of the
Company's Board of Directors, for any reason, to recommend to
its stockholders the approval of the Merger Agreement and the
transactions contemplated thereby; (ii) the failure by the
Company at a Stockholders Meeting to obtain the affirmative
vote of the holders of two-thirds of the outstanding shares of
the Common Stock entitled to vote thereon, to consummate the
Merger; and (iii) the termination of the Merger Agreement
pursuant to Section 7.1(f) thereof. As used herein, the
"Expiration Date" shall mean the first to occur of: (i) in the
event that the Merger is not consummated in accordance with the
terms of the Merger Agreement because (x) PCN fails or refuses
to close the Merger for any reason other than a breach by the
Company of any provision of the Merger Agreement or (y) as a
result of a material breach by PCN of any representation,
warranty, covenant or agreement contained therein; (ii)
consummation of the Merger; and (iii) the later to occur of (x)
the termination of the Merger Agreement in accordance with its
terms (other than termination pursuant to Section 7.1(f) of the
Merger Agreement) or (y) October 15, 1996.
(b) The Option shall be exercisable by PCN by
delivery to Stockholder of a written notice indicating the
number of shares PCN wishes to acquire (the "Notice"). The
Notice shall be accompanied by payment of the purchase price of
the Shares purchased as specified therein. The cash portion of
the purchase price for the shares may be made in cash or by
check payable to the order of Stockholder. Upon delivery of
payment for the Shares, Stockholder shall deliver to PCN a
certificate or certificates for the number of Shares indicated
in the Notice, together with duly executed stock powers
therefor. Upon delivery, such Shares shall be fully-paid and
non-assessable and free and clear of all liens, security
interests and other encumbrances.
(c) In the event that, prior to the Expiration Date,
the Company shall issue shares of its Common Stock as stock
dividends or shall subdivide or split or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith proportionately be decreased in the case of a stock
dividend, subdivision or stock split, or proportionately be
increased in the case of combinations, in each case to the
nearest one cent, to give effect to such change. Concurrently,
the number of Shares to which this Option shall apply shall be
increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding as
a result of such change.
(d) In the event of any reorganization or
reclassification of the outstanding shares of Common Stock, or
in the case of any consolidation with or merger of the Company
into another corporation in which the Company is not the
surviving corporation, or in the case of any sale, lease or
conveyance of all, or substantially all, of the property,
assets, business and goodwill of the Company, PCN shall
thereafter have the right upon exercise of the Option to
purchase from Stockholder the kind and amount of shares of
stock and other securities and property received by Stockholder
upon such reorganization, reclassification, consolidation,
merger or sale, at a price equal to the Exercise Price then in
effect, and, prior to the Expiration Date, Stockholder will not
sell, convey or otherwise dispose of any shares of stock and
other securities or property received by Stockholder upon the
consummation of any such transaction.
(e) In the event the Company shall, at any time
prior to the Expiration Date and prior to the exercise in full
of the Option, dissolve, liquidate or wind up its affairs, PCN
shall be entitled, upon exercise of the Option, to receive, in
lieu of the Shares which it would have been entitled to
receive, the same kind and amount of assets as PCN would have
received, the same kind and amount of assets as would have been
issued, distributed or paid to it upon any such dissolution,
liquidation or winding up with respect to such Shares had it
been the holder of record of such Shares on the record date for
the determination.
Section 2. Maintenance of Shares. During the
term of this Agreement, except the sale of the Shares to PCN
upon exercise of the Option or in connection with the Merger,
Stockholder will continue to be the beneficial and record owner
of all right, title and interest in and to the Shares and
agrees that he will not sell, and will not offer or agree to,
assign, pledge or otherwise dispose of, or grant any proxies
with respect to, the Shares, other than proxies to vote for
proposals put forth by management of the Company which are not
inconsistent with the proposals required to be voted for
pursuant to Section 3 below, or enter into any contract, option
or other arrangement or understanding with respect to the sale,
assignment, pledge or other disposition, directly or
indirectly, of the Shares or any right, title or interest in or
to the Shares.
Section 3. Voting of Shares. Stockholder
agrees that, during the term of this Agreement, he will vote
the Shares which Stockholder then owns and which Stockholder is
entitled to vote, in person or by proxy, at any annual, special
or other meeting of the holders of capital stock of the Company
and at any adjournments thereof or pursuant to any consent in
lieu of a meeting, or otherwise, for approval of the Merger and
against any: (i) other sale or purchase of assets or any
merger, consolidation, reorganization, recapitalization,
liquidation or winding up of or by the Company; or (ii) other
transaction or other matter that would interfere with or delay
the prompt completion of the Merger.
Section 4. Term of Agreement. The obligations of
Stockholder under this Agreement will terminate on the
Expiration Date.
Section 5. Representations and Warranties of
Stockholder. Stockholder represents and warrants to PCN as of
the date hereof that:
(a) Stockholder is the record and beneficial owner
of the Shares and the Shares (i) represent all of the Common
Stock owned of record or beneficially by Stockholder, directly
or indirectly, (ii) are fully-paid and non-assessable and (iii)
are free and clear of all liens, security interests and other
encumbrances;
(b) Stockholder has full legal power and authority
to execute and deliver this Agreement;
(c) the Shares are free and clear of all proxies,
voting agreements, voting trusts and other agreements relating
to the voting of the shares; and
(d) Stockholder has duly executed and delivered this
Agreement.
Section 6. Specific Performance. Stockholder
acknowledges that PCN would suffer irreparable damage if any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that PCN shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy
to which PCN may be entitled at law or in equity.
Section 7. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
upon receipt, if made or given by hand delivery, telecopier or
facsimile transmission, or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) to
Stockholder at the address set forth below Stockholder's name
on the signature page hereto and to PCN's at the address for
notices set forth in the Merger Agreement or to such other
address as any party may have furnished to the others in
writing in accordance herewith.
Section 8. Binding Effect. This Agreement shall
inure to the benefit of and, subject to applicable law, be
binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns.
Section 9. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the
State of Washington, without giving effect to the principles of
conflict of laws thereof.
Section 10. Counterparts. This Agreement may be
executed in two counterparts, each of which shall be an
original, but which together shall constitute one and the same
agreement.
Section 11. Effect of Headings. The section
headings herein are for convenience only and shall not affect
the construction hereof.
Section 12. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
Section 13. Amendment; Waiver. No amendment or
waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and
signed by PCN and Stockholder, in the case of an amendment, or
by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to departure therefrom.
Section 14. Entire Agreement. This Agreement sets
forth the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements, covenants, arrangements, communications,
representations and warranties, whether oral or written, by
either party with respect thereto.
IN WITNESS WHEREOF, this Option and Voting Agreement
has been duly executed by the parties hereto on the day and
year first above written.
/s/James F. Etter
Name: James F. Etter
Number of Shares: 637,500
Address: E-16925 Wellestey
Spokane, WA 99216
PHYSICIAN COMPUTER NETWORK, INC.
Name: /s/ Henry Green
Title:
AGREEMENT AND PLAN OF MERGER
dated June 20, 1996
by and among
WISMER-MARTIN, INC.,
PHYSICIAN COMPUTER NETWORK, INC.,
AND
NORTHWEST ACQUISITION CORP.
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated June 20, 1996 (the
"Agreement"), by and among WISMER-MARTIN, INC., a Washington
corporation (the "Company"), PHYSICIAN COMPUTER NETWORK, INC., a
New Jersey corporation ("PCN"), and NORTHWEST ACQUISITION CORP., a
Washington corporation that is a wholly-owned subsidiary of PCN
("Merger Sub").
WHEREAS, the Boards of Directors of PCN, Merger Sub and the
Company have each determined that it is in the best interests of
their respective stockholders for Merger Sub to merge with and into
the Company upon the terms and subject to the conditions set forth
herein, and have approved the merger;
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended;
WHEREAS, PCN, Merger Sub and the Company desire to make
certain representations, warranties, covenants and agreements in
connection with the merger and also to prescribe various conditions
to the merger;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to
be legally bound hereby, PCN, Merger Sub and the Company hereby
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time (as defined in
Section 1.2) and subject to the terms and conditions contained
herein, Merger Sub shall be merged with and into the Company (the
"Merger") (Merger Sub and the Company are sometimes referred to
herein as the "Constituent Corporations"), in accordance with the
Washington Business Corporation Act (the "WBCA"), and the separate
existence of Merger Sub shall thereupon cease, and the Company
shall be the surviving corporation of the Merger (the "Surviving
Corporation"). At and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and
franchises of a public as well as of a private nature, and be
subject to all the restrictions, disabilities and duties of the
Constituent Corporations; and all and singular rights, privileges,
powers and franchises of each of the Constituent Corporations, and
all property, real, personal and mixed, and all debts due to either
of the Constituent Corporations on whatever account, as well as for
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stock subscriptions and all other things in action or belonging to
each of the Constituent Corporations, shall be vested in the
Surviving Corporation; and all property, rights, privileges, powers
and franchises, and all and every other interest shall be
thereafter as effectually the property of the Surviving Corporation
as they were of the Constituent Corporations; and the title to any
real estate vested by deed or otherwise, in either of the
Constituent Corporations, shall not revert or be in any way
impaired; but all rights of creditors and all liens upon any
property of either of the Constituent Corporations shall be
preserved unimpaired; and all debts, liabilities and duties of the
Constituent Corporations shall thenceforth attach to the Surviving
Corporation, and may be enforced against it to the same extent as
if said debts and liabilities had been incurred by it. At PCN's
election, any direct wholly-owned Subsidiary (as defined in Section
1.7(c) hereof) of PCN incorporated under the laws of the state of
Washington may be substituted for Merger Sub as a constituent
corporation in the Merger, in which event, the parties shall
execute an appropriate amendment to this Agreement in form and
substance reasonably satisfactory to PCN and the Company in order
to reflect such substitution.
Section 1.2 Effective Time of the Merger. Subject to the
provisions of this Agreement, a certificate of merger in
substantially the form attached hereto as Exhibit I (the
"Certificate of Merger") shall be duly prepared, executed and
acknowledged by the Surviving Corporation and thereafter delivered
to the Secretary of State of the State of Washington, for filing as
provided in the WBCA, as soon as practicable on or after the
Closing Date (as defined in Section 1.3). The Merger shall become
effective upon the filing of the Certificate of Merger with the
Secretary of State of the State of Washington (the "Effective Time"
and the date on which the Effective Time occurs is referred to
herein as the "Effective Date").
Section 1.3 Closing. The closing of the Merger (the
"Closing") will take place as soon as practicable (but in no event
later than the second Business Day (as defined below)) after the
latest to occur of the conditions set forth in Article VI having
been fulfilled or having been waived in accordance with this
Agreement (the "Closing Date"), at the offices of Gordon Altman
Butowsky Weitzen Shalov & Wein, 114 West 47th Street, New York, New
York 10036, unless another date or place is agreed to in writing by
the parties hereto. For purposes of this Agreement, "Business Day"
means any day other than: (i) a Saturday or Sunday; and (ii) a day
on which banks in the state of Washington or the state of New York
are required or permitted to be closed.
Section 1.4 Articles of Incorporation. The Articles of
Incorporation of Merger Sub, as in effect immediately prior to the
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Effective Time, shall be the articles of incorporation of the
Surviving Corporation, until duly amended in accordance with the
terms thereof and the WBCA, except for the changes thereto
specified in the Certificate of Merger.
Section 1.5 By-Laws. The By-Laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the by-laws of
the Surviving Corporation, until duly amended in accordance with
the terms thereof, of the articles of incorporation of the
Surviving Corporation and of the WBCA.
Section 1.6 Directors and Officers. The directors and
officers of Merger Sub at the Effective Time shall, from and after
the Effective Time, be the directors and officers of the Surviving
Corporation until the successors of all such persons shall have
been duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving
Corporation's Articles of Incorporation and by-laws.
Section 1.7 Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of the
holder of any shares of the Common Stock (as defined below) or of
any capital stock of Merger Sub:
(a) Each share of the capital stock of Merger Sub
which is issued and outstanding immediately prior to the Effective
Time shall be converted into and become one fully paid and
nonassessable share of common stock, par value $.001 per share, of
the Surviving Corporation.
(b) Each share of the Company's common stock, par
value $.001 per share (the "Common Stock"), which is issued and
outstanding immediately prior to the Effective Time, except those
held by stockholders who validly perfect dissenters' rights under
the WBCA, shall be converted into the right to receive (the "Merger
Consideration"): (x) the Common Stock Cash Consideration (as
defined in Section 1.8 below), without interest; and (y) that
number (the "Conversion Number") of shares of duly authorized,
validly issued, fully paid and non-assessable shares of PCN's
common stock, $.01 per share (the "PCN Stock"), computed in
accordance with Section 1.9. Anything contained in this Agreement
to the contrary notwithstanding, in the event that the per share
Market Price (as defined in Section 1.9 below) of PCN Stock on the
Trigger Date (as defined in Section 1.9 below) is less than or
equal to nine dollars ($9.00), then, at PCN's option (the "All Cash
Option"), in lieu of the consideration described in clauses (x) and
(y) of the immediately preceding sentence, the "Merger
Consideration" shall be an amount in cash equal to (A) $14,000,000;
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divided by (B) the Common Share Number (as defined in Section 1.8
below). All shares of Common Stock, and each holder of a
certificate representing such shares of Common Stock, shall cease
to have any rights with respect thereto, except the right to
receive the Merger Consideration to be issued or paid in
consideration therefor upon surrender of such certificate in
accordance with Section 1.11, without interest.
(c) All shares of the Common Stock and all other
shares of capital stock of the Company that are owned by the
Company as treasury stock and any shares of the Common Stock or
other shares of capital stock of the Company owned by the Company
or any wholly-owned Subsidiary of the Company, shall be canceled.
