-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/7RMcgnupjiWx9l0+VSpXNFfSSuHOuRyCDLVQU4pFinI1oTDvwmGbDPrvqT8qzb suq/8MaK7V8Nwbr6jUS0HQ== 0001095811-00-005408.txt : 20001221 0001095811-00-005408.hdr.sgml : 20001221 ACCESSION NUMBER: 0001095811-00-005408 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20001220 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PMR CORP CENTRAL INDEX KEY: 0000829608 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 232491707 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20488 FILM NUMBER: 792466 BUSINESS ADDRESS: STREET 1: 501 WASHINGTON ST 5TH FL CITY: SAN DIEGO STATE: CA ZIP: 92103 BUSINESS PHONE: 6192952227 MAIL ADDRESS: STREET 1: 3990 OLD TOWN AVENUE SUITE 206A CITY: SAN DIEGO STATE: CA ZIP: 92110 FORMER COMPANY: FORMER CONFORMED NAME: ZARON CAPITAL INC DATE OF NAME CHANGE: 19891116 8-K 1 a68079e8-k.txt FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): December 20, 2000 PMR CORPORATION ----------------- (Exact Name of Registrant as Specified in its Charter) Delaware 0-20488 23-2491707 (State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
501 Washington Street, 5th Floor San Diego, California 92103 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (619) 610-4001 2 ITEM 5. OTHER EVENTS On December 14, 2000 PMR Corporation issued a press release announcing the declaration of a special dividend of $1.00 per share, payable on December 29, 2000 to its shareholders of record as of December 21, 2000. The press release is filed as Exhibit 99.1 to this Current Report on Form 8-K, and the contents of such Exhibit are incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements -- Not applicable. (b) Pro-Forma Financial Information -- Not applicable. (c) Exhibits 99.1 Press Release dated December 14, 2000. 99.2 Letter Agreement, dated December 15, 2000, regarding waiver of certain terms of the Promissory Notes and Stock Pledge Agreement between Mark Clein and PMR Corporation dated January 19, 2000. 99.3 Letter Agreement, dated December 15, 2000, regarding waiver of certain terms of the Promissory Notes and Stock Pledge Agreement between Fred Furman and PMR Corporation dated January 19, 2000. 99.4 Promissory Note between L. Jean Dunn and PMR Corporation in the amount of $146,250, dated December 14, 2000. 99.5 Stock Pledge Agreement between L. Jean Dunn and PMR Corporation, dated December 14, 2000. 99.6 Promissory Note between Kurt Kessler and PMR Corporation in the amount of $233,750, dated December 14, 2000. 99.7 Stock Pledge Agreement between Kurt Kessler and PMR Corporation, dated December 14, 2000. 2 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: December 20, 2000 PMR CORPORATION By: /s/ MARK CLEIN ---------------------------- Mark Clein Chief Executive Officer 3 4 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------- ----------- 99.1 Press Release dated December 14, 2000. 99.2 Letter Agreement, dated December 15, 2000, regarding waiver of certain terms of the Promissory Notes and Stock Pledge Agreement between Mark Clein and PMR Corporation dated January 19, 2000. 99.3 Letter Agreement, dated December 15, 2000, regarding waiver of certain terms of the Promissory Notes and Stock Pledge Agreement between Fred Furman and PMR Corporation dated January 19, 2000. 99.4 Promissory Note between L. Jean Dunn and PMR Corporation in the amount of $146,250, dated December 14, 2000. 99.5 Stock Pledge Agreement between L. Jean Dunn and PMR Corporation, dated December 14, 2000. 99.6 Promissory Note between Kurt Kessler and PMR Corporation in the amount of $233,750, dated December 14, 2000. 99.7 Stock Pledge Agreement between Kurt Kessler and PMR Corporation, dated December 14, 2000.
4 EX-99.1 2 a68079ex99-1.txt EXHIBIT 99.1 1 EXHIBIT 99.1 Contact Information: COFFIN COMMUNICATIONS GROUP PMR CORPORATION 15300 Ventura Boulevard, Suite 303 501 Washington Street, 5th Floor Sherman Oaks, CA 91403 San Diego, CA 92103 (818) 789-0100 (619) 610-4001 Crocker Coulson, Partner Mark Clein, CEO crocker.coulson@coffincg.com Jean Dunn, Chief Financial Officer FOR IMMEDIATE RELEASE PMR ANNOUNCES SPECIAL DIVIDEND OF $1.00 PER SHARE SAN DIEGO, CA, DECEMBER 14, 2000 -- PMR Corporation (NasdaqNM:PMRP), a leader in the development of innovative market research solutions for the pharmaceutical and healthcare industries, today announced that it will issue a special dividend of $1.00 per share. The dividend will be payable on December 29, 2000 to shareholders of record as of December 21, 2000. There are approximately 7,100,000 shares outstanding. "The Company is constantly evaluating its cash needs while focussing on building