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EXHIBIT 2.1
AGREEMENT
This AGREEMENT dated as of June 13, 1997 (the "Agreement"), by and
between Healthdyne Information Enterprises, Inc., a Georgia corporation ("HIE"),
Criterion Health Strategies, Inc. (f/k/a Alpha Development Corp.), a Tennessee
corporation (the "Company"), and Xxxxxxx X. Xxxxxx ("Teveit").
W I T N E S S E T H:
WHEREAS, each of HIE, The Southern Venture Fund II, L.P., a Delaware
limited partnership ("SVFII"), Teveit and J. Xxxxxx Xxxxxxx, Xx. ("Pearson")
(Teveit and Pearson, collectively, the "Shareholders" and, individually, a
"Shareholder") are investors in the Company, with the following respective
interests in the Company:
(i) each of HIE and SVFII owning twenty-five (25) shares of
common stock, no par value, of the Company (the "Criterion Common
Stock"), and a Convertible Debenture of the Company due June 30, 2004,
dated October 21, 1994, in the principal amount of $2,000,000
(individually, a "Criterion Debenture" and collectively, the "Criterion
Debentures"), pursuant to the terms of the Investment Agreement (as
hereinafter defined) among the Company, Healthdyne, Inc., a Georgia
corporation ("Healthdyne"), HIE, SVFII, and the Shareholders; and
(ii) each of the Shareholders owning 650,000 shares of
Criterion Common Stock (as to each Shareholder, the "Shareholder's
Criterion Shares" and, collectively, the "Shareholders' Criterion
Shares"); and
WHEREAS, the Company currently has outstanding options to purchase an
aggregate of 164,100 shares of the Criterion Common Stock, as set forth in
greater detail on Exhibit A hereto; and
WHEREAS, HIE and SVFII are parties to the SVFII Agreements (as
hereinafter defined), pursuant to which SVFII has granted to HIE an option to
purchase SVFII's entire investment in the Company; and
WHEREAS, HIE, SVFII, the Shareholders and the Company have previously
entered into a Consent (as hereinafter defined), pursuant to which the parties
consented to the execution and entry into the SVFII Agreements and the
consummation of the transactions contemplated thereby, subject, in the case of
the Shareholders and the Company, to the execution and consummation of
definitive agreements between HIE and the Shareholders as contemplated by the
AIP (as hereinafter defined); and
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WHEREAS, HIE, the Company and each of the Shareholders desires to
restructure the transactions contemplated by the AIP as set forth herein and in
the agreement of even date herewith among the Company, HIE and Pearson (the
"Pearson Agreement");
NOW, THEREFORE, in consideration of the premises hereof and the mutual
benefits to be derived hereunder and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, HIE, the Company and
Teveit agree as follows:
1. Definitions. For purposes of this Agreement, the following
terms shall have the respective meanings indicated below:
"AIP" -- Agreement in principle dated November 6, 1996 among
HIE and the Shareholders.
"Amended Loan Agreement" -- Loan Agreement effective as of
October 21, 1994 between the Company and Healthdyne, as amended by the First
Amendment thereto dated as of December 4, 1995.
"Amended Pledge Agreement" -- the Pledge Agreement dated as of
October 21, 1994 between Healthdyne and the Shareholders, as amended by the
First Amendment thereto, dated as of December 4, 1995 between Healthdyne, HIE,
SVFII and the Shareholders.
"Amended Security Agreement" -- the Security Agreement
effective as of October 21, 1994 between Healthdyne and the Company, as amended
by the First Amendment thereto dated as of December 4, 1995 between Healthdyne,
HIE, SVFII and the Company.
"Amended Shareholders Agreement" -- the Shareholders'
Agreement dated as of October 21, 1994 between Healthdyne, the Company and the
Shareholders, as amended by the Waiver and Second Amendment to Shareholders'
Agreement dated as of December 4, 1995 between Healthdyne, HIE, SVFII, the
Company and the Shareholders.
"Ancillary Agreements" -- the Amended Loan Agreement, the
Amended Pledge Agreement, the Amended Security Agreement, the Amended
Shareholders' Agreement, the Incorporation Agreement (as hereinafter defined),
the Intercreditor Agreement (as hereinafter defined), the Investment Agreement
(as hereinafter defined) and the Side Letter Agreement (as hereinafter defined).