As used in this Agreement, a "Subsidiary" of any party means any
corporation or other organization, whether incorporated or
unincorporated, of which (i) such party or any other Subsidiary of
such party is a general partner (excluding partnerships, the
general partnership interests of which held by such party or any
Subsidiary of such party do not have a majority of the voting
interests in such partnership) or (ii) 50% or more of the
securities or other interests having by their terms ordinary voting
power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or
other organization is directly or indirectly owned or controlled by
such party or by any one or more of its Subsidiaries, or by such
party and one or more of its Subsidiaries.
Section 1.8 Common Stock Cash Consideration. As used
herein, the "Common Stock Cash Consideration" means the amount
equal to: (a) $1,980,000 (subject to adjustment as provided in
Section 1.9); divided by (b) the Common Share Number (as defined
below). As used herein, the "Common Share Number" means the number
of shares of Common Stock issued and outstanding immediately prior
to the Effective Time.
Section 1.9 Conversion Number. As used herein, the
Conversion Number means the amount equal to: (a) the Adjusted PCN
Share Number (as defined below); divided by (b) the Common Share
Number. As used herein, the "Adjusted PCN Share Number" means
935,000; provided, however, that, in the event that on the third
business day prior to the Effective Time (the "Trigger Date") the
aggregate Market Price (as hereinafter defined) of 935,000 shares
of PCN Stock is: (i) less than $9,350,000, then the Adjusted PCN
Share Number shall be increased to equal such number of shares of
PCN Stock as has an aggregate Market Price on the Trigger Date
equal to $9,350,000; or (ii) is greater than $11,453,750, then the
Adjusted PCN Share Number shall be decreased to equal such number
of shares of PCN Stock as has an aggregate Market Price on the
Trigger Date equal to $11,453,750. Notwithstanding the foregoing,
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in the event that stockholders of the Company exercise dissenters'
rights as provided in Section 1.10 and, as a result, assuming for
such purpose that each Dissenting Share (as defined in Section
1.10) is entitled to receive, in lieu of the Merger Consideration,
an amount in cash (the "Dissenting Share Amount") equal to (i) the
Common Stock Cash Consideration plus (ii) the Market Price of the
Conversion Number of shares of PCN Stock on the Trigger Date, the
aggregate Market Price of the Adjusted PCN Share Number of PCN
Stock (less the aggregate number of shares of PCN Stock into which
the Dissenting Shares would have been convertible pursuant to
Section 1.7 had such dissenting stockholders not demanded
dissenters' rights) on the Trigger Date constitutes less than
eighty-percent (80%) of the sum (the "Total Merger Consideration")
of the aggregate dollar value of (A) the Merger Consideration plus
(B) the Dissenting Share Amount, then (x) the aggregate number of
shares PCN Stock issued to non-Dissenting Shareholders (the "Stock
Consideration") shall be increased to equal such number of shares
of PCN Stock as has an aggregate Market Price equal to eighty-
percent (80%) of the Total Merger Consideration and (y) the
aggregate amount of Common Stock Cash Consideration paid to non-
Dissenting Shareholders shall be decreased by the aggregate Market
Price of the number of shares of PCN Stock added to the Stock
Consideration pursuant to the preceding clause (x). As used
herein, the "Market Price" of each share of PCN Stock means the
average of the closing sale price of a share of PCN Stock as
reported on the NASDAQ Stock Market during the fifteen (15) trading
days immediately preceding the date of the determination.
Section 1.10 Dissenters' Rights. Shares of Common Stock
that have not been voted for the adoption of the Merger and with
respect to which dissenters' rights shall have been properly
demanded in accordance with the WBCA ("Dissenting Shares") shall
not be converted into the right to receive the Merger Consideration
as provided in Section 1.7 on or after the Effective Time unless
and until the holder of such shares withdraws his demand for such
appraisal in accordance with applicable law or becomes ineligible
for such appraisal, at which time such shares shall be converted
into and represent the right to receive the Merger Consideration,
without interest, as set forth in Section 1.7. The Company shall
give PCN: (i) prompt notice of any written demand for appraisal,
withdrawals of demands for appraisal and any other instrument in
respect thereof received by the Company; and (ii) the opportunity
to direct all negotiations and proceedings with respect to demands
for appraisal. The Company will not voluntarily make any payment
with respect to any demands for appraisal and will not, except with
the prior written consent of PCN, settle or offer to settle any
such demand.
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Section 1.11 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, PCN shall
deposit, or shall cause to be deposited, with American Stock
Transfer and Trust Company, or such other bank or trust company
which shall be mutually acceptable to the parties hereto (the
"Exchange Agent"), for the benefit of holders of shares of Common
Stock, for exchange in accordance with this Section 1.11, through
the Exchange Agent: (i) certificates representing the Adjusted PCN
Share Number of PCN Stock; (ii) the estimated amount of cash to be
paid pursuant to Section 1.11(e); and (ii) all funds necessary to
pay the Cash Consideration for shares of Common Stock converted by
reason of the Merger (in each case other than Merger Consideration
with respect to Dissenting Shares) (together, all such certificates
and cash being hereinafter referred to as the "Exchange Fund").
The Exchange Agent shall deliver, pursuant to irrevocable
instructions, the Cash Consideration, the shares of PCN Stock
contemplated to be issued pursuant to Section 1.7 and the cash to
be issued pursuant to Section 1.11(e) out of the Exchange Fund.
The Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall mail
to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding
shares of Common Stock (the "Certificates") whose shares were
converted into the right to receive the Merger Consideration
pursuant to Section 1.7: (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and
have such other provisions as PCN and the Company may reasonably
specify); and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for certificates representing the
Cash Consideration and shares of PCN Stock. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other
agent or agents as may be appointed by PCN, together with such
letter of transmittal, duly executed, and such other documents as
may be reasonably required by the Exchange Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration which such holder has the right to receive
pursuant to this Section 1.17, and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of
ownership of Common Stock which is not registered in the transfer
records of the Company, the Cash Consideration may be paid to and
certificates representing the proper number of shares of PCN Stock
may be issued to a transferee if the Certificate representing such
Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by
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evidence that any applicable stock transfer taxes have been paid.
Until surrendered as contemplated by this Section 1.11, each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger
Consideration. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the PCN Stock held
by it from time to time hereunder.
(c) Distributions with Respect to Unexchanged Shares.
No dividends or other distributions with respect to PCN Stock with
a record date after the Effective Time shall be paid to the holder
of any unsurrendered Certificate with respect to the shares of PCN
Stock represented thereby and no cash payment (including, without
limitation, cash payment in lieu of fractional shares) shall be
paid to any such holder pursuant to this Section 1.11 until the
surrender of such Certificate in accordance with this Section 1.11.
Subject to the effect of applicable laws, following surrender of
any such Certificate, there shall be paid to the holder of the
Certificates representing whole shares of PCN Stock issued in
exchange therefor, without interest: (i) at the time of such
surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect
to such whole shares of PCN Stock; and (ii) at the appropriate
payment date, the amount of dividends or other distributions with
a record date after the Effective Time but prior to such surrender
and with a payment date subsequent to such surrender payable with
respect to such whole shares of PCN Stock.
(d) No Further Ownership Rights in Common Stock. All
shares of the PCN Stock issued, together with the Cash
Consideration paid, upon the surrender for exchange of Certificates
in accordance with the terms hereof (including any cash paid
pursuant to Section 1.11(e)) shall be deemed to have been issued
(and paid) in full satisfaction of all rights pertaining to such
shares of Common Stock and there shall be no further registration
of transfers on the stock transfer books of the Surviving
Corporation of the shares of Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or
the Exchange Agent for any reason, they shall be canceled and
exchanged as provided in this Section 1.11.
(e) No Fractional Shares. No certificate or scrip
representing fractional shares of PCN Stock shall be issued upon
the surrender for exchange of Certificates, and such fractional
share interests will not entitle the owner thereof to vote or to
any rights of a stockholder of PCN. Notwithstanding any other
provision of this Agreement, each holder of shares of Common Stock
exchanged pursuant to the Merger who would otherwise have been
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entitled to receive a fraction of a share of PCN Stock (after
taking into account all Certificates delivered by such holder)
shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of PCN Stock
multiplied by the Market Price of a share of PCN Stock on the
Effective Date.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed for 180 days after the
Effective Time shall be delivered to PCN, upon demand, and any
holders of the Certificates who have not theretofore complied with
this Section 1.11 shall thereafter look only to PCN for delivery of
the Merger Consideration.
(g) No Liability. None of PCN, Merger Sub, the Company
nor the Exchange Agent shall be liable to any holder of shares of
Common Stock or PCN Stock, as the case may be, for such shares (or
dividends or distributions with respect thereto) or cash from the
Exchange Fund (or by PCN after the Exchange Fund has terminated)
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. At such time as any amounts
remaining unclaimed by holders of any such shares would otherwise
escheat to or become property of any Governmental Entity (as
defined in Section 2.2(c)), such amounts shall, to the extent
permitted by applicable law, become the property of PCN free and
clear of any claims or interest of any such holders or their
successors, assigns or personal representatives previously entitled
thereto.
(h) Investment of Exchange Fund. The Exchange Agent
shall invest any cash included in the Exchange Fund, as directed by
PCN, on a daily basis. Any interest and other income resulting
from such investments shall be paid to PCN.
Section 1.12 Taking Necessary Action; Further Action. PCN,
Merger Sub and the Company, respectively, shall take all such
action as may be necessary or appropriate in order to effectuate
the Merger as promptly as possible. If, at any time after the
Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of either of
the Constituent Corporations, the officers and directors of such
corporations are fully authorized in the name of their corporation
or otherwise to take, and shall take, all such action.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PCN AND MERGER SUB
PCN and Merger Sub hereby represent and warrant to the
Company as follows:
Section 2.1 Organization, Standing and Power. Each of PCN
and Merger Sub: (i) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; (ii) has all requisite corporate power and corporate
authority to own, lease and operate its properties and to carry on
its business as now being conducted; and (iii) is duly qualified or
licensed to do business and in good standing in each jurisdiction
in which the business it is conducting, or the operation, ownership
or leasing of its properties, makes such qualification or licensing
necessary, other than in such jurisdictions where the failure so to
be in good standing, qualified or licensed does not, individually
or in the aggregate, have a Material Adverse Effect (as defined in
Section 8.3). Each of PCN and Merger Sub has previously made
available to the Company complete and correct copies of its
presently effective Articles of Incorporation and By-Laws.
Section 2.2 Authority Relative to This Agreement. (a)
PCN and Merger Sub have all necessary corporate power and corporate
authority to execute and deliver this Agreement and each PCN
Document (as hereinafter defined) to which PCN and/or Merger Sub,
as the case may be, is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of
this Agreement by PCN and Merger Sub and of each PCN Document by
PCN and/or Merger Sub, as the case may be, and the consummation by
PCN and Merger Sub of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action
on the part of PCN and Merger Sub. This Agreement has been, and
each PCN Document will be, duly executed and delivered by PCN
and/or Merger Sub, as the case may be, and, assuming this Agreement
constitutes the valid and binding agreement of the Company,
constitutes the legal, valid and binding obligation of PCN and/or
Merger Sub, as the case may be, enforceable against PCN and/or
Merger Sub, as the case may be, in accordance with its terms. As
used herein, PCN Document means each or any instrument executed and
delivered by PCN or Merger Sub in connection with the transactions
contemplated hereby.
(b) The execution and delivery of this Agreement by PCN
and Merger Sub does not, and the consummation of the transactions
contemplated hereby by PCN and Merger Sub will not: (i) conflict
with, or result in any violation or breach of any provision of, the
Articles of Incorporation or By-Laws of PCN or Merger Sub; or (ii)
except as to which requisite waivers or consents have been obtained
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and assuming the consents, approvals, authorizations or permits and
filings or notifications referred to in Section 2.2(c) are duly and
timely obtained or made, result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
obligation or the loss of a material benefit under, or the creation
of a lien, pledge, security interest or other encumbrance on assets
or property, right of first refusal with respect to any asset or
property (any such conflict, violation, default, right of
termination, cancellation or acceleration, loss, creation or right
of first refusal, a "Violation"), of any loan or credit agreement,
note, mortgage, indenture, lease, or other agreement, obligation,
instrument, concession, franchise, license, judgment, order,
decree, or, to PCN's knowledge, any statute, law, ordinance, rule
or regulation applicable to PCN and Merger Sub or their respective
properties or assets.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from any court,
administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign (a "Governmental Entity")
is required by or with respect to PCN or Merger Sub to validly
execute and deliver this Agreement or to effect the Merger, except
for: (i) the filing with the Securities and Exchange Commission
("SEC") of (A) a proxy statement in definitive form relating to the
meetings of the Company's stockholders to be held in connection
with the Merger, as amended or supplemented (such definitive proxy
statement, as it may be amended or supplemented from time to time,
the "Proxy Statement"); (B) ,and effectiveness of, a registration
statement on Form S-4 under the Securities Act of 1933, as amended
(the "Securities Act"), in connection with the issuance of the PCN
Stock pursuant to this Agreement, as amended or supplemented (such
registration statement, as it may be amended or supplemented from
time to time, the "S-4"); and (C) such reports under Section 13(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and such other compliance with the Securities Act, the
Exchange Act and the rules and regulations thereunder as may be
required in connection with this Agreement and the transactions
contemplated hereby, and the obtaining from the SEC of such orders
as may be so required; (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Washington; (iii) such
filings and approvals as may be required by applicable "blue sky"
or takeover laws; and (iv) filing with the NASDAQ Stock Market for
the listing of the shares of PCN Stock issuable upon exchange of
the Common Stock (and after the Effective Time, the shares of PCN
Stock issuable upon the exercise of Options (as defined in Section
5.7)).