long-term shareholder value. The dividend payment reflects the Company's commitment to its shareholders to maximize their investment," said Mark Clein, CEO. "We are pleased with the progress of the InfoScriber subsidiary and we intend to continue to manage the development of the business so that we have sufficient resources to capitalize on this significant opportunity." InfoScriber Corporation has developed a unique web-based platform that provides real-time longitudinal and physician reasoning database information products to the pharmaceutical and healthcare industry. PMR also manages programs and services for individuals with a serious mental illness. This press release contains forward looking statements that involve risks and uncertainties, including the risk that the future financial impact from the development of InfoScriber and the sufficiency of PMR's financial resources for the expansion of this business will not be as expected; and the risks and uncertainties set forth in PMR's periodic reports and other filings with the Securities and Exchange Commission. Forward-looking statements reflect PMR's current views with respect to future events. Actual results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated. EX-99.2 3 a68079ex99-2.txt EXHIBIT 99.2 1 EXHIBIT 99.2 December 15, 2000 Mark Clein, CEO PMR Corporation 501 Washington Street, 5th Floor San Diego, CA 92103 RE: December 29, 2000 Cash Dividend Dear Mark: On January 19, 2000 you executed two Promissory Notes ("Notes") and a related Stock Pledge Agreement whereby PMR Corporation ("PMR") loaned you $467,500 for the purchase of shares of stock in PMR and up to $257,208 for the tax liabilities relating to the purchase of the shares of stock. To the extent that either of the Notes and/or Stock Pledge Agreement require the cash received as a dividend is immediately payable towards the payment of the amounts outstanding under the Notes, PMR is hereby waiving that requirement with respect to the cash dividend payable December 29, 2000. In all other respects the terms of the Notes and Stock Pledge Agreement remain unaltered. Sincerely yours, /s/ ALLEN TEPPER Allen Tepper Chairman of the Board EX-99.3 4 a68079ex99-3.txt EXHIBIT 99.3 1 EXHIBIT 99.3 December 15, 2000 Fred D. Furman, President PMR Corporation 501 Washington Street, 5th Floor San Diego, CA 92103 RE: December 29, 2000 Cash Dividend Dear Fred: On January 19, 2000 you executed two Promissory Notes ("Notes") and a related Stock Pledge Agreement whereby PMR Corporation ("PMR") loaned you $684,750 for the purchase of shares of stock in PMR and up to $193,311 for the tax liabilities relating to the purchase of the shares of stock. To the extent that either of the Notes and/or Stock Pledge Agreement require the cash received as a dividend is immediately payable towards the payment of the amounts outstanding under the Notes, PMR is hereby waiving that requirement with respect to the cash dividend payable December 29, 2000. In all other respects the terms of the Notes and Stock Pledge Agreement remain unaltered. Sincerely yours, /s/ ALLEN TEPPER Allen Tepper Chairman of the Board EX-99.4 5 a68079ex99-4.txt EXHIBIT 99.4 1 EXHIBIT 99.4 PROMISSORY NOTE $146,250 San Diego, California December 14, 2000 FOR VALUE RECEIVED, the undersigned hereby unconditionally promises to pay to the order of PMR CORPORATION, a Delaware corporation (the "Company"), at 501 Washington Street, 5th Floor, San Diego, CA 92103, or at such other place as the holder hereof may designate in writing, in lawful money of the United States of America and in immediately available funds, the principal sum of One Hundred Forty-six Thousand Two Hundred Fifty Dollars ($146,250) together with interest accrued from the date hereof on the unpaid principal at the rate of 5.87% per annum, or the maximum rate permissible by law (which under the laws of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans), whichever is less, as follows: PRINCIPAL REPAYMENT. The outstanding principal amount hereunder shall be due and payable in full on December 31, 2005; and INTEREST PAYMENTS. Interest shall be compounded annually and shall be payable annually in arrears on the thirty-first (31st) day of December of each year, beginning on December 31, 2001, and shall be calculated on the basis of a 360-day year for the actual number of days elapsed. Upon an Event of Default, the Company, at its sole option, shall have the right to accelerate this Note, in which event the entire principal balance and all accrued interest shall become immediately due and payable, and immediately collectible by the Company pursuant to