"Consent"-- the Consent dated as of December 18, 1996 among
the Company, HIE, SVFII and the Shareholders.
"Criterion Options" -- Options to purchase shares of the
Criterion Common Stock, as listed on Exhibit A to this Agreement.
"Incorporation Agreement" -- the Incorporation Agreement dated
as of October 21, 1994 between the Company, Healthdyne and the Shareholders, as
amended.
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"Intercreditor Agreement"-- the Intercreditor Agreement
dated as of December 4, 1995 between HIE and SVFII.
"Investment Agreement" -- the Investment Agreement and First
Amendment to Incorporation Agreement dated as of December 4, 1995 among the
Company, Healthdyne, HIE, SVFII and the Shareholders.
"Side Letter Agreement" -- Letter Agreement dated as of
December 4, 1995 among HIE, SVFII and the Company.
"SVFII Agreements" -- the Option Agreement dated as of
December 18, 1996 between HIE and SVFII, as amended by that certain letter
agreement between SVFII and HIE dated May 16, 1997, and related Stock Purchase
Warrant.
2. Surrender of Shareholder's Criterion Shares.
(a) Surrender of Shareholder's Criterion Shares. Subject to
the terms and conditions of this Agreement, Teveit agrees to surrender to the
Company all of his Shareholder's Criterion Shares for the consideration
specified below in this Section 2.
(b) Consideration. It being hereby recognized, agreed and
acknowledged by the parties hereto that the Shareholder's Criterion Shares owned
by Teveit are currently without value, the Company shall pay to Teveit in
consideration for the surrender of his Shareholder's Criterion Shares the
nominal sum of $10.00, such sum constituting the entire consideration for such
Shareholder's Criterion Shares.
3. Employment Arrangements between the Company and Teveit.
(a) Employment Agreement. Upon and subject to the Closing
of the transactions contemplated by this Agreement, Teveit and the Company shall
enter into an employment agreement (the "Teveit Employment Agreement") on
substantially the terms and conditions reflected on Exhibit B hereto, whereby
Teveit shall be employed by the Company during the period and on the terms and
conditions set forth therein.
(b) HIE Option. In consideration of Teveit's agreeing to
enter into the Teveit Employment Agreement and to provide services to the
Company pursuant thereto, HIE has granted to Teveit an option (the "HIE Option")
to purchase 60,000 shares of the Common Stock, par value $.01 per share, of HIE,
at an exercise price of $2.88 per HIE share, such HIE Option subject to those
terms and conditions set forth in the Option Agreement between HIE and Teveit
attached hereto as Exhibit C (the "HIE Option Agreement").
4. Consent to SVFII Agreements. Upon and subject to the Closing
of the transactions contemplated by this Agreement, Teveit hereby consents to
and approves the execution of and entry by HIE and SVFII into the SVFII
Agreements and the consummation of the transactions contemplated thereby, and
waives his right of first refusal under the Amended Shareholders' Agreement and
any requirements under the Investment Agreement and the
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Incorporation Agreement which may be applicable with respect to any transfer of
SVFII's interest in the Company to HIE pursuant to the SVFII Agreements.
5. Criterion Options.
(a) Each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all actions and do, or cause to be done,
all things necessary, proper or advisable in order to accomplish the following:
(i) the cancellation and termination of all
outstanding Criterion Options; and
(ii) the issuance to the holders of Criterion
Options of options to be issued under a stock option plan of
HIE, such replacement options to reflect the terms and
conditions set forth in the HIE Replacement Stock Option
Agreement attached as Exhibit D hereto.
6. Closing.
(a) Time and Location. Subject to the terms and conditions
of this Agreement, the closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxxx Xxxxxxx
LLP, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 at 9:00 a.m.
local time on the second business day following the satisfaction or waiver of
all conditions to the obligations of the parties to consummate the transactions
contemplated hereby, or such other place and time as HIE, the Company and Teveit
shall agree (the "Closing Date"). The parties hereto acknowledge and agree that
the Closing hereunder shall occur simultaneously with the closing of the
transactions contemplated by the Pearson Agreement and satisfaction of the other
conditions hereinafter set forth in Section 6(c).