Section 2.3 Issuance of PCN Stock. All shares of PCN Stock
which are to be issued pursuant to the Merger will be, when issued
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in accordance with the terms thereof, validly issued, fully paid
and non-assessable and not subject to preemptive rights.
Section 2.4 SEC Documents; Financial Statements. (a) PCN
has filed all forms, reports and documents required to be filed by
PCN with the SEC and has heretofore delivered to the Company, in
the form filed with the SEC, its Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (the "PCN 10-K"), its Quarterly
Report on Form 10-Q for the period ending March 31, 1996 (the "PCN
10-Q") and any Current Reports on Form 8-K filed by PCN with the
SEC since March 31, 1996 (the "PCN 8-K" and, together with the PCN
10-K and the PCN 10-Q, the "PCN SEC Documents"). As of their
respective dates: (i) the PCN SEC Documents complied in all
material respects with the requirements of the Securities Act or
the Exchange Act, and the rules and regulations of the SEC
thereunder applicable to such PCN SEC Documents; and (ii) none of
the PCN SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) The financial statements of PCN included in the PCN
SEC Documents complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto,
were prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto
or, in the case of the unaudited statements, as permitted by Rule
10-01 of Regulation S-X of the SEC) and fairly present in
accordance with applicable requirements of GAAP (subject, in the
case of the unaudited statements, to normal, recurring audit
adjustments) the consolidated financial position of PCN and its
consolidated Subsidiaries as at their respective dates and the
consolidated results of operations and the consolidated cash flows
of PCN for the periods then ended.
Section 2.5 Absence of Certain Changes or Events. Since
March 31, 1996 to the date hereof (except as disclosed in the PCN
SEC Documents), PCN and its Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent
with past practice and, since such date to the date hereof, (except
as disclosed in the PCN SEC Documents) there has not been any
change in the business, results of operations, properties
(including intangible properties), financial condition, assets or
liabilities of PCN or any of its Subsidiaries having a Material
Adverse Effect.
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Section 2.6 Finders and Investment Bankers. No broker,
finder or investment banker is entitled to any brokerage, finder's
or other fee or commission in connection with the Merger or any
other transaction contemplated hereby on account of any actions
taken by PCN or Merger Sub.
Section 2.7 Information Supplied. None of the information
supplied or to be supplied by PCN for inclusion or incorporation by
reference in: (i) the S-4 will, at the time the S-4 is filed with
the SEC and at the time it becomes effective under the Securities
Act or at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; and (ii) the Proxy Statement will, at the date mailed
to stockholders of the Company and at the times of any meetings of
stockholders to be held in connection with the Merger, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement, insofar as it
relates to PCN or Merger Sub or other information supplied by PCN
for inclusion therein, will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and
regulations thereunder, and the S-4, insofar as it relates to PCN
or Merger Sub or other information supplied by PCN for inclusion
therein, will comply as to form in all material respects with the
provisions of the Securities Act and the rules and regulations
thereunder.
Section 2.8 Disclosure. No representation or warranty by
PCN or Merger Sub in this Agreement and no statement contained in
any document or other writing furnished or to be furnished to the
Company or any of its representatives pursuant to the provisions
hereof contains or will contain any untrue statement of material
fact or omits or will omit to state any material fact necessary in
order to make the statements made herein or therein not misleading.
All copies of all documents delivered to the Company or any of its
representatives pursuant hereto are true, complete and accurate in
all material respects. There has been no event or transaction
which has occurred or information which has come to the attention
of PCN (other than events or information relating to economic
conditions of general public knowledge) which could reasonably be
expected to have a Material Adverse Effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to PCN and to
Merger Sub as follows:
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Section 3.1 Organization, Standing and Power. Each of the
Company and its Subsidiaries: (i) is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation; (ii) has all requisite corporate
power and corporate authority to own, lease and operate its
properties and to carry on its business as now being conducted; and
(iii) is duly qualified or licensed to do business and in good
standing in each jurisdiction in which the business it is
conducting, or the operation, ownership or leasing of its
properties, makes such qualification or licensing necessary, other
than in such jurisdictions where the failure so to be in good
standing, qualified or licensed does not, individually or in the
aggregate, have a Material Adverse Effect. Set forth in the
Company's disclosure schedule previously delivered to PCN (the
"Disclosure Schedule"), is a true and complete list of all
Subsidiaries of the Company and their respective jurisdictions of
incorporation or organization and the jurisdictions in which the
Company or any of its Subsidiaries are qualified or licensed to do
business. The Company has previously made available to PCN
complete and correct copies of the presently effective Articles of
Incorporation and By-Laws of the Company and its Subsidiaries.
Section 3.2 Capital Structure. (a) The authorized capital
stock of the Company consists of 20,000,000 shares of Common Stock.
(b) As of the date hereof 16,325,461 shares of Common
Stock are issued and outstanding, all of which are validly issued,
fully paid and non-assessable and not subject to preemptive rights.
As of the date hereof, 528,333 shares of Common Stock are reserved
for issuance pursuant to options outstanding as of the date hereof
(whether or not vested).
(c) All outstanding shares of capital stock of the
Subsidiaries of the Company are owned directly by the Company, free
and clear of all liens, charges, encumbrances, claims and options
of any nature (collectively, "Liens") other than the Liens referred
to in the Disclosure Schedule. Set forth in the Disclosure
Schedule is a true and complete schedule of all options which are
outstanding as of the date hereof, the number of shares of Common
Stock for which such options are exercisable, the exercise price of
the option, the dates on which such options become exercisable and
the identity and the last known address of the optionee. Except as
set forth in this Section 3.2, there are not outstanding any: (i)
shares of capital stock or other voting securities of the Company;
(ii) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or
other voting securities of the Company or any of its Subsidiaries;
(iii) options, warrants, calls, rights (including preemptive
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rights), commitments, agreements or understandings to which the
Company or any of its Subsidiaries is a party or by which it is
bound obligating the Company or any of its Subsidiaries to issue,
deliver, sell, purchase, redeem or acquire or cause to be issued,
delivered, sold, purchased, redeemed or acquired, additional shares
of capital stock or other voting securities of the Company or any
of its Subsidiaries or obligating the Company or any of its
Subsidiaries to grant, extend or enter into any such option,
warrant, call, right, commitment, agreement or understanding; or
(iv) stock appreciation or other similar or related right which is
measured by, and no person has or has the right or interest to
acquire any equity interests in the Company or any of its
Subsidiaries or any interests measured by, the value of the capital
stock or the income, profits or other results of the operations or
conduct of the business of the Company or any of its Subsidiaries.
There are no shareholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or by
which it is bound relating to the voting of any shares of the
capital stock of the Company.
Section 3.3 Authority Relative to This Agreement. (a) The
Company has all necessary corporate power and corporate authority
to execute and deliver this Agreement and each Company Document (as
hereinafter defined) and, subject to adoption of this Agreement by
the affirmative vote of the holders of two-thirds of the
outstanding shares of Common Stock entitled to vote thereon (the
"Company Vote"), to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and each
Company Document by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the
Company subject to adoption of this Agreement by the Company Vote.
This Agreement has been and each Company Document will be duly
executed and delivered by the Company and, subject to adoption of
this Agreement by the Company Vote, and assuming this Agreement
constitutes the valid and binding agreement of PCN and Merger Sub,
constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. As
used herein, "Company Document" means each or any instrument
executed and delivered by the Company in connection with the
transactions contemplated hereby.
(b) The execution and delivery of this Agreement by the
Company does not, and the consummation of the transactions
contemplated hereby by the Company will not: (i) conflict with, or
result in any violation or breach of any provision of, the Articles
of Incorporation or By-Laws of the Company or any of its
Subsidiaries; or (ii) except as to which requisite waivers or
consents have been obtained and assuming the consents, approvals,
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authorizations or permits and filings or notifications referred to
in Section 3.2(c) are duly and timely obtained or made and the
approval of this Agreement by the Company Vote has been obtained,
result in any Violation of any loan or credit agreement, note,
mortgage, indenture, real property lease, Benefit Plan (as defined
in Section 3.15) or other Material Contract (as defined in Section
3.19), judgment, order, decree, or, to the Company's knowledge, any
statute, law, ordinance, rule or regulation applicable to the
Company or any of its Subsidiaries or their respective properties
or assets.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from any
Governmental Entity is required by or with respect to the Company
or any of its Subsidiaries to validly execute and deliver this
Agreement or to effect the Merger, except for: (i) the filing with
the SEC of (A) the Proxy Statement; and (B) such reports under
Section 13(a) of the Exchange Act, and such other compliance with
the Securities Act, the Exchange Act and the rules and regulations
thereunder as may be required in connection with this Agreement and
the transactions contemplated hereby; (ii) the filing of the
Certificate of Merger with the Secretary of State of the State of
Washington; (iii) such filings and approvals as may be required by
applicable "blue sky" or takeover laws; and (iv) such other
required consents as are set forth on the Disclosure Schedule.
Section 3.4 SEC Documents; Financial Statements. (a)
The Disclosure Schedule sets forth a true and complete list of each
report, schedule, registration statement and definitive proxy
statement filed by the Company with the SEC since June 30, 1993
(the "Company SEC Documents"), including, without limitation, the
Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1995 (the "Company 10-KSB") and the Company's quarterly
report on Form 10-QSB for the quarter ended March 31, 1996 (the
"Company 10-QSB"). As of their respective dates: (i) the Company
SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder
applicable to such Company SEC Documents and (ii) none of the
Company SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) The financial statements of the Company included in
the Company SEC Documents complied as to form in all material
respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with GAAP applied on
a consistent basis during the periods involved (except as may be
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indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Rule 10-01 of Regulation S-X of the
SEC) and fairly present in accordance with applicable requirements
of GAAP (subject, in the case of the unaudited statements, to
normal, recurring audit adjustments) the consolidated financial
position of the Company and its consolidated Subsidiaries as at
their respective dates and the consolidated results of operations
and the consolidated cash flows of the Company for the periods then
ended.
(c) The Company has delivered to PCN correct and
complete copies of the audited consolidated balance sheets of the
Company and its consolidated Subsidiaries as at March 31, 1996, and
the audited related consolidated statements of operations, cash
flows and changes in shareholders' equity for the nine-month period
then ended and the notes thereto, together with a report thereon by
BDO Seidman & Company (the "Audited Financial Statements"). The
Audited Financial Statements: (i) are in accordance with the books
and records of the Company and its Subsidiaries; (ii) have been
prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the
notes thereto); and (iii) fairly present in accordance with
applicable requirements of GAAP the consolidated balance sheets of
the Company and its consolidated Subsidiaries as at their
respective dates and the consolidated statements of operations,
cash flows and changes in shareholders' equity for the period then
ended. The reserves provided for on the Audited Financial
Statements with respect to contingent liabilities of the Company
are adequate to cover all costs, expenses, liabilities and damages
associated with such contingent liabilities.
Section 3.5 No Undisclosed Material Liabilities. Since June
30, 1995, neither the Company nor any of its Subsidiaries has
incurred any material obligations or liabilities of any kind
whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than: (i) liabilities provided for
in the Company SEC Documents (or disclosed in the notes thereto)
filed by the Company with the SEC since June 30, 1995; (ii)
liabilities incurred in the ordinary course of business consistent
with past practice since June 30, 1995, none of which were entered
into for inadequate consideration; (iii) liabilities under this
Agreement; (iv) liabilities disclosed in the Disclosure Schedule;
and (v) liabilities disclosed in the Audited Financial Statements.
Section 3.6 Absence of Certain Changes or Events. Except
as set forth in the Disclosure Schedule, any Company SEC Document
filed by the Company with the SEC since June 30, 1995 or the
Audited Financial Statements, the Company and its Subsidiaries have
conducted their businesses only in the ordinary course and in a
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manner consistent with past practice and, since such date, neither
the Company nor any of its Subsidiaries has: (i) suffered any
change in the business, results of operations, properties
(including any intangible properties), financial condition, assets
or liabilities of the Company or any of its Subsidiaries which,
individually or in the aggregate, has a Material Adverse Effect;
(ii) incurred damage to or destruction of any of the Company's
assets by casualty, whether or not covered by insurance, in an
amount in excess of $20,000 or suffered or became subject to any
pending or threatened condemnation of property; (iii) made any
change in the nature of its business; (iv) mortgaged, pledged,
assigned, hypothecated or subjected to any lien or any other
encumbrance any of the assets; (v) sold, transferred or leased any
of its assets, except, in each case, in the ordinary course of
business and consistent with past practice; (vi) sold, assigned,
transferred, or granted any rights under or with respect to, any of
its licenses, agreements, patents, inventions, trademarks, trade
names, copyrights or formulae or with respect to know-how or any
other intangible asset, in each case, other than in the ordinary
course of business consistent with past practice; (vii) amended or
terminated any of its Material Contracts other than in the ordinary
course of business consistent with past practice; (viii) waived or
released any other rights having a value in excess of $20,000 in
the aggregate; (ix) incurred or entered into any agreement to
incur indebtedness for borrowed money or guaranteed any liability
or obligation of any other person for borrowed money; (x) suffered
any labor dispute; (xi) made or granted any increase in wage or
salary to any employee or granted any severance or termination pay
to any officer, director or employee (other than in the ordinary
course of business consistent with past practice or contractual
obligations) or entered into any employment agreement with any
officer or employee; (xii) made any increase in or commitment to
increase any employment benefit or adopted or made any commitments
to adopt any additional employee benefit plan; (xiii) made any
change in any method of accounting or accounting practice employed
by the Company or any of its Subsidiaries; (xiv) written down the
value of inventory or written off notes or accounts receivable
other than in the ordinary course of business; (xv) declared, set
aside or paid any dividends or distributions in respect of the
shares of its capital stock or any issuance, sale, transfer by the
Company, or commitment to issue, sell or transfer any shares of its
capital stock or any redemption, purchase or other acquisition of
any of its securities; or (xvi) received notice of a default under
any Material Contract (as defined in Section 3.19).