applicable law. "Event of Default" shall include (a) a failure by the undersigned to pay any of the principal or accrued interest when due; or (b) if a court of competent jurisdiction shall enter a decree or order for relief in respect of the undersigned in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the undersigned or for any substantial part of his property, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or (c) if the undersigned shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in any involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the undersigned or shall make any general assignment for the benefit of creditors or shall fail generally to pay his or her debts as they become due or shall take any action in furtherance of any of the foregoing. This Note may be prepaid at any time without penalty. All money paid toward the satisfaction of this Note shall be applied first to the payment of interest as required hereunder and then to the retirement of the principal. The undersigned agrees that any and all cash that may be received as a dividend upon the shares being purchased with the proceeds of this Note shall immediately be applied toward the payment of amounts outstanding under this Note. 1. 2 The full amount of this Note is secured by a pledge of shares of Common Stock of the Company, and is subject to all of the terms and provisions of the Stock Pledge Agreement of even date herewith between the undersigned and the Company. The undersigned hereby represents and agrees that the amounts due under this Note are not consumer debt, and are not incurred primarily for personal, family or household purposes, but are for business and commercial purposes only. The undersigned hereby waives presentment, protest and notice of protest, demand for payment, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. The holder hereof shall be entitled to recover, and the undersigned agrees to pay when incurred, all costs and expenses of collection of this Note, including without limitation, reasonable attorneys' fees. This Note shall be governed by, and construed, enforced and interpreted in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. Signed /s/ JEAN DUNN ----------------------- Jean Dunn 2. EX-99.5 6 a68079ex99-5.txt EXHIBIT 99.5 1 EXHIBIT 99.5 STOCK PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT ("Pledge Agreement") is made by Jean Dunn ("Pledgor"), in favor of PMR CORPORATION, a Delaware corporation with its principal place of business at 501 Washington Street, 5th Floor, San Diego, CA 92103 ("Pledgee"). WHEREAS, Pledgor has concurrently herewith executed that certain Promissory Note (the "Note") in favor of Pledgee in the amount of $146,250 in payment of the purchase price for shares of the Common Stock of Pledgee; and WHEREAS, Pledgee is willing to accept the Note from Pledgor, but only upon the condition, among others, that Pledgor shall have executed and delivered to Pledgee this Pledge Agreement and the Collateral (as defined below): NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Pledgor hereby agrees as follows: 1. As security for the full, prompt and complete payment and performance when due (whether by stated maturity, by acceleration or otherwise) of all indebtedness of Pledgor to Pledgee created under the Note (all such indebtedness being the "Liabilities"), together with, without limitation, the prompt payment of all expenses, including, without limitation, reasonable attorneys' fees and legal expenses, incidental to the collection of the Liabilities and the enforcement or protection of Pledgee's lien in and to the collateral pledged hereunder, Pledgor hereby pledges to Pledgee, and grants to Pledgee, a first priority security interest in all of the following (collectively, the "Pledged Collateral"): (a) 65,000 shares of Common Stock of Pledgee represented by Certificates numbered _______________ (the "Pledged Shares"), and all dividends, cash, instruments, and other property or proceeds from time to time received, receivable, or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; (b) all voting trust certificates held by Pledgor evidencing the right to vote any Pledged Shares subject to any voting trust; and (c) all additional shares and voting trust certificates from time to time acquired by Pledgor in any manner (which additional shares shall be deemed to be part of the Pledged Shares), and the certificates representing such additional shares, and all dividends, cash, instruments, and other property or proceeds from time to time received, receivable, or otherwise distributed in respect of or in exchange for any or all of such shares. The term "indebtedness" is used herein in its most comprehensive sense and includes any and all advances, debts, obligations and Liabilities heretofore, now or hereafter made, incurred or created, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness may be or hereafter becomes unenforceable. 