ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), dated April 1, 1998,
is by and among JA Special Limited Partnership ("JA") Xxxxxx Xxxxxx Butowsky
Xxxxxxx Shalov & Xxxx (the "Escrow Agent") and Physician Computer Network, Inc.
(the "Company").
BACKGROUND
JA and the Company are parties to the Stock Purchase Agreement dated
April 1, 1998 (the "Purchase Agreement"). Unless otherwise defined herein, each
capitalized term used herein shall have the meaning attributed to it in the
Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment of Escrow Agent. The parties hereto hereby
appoint the Escrow Agent as their agent to hold and to release the Escrowed
Property (as hereinafter defined) on the terms and conditions hereinafter set
forth, and the Escrow Agent hereby accepts such appointment.
2. Deposit. Simultaneously with the execution and delivery of
this Agreement by the parties hereto:(i) JA shall deposit with the Escrow Agent,
checks payable to the Company in the aggregate amount of $11 million (the
"Checks"); (ii) the Company shall deposit with the Escrow Agent the Warrant and
certificates representing the Preferred Shares (the "Instruments") and (iii)
both parties shall deposit with the Escrow Agent, the Purchase Agreement and the
Letter Agreement (the "Documents" and together with the Checks and the
Instruments, the "Escrowed Property").
3. Distribution. The Escrow Agent shall only release the
Escrowed Property, in accordance with: (A) the joint written instructions of JA
and the Company indicating that: (i) the Instruments should immediately be
delivered to JA; (ii) the Checks should immediately be delivered to the Company;
and (iii) copies of the Documents should immediately be delivered to each of JA
and the Company, and each of JA and the Company agrees to enter into such joint
instructions at such time as the currently contemplated documentation with the
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Company's Senior Lenders regarding loan forbearance and related matters has been
completed to the mutual reasonable satisfaction of JA and the Company; (B) an
order of a court of competent jurisdiction; or (C) such other joint written
instructions of JA and the Company as are given to the Escrow Agreement.
4. Duties and Obligations. It is agreed that the duties and
obligations of the Escrow Agent are those herein specifically provided and no
other. The Escrow Agent shall not have any liability under, or duty to inquire
into, the terms and provisions of any agreement, other than this Escrow
Agreement. The Escrow Agent's duties are ministerial in nature and the Escrow
Agent shall not incur any liability whatsoever so long as it has acted in good
faith, except for willful misconduct or gross negligence.
The Escrow Agent may consult with counsel of its choice (other
than any lawyer practicing with the Escrow Agent, if any), and shall not be
liable for any action taken, suffered or omitted by it in accordance with the
advice of such counsel. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this Escrow
Agreement unless the same shall be in writing and signed by all of the parties
hereto.
In the event that the Escrow Agent shall be uncer tain as to
its duties or rights hereunder or shall receive in structions, claims or demands
from any party hereto which, in its opinion, conflict with any of the provisions
of this Escrow Agreement, it shall be entitled to refrain from taking any action
and its sole obligation shall be to keep all Escrowed Property then held by it
pursuant to this Escrow Agreement until it shall be directed otherwise by a
final, binding, non-appealable order or judgment of a court of competent
jurisdiction.
The Escrow Agent shall not incur any liability for following
the instructions herein contained or expressly pro vided for.
The Escrow Agent shall not have any responsibility for the
genuineness or validity of any document or other item deposited with it or any
liability for action in accordance with any written instructions or certificates
given to it hereunder and reasonably believed by it to be signed by the proper
parties. In taking any action hereunder, the Escrow Agent may rely on and follow
instructions given by JA and the Company.
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The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to initiate or defend any
legal proceedings which may be instituted against it in respect of the subject
matter of these instructions. If it does elect to act, it will do so only if it
is indemnified against the reasonable cost and expense of such defense or
initiation.
Nothing contained in this Escrow Agreement will limit or
restrict the Escrow Agent, in its capacity as attorneys, from rendering legal
services to any person.