Section 3.7 Real Estate. (a) Neither the Company nor any of
its Subsidiaries have any interest in real property other than as
disclosed in the Disclosure Schedule or as a lessee of the property
demised under the Real Property Leases (as hereinafter defined).
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All real property which is now or was previously owned by the
Company or any of its current or former Subsidiaries is listed in
the Disclosure Schedule (all such real property currently owned
referred to herein as the "Owned Property" and all such real
property formerly owned or leased referred to as the "Former
Property").
(b) The leasehold estates listed in the Disclosure
Schedule are all of the leasehold estates under which the Company
or any of its Subsidiaries is a lessee, sublessee or sublessor of
any real property or interest therein (collectively, the "Real
Property Leases") (the premises demised under the Real Property
Leases, together with the Owned Property, are, collectively,
referred to herein as the "Real Property"). No proceeding is
pending or, to the best knowledge of the Company, threatened, for
the taking or condemnation of all or any portion of the Real
Property. Except as disclosed in the Disclosure Schedule, the
Company or its Subsidiary, as the case may be, holds valid title to
the Owned Property, leasehold estates and the Real Property Leases
free and clear of any encroachment, sublease, right of occupancy or
use of any third party, mortgage, pledge, lien, security interest,
encumbrance, claim, charge, covenant, conditional limitation or
other restriction of any kind, except for: (i) real property taxes,
if any, affecting the Owned Properties or the properties of which
the premises demised under the Real Property Leases form a part,
not yet due and payable or for which adequate provision has been
made; (ii) landlord's liens, encumbrances, and other restrictions
set forth in the Real Property Leases or related documents or
imposed by applicable law; (iii) easements, rights-of-way,
restrictions, minor defects or irregularities in title, and other
encumbrances not interfering in any material respect with (x) the
ordinary conduct of the business of the Company or its Subsidiary
and (y) the marketability of the Owned Properties. Except as set
forth in the Disclosure Schedule, there is no brokerage commission
or finder's fee due from the Company or any of its Subsidiaries and
unpaid with regard to any of Owned Property or the Real Property
Leases, or which will become due any time in the future with regard
to any Owned Property or Real Property Lease.
(c) Except as set forth in the Disclosure Schedule, to
the knowledge of the Company, there are no: (i) unrecorded
agreements; (ii) rights of occupancy; or (iii) mortgages, pledges,
liens, security interests, encumbrances, claims, charges which
materially encumber any of the Owned Property or any of the
properties demised under any of the Real Property Leases.
(d) Except as set forth in the Disclosure Schedule,
there are no easements, rights of way or licenses necessary for the
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operations of the Owned Property or the properties demised under
the Real Property Leases which are not in full force and effect.
(e) Except as set forth in the Disclosure Schedule, the
Owned Property and the building systems such as heating, plumbing,
ventilation, air conditioning and electric used in the operation of
the Owned Property are adequate in all material respects for the
current operations of the Company, and the Owned Property and such
building systems now being used by the Company in its business and
operations, whether leased or owned, are in working order, repair
and operating condition (normal wear and tear excepted), and are,
to the knowledge of the Company, without any material structural
defects.
(f) Neither the Company nor any of its Subsidiaries is
in material or monetary default or has received any notice of any
material or monetary default, or failed to take any action that
could result in a material or monetary default, under any Real
Property Lease. To the Company's knowledge, no other party to any
such lease is in material or monetary default thereunder.
Section 3.8 Title to Property; Encumbrances. Except as set
forth in the Disclosure Schedule and as set forth in Section 3.9
with respect to the Intellectual Property (as defined in Section
3.9), the Company has good and valid title to, and owns outright,
all of the tangible and intangible personal properties shown as
owned by the Company and its Subsidiaries on the Company's books
and records, including, without limitation, all of the properties
and assets reflected on the Audited Financial Statements and all
properties and assets purchased by and delivered to it since March
31, 1996 (except for properties and assets sold or disposed of
since March 31, 1996, in the ordinary course of business) free and
clear of all mortgages, claims, liens, charges, leases, subleases,
encumbrances, security interests, restrictions on use or transfer
or other defects of any kind or nature, whether or not recorded,
except for (collectively, "Permitted Liens" and, together with the
Liens referred to in the Disclosure Schedule, the "Existing
Liens"): (i) liens for taxes, assessments or other governmental
charges or levies the payment of which is not due; (ii) landlord's
liens in favor of the landlord of the premises demised under the
Real Property Leases and liens of carriers, warehousemen,
mechanics, materialmen, and other liens imposed by law incurred in
the ordinary course of business of the Company for amounts not yet
due or being contested in good faith by appropriate proceedings;
and (iii) liens incurred or deposits made in the ordinary course of
business of the Company in connection with workers' compensation,
unemployment insurance and other types of social security. The
tangible personal properties and assets owned or leased by the
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Company are adequate and sufficient for the current operations of
the business of the Company and its Subsidiaries.
Section 3.9 Intellectual Property. The Company and its
Subsidiaries own, license or have the right to use all franchises,
patents, trademarks, copyrights, service marks, tradenames,
corporate names, licenses, trade secrets and know-how and
proprietary computer software or hardware, proprietary technology,
technical information, discoveries, designs and other proprietary
rights, whether or not patentable (collectively, "Intellectual
Property") which are currently used in, their respective
businesses. Except as disclosed in the Disclosure Schedule, the
Company holds all Intellectual Property free and clear of all mort-
gages, claims, liens, charges, leases, subleases, encumbrances,
security interests, restrictions on use or transfer or other
defects of any kind or nature, whether or not recorded, except for
Permitted Liens. The Disclosure Schedule sets forth a true,
correct and complete list and description of all such Intellectual
Property (other than licenses for standard "off-the-shelf" software
which can be readily acquired or licensed for $10,000 or less) and
indicates whether the Company or its Subsidiaries, as applicable,
is a licensor or licensee thereof. Except for: (i) the Company's
software licensed to others in the ordinary course of the Company's
business; or (ii) as set forth in the Disclosure Schedule, the
Company has sole title to and ownership of or has full, exclusive
right to use, for the life of the proprietary right, all
Intellectual Property. Except where the failure to do so would
have a Material Adverse Effect, all filings and other actions
necessary to acquire, maintain, register, renew and perfect the
rights of the Company and its Subsidiaries to its or their
Intellectual Property rights have been duly made in all
jurisdictions where such rights are used by it or them. The use of
the Intellectual Property by the Company or its Subsidiaries in the
operation of their respective businesses does not violate or
infringe on the rights of any other person. Neither the Company
nor any of its Subsidiaries has received any notice of or alleging
any violation of the asserted rights of others with respect to the
Intellectual Property. The Company is not aware of any third party
that is infringing or violating any of the rights of the Company or
any of its Subsidiaries with respect to the Intellectual Property.
Section 3.10 Litigation. Except as set forth in the
Disclosure Schedule, there are no actions, proceedings, claims or
investigations pending or, to the Company's knowledge, threatened
against the Company or any of its Subsidiaries, or any properties
or rights of the Company or any of its Subsidiaries, before any
court, administrative, governmental or regulatory authority or
body, domestic or foreign. To the Company's knowledge, except as
disclosed in the Disclosure Schedule, no basis exists for the
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commencement of any action, proceeding or investigation of the
Company or its Subsidiaries. Except as set forth in the Disclosure
Schedule, as of the date hereof, neither the Company nor any of its
Subsidiaries nor any of their property is subject to any order,
judgment, writs, injunction or decree.
Section 3.11 Compliance with Laws. Except as set forth in
the Disclosure Schedule or with respect to Environmental Laws (as
defined in Section 3.12 hereto), the Company and its Subsidiaries
have complied and are in compliance with all applicable laws,
rules, regulations, ordinances, orders, judgments and decrees
(including, without limitation, occupational safety and health,
pension, fair employment, equal opportunity or similar laws, rules
and regulations) of any Governmental Entity and all other
regulatory bodies which affect its business or assets, the failure
to comply with which has or would result in liability to the
Company or the Surviving Corporation of $5,000 or more with respect
to each such failure (a "Compliance Failure"), and there are no
pending claims which have been filed against the Company, its
Subsidiaries or any of its affiliates alleging a violation of any
such law, rule, regulation, ordinance, order, judgment and decree.
All Compliance Failures, whether or not any such occurrence,
individually, results in liability to the Company or the Surviving
Corporation of $5,000 or less, collectively, will not result in
liability to the Company and the Surviving Corporation for an
amount of $30,000 or more in the aggregate.
Section 3.12 Environmental Laws. (a) The Company and its
Subsidiaries are in compliance with all applicable Environmental
Laws (as defined below in this Section 3.12), and have obtained all
necessary licenses and permits required to be issued pursuant to
any Environmental Law, except where the failure to so comply or to
obtain such licenses or permits, individually or in the aggregate,
does not have a Material Adverse Effect. Except as disclosed in
the Disclosure Schedule, neither the Company nor any of its
Subsidiaries has received notice of or communication from any
Governmental Entity with respect to: (i) any Hazardous Substance
(as defined below in this Section 3.12) in relation to its
operations, property, Owned Properties, Former Properties (or any
of them) or acts; or (ii) any investigation, demand or request
pursuant to enforcing any Environmental Law relating to it or its
operations or the Owned Properties or the Former Properties (or any
of them), and, to the Company's knowledge, no such investigation is
pending or threatened. For purposes of this Agreement: (i)
"Environmental Law" means any present or future federal, state or
local law, statute, regulation or ordinance, binding
interpretation, binding policy, and any judicial or administrative
order or judgment thereunder and the common law, pertaining to
health, industrial hygiene, Hazardous Substances or the
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environment, including, but not limited to, each of the following,
as enacted as of the date hereof or as hereafter amended: the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Sections 9601-9657; the Resource Conservation
and
Recovery Act of 1976, 42 U.S.C. Sections 6901-6991; the Toxic Substance
Control Act, 15 U.S.C. Sections 2601-2629; the Water Pollution Control
Act (also known as the Clean Water Act), 33 U.S.C. Section 1251 et seq;
the Clean Air Act, 42 U.S.C. Section 7401 et seq; the Federal Water
Pollution Control Act, 42 U.S.C. Section 1251, et seq; the Federal Safe
Drinking Water Act, 42 U.S.C. Section 300(f), et seq; the Federal Solid
Waste Disposal Act, 42 U.S.C. Section 6901, et seq; the Atomic Energy
Act, 42 U.S.C. Section 2011, et seq; and the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq; and (ii) "Hazardous
Substances" means any material, waste or substance which is
included within the definition of "hazardous substances,"
"hazardous materials," "toxic substances," or "solid waste" in or
pursuant to any Environmental Law, or subject to regulation under
any Environmental Law.
(b) There are presently no underground storage tanks
("USTS") located on any of the Real Property nor, to the knowledge
of the Company, were there any USTS located on the Former Property,
nor were any such USTS removed at any time from the Real Property
or Former Property unless such removal was completed in accordance
with Environmental Law and the requirements of each Governmental
Agency having jurisdiction over such removal. None of the
properties contain asbestos or Urea Formaldehyde (or Urea
Formaldehyde insulation).
(c) The Company is not now under any duty to self-report
any condition existing on any of the Real Property or Former
Property which constitutes or may constitute a violation of any
Environmental Law to any Governmental Agency.
(d) None of the Real Property or Former Property are or
were used for the manufacture or storage of Hazardous Substances.
(e) All transportation or disposition, if any, of
Hazardous Substances from the Real Property or Former Property,
were performed in compliance with applicable Environmental Laws.
(f) The Company has no knowledge of any pending or
threatened claim against the Company arising out of the
transportation or disposition of Hazardous Substances.
Section 3.13 Permits. The Disclosure Schedule sets forth
a true and correct list and description of each material consent,
permit, approval, authorization, license and order of or from a
Governmental Entity that is held or has been received by the
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Company or any of its Subsidiaries (collectively, the "Company
Permits"). The Company Permits constitute all of the consents,
permits, approvals, authorizations, licenses and orders necessary
for the operations of the Company and its Subsidiaries and their
respective businesses, except for those which, if not obtained,
would not, individually or in the aggregate, have a Material
Adverse Effect. Each Company Permit is valid and in full force and
effect as of the date hereof. There has not been any attempt to
revoke or in any way limit or impair any of such Company Permits
nor, to the Company's knowledge, is there any reason for any such
Company Permit not to be renewed. The Company and each of its
Subsidiaries is in material compliance with, and is not in
violation of or in breach or default under, and has not received
any notice of any alleged violation of or material breach or
default under the terms of any Company Permit held or received by
it.
Section 3.14 Tax Matters. Except as disclosed in the
Disclosure Schedule: (a) The Company is the common parent of an
affiliated group of corporations (the "Consolidated Group") which
includes the Company and its domestic Subsidiaries and files
consolidated Federal income tax returns. Except as set forth in
the Disclosure Schedule, all United States Federal, state, local
and foreign tax returns, including information returns, reports and
forms ("Tax Returns") that were required to be filed by, or with
respect to, the Company and its Subsidiaries on or before the date
hereof have been filed on a timely basis in accordance with the
laws, regulations and administrative requirements of the
appropriate Governmental Entity. All such Tax Returns that have
been filed were, when filed, and continue to be, true, correct and
complete in all material respects.
(b) The Company recognized no income or gain on the
cancellation of the Company's 7% convertible subordinated
debentures due 1998 by the holders of such convertible subordinated
debentures in exchange for the Company's Common Stock offered
through the Company's August 15, 1995 public offering.