1. 2 2. At any time, without notice, and at the expense of Pledgor, Pledgee in its name or in the name of its nominee or of Pledgor may, but shall not be obligated to: (1) collect by legal proceedings or otherwise all dividends (except cash dividends other than liquidating dividends), interest, principal payments and other sums now or hereafter payable upon or on account of said Pledged Collateral; (2) enter into any extension, reorganization, deposit, merger or consolidation agreement, or any agreement in any wise relating to or affecting the Pledged Collateral, and in connection therewith may deposit or surrender control of such Pledged Collateral thereunder, accept other property in exchange for such Pledged Collateral and do and perform such acts and things as it may deem proper, and any money or property received in exchange for such Pledged Collateral shall be applied to the indebtedness or thereafter held by it pursuant to the provisions hereof; (3) insure, process and preserve the Pledged Collateral; (4) cause the Pledged Collateral to be transferred to its name or to the name of its nominee; (5) exercise as to such Pledged Collateral all the rights, powers and remedies of an owner, except that so long as no default exists under any of the Notes or hereunder Pledgor shall retain all voting rights as to the Pledged Shares. 3. Pledgor agrees to pay prior to delinquency all taxes, charges, liens and assessments against the Pledged Collateral, and upon the failure of Pledgor to do so, Pledgee at its option may pay any of them and shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same. 4. At the option of Pledgee and without necessity of demand or notice, all or any part of the indebtedness of Pledgor shall immediately become due and payable irrespective of any agreed maturity, upon the happening of any of the following events: (1) failure to keep or perform any of the terms or provisions of this Pledge Agreement; (2) failure to pay any installment of principal or interest on any of the Notes when due; (3) the levy of any attachment, execution or other process against the Pledged Collateral; or (4) the insolvency, commission of an act of bankruptcy, general assignment for the benefit of creditors, filing of any petition in bankruptcy or for relief under the provisions of Title 11 of the United States Code of, by, or against Pledgor. 5. In the event of the nonpayment of any indebtedness when due, whether by acceleration or otherwise, or upon the happening of any of the events specified in the last preceding section, Pledgee may then, or at any time thereafter, at its election, apply or set off, collect or sell in one or more sales, or take such steps as may be necessary to liquidate and reduce to cash in the hands of Pledgee in whole or in part, with or without any previous demands or demand of performance or notice or advertisement, the whole or any part of the Pledged Collateral in such order as Pledgee may elect, and any such sale may be made either at public or private sale at its place of business or elsewhere, or at any broker's board or securities exchange, either for cash or upon credit or for future delivery; provided, however, that if such disposition is at private sale, then the purchase price of the Pledged Collateral shall be equal to the public market price then in effect, or, if at the time of sale no public market for the Pledged Collateral exists, then, in recognition of the fact that the sale of the Pledged Collateral would have to be registered under the Securities Act of 1933 and that the expenses of such registration are commercially unreasonable for the type and amount of collateral pledged hereunder, Pledgee and Pledgor hereby agree that such private sale shall be at a purchase price mutually agreed to by Pledgee and Pledgor or, if the parties cannot agree upon a purchase price, then at a purchase 2. 