5. Resignation. The Escrow Agent may at any time resign
hereunder by giving written notice of its resignation to the parties hereto at
the addresses set forth in Section 8 hereof, at least two (2) business days
prior to the date specified for such resignation to take effect, and, upon the
effective date of such resignation, any Escrowed Property then held the by
Escrow Agent hereunder shall be delivered by it to a financial institution,
designated by the Company (the "Substituted Escrow Agreement"), whereupon all of
Xxxxxx Xxxxxx Butowsky Xxxxxxx Shalov & Xxxx'x obligations hereunder shall cease
and terminate. If no such person shall have been designated by such date, all
obligations of the Escrow Agent hereunder shall nevertheless cease and terminate
except that the Escrow Agent's sole responsibility thereafter shall be to keep
all the Escrowed Property then held by it and to deliver the same to a person
designated in writing by the Company and JA or in accordance with the directions
of a final, binding, non-appealable order or judgment of a court of competent
jurisdiction. Any successor Escrow Agent shall execute and deliver to the
predecessor Escrow Agent and the parties hereto, an instrument accepting such
appointment and agreeing to the terms of this Escrow Agreement, and thereupon
such successor Escrow Agent shall, without further act, become vested with the
rights, powers and duties of the predecessor Escrow Agent as if originally named
herein.
6. Indemnification. JA and the Company, jointly and severally,
agree to indemnify, defend and hold the Escrow Agent harmless from and against
any and all loss, damage, tax, liability and expense that may be incurred by the
Escrow Agent arising out of or in connection with its acceptance of appointment
as Escrow Agent hereunder, except as caused by its gross negligence or willful
misconduct, including, without limitation, the legal costs and expenses of (a)
defending itself against any claim or liability in connection with its
performance hereunder and (b) participating (whether as a party or otherwise) or
appearing in any action brought to
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adjudicate the rights or obligations of the respective parties
hereto.
7. Disputes. If there arises a dispute concerning a party's
entitlement to some or all of the Escrowed Property, the prevailing party shall
be entitled to recover its reasonable costs (including attorneys' fees) incurred
in connection with such dispute.
8. Notices. All notices, requests, demands, waivers,
consents, approvals or other communications to any party hereunder shall be in
writing and shall be deemed to have been duly given if: (a) delivered personally
to such party; or (b) sent to such party by telegram or telecopy, with a copy
sent on the same day for overnight delivery by Federal Express to the following
addresses:
If to JA or the Company:
as set forth in the notice
provisions of the Purchase Agreement
If to Escrow Agent, to it as follows:
Xxxxxx Xxxxxx Butowsky Xxxxxxx
Shalov & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
or, in each case, to such other address as the addressee may have specified in
notice duly given to the sender as provided herein. Such notice, request,
demand, waiver, consent, approval or other communications will be deemed to have
been given as of the date so delivered, telegraphed or telecopied.
9. Binding Nature. This Escrow Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
10. Governing Law. This Escrow Agreement shall be governed by
and interpreted under the laws of the State of New York applicable to contracts
made and performed therein without giving effect to the principles of conflict
of laws thereof.
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11. Amendment; Waiver. No amendment, modification or waiver of
the provisions of this Escrow Agreement shall be effective unless in a writing
executed by the party against whom such amendment or modification is sought to
be enforced (or in the case of a waiver by the party waiving one or more of its
rights hereunder).
12. Counterparts. This Escrow Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
collectively all of such counterparts shall constitute one and the same
agreement.
13. Headings. The headings contained in this
Escrow Agreement are inserted for convenience only and shall
not constitute a part hereof.
14. Third Party Beneficiary. This Agreement is solely for the
benefit of the parties hereto. No provision of this Agreement shall create any
third party beneficiary.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement on the date first above written.
XXXXXX XXXXXX BUTOWSKY
XXXXXXX SHALOV & XXXX
By: /s/ Xxxxx Xxxxxxxxx, Partner
_____________________________
PHYSICIAN COMPUTER NETWORK, INC.
By: /s/ Xxxx Xxxxxxxx
_____________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
JA SPECIAL LIMITED PARTNERSHIP
By: Decision, Inc.,
General Partner
By: /s/ Xxxxxx X. Picower
____________________________
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