(c) The Disclosure Schedule lists all Tax Returns by or
with respect to the Company and its Subsidiaries that are in the
process of being audited by any Governmental Entity. The
Disclosure Schedule describes all adjustments to Tax Returns filed
by, or on behalf of, the Company and its Subsidiaries that have
been proposed by any representative of any Governmental Entity, and
the resulting Taxes (as defined below), if any, proposed to be
assessed. As used herein, the term "Taxes" means all foreign,
Federal, state, county, local and other taxes, levies, impositions,
deductions, charges and withholdings, including, without
limitation, income or franchise taxes or other taxes imposed on or
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with respect to net income or capital, gross receipts, profits,
sales, use, occupation, value added, ad valorem, transfer,
withholding, payroll, employment excise or property taxes, and
shall include any interest, penalties or additions thereto. All
deficiencies proposed (plus interest, penalties and additions to
Tax that were or are proposed to be assessed thereon, if any) with
respect to the Company and its Subsidiaries as a result of any
examinations have been paid or, as described in the Disclosure
Schedule, are being contested in good faith by appropriate
proceedings. Except as set forth in the Disclosure Schedule, there
are no outstanding waivers or extensions of any statute of
limitations relating to the payment of Taxes for which the Company
or its Subsidiaries may be liable and no Governmental Entity has
either formally or informally requested such a waiver or extension.
(d) All Taxes (whether or not shown on any return) which
were required to be paid by the Company and its Subsidiaries on or
before the date hereof have been timely paid, except such Taxes, if
any, as are set forth in the Disclosure Schedule, that are being
contested in good faith. All Taxes that the Company or its
Subsidiaries were required by law to withhold or collect have been
duly withheld or collected and, to the extent required, have been
paid to the appropriate Governmental Entity. There are no liens
with respect to Taxes upon any of the properties or assets, real or
personal, tangible or intangible, of the Company or its
Subsidiaries (except for Taxes not yet due). Any liability
existing on March 31, 1996 of the Company for Taxes not yet due and
payable has adequately been provided for on the Audited Financial
Statements.
(e) The Company has paid all consolidated Federal income
Taxes (whether or not shown on any return) which were required to
be paid by the Consolidated Group, except such Taxes, if any, as
are set forth in the Disclosure Schedule, that are being contested
in good faith.
(f) Except for (i) consolidated Federal income Tax
Returns filed by Company with respect to the Consolidated Group,
(ii) and as set forth on the Disclosure Schedule, the Company and
its Subsidiaries have never been included in a consolidated or
combined income Tax Return.
(g) No consent to the application of Section 341(f)(2)
of the Internal Revenue Code of 1986, as amended (the "Code") has
been filed with respect to any property or assets held or acquired
by the Company or its Subsidiaries.
(h) No property owned by the Company or its Subsidiaries
is property that the Company or its Subsidiaries are required to
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treat as being owned by another person pursuant to the provisions
of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately before the enactment of the Tax
Reform Act of 1986, or is "tax-exempt use property" within the
meaning of Section 168(h)(1) of the Code.
(i) The Company and its Subsidiaries: (i) have not
agreed to or been required to make any adjustment pursuant to
Section 481(a) of the Code; (ii) have no knowledge that the
Internal Revenue Service has proposed any such adjustment or change
in accounting method with respect to it; (iii) do not have an
application pending with any taxing authority requesting permission
for any change in accounting method; and (iv) have reported all
income and deductions using a permissible method of accounting
under Section 446 of the Code.
(j) The Company is not foreign person within the meaning
of Section 1445 of the Code.
(k) Except as disclosed on the Disclosure Schedule,
neither the Company nor its Subsidiaries has in effect any tax
elections for Federal income tax purposes under Section 108, 168,
338, 441, 471, 1017, 1033 or 4977 of the Code.
(l) There is no contract, agreement, plan or arrangement
covering any person that, individually or collectively, as a
consequence of the Merger, could give rise to the payment of any
amount that would not be deductible by the Company or its
Subsidiaries by reason of Section 162(m) or 280G of the Code or as
excessive or unreasonable compensation.
(m) The Company and its Subsidiaries are not a party
(other than as an investor) to any industrial development bond.
(n) Except as provided on the Disclosure Schedule,
during the previous two years the Company and any person related to
the Company (within the meaning of Section 1031(f)(3)) have not
engaged in any exchange under which the gain realized on such
exchange was not recognized due to Section 1031 of the Code.
(o) No written claim has ever been made by an authority
in a jurisdiction in which the Company or its Subsidiaries do not
file Tax Returns that it or they are or may be subject to taxation
by that jurisdiction.
(p) The Company and its Subsidiaries are not and have
not been a party to any tax sharing or similar agreement or
arrangement.
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(q) The Company and its Subsidiaries have not been a
party to a transaction, the income with respect to which was
deferred under Treasury Regulations issued under Section 1502 of
the Code, which income will be taken into account by the Company as
a result of the Merger.
(r) The Disclosure Schedule hereto sets forth, as of
March 31, 1996, the liabilities of the Company and its Subsidiaries
and the adjusted basis of the assets of the Company and its
Subsidiaries for Federal, state, local and foreign income tax
purposes, which has been determined by the Company in good faith
based on the best data available to the Company.
(s) The Company has provided PCN with copies of:
(i) all Tax Returns of or with respect to the Company and its
Subsidiaries for all periods with respect to which the statute of
limitations on assessment has not expired; (ii) any notices,
protests, or closing agreements relating to issues arising, or
potentially arising, in any audit, litigation or similar proceeding
with respect to the liability for Taxes of the Company or its
Subsidiaries; (iii) any elections or disclosure of any
controversial position filed by or on behalf of the Company or its
Subsidiaries with any taxing authority (whether or not filed with
any Tax Return); and (iv) any letter rulings, determination letters
or similar documents issued by any taxing authority with respect to
the Company or its Subsidiaries.
(t) The net operating loss carryovers and any credit
carryovers of the Company and each of its Subsidiaries as of June
30, 1995 for Federal income tax purposes and for state income tax
purposes in each state in which the Company or its Subsidiaries
file a state income tax return are set forth on the Disclosure
Schedule. Except to the extent attributable to income generated in
the ordinary course of business subsequent to June 30, 1995,
neither the Company nor its Subsidiaries has recognized income or
gain which has reduced the net operating loss carryovers or the
credit carryovers set forth on the Disclosure Schedule. Except as
described in the Disclosure Schedule, neither the Company nor any
Subsidiary has a net operating loss carryover or a credit carryover
which (i) in the case of a net operating loss carryover, is subject
to restriction under Section 382 of the Code (or any similar
provision under state, local, or foreign law), (ii) in the case of
any credit carryover, is subject to restriction under Section 383
of the Code (or any similar provision under state, local or foreign
law) or (iii) in the case of either a net operating loss or credit
carryover, arose in a separate return limitation year.
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(u) Except as set forth on the Disclosure Schedule, no
contributions have been made to capital of the Company or its
Subsidiaries during the five year period ending on the date hereof.
(v) Neither the Company or its Subsidiaries are liable
for the payment of any Taxes imposed on the Company or its
Subsidiaries under Treasury Regulation Section 1.1502-6 (or any
successor provision thereto or similar provision under state, local
or foreign law).
Section 3.15 Benefit Plans. (a) The Disclosure Schedule
contains a true and complete list of each pension, retirement,
savings, profit sharing, stock bonus, stock ownership, deferred
compensation, bonus, incentive compensation, stock option,
restricted stock, stock purchase, stock appreciation right, salary
continuation, severance or termination pay, medical, hospital,
dental, cafeteria, flexible spending, dependent care, life or other
insurance, disability, fringe benefit, vacation pay, sick pay,
holiday, unemployment, employee loan, educational assistance or
other employee benefit plan or program, agreement or arrangement,
whether written or oral, covering current or former employees,
directors or agents of the Company or its Subsidiaries and
maintained, sponsored or contributed to by the Company or any of
its Subsidiaries, or with respect to which the Company or any of
its Subsidiaries may otherwise have any liability (including, but
not limited to, any "employee benefit plans", as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (all the foregoing being herein called "Benefit
Plans")). With respect to the Benefit Plans, the Company has made
available to PCN a true and correct copy of (i) the three most
recent annual reports (Form 5500) filed with the IRS, (ii) all such
Benefits Plans, (iii) any summary plan description relating to any
Benefit Plan, (iv) each trust agreement, insurance contract,
annuity contract or other funding vehicle or investment contract,
relating to such Benefit Plans, (v) the most recent actuarial
report or valuation, (vi) the latest IRS determination letter and
any other IRS ruling relating to a Benefit Plan and (vii) the
premium expenses and claims experience for each Benefit Plan which
is a welfare benefit plan for the three most recent fiscal years
and for the period from the end of the most recent fiscal year to
the last day of the month preceding the date hereof. Each of the
Company and its Subsidiaries currently has no commitment or plans
to create any additional Benefit Plans.
(b) Except as disclosed on the Disclosure Schedule, each
Benefit Plan is and has been in compliance, in form and operation,
in all material respects, with all applicable laws and has been
administered in all material respects in accordance with its terms
and ERISA, the Code or any other applicable statute, order or
governmental rule or regulation.
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(c) Each of the Benefit Plans and related trusts that is
intended to be qualified under Section 401(a) and exempt from tax
under Section 501(a) of the Code has been determined by the IRS to
be qualified and exempt under the Code, and to the Company's
knowledge, nothing has occurred since such determination to cause
any of such Benefit Plans and related trusts not to qualify under
Section 401(a) or be exempt under Section 501(a) of the Code except
as disclosed on the Disclosure Schedule.
(d) Except as disclosed on the Disclosure Schedule, all
required returns, reports and descriptions with respect to the
Benefit Plans have been appropriately filed and distributed.
(e) With respect to the Benefit Plans, individually and
in the aggregate, except as disclosed on the Disclosure Schedule,
there has been no prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code, or any liability
for taxes or breach of fiduciary duty. There is no action, suit,
grievance, arbitration or other claim with respect to the
administration or investment of assets of the Benefit Plans (other
than routine claims for benefits made in the ordinary course of
plan administration) pending or threatened and which are likely to
give rise to any such action, suit, grievance, arbitration or other
claim.
(f) Neither the Company nor any of its Subsidiaries
currently maintains, sponsors, or contributes to (or is required to
contribute to) any "defined benefit plan" as defined in Section
3(35) of ERISA, any "multiemployer plan" as defined in Section
3(37) of ERISA or any "multiple employer plan" within the meaning
of Sections 4063 or 4064 of ERISA. With respect to any "employee
benefit plan" (as defined in Section 3(3) of ERISA), whether or not
terminated, currently or formerly maintained or contributed to by
the Company or its Subsidiaries, or any entity which was at any
time treated as a single employer, determined under Section 414(b),
(c), (m) or (o) of the Code, with the Company or its Subsidiaries,
no liability currently exists and no event has occurred and no
condition exists, which could subject the Company, its
Subsidiaries, the Surviving Corporation or any of its Subsidiaries
directly or indirectly (through an indemnification agreement or
otherwise) to any liability, including, without limitation, any
liability under Title IV of ERISA or Section 412, 4971, 4975 or
4980B of the Code.
(g) With respect to the Benefit Plans, individually and
in the aggregate, there are no funded benefit obligations for which
contributions are due and have not been made or for which
contributions have not been properly accrued as required by GAAP,
and there are no unfunded benefit obligations which have not been
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(i) accounted for by reserves (if required by GAAP) or (ii) if
required (and to the extent required, if any), properly disclosed
in accordance with GAAP, in the consolidated financial statements
of the Company.
(h) No Benefit Plan or other contract or agreement to
which the Company or any of its Subsidiaries is a party provides
life, health or other welfare benefits to retirees or other
terminated employees of the Company or its Subsidiaries or their
dependents, other than continuation coverage mandated by Section
4980B of the Code or any state law requiring similar continuation
coverage.
(i) The financial statements included in the Company SEC
Documents and the Audited Financial Statements reflect reserves
which are adequate to cover any reasonably expected liabilities for
unresolved or outstanding workers compensation claims or claims
under the Company's self-funded employee welfare plans.
Section 3.16 Employees; Labor Relations. (a) None of the
Company's or any of its Subsidiaries' employees is represented by
any labor union. To the Company's knowledge, there is no activity
involving any employees of the Company or any of its Subsidiaries
seeking to certify a collective bargaining unit or engaging in any
other organizational activity. There are no pending or, to the
Company's knowledge, threatened, lawsuits, administrative
proceedings, reviews, or investigations by any person or
Governmental Entity against the Company or any of its Subsidiaries
with respect to any violation or alleged violation of any
applicable Federal, state or local laws, rules or regulations: (i)
prohibiting discrimination on any basis, including, without
limitation, on the basis of race, color, religion, sex, disability,
national origin or age; or (ii) relating to employment or labor,
including, without limitation, those related to immigration, wages
or hours.
(b) The Disclosure Schedule contains a true and correct
schedule of: (i) the name, job title and current annual base salary
of all current officers and employees of the Company and its
Subsidiaries and the amount of any bonuses the Company or its
Subsidiaries have promised to pay such persons; and (ii) all
written employment, consulting, severance or compensation
agreements with each such persons, true and correct copies of which
have been previously delivered to PCN. Except for employees with
employment agreements or as set forth on the Disclosure Schedule or
as provided by the laws of the jurisdiction in which the employee
is employed, all employees of the Company and its subsidiaries are
at-will employees and the Company has taken no action which could
result in any such employees not being considered at-will
employees.
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(c) Except as set forth on the Disclosure Schedule, each
employee of the Company and its Subsidiaries is a party to a
confidentiality and non-disclosure agreement substantially in the
form of the agreement attached to the Disclosure Schedule (the
"Employee Confidentiality Agreement").