3 price established by a majority of three independent appraisers knowledgeable of the value of such collateral, one named by Pledgor within ten (10) days after written request by the Pledgee to do so, one named by Pledgee within such 10-day period, and the third named by the two appraisers so selected, with the appraisal to be rendered by such body within thirty (30) days of the appointment of the third appraiser. The cost of such appraisal, including all appraiser's fees, shall be charged against the proceeds of sale as an expense of such sale. Pledgee may be the purchaser of any or all Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Pledgor or right of redemption. Demands of performance, notices of sale, advertisements and presence of property at sale are hereby waived, and Pledgee is hereby authorized to sell hereunder any evidence of debt pledged to it. Any officer or agent of Pledgee may conduct any sale hereunder. 6. The proceeds of the sale of any of the Pledged Collateral and all sums received or collected by Pledgee from or on account of such Pledged Collateral shall be applied by Pledgee to the payment of expenses incurred or paid by Pledgee in connection with any sale, transfer or delivery of the Pledged Collateral, to the payment of any other costs, charges, attorneys' fees or expenses mentioned herein, and to the payment of the indebtedness or any part hereof, all in such order and manner as Pledgee in its discretion may determine. Pledgee shall then pay any balance to Pledgor. 7. Upon the transfer of all or any part of the indebtedness Pledgee may transfer all or any part of the Pledged Collateral and shall be fully discharged thereafter from all liability and responsibility with respect to such Pledged Collateral so transferred, and the transferee shall be vested with all the rights and powers of Pledgee hereunder with respect to such Pledged Collateral so transferred; but with respect to any Pledged Collateral not so transferred Pledgee shall retain all rights and powers hereby given. 8. Until all indebtedness shall have been paid in full the power of sale and all other rights, powers and remedies granted to Pledgee hereunder shall continue to exist and may be exercised by Pledgee at any time and from time to time irrespective of the fact that the indebtedness or any part thereof may have become barred by any statute of limitations, or that the personal liability of Pledgor, if any, may have ceased. 9. Pledgee agrees that so long as no default exists under any of the Note or hereunder, the Pledged Shares shall, upon the request of Pledgor, be released from pledge as the indebtedness is paid. Such releases shall be at the rate of one share for each One and 63/100 Dollars ($1.63) of principal amount of indebtedness paid. 10. Pledgee may at any time deliver the Pledged Collateral or any part thereof to Pledgor and the receipt of Pledgor shall be a complete and full acquittance for the Pledged Collateral so delivered, and Pledgee shall thereafter be discharged from any liability or responsibility therefor. 11. The rights, powers and remedies given to Pledgee by this Pledge Agreement shall be in addition to all rights, powers and remedies given to Pledgee by virtue of any statute or rule of law. Any forbearance or failure or delay by Pledgee in exercising any right, power or remedy hereunder shall not be deemed to be a waiver of such right, power or remedy, and any single or 3. 4 partial exercise of any right, power or remedy hereunder shall not preclude the further exercise thereof; and every right, power and remedy of Pledgee shall continue in full force and effect until such right, power or remedy is specifically waived by an instrument in writing executed by Pledgee. 12. If any provision of this Pledge Agreement is held to be unenforceable for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Pledge Agreement shall be deemed valid and enforceable to the full extent possible. 13. This Pledge Agreement shall be governed by, and construed in accordance with, the laws of the State of California as applied to contracts made and performed entirely within the State of California by residents of such State. Dated: December 14, 2000 PLEDGOR ------------------- /s/ JEAN DUNN ----------------------------- Jean Dunn 4. EX-99.6 7 a68079ex99-6.txt EXHIBIT 99.6 1 EXHIBIT 99.6 PROMISSORY NOTE $233,750 San Diego, California December 14, 2000 FOR VALUE RECEIVED, the undersigned hereby unconditionally promises to pay to the order of PMR CORPORATION, a Delaware corporation (the "Company"), at 501 Washington Street, 5th Floor, San Diego, CA 92103, or at such other place as the holder hereof may designate in writing, in lawful money of the United States of America and in immediately available funds, the principal sum of Two Hundred Thirty-three Thousand Seven Hundred Fifty Dollars ($233,750) together with interest accrued from the date hereof on the unpaid principal at the rate of 5.87% per annum, or the maximum rate permissible by law (which under the laws of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans), whichever