Section 3.17 Insurance. The Disclosure Schedule sets forth
a true, complete and accurate list and summary description of all
material insurance policies maintained by the Company or any of its
Subsidiaries which are currently in effect or with respect to which
there are unresolved pending claims, which description includes,
among other things, whether the policy is an "occurrence" or
"claims made" policy and whether there is any deductible or self-
insured retention with respect to such policy. All such current
policies are in full force and effect on the date hereof. Such
policies insure the Company and/or its Subsidiaries, as the case
may be, against such risks and are in such amounts as the Company
reasonably believes are necessary to conduct its business. The
Company and its Subsidiaries are not in default with respect to any
provisions or requirements of any such policy nor have any of them
failed to give notice or present any claim thereunder in due and
timely fashion, except for defaults or failures which, individually
or in the aggregate, do not have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries have received any
notice of cancellation or termination in respect of any of the
insurance policies listed on the Disclosure Schedule.
Section 3.18 Accounts Receivable. The Disclosure Schedule
sets forth an aged list of the accounts receivable of the Company
and its Subsidiaries at May 31, 1996. All such accounts
receivable, and all accounts receivable subsequently acquired by
the Company or any of its Subsidiaries, arose in the ordinary
course of business. The Company has no knowledge or any reason to
believe that, subject to the Company's allowance for doubtful
accounts and maintenance contract allowance as reflected in the
Unaudited Financial Statements and/or the Company's internal
accounting records (all of which have been made available to PCN
for review), such accounts receivable are not collectible at their
aggregate recorded accounts in the ordinary course of business.
Section 3.19 Contracts. (a) Except as set forth in the
Disclosure Schedule or any Company SEC Document, neither the
Company nor any of its Subsidiaries is party to or bound by any:
(i) lease agreement (whether as lessor or lessee)
relating to real or personal property requiring payments of
more than $10,000 on an annualized basis or which cannot be
canceled or terminated (or will not, by its terms, terminate)
within one year of the date hereof;
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(ii) license agreement, assignment or contract
(whether as licensor or licensee, assignor or assignee)
relating to trademarks, trade names, patents, or copyrights
(or applications therefor), software, unpatented designs or
processes, formulae, know-how or technical assistance, or
other proprietary rights, including, without limitation, the
Intellectual Property (other than standard licenses of the
Company's software products to in the ordinary course of
business);
(iii) employment, consulting agreement, severance
agreements, other agreement regarding employees, directors or
agents, including any (x) agreement with any officer or other
employee of the Company or any Subsidiary the benefits of
which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving the
Company of the nature contemplated by this Agreement or (y)
agreement or plan, any of the benefits of or rights under
which will be increased, or the vesting or payment of the
benefits of or rights under which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement, in each case other than agreements entered into at
the request of PCN;
(iv) non-competition, non-disclosure, secrecy or
confidentiality agreement or similar agreement, including,
without limitation, any such agreement with any employee of
the Company, other than the Employee Confidentiality Agreement
(as defined in Section 3.16), agreements entered into in the
ordinary course of business consistent with past practice,
agreements with the Company related specifically to the
transactions contemplated by this Agreement and agreement
under which the Company is the disclosing party;
(v) agreement or other arrangement pursuant to
which the Company acts as a remarketer or reseller of goods or
services for another person or entity;
(vi) agreement with any value-added reseller,
business partner, distributor, dealer, sales agent or
representative with respect to the sale or licensing of the
Company's products or services;
(vii) agreement with any manufacturer, supplier or
customer with respect to discounts or allowances or extended
payment terms;
(viii) any original equipment manufacture agreement;
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(ix) joint venture or partnership agreement with any
other person;
(x) agreement for the borrowing or lending of
money;
(xi) agreement guaranteeing, indemnifying or
otherwise becoming liable for the obligations or liabilities
of another;
(xii) agreement with any bank, financing company
or similar organization which acquires accounts receivable or
contracts for the sale of merchandise on credit;
(xiii) agreement granting to any person a lien,
security interest or mortgage on any asset of the Company or
any of its Subsidiaries, including, without limitation, any
factoring agreement or agreement for the assignment of
accounts receivable or inventory;
(xiv) agreement for the construction or modification
of any building or structure or for the incurrence of any
other capital expenditures in excess of $20,000;
(xv) advertising agreement;
(xvi) agreement which restricts the Company or any
of its Subsidiaries from conducting any type of business
anywhere in the world;
(xvii) long-term sale or private brand agreement;
(xviii) claims clearing agreement, electronic
data interchange agreement, clinical laboratory link or other
agreement which permits or relates to the linkage of any of
the Seller's software products with any other software product
or service;
(xix) source-code escrow agreements;
(xx) agreement entered into since January 1, 1994
regarding any acquisition or disposition of any assets by or
from the Company other than in the ordinary course of business
containing any currently operative provisions;
(xxi) currently operative agreement regarding
the settlement of any litigation; or
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(xxii) other material agreement affecting the
Company or its assets entered into out of the ordinary course
of business which are for an amount in excess of $15,000 on an
annualized basis or which have a remaining term of one year or
more.
Also set forth on the Disclosure Schedule is a list of
(i) the 50 end-users of the Company's medical software products who
or which generated the most revenues for the Company during the
nine (9) month period ended March 31, 1996; and (ii) the 50 end-
users of the Company's hospital system software products who or
which generated the most revenue for the Company during the same
period (collectively, "Material End-Users"). Correct and complete
copies of all such agreements, licenses, leases, contracts,
arrangements and other instruments and written amendments thereto
(or, where they are oral, true and complete written summaries
thereof) referred to in this Section 3.19(a) and shown or required
to be shown on the Disclosure Schedule or Company SEC Document
(together with each agreement with a Material End-User,
collectively referred to herein as the "Material Contracts"), have
been made available to PCN on or prior to the date hereof.
(b) Except as set forth in the Disclosure Schedule,
each of the Material Contracts is valid, in full force and effect
and enforceable in all material respects by the Company or its
Subsidiaries in accordance with its terms (subject to the effects
of insolvency and general creditors' rights laws and to equitable
principles of general application).
(c) Except as set forth in the Disclosure Schedule,
the Company or its Subsidiary, as applicable, has fulfilled, or has
taken all action reasonably necessary to have been taken to date to
enable it to fulfill when due, all of its material or monetary and
obligations under the Material Contracts. Except as indicated in
the Disclosure Schedule, there has not occurred any material or
monetary default by the Company or any of its Subsidiaries or any
event which, with the giving of notice or the lapse of time or
both, and/or the election of any person other than the Company or
such Subsidiary will become a material or monetary default, nor, to
the knowledge of the Company, has there occurred any material or
monetary default by others or any event which, with the lapse of
time and/or the election of the Company or its Subsidiary, will
become a material or monetary default under any of the Material
Contracts. Except as set forth in the Disclosure Schedule, neither
the Company nor any other party is in arrears in respect of the
performance or satisfaction of any material term or condition to be
performed or satisfied by it under any of the Material Contracts
and, to the best knowledge of the Company, no waiver or indulgence
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has been granted by any of the parties thereto.
(d) Except as set forth in the Disclosure Schedule,
the Merger will not result in a breach or default by the Company
under any of the Material Contracts and the consent of the other
parties thereto will not be required with respect thereto.
(e) Except as disclosed in the Disclosure Schedule
or with respect to the Company's agreements with the Material End-
Users, all of the end-user license agreements, end-user maintenance
and enhancement agreements and end-user support agreements between
the Company and any end-user or licensor of the Company's products
or services, including, without limitation, computer hardware,
medical practice management software products and hospital
information system software products, are substantially in the form
of the agreements attached to the Disclosure Schedule and contain
no material variation therefrom.
Section 3.20 Related Party Transactions. Except as set
forth in the Disclosure Schedule, neither the Company nor any of
its Subsidiaries has entered into any transaction which is still
operative with (i) an officer or director of the Company or of any
of its Subsidiaries, (ii) a record or beneficial owner of five
percent or more of the voting securities of the Company or (iii) an
affiliate of any such officer, director or beneficial owner other
than payment of compensation for services rendered to the Company
or its Subsidiaries.
Section 3.21 Vote Required; Voting Agreement. The only vote
of the holders of any class or series of the Company's capital
stock necessary to adopt this Agreement is the Company Vote.
Pursuant to certain Voting Agreements (each a "Voting Agreement"
and collectively, the "Voting Agreements") dated as of the date
hereof among certain beneficial owners of Common Stock (the
"Majority Holders") and PCN, the Majority Holders have agreed to
vote in favor of adopting this Agreement votes that are presently
sufficient, and will be sufficient at the time of the meeting to be
held by the Company regarding the adoption of this Agreement (the
"Company Meeting"), to approve the adoption of this Agreement by
the Company Vote. Each of the Majority Holders is: (i) the
beneficial owner of the number of shares of Common Stock shown as
being beneficially owned by such Majority Holder in the Voting
Agreement and (ii) has the right to vote such shares of Common
Stock at the Company Meeting.
Section 3.22 Customers and Suppliers. The Disclosure
Schedule contains: (a) the number of currently active end-users who
or which, as the case may be, licensed any product from the Company
or any of its Subsidiaries (categorized by medical software
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products, hardware information system software products, networking
products and hardware products); (b) the number of current end-
users who or which, as the case may be, receives any services,
including without limitation, any maintenance or support services,
from the Company or any of its Subsidiaries (collectively,
"Customers") (categorized by medical software products, hardware
information system software products, networking products and
hardware products); and (c) a good faith estimate of the number of
physician Customers who utilize the Company's medical software
products. Except as set forth on the Disclosure Schedule, neither
the Company nor its Subsidiaries has received any notifications
(whether written or verbal) that: (i) any Material End-Users or
suppliers; or (ii) other Customers who or which account for 10% or
more in the aggregate of the Company's current annualized revenues,
will or may cease to continue such relationship with the Company,
or will or may substantially reduce the extent of such
relationship, at any time prior to or after the Closing Date except
normal turnover of the customer base consistent with past
experience. Neither the Company nor its Subsidiaries has knowledge
of any other material modification or change in the Company's or
any of its Subsidiaries' business relationship with such Material
End-Users or suppliers and neither the Company nor any of its
Subsidiaries is engaged in any material dispute with any Material
End-User or suppliers. Except as set forth on the Disclosure
Schedule, neither the Company nor its Subsidiaries is obligated to
provide any maintenance or support services to any person or entity
free of charge.
Section 3.23 Bank Accounts. Set forth on the Disclosure
Schedule is a true and complete list of: (i) the name of each bank
or other financial institutions in which the Company or its
Subsidiaries has an account or safe deposit box; (ii) the type and
number of each such account or safe deposit box; and (iii) the
names of all persons authorized to draw thereon or have access
thereto.
Section 3.24 Accounting Controls. To the best knowledge of
the Company, the Company has not made, and does not have, any
unlawful payments problems of the type that could reasonably be
expected to have a Material Adverse Effect.
Section 3.25 Finders and Investment Bankers. Except as set
forth on the Disclosure Schedule, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger or any other transaction
contemplated hereby on account of any actions taken by the Company,
any of its Subsidiaries or any of its shareholders.
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Section 3.26 Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion in: (i)
the S-4 will, at the time the S-4 is filed with the SEC and at the
time it becomes effective under the Securities Act or at the
Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and (ii)
the Proxy Statement will, at the date mailed to the Company's
stockholders and at the respective times of any meetings of
stockholders to be held in connection with the Merger or at the
Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy
Statement, insofar as it relates to the Company or Subsidiaries of
Company or other information supplied by the Company for inclusion
therein, will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations
thereunder, and the S-4, insofar as it relates to the Company or
its Subsidiaries or other information supplied by the Company for
inclusion therein, will comply as to form in all material respects
with the provisions of the Securities Act and the rules and
regulations thereunder.
Section 3.27 Disclosure. No representation or warranty by
the Company in this Agreement and no statement contained in any
document or other writing furnished or to be furnished to PCN or
its representatives pursuant to the provisions hereof contains or
will contain any untrue statement of material fact or omits or will
omit to state any material fact necessary in order to make the
statements made herein or therein not misleading. All copies of
Material Contracts and all other documents delivered to PCN or its
representatives pursuant hereto are true, complete and accurate in
all material respects. There has been no event or transaction
(other than the transactions contemplated hereby and the matters
related thereto) which has occurred or information which has come
to the attention of the Company (other than events or information
relating to economic conditions of general public knowledge) which
could reasonably be expected to have a Material Adverse Effect or
which could reasonably be expected to prevent or impair the ability
of the Surviving Corporation, after the Effective Time, to carry on
the business of the Company and its Subsidiaries in the same manner
as it is presently being conducted.
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ARTICLE IV
COVENANTS OF THE COMPANY
Section 4.1 Conduct of Business of the Company Pending the
Merger. During the period from the date of this Agreement to the
Effective Time, the Company agrees as to itself and its
Subsidiaries that (except as contemplated or expressly permitted by
this Agreement or to the extent that PCN shall otherwise agree in
writing):
(a) The businesses of the Company and its Subsidiaries
shall be conducted only in the ordinary course of business and in
a manner consistent with past practice.
(b) The Company shall use its reasonable commercial
efforts to: (i) preserve, and shall cause its Subsidiaries to
preserve, intact the business organization of itself and its
Subsidiaries; (ii) keep available the services of its present
officers, employees and consultants; and (iii) preserve its present
relationships with Customers, suppliers and other persons with
which it has a significant business relationship.
(c) The Company shall not, and shall not permit any of
its Subsidiaries to, amend or propose to amend its Articles of
Incorporation or By-Laws or equivalent organizational documents.
(d) The Company shall not, nor shall it permit any of
its Subsidiaries to, issue, deliver, sell or pledge, or authorize
or propose to issue, deliver, sell or pledge, any shares of its
capital stock of any class, or any securities convertible into, or
any rights, warrants or options to acquire any such shares, or
convertible securities or other ownership interest, except, in each
case, as required by the terms of the Options.