is less, as follows: PRINCIPAL REPAYMENT. The outstanding principal amount hereunder shall be due and payable in full on December 31, 2005; and INTEREST PAYMENTS. Interest shall be compounded annually and shall be payable annually in arrears on the thirty-first (31st) day of December of each year, beginning on December 31, 2001, and shall be calculated on the basis of a 360-day year for the actual number of days elapsed. Upon an Event of Default, the Company, at its sole option, shall have the right to accelerate this Note, in which event the entire principal balance and all accrued interest shall become immediately due and payable, and immediately collectible by the Company pursuant to applicable law. "Event of Default" shall include (a) a failure by the undersigned to pay any of the principal or accrued interest when due; or (b) if a court of competent jurisdiction shall enter a decree or order for relief in respect of the undersigned in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the undersigned or for any substantial part of his property, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or (c) if the undersigned shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in any involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the undersigned or shall make any general assignment for the benefit of creditors or shall fail generally to pay his or her debts as they become due or shall take any action in furtherance of any of the foregoing. This Note may be prepaid at any time without penalty. All money paid toward the satisfaction of this Note shall be applied first to the payment of interest as required hereunder and then to the retirement of the principal. The undersigned agrees that any and all cash that may be received as a dividend upon the shares being purchased with the proceeds of this Note shall immediately be applied toward the payment of amounts outstanding under this Note. 1. 2 The full amount of this Note is secured by a pledge of shares of Common Stock of the Company, and is subject to all of the terms and provisions of the Stock Pledge Agreement of even date herewith between the undersigned and the Company. The undersigned hereby represents and agrees that the amounts due under this Note are not consumer debt, and are not incurred primarily for personal, family or household purposes, but are for business and commercial purposes only. The undersigned hereby waives presentment, protest and notice of protest, demand for payment, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. The holder hereof shall be entitled to recover, and the undersigned agrees to pay when incurred, all costs and expenses of collection of this Note, including without limitation, reasonable attorneys' fees. This Note shall be governed by, and construed, enforced and interpreted in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. Signed /s/ KURT KESSLER ----------------------- Kurt Kessler 2. EX-99.7 8 a68079ex99-7.txt EXHIBIT 99.7 1 EXHIBIT 99.7 STOCK PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT ("Pledge Agreement") is made by Kurt Kessler ("Pledgor"), in favor of PMR CORPORATION, a Delaware corporation with its principal place of business at 501 Washington Street, 5th Floor, San Diego, CA 92103 ("Pledgee"). WHEREAS, Pledgor has concurrently herewith executed that certain Promissory Note (the "Note") in favor of Pledgee in the amount of $233,750 in payment of the purchase price for shares of the Common Stock of Pledgee; and WHEREAS, Pledgee is willing to accept the Note from Pledgor, but only upon the condition, among others, that Pledgor shall have executed and delivered to Pledgee this Pledge Agreement and the Collateral (as defined below): NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Pledgor hereby agrees as follows: 1. As security for the full, prompt and complete payment and performance when due (whether by stated maturity, by acceleration or otherwise) of all indebtedness of Pledgor to Pledgee created under the Note (all such indebtedness being the "Liabilities"), together with, without limitation, the prompt payment of all expenses, including, without limitation, reasonable attorneys' fees and legal expenses, incidental to the collection of the Liabilities and the enforcement or protection of Pledgee's lien in and to the collateral pledged hereunder, Pledgor hereby pledges to Pledgee, and grants to Pledgee, a first priority security interest in all of the following (collectively, the "Pledged Collateral"): (a) 110,000 shares of Common Stock of Pledgee represented by Certificates numbered _______________ (the "Pledged Shares"), and all dividends, cash, instruments, and other property or proceeds from time to time received, receivable, or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; (b) all voting trust certificates held by Pledgor evidencing the right to vote any Pledged Shares subject to any voting trust; and (c) all additional shares and voting trust certificates from time to time acquired by Pledgor in any manner (which additional shares shall be deemed to be part of the Pledged Shares), and the certificates representing such additional shares, and all dividends, cash, instruments, and other property or proceeds from time to time received, receivable, or otherwise distributed in respect of or in exchange for any or all of such shares. The term "indebtedness" is used herein in its most comprehensive sense and includes any and all advances, debts, obligations and Liabilities heretofore, now or hereafter made, incurred or created, whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness may be or hereafter becomes unenforceable. 1. 2 2. At any time, without notice, and at the expense of Pledgor, Pledgee in its name or in the name of its nominee or of Pledgor may, but shall not be obligated to: (1) collect by legal proceedings or otherwise all dividends (except cash dividends other than liquidating dividends), interest, principal payments and other sums now or hereafter payable upon or on account of said Pledged Collateral; (2) enter into any extension, reorganization, deposit, merger or consolidation agreement, or any agreement in any wise relating to or affecting the Pledged Collateral, and in connection therewith may deposit or surrender control of such Pledged Collateral thereunder, accept other property in exchange for such Pledged Collateral and do and perform such acts and things as it may deem proper, and any money or property received in exchange for such Pledged Collateral shall be applied to the indebtedness or thereafter held by it pursuant to the provisions hereof; (3) insure, process and preserve the Pledged Collateral; (4) cause the Pledged Collateral to be transferred to its name or to the name of its nominee; (5) exercise as to such Pledged Collateral all the rights, powers and remedies of an owner, except that so long as no default exists under any of the Notes or hereunder Pledgor shall retain all voting rights as to the Pledged Shares. 3. Pledgor agrees to pay prior to delinquency all taxes, charges, liens and assessments against the Pledged Collateral, and upon the failure of Pledgor to do so, Pledgee at its option may pay any of them and shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same. 4. At the option of Pledgee and without necessity of demand or notice, all or any part of the indebtedness of Pledgor shall immediately become due and payable irrespective of any agreed maturity, upon the happening of any of the following events: (1) failure to keep or perform any of the terms or provisions of this Pledge Agreement; (2) failure to pay any installment of principal or interest on any of the Notes when due; (3) the levy of any attachment, execution or other process against the Pledged Collateral; or (4) the insolvency, commission of an act of bankruptcy, general assignment for the benefit of creditors, filing of any petition in bankruptcy or for relief under the provisions of Title 11 of the United States Code of, by, or against Pledgor. 5. In the event of the nonpayment of any indebtedness when due, whether by acceleration or otherwise, or upon the happening of any of the events specified in the last preceding section, Pledgee may then, or at any time thereafter, at its election, apply or set off, collect or sell in one or more sales, or take such steps as may be necessary to liquidate and reduce to cash in the hands of Pledgee in whole or in part, with or without any previous demands or demand of performance or notice or advertisement, the whole or any part of the Pledged Collateral in such order as Pledgee may elect, and any such sale may be made either at public or private sale at its place of business or elsewhere, or at any broker's board or securities exchange, either for cash or upon credit or for future delivery; provided, however, that if such disposition is at private sale, then the purchase price of the Pledged Collateral shall be equal to the public market price then in effect, or, if at the time of sale no public market for the Pledged Collateral exists, then, in recognition of the fact that the sale of the Pledged Collateral would have to be registered under the Securities Act of 1933 and that the expenses of such registration are commercially unreasonable for the type and amount of collateral pledged hereunder, Pledgee and Pledgor hereby agree that such private sale shall be at a purchase price mutually agreed to by 2. 