(e) The Company shall not, nor shall it permit any of
its Subsidiaries to: (i) declare, propose to declare, set aside,
make or pay any dividend or other distribution, payable in cash,
stock, property or otherwise, with respect to any of its capital
stock; or (ii) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock.
(f) The Company shall not, nor shall it permit any of
its Subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest
in or a substantial portion of the assets of, or by any other
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manner, any business or any corporation, partnership, association
or other business organization or division thereof or otherwise
acquire or agree to acquire any material amount of assets other
than in the ordinary course of business.
(g) The Company shall not, nor shall it permit any of
its Subsidiaries to, sell, lease, encumber or otherwise dispose of,
or agree to sell, lease (whether such lease is an operating or
capital lease), encumber or otherwise dispose of any portion of its
assets, other than in the ordinary course consistent with past
practice.
(h) The Company shall not, nor shall it permit any of
its Subsidiaries to, incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt
securities or warrants or rights to acquire any debt securities of
the Company or any of its Subsidiaries or guarantee any debt
securities of others or enter into any lease (whether such lease is
an operating or capital lease) other than in each case in the
ordinary course of business under the Company's existing credit
facilities.
(i) Neither the Company nor any of its Subsidiaries
shall: (i) except to the extent required by applicable law or as
required or permitted by the terms of any currently effective
employment agreement, increase or agree to increase the
compensation (whether cash or non-cash) payable or to become
payable to their officers or employees, except for increases in
salary or wages of employees, other than officers who are currently
paid annual compensation in excess of $50,000, of the Company or
any of its Subsidiaries (whether in such capacity or otherwise) in
accordance with past practices and not to exceed 5% on an annual
basis; (ii) increase or agree to increase the compensation payable
or to become payable to any executive officer of the Company or any
of its Subsidiaries who currently receives annual compensation in
excess of $50,000; (iii) grant any severance or termination pay to,
or enter into any employment, consulting or severance agreement
with any executive officer, director, employee or agent of the
Company or any of its Subsidiaries; (iv) enter into any collective
bargaining agreement; or (v) establish, adopt, enter into or amend
any Benefit Plan or establish or adopt any other employee benefit
plan for the benefit of any directors, officers or employees.
(j) Neither the Company nor any of its Subsidiaries
shall authorize, recommend, propose or announce an intention to
adopt a plan of complete or partial liquidation or dissolution.
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(k) Neither the Company nor any of its Subsidiaries
shall enter into any settlement agreement with respect to any
grievances, litigation, administrative charges, or any other
litigation pending on the date hereof or arising hereafter which
are not either consistent with past practice or which will have a
Material Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries
shall terminate or amend or modify in any material respect any of
the Material Contracts.
(m) The Company will promptly notify PCN in the event
that it fails to operate its business in accordance with this
Section 4.1.
Section 4.2 Acquisition Proposals. The Company and its
Subsidiaries will not, nor will they authorize or permit any of
their officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative
retained by the Company or any of its Subsidiaries to: (i) initiate
contact with, solicit or otherwise encourage any inquiries or the
making of any proposal which constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal (as hereinafter
defined); or (ii) engage in negotiations concerning, provide any
nonpublic information to, or have any discussions with, any person
relating to any Acquisition Proposal. The Company and its
Subsidiaries will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing. The
Company shall immediately notify PCN of any negotiations, requests
for nonpublic information or discussions with respect to an
Acquisition Proposal and will keep PCN fully informed of the status
and terms of any such Acquisition Proposal, indication or request.
As used in this Agreement, "Acquisition Proposal" means any
proposal or offer for a merger, consolidation, share exchange,
recapitalization or other business combination involving the
Company or any of its Subsidiaries or any proposal or offer to
acquire an equity interest in, all or (other than in the ordinary
course of business consistent with past practice) any portion of
the assets of the Company (including any capital stock or assets of
any of its Subsidiaries) other than the transactions contemplated
by this Agreement.
Section 4.3 Tax Returns. The Company and each of its
Subsidiaries will file all Tax Returns required to be filed by any
of them (including estimated Tax Returns) and will pay (or the
Company will pay on its behalf) all taxes due prior to the
Effective Time.
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Section 4.4 Financial Statements. As soon as available,
the Company shall deliver to PCN copies of unaudited financial
statements for each fiscal quarter and each month ending after the
date hereof.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Preparation of S-4 and Proxy Statement. PCN and
the Company shall as promptly as practicable prepare and file with
the SEC the Proxy Statement and PCN shall prepare and file with the
SEC the S-4, in which the Proxy Statement will be included as a
prospectus. PCN shall use all reasonable efforts, and the Company
shall cooperate with PCN, to have the S-4 declared effective by the
SEC as promptly as practicable and to keep the S-4 effective as
long as is necessary to consummate the Merger. PCN shall, as
promptly as practicable, provide copies of any written comments
received from the SEC with respect to the S-4 to the Company and
advise the Company of any verbal comments with respect to the S-4
received from the SEC. The Company shall use all reasonable
efforts to cause the Proxy Statement to be mailed to its
stockholders at the earliest practicable date. PCN shall use all
reasonable efforts to obtain all necessary state securities laws or
"blue sky" permits, approvals and registrations in connection with
the issuance of PCN Stock pursuant to this Agreement. If at any
time prior to the Effective Time, any event with respect to PCN or
any of its Subsidiaries or with respect to other information
supplied by PCN or for inclusion in the Proxy Statement or S-4
shall occur which is required to be described in an amendment of,
or a supplement to, the Proxy Statement or the S-4, such event
shall be so described, and such amendment or supplement shall be
promptly filed with the SEC and, as required by law, disseminated
to the stockholders of the Company. If at any time prior to the
Effective Time, any event with respect to the Company or any of its
Subsidiaries or with respect to other information supplied by the
Company for inclusion in the Proxy Statement or S-4 shall occur
which is required to be described in an amendment of, or a
supplement to, the Proxy Statement or the S-4, such event shall be
so described, and such amendment or supplement shall be promptly
filed with the SEC and, as required by law, disseminated to the
stockholders of the Company. PCN shall advise the Company,
promptly after it receives notice thereof, of the time when the S-4
has become effective or any supplement or amendment thereto has
been filed, the issuance of any stop order, the denial or
suspension of the qualification of the PCN Stock issuable in
connection with the Merger for offering or sale in any jurisdiction
or any request by the SEC for any amendment or supplement to the S-
4 or comments thereon and responses thereto or requests by the SEC
for additional information.
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Section 5.2 Letters of Accountants. The Company shall use
all reasonable efforts to cause to be delivered to PCN a letter of
BDO Seidman & Company, the Company's independent auditors (the
"Company Auditors"), dated a date within two Business Days before
the date on which the S-4 shall become effective and addressed to
PCN, of the kind contemplated by the Statement of Auditing
Standards with respect to Letters to Underwriters promulgated by
the American Institute of Certified Public Accountants (the "AICPA
Statement") in form and substance reasonably acceptable to PCN and
customary in scope and substance for letters delivered by
independent public accountants in connection with registration
statements similar to the S-4.
Section 5.3 Access to Information. From the date hereof to
the Effective Time, PCN and the Company shall each (and shall cause
each of their respective Subsidiaries to) afford to the other, and
the officers, employees, accountants, counsel and other
representatives of the other, access at all reasonable times to its
officers, employees, agents, properties, offices, plants, other
facilities and to all books and records (including tax returns),
and shall furnish to the other party all financial, operating and
other data and information as the other party, through its
officers, employees or agents, may reasonably request; provided,
however, that any such access and all such requests shall be
reasonably related to the transactions contemplated hereby and
shall not interfere unnecessarily with normal operations. Each of
the Company and PCN agrees that it will not, and will cause its
respective representatives not to, use any information obtained
pursuant to this Section 5.3 for any purpose unrelated to the
consummation of the transaction contemplated by this Agreement.
The Confidentiality Agreement between PCN and the Company (the
"Confidentiality Agreement") shall apply with respect to
information furnished by the Company or its Subsidiaries and the
Company's representatives thereunder or hereunder and any other
activities contemplated thereby and to information furnished by PCN
or its Subsidiaries and PCN's representatives thereunder or
hereunder and any other activities contemplated thereby. The
parties agree that this Agreement and the transactions contemplated
hereby shall not constitute a violation of the Confidentiality
Agreement.
Section 5.4 Meetings of Stockholders. The Company shall
promptly take all action necessary in accordance with the WBCA and
its articles of incorporation and by-laws to convene a meeting of
its stockholders for the purpose of approving this Agreement and
the transactions contemplated hereby. The Company will, through
its Boards of Directors, recommend to its stockholders approval of
such matters and shall use its reasonable best efforts to obtain
approval and adoption of this Agreement and the transactions
contemplated hereby by its stockholders.
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Section 5.5 Legal Conditions to Merger. Each of the Company
and PCN will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it
with respect to the Merger (including furnishing all information
required in connection with approvals of or filings with any
Governmental Entity) and will promptly cooperate with and furnish
information to each other in connection with any such requirements
imposed upon any of them or any of their Subsidiaries in connection
with the Merger.
Section 5.6 NASDAQ Listing. Prior to the Effective Time, PCN
shall use all reasonable efforts to permit it to issue the number
of shares of PCN Stock required to be issued pursuant to this
Agreement, including, without limitation, filing for listing of
such shares on the NASDAQ Stock Market prior to the Closing Date.
Section 5.7 Stock Options. (a) The Company shall use its
reasonable best efforts to cause all options to purchase Common
Stock, whether or not vested ("Options"), whose purchase price per
share is less than or equal to the Merger Consideration per share
of Common Stock ("In-the-Money Options"), to be exercised or
canceled prior to the Effective Time. To the extent that the
Company has an obligation to do so or determines to be in the best
interest of the Company, promptly following June 30, 1996, the
Company shall grant those Options set forth in the Disclosure
Schedule which are not outstanding as of the date hereof. All such
Options shall provide that, unless exercised prior thereto, such
Options shall terminate on the Trigger Date.
(b) After the Effective Time, each Option then
outstanding shall automatically be deemed to constitute an option
or right to acquire, on the same terms and conditions as were
applicable under such Option, the amount of Cash Consideration and
the number of shares of PCN Stock as such Option would have entitle
the holder thereof to receive if such Option had been exercised in
full immediately prior to the Effective Time; provided however,
that the number of shares of PCN Stock that may be purchased upon
exercise of such Option shall not include any fractional share and,
upon exercise of such Option, a cash payment shall be made for any
fractional share based upon the closing price of a share of PCN
Common Stock on the NASDAQ Stock Market on the trading day
immediately preceding the date of exercise.
Section 5.8 Advice of Changes; Governmental Filings. Each
party shall confer on a regular and frequent basis with the other,
report on operational matters and promptly advise the other orally
and in writing of: (i) any event which occurs after the date hereof
that would under this Agreement have been required to be disclosed
on the date of the execution and delivery of this Agreement had
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such event occurred on or prior to the date hereof or would have
resulted in a breach of any representation, warranty covenant or
agreement contained herein; and (ii) any change or event having, or
which, insofar as can reasonably be foreseen, could have, a
Material Adverse Effect.
Section 5.9 No Action. Except as contemplated by this
Agreement, no party hereto will, nor will either such party permit
any of its Subsidiaries to, take or agree or commit to take any
action that is reasonably likely to make any of its representations
or warranties hereunder inaccurate in any material respect at the
date made (to the extent so limited) or as of the Effective Time.
Section 5.10 Legal Conditions to Merger. Each of the
Company and PCN will take all reasonable actions necessary to
comply promptly with all legal requirements which may be imposed on
itself with respect to the Merger (including furnishing all
information required in connection with approvals of or filings
with any Governmental Entity) and will promptly cooperate with and
furnish information to each other in connection with any such
requirements imposed upon any of them or any of their Subsidiaries
in connection with the Merger.
Section 5.11 Tax Opinion. The Company shall cause its
counsel to issue to the Company an opinion, dated prior to the date
on which the S-4 is first mailed to shareholders of the Company, to
the effect that (so long as the All Cash Option is not exercised):
(i) the Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code;
(ii) each of PCN, Merger Sub and the Company will be a party to the
reorganization within the meaning of Section 368(b) of the Code;
(iii) no gain or loss will be recognized by PCN, Merger Sub or the
Company as a result of the Merger; (iv) with respect to the shares
of PCN Stock to be issued in connection with the Merger, no gain or
loss will be recognized by shareholders of the Company; and (v)
such other matters related to the tax treatment of the Merger
Consideration as are customary in connection with a transaction
similar to the Merger in which a Form S-4 joint proxy/prospectus is
utilized, including, without limitation, matters relating to stock
basis, holding periods, treatment of cash received for fractional
shares and the treatment of the Cash Consideration.
Section 5.12 Description of Owned Property. The Company
shall deliver to PCN, as soon practicable but in no event later
than three days prior to the Effective Time, a true and complete
description of the Owned Property.
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Section 5.13 Additional Agreements; Reasonable Efforts.
Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all reasonable business efforts to
take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without
limitation, using its reasonable best efforts to obtain all
necessary waivers, consents and approvals and to cause the
conditions set forth in Article VI to be satisfied as promptly as
practicable. Without limiting the foregoing, the parties hereto
will execute and deliver, or cause to be executed and delivered,
all such documents and instruments, in addition to those
specifically required by the provisions of this Agreement, in form
and substance reasonably satisfactory to the parties hereto, as may
be reasonably necessary or desirable to carry out and implement the
provisions of this Agreement.
ARTICLE VI
CONDITIONS OF MERGER
Section 6.1 Conditions to Obligation of Each Party to
Effect the Merger. The respective obligations of each party to
effect the Merger shall be subject to the fulfillment at or prior
to the Effective Time of the following conditions:
(a) Shareholder Vote. This Agreement shall have been
adopted by the Company Vote.
(b) Other Approvals. Other than the filing provided for
by Section 1.2, all authorizations, consents, orders or approvals
of, or declarations or filings with, or expirations of waiting
periods imposed by, any Governmental Entity required in connection
with the consummation of the Merger, the failure to obtain which
has a Material Adverse Effect on PCN and its Subsidiaries, taken as
a whole (assuming the Merger had taken place), shall have been
filed, occurred or been obtained. PCN shall have received all
state securities laws or "blue sky" permits and authorizations
necessary to issue PCN Stock pursuant to the Merger.
(c) S-4. The S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
(d) No Injunction. No temporary restraining order,
preliminary or permanent injunction or other order issued by any
court of competent jurisdiction prohibiting the consummation of the
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Merger shall be in effect; provided, however, that prior to
invoking this condition, each party shall use all reasonable
efforts to have any such decree, ruling, injunction or order
vacated, except as otherwise contemplated by this Agreement.
(e) Violation of Law. No statue, rule or regulation
shall have been adopted which will result in the consummation of
the Merger violating any applicable law.
Section 6.2 Additional Conditions to Obligations of PCN and
Merger Sub. The obligations of PCN and Merger Sub to effect the
Merger are also subject to the following conditions (any one or
more of which may be waived by PCN, but only in a writing signed by
PCN):
(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this
Agreement or in any document or instrument delivered by the Company
in connection herewith, shall be true and correct, individually and
in the aggregate, in all material respects (except that any
specific representation or warranty that is qualified as to
materiality must be true as written) on and as of the Closing Date,
except for changes contemplated by this Agreement, with the same
force and effect as if made on and as of the Closing Date, except
that any such representations or warranties made as of a specified
date shall have been true on and as of such date.
(b) Agreements and Covenants. The Company shall have
performed or complied in all material respects with all of its
agreements and covenants contained in this Agreement to be
performed or complied with by it at or prior to the Closing Date
(except that any specific agreement or covenant that is qualified
as to materiality must have been performed as written).
(c) No Material Adverse Change. There shall have been
no change in the business, results of operations, properties
(including intangible properties), financial condition, assets or
liabilities of the Company since the date of this Agreement which,
individually or in the aggregate, has a Material Adverse Effect.
(d) Third Party Consents. The Company shall have
obtained, and PCN shall have received copies of, all of the
approvals, waivers, consents and releases of third parties listed
on the Disclosure Schedule under the caption "Required Consents and
Related Approvals," none of which shall have been withdrawn,
revoked or modified as of the Closing Date.
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(e) Appraisal Rights. Shareholders holding no more than
5% of any class of the outstanding the Common Stock shall have
demanded their dissenters rights under the WBCA.
(f) Options. All In-the-Money Options shall have been
exercised or canceled.
(g) Opinion of Counsel. PCN shall have received an
opinion of outside counsel to the Company in form and substance
reasonably satisfactory to PCN.
(h) Compliance Certificate. The Company shall have
delivered to PCN a certificate, dated the Closing Date, signed by
the President of the Company, certifying as to the fulfillment of
the conditions specified in paragraphs (a), (b) and (c) of this
Section 6.2.
(i) Proceedings. All corporate proceedings taken by the
Company in connection with the transactions contemplated hereby and
all documents incident thereto shall be reasonably satisfactory in
all material respects to PCN and PCN's counsel, and PCN and PCN's
counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably
request.
Section 6.3 Additional Conditions to Obligation of the
Company. The obligation of the Company to effect the Merger are
also subject to the following conditions (any one or more of which
may be waived by the Company, but only in a writing signed by the
Company):
(a) Representations and Warranties. Each of the
representations and warranties of PCN and Merger Sub contained in
this Agreement or in any document or instrument delivered by PCN or
Merger Sub in connection herewith, shall be true and correct,
individually and in the aggregate, in all material respects (except
that any specific representation or warranty that is qualified as
to materiality must be true as written) on and as of the Closing
Date, except for changes contemplated by this Agreement, with the
same force and effect as if made on and as of the Closing, except
that any such representations or warranties made as of a specified
date shall have been true on and as of such date.
(b) Agreements and Covenants. PCN and the Merger Sub
shall have performed or complied in all material respects with all
of its agreements and covenants contained in this Agreement to be
performed or complied with by it at or prior to the Closing Date
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(except that any specific agreement or covenant that is qualified
as to materiality must have been performed as written).
(c) No Material Adverse Change. There shall have been no
change in the business, results of operations, properties
(including intangible properties), financial condition, assets or
liabilities of PCN since the date of this Agreement which has a
Material Adverse Effect.
(d) Opinion of Counsel. The Company shall have received
an opinion of counsel to PCN in form and substance reasonably
satisfactory to the Company.
(e) Compliance Certificate. PCN shall have delivered to
the Company a certificate, dated the Closing Date, signed by the
Chairman, President or any Vice President of PCN, certifying as to
the fulfillment of the conditions specified in paragraphs (a), (b)
and (c) of this Section 6.3.
(f) Proceedings. All corporate proceedings taken by PCN
in connection with the transactions contemplated hereby and all
documents incident thereto shall be reasonably satisfactory in all
material respects to the Company and the Company's counsel, and the
Company and the Company's counsel shall have received all such
counterpart originals or certified or other copies of such
documents as they may reasonably request.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated
at any time prior to the Effective Time, whether before or after
adoption of this Agreement by the shareholders of the Company:
(a) By mutual consent of the Board of Directors of PCN
and the Board of Directors of the Company; or
(b) By either PCN or the Company, if the Merger shall
not have been consummated by October 15, 1996 (the "Termination
Date") (provided that the right to terminate this Agreement under
this Section 7.1(b) shall not be available to any party whose
failure to fulfill any obligation hereunder has been the cause of
or resulted in the failure of the Merger to occur on or before such
date); or
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(c) By either PCN or the Company if there has been a
material breach of any representation, warranty, covenant or
agreement on the part of the other party set forth in this
Agreement, which breach has not been cured within fifteen (15)
Business Days following receipt by the breaching party of notice
specifying such breach in reasonable detail; or
(d) By either PCN or the Company if a court of competent
jurisdiction or governmental regulatory or administrative agency or
commission having proper jurisdiction and authority thereof shall
have issued an order, decree or ruling (which order, decree or
ruling the parties hereto shall use their best efforts to lift)
prohibiting the transactions contemplated by this Agreement and
such order, decree or ruling shall have become final and non-a-
ppealable; or
(e) By PCN or the Company if the Company Vote shall not
have been obtained by reason of the failure to obtain the required
vote at a duly held meeting of shareholders or at any adjournment
thereof; or
(f) By PCN, if any Majority Holder breaches any of the
material terms of a Voting Agreement or if any Voting Agreement is
not in full force and effect and enforceable in all material
respects against the Majority Holder executing such agreement.
Section 7.2 Effect of Termination. (a) Except as otherwise
set forth in this Section 7.2, in the event of termination of this
Agreement as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability or further
obligation on the part of any party hereto.
(b) In the event of termination of this Agreement as
pursuant to Section 7.1(b) or (c) due to (a "Termination Event"):
(i) failure of the conditions set forth in 6.2(b) or 6.3(b), as the
case may be, to occur; or (ii) if any representation or warranty of
the Company or of PCN and Merger Sub, as the case may be, was
materially inaccurate at the time that such representation or
warranty was given, the non-terminating party shall pay to the
terminating party an amount equal to all damages, losses, costs,
expenses and liabilities, including, without limitation, reasonable
fees and disbursements of counsel, financing commitment and
financial advisory fees (collectively, "Termination Losses"),
incurred by the non-terminating party in connection with the
transaction contemplated in this Agreement and any and all other
damages, losses, costs, expenses and liabilities incurred by the
terminating party as a result of such Termination Event. In the
event of the termination of this Agreement by a party (the
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"Terminating Party") as a result of a Termination Event, the
foregoing shall not be deemed in any way limit or relieve the
Terminating Party of any liability to the non-terminating party
hereto on account of a breach by the Terminating Party of any of
its representations, warranties, covenants or agreements contained
herein.
(c) Except as provided in paragraph (b) of this Section
7.2, whether or not the Merger is consummated, all costs and
expenses incurred in connection with the Merger, this Agreement and
the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
Section 7.3 Amendment. This Agreement may be amended by
the parties hereto (in the case of PCN, Merger Sub or the Company,
by action taken by or on behalf of their respective Boards of
Directors) at any time prior to the Effective Time; provided,
however, that, after adoption of this Agreement by the shareholders
of the Company, no amendment may be made which would under
applicable law require further approval by such shareholders unless
such further approval is duly obtained. This Agreement may not be
amended except by an instrument in writing signed on behalf of the
parties hereto.
Section 7.4 Extension; Waiver. At any time prior to the
Effective Time, PCN, Merger Sub or the Company may, by action taken
or authorized by their respective Boards of Directors, to the
extent legally allowed: (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party
to be bound thereby.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations, Warranties and
Agreements. (a) None of the representations, warranties,
covenants or agreements contained in this Agreement or in any
certificate, instrument or agreement delivered in connection
herewith survive the Closing, except for Sections 1.4, 1.5, 1.6,
1.7, 1.8, 1.9, 1.10 and 1.11 hereof.
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Section 8.2 Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be
deemed to have been duly given or made upon receipt, if made or
given by hand delivery, telecopier or facsimile transmission, or
upon receipt by registered or certified mail (postage prepaid,
return receipt requested) at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to PCN or Merger Sub:
Physician Computer Network, Inc.
1200 The American Road
Morris Plains, New Jersey 07950
Attention: President
(201) 490-3100 (telephone)
(201) 490-3103 (telecopy)
with copies to:
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
Attention: Jonathan Klein, Esq.
212-626-0879 (Telephone)
212-626-0799 (Telecopier)
(b) if to the Company:
Wismer-Martin, Inc.
N. 12828 Newport Highway
Mead, Washington 99021
Attention: President
(509) 466-0396 (Telephone)
(509) 467-4538 (Telecopier)
with copies to:
Paine, Hamblen, Coffin, Brooke & Miller
717 West Sprague Avenue, Suite 1200
Spokane, Washington 99204
Attention: Lawrence R. Small, Esq.
(509) 455-0396 (Telephone)
(509) 838-0007 (Telecopier)
Section 8.3 Interpretation; Certain Definitions. When a
reference is made in this agreement to Sections, such reference
shall be to a Section of this Agreement unless otherwise indicated.
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The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation
of this Agreement. Whenever the word "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". As used herein, the
term "Material Adverse Effect" means with respect to PCN or the
Company, as the case may be, any effect on the business of PCN or
the Company, as the case may be, or any of its Subsidiaries that is
or that a reasonable person would believe will be materially
adverse to the business, results of operations, properties
(including intangible properties), financial condition, assets or
liabilities of PCN or the Company, as the case may be, and its
Subsidiaries, taken as a whole. The phrase "made available" in
this Agreement shall mean that the information referred to has been
made available if requested by the party to whom such information
is to be made available.
Section 8.4 Counterparts. This Agreement may be executed
in two or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when two or more
counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not
sign the same counterpart.
Section 8.5 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement (including the documents and
the instruments referred to herein) constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the
subject matter hereof. This Agreement is not intended to confer
upon any person other than the parties hereto any rights or
remedies hereunder. The parties hereby acknowledge that no party
shall have the right to acquire or shall be deemed to have acquired
shares of common stock of the other party pursuant to the Merger
until consummation thereof.
Section 8.6 Governing Law. This Agreement shall be
governed by, and interpreted under, the laws of the State of
Washington applicable to contracts made and to be performed therein
without regard to conflicts of law principles. The consummation
and effectiveness of the Merger shall be governed by, and construed
in accordance with, the WBCA.
Section 8.7 No Remedy in Certain Circumstances. Each party
agrees that, should any court or other competent authority hold any
provision of this Agreement or part hereof to be null, void or
unenforceable, or order any party to take any action inconsistent
herewith or not to take an action consistent herewith or required
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hereby, the validity, legality and enforceability of the remaining
provisions and obligations contained or set forth herein shall not
in any way be affected or impaired thereby, unless the foregoing
inconsistent action or the failure to take an action makes the
Agreement impossible to perform in which case this Agreement shall
terminate pursuant to Article VII hereof. Except as otherwise
expressly contemplated by this Agreement, to the extent that a
party hereto took an action inconsistent herewith or failed to take
action consistent herewith or required hereby pursuant to an order
or judgment of a court or other competent authority, such party
shall incur no liability or obligation unless such party did not in
good faith seek to resist or object to the imposition or entering
of such order or judgment.
Section 8.8 Publicity. The parties will consult with each
other and will mutually agree upon any press release or public
announcement pertaining to the Merger and shall not issue any such
press release or make any such public announcement prior to such
consultation and agreement, except as may be required by applicable
law, in which case the party proposing to issue such press release
or make such public announcement shall use reasonable efforts to
consult in good faith with the other party before issuing any such
press release or making any such public announcement.
Section 8.9 Assignment. Except as expressly provided in
this Agreement, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their
respective successors and assigns.
Section 8.10 Specific Performance. The parties acknowledge
that money damages are not an adequate remedy for violations of
this Agreement and that any party may, in its sole discretion,
apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and
proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party
waives any objection to the imposition of such relief.
Section 8.11 Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not
alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be executed on the date first above
written.
PHYSICIAN COMPUTER NETWORK, INC.
By: /s/ Henry Green
Title: President
NORTHWEST ACQUISITION CORP.
By: /s/ Henry Green
Title: President
WISMER-MARTIN, INC.
By: /s/ Ronald Holden
Title: Chairman & CEO