3 Pledgee and Pledgor or, if the parties cannot agree upon a purchase price, then at a purchase price established by a majority of three independent appraisers knowledgeable of the value of such collateral, one named by Pledgor within ten (10) days after written request by the Pledgee to do so, one named by Pledgee within such 10-day period, and the third named by the two appraisers so selected, with the appraisal to be rendered by such body within thirty (30) days of the appointment of the third appraiser. The cost of such appraisal, including all appraiser's fees, shall be charged against the proceeds of sale as an expense of such sale. Pledgee may be the purchaser of any or all Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Pledgor or right of redemption. Demands of performance, notices of sale, advertisements and presence of property at sale are hereby waived, and Pledgee is hereby authorized to sell hereunder any evidence of debt pledged to it. Any officer or agent of Pledgee may conduct any sale hereunder. 6. The proceeds of the sale of any of the Pledged Collateral and all sums received or collected by Pledgee from or on account of such Pledged Collateral shall be applied by Pledgee to the payment of expenses incurred or paid by Pledgee in connection with any sale, transfer or delivery of the Pledged Collateral, to the payment of any other costs, charges, attorneys' fees or expenses mentioned herein, and to the payment of the indebtedness or any part hereof, all in such order and manner as Pledgee in its discretion may determine. Pledgee shall then pay any balance to Pledgor. 7. Upon the transfer of all or any part of the indebtedness Pledgee may transfer all or any part of the Pledged Collateral and shall be fully discharged thereafter from all liability and responsibility with respect to such Pledged Collateral so transferred, and the transferee shall be vested with all the rights and powers of Pledgee hereunder with respect to such Pledged Collateral so transferred; but with respect to any Pledged Collateral not so transferred Pledgee shall retain all rights and powers hereby given. 8. Until all indebtedness shall have been paid in full the power of sale and all other rights, powers and remedies granted to Pledgee hereunder shall continue to exist and may be exercised by Pledgee at any time and from time to time irrespective of the fact that the indebtedness or any part thereof may have become barred by any statute of limitations, or that the personal liability of Pledgor, if any, may have ceased. 9. Pledgee agrees that so long as no default exists under any of the Note or hereunder, the Pledged Shares shall, upon the request of Pledgor, be released from pledge as the indebtedness is paid. Such releases shall be at the rate of one share for each One and 63/100 Dollars ($1.63) of principal amount of indebtedness paid. 10. Pledgee may at any time deliver the Pledged Collateral or any part thereof to Pledgor and the receipt of Pledgor shall be a complete and full acquittance for the Pledged Collateral so delivered, and Pledgee shall thereafter be discharged from any liability or responsibility therefor. 11. The rights, powers and remedies given to Pledgee by this Pledge Agreement shall be in addition to all rights, powers and remedies given to Pledgee by virtue of any statute or rule 3. 4 of law. Any forbearance or failure or delay by Pledgee in exercising any right, power or remedy hereunder shall not be deemed to be a waiver of such right, power or remedy, and any single or partial exercise of any right, power or remedy hereunder shall not preclude the further exercise thereof; and every right, power and remedy of Pledgee shall continue in full force and effect until such right, power or remedy is specifically waived by an instrument in writing executed by Pledgee. 12. If any provision of this Pledge Agreement is held to be unenforceable for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Pledge Agreement shall be deemed valid and enforceable to the full extent possible. 13. This Pledge Agreement shall be governed by, and construed in accordance with, the laws of the State of California as applied to contracts made and performed entirely within the State of California by residents of such State. Dated: December 14, 2000 PLEDGOR ------------------ /s/ KURT KESSLER ------------------------------- Kurt Kessler 4. -----END PRIVACY-ENHANCED MESSAGE-----