(b) Closing Deliveries. At the Closing, the following
deliveries shall take place:
(i) Teveit shall deliver to the Company stock
certificates representing his Shareholder's Criterion Shares,
accompanied by a duly executed stock power or duly endorsed
for transfer to the Company.
(ii) The Company shall deliver to Teveit a check
in the amount of $10.00.
(iii) The Company shall deliver to HIE all
outstanding agreements evidencing Criterion Options,
accompanied by evidence satisfactory to HIE of the
cancellation and termination of such Criterion Options as
contemplated by Section 5 of this Agreement.
(iv) HIE, the Company and the Shareholders
mutually agree to execute and deliver such other instruments
as shall be reasonably necessary to consummate the
transactions contemplated hereby, by the Pearson Agreement and
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by the SVFII Agreements, including but not limited to the
resignation of Teveit from the Board of Directors of the
Company and the termination or modification, if necessary and
as appropriate, of the Ancillary Agreements.
(c) Conditions to Closing. The Closing hereunder shall be
subject to the satisfaction or waiver of the following conditions:
(i) the simultaneous closing of Xxxxxxx'x
surrender to the Company of the Shareholder's Criterion Shares
owned by Pearson pursuant to the Pearson Agreement;
(ii) the cancellation and replacement of the
Criterion Options, as contemplated by Section 6 hereof; and
(iii) the termination or modification, as
appropriate or necessary, of the Ancillary Agreements.
7. Representations, Warranties and Agreements of HIE. HIE hereby
represents and warrants to Teveit that:
(a) HIE is a corporation duly organized, validly existing
and in good standing under the laws of the State of Georgia, and has the
corporate power to own and operate its properties, to carry on its business as
now conducted and to enter into and to perform its obligations under this
Agreement.
(b) HIE has full legal right, power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the performance by HIE of its
obligations hereunder and under each instrument and under the transactions
contemplated hereby are within the corporate powers of HIE and have been duly
authorized by all necessary corporate action properly taken, and do not and will
not contravene or conflict with the articles of incorporation or by-laws of HIE
or any material agreement binding upon HIE or its properties or, to the
knowledge of HIE, any material provision of law or any applicable material
judgment, ordinance, regulation or order of any court or governmental agency.
(c) This Agreement is the legal, valid and binding
obligation of HIE, enforceable against it in accordance with its respective
terms except as such enforceability may be limited by bankruptcy or similar laws
affecting the rights of creditors generally and by the availability of equitable
remedies.
(d) No consent, waiver, approval or other authorization and
filing or registration with any private or public authority is required for the
execution, delivery and performance by HIE of this Agreement or the consummation
by HIE of the transactions contemplated hereby, except such as may be required
under the Securities Act of 1933, as amended, or any applicable Blue Sky Laws.
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8. Representations, Warranties and Agreements of The Company.
The Company hereby represents and warrants to Teveit that:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee, and has
the corporate power to own and operate its properties, to carry on its business
as now conducted and to enter into and to perform its obligations under this
Agreement.
(b) The Company has full legal right, power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the performance by the
Company of its obligations hereunder and under each instrument and under the
transactions contemplated hereby are within the corporate powers of the Company
and have been duly authorized by all necessary corporate action properly taken,
and do not and will not contravene or conflict with the articles of
incorporation or by-laws of the Company or any material agreement binding upon
the Company or its properties or, to the knowledge of the Company, any material
provision of law or any applicable material judgment, ordinance, regulation or
order of any court or governmental agency.
(c) This Agreement is the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its
respective terms except as such enforceability may be limited by bankruptcy or
similar laws affecting the rights of creditors generally and by the availability
of equitable remedies.
(d) No consent, waiver, approval or other authorization and
filing or registration with any private or public authority is required for the
execution, delivery and performance by the Company of this Agreement or the
consummation by the Company of the transactions contemplated hereby.
9. Representations, Warranties and Agreements of Teveit.
Teveit hereby represents and warrants to HIE and the Company that:
(a) Teveit has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, and has taken
all action necessary for the due execution and delivery of this Agreement and
has duly executed and delivered this Agreement. This Agreement constitutes
Teveit's legal, valid and binding obligation enforceable against Teveit in
accordance with its terms, except as such enforceability may be limited by
bankruptcy or similar laws affecting the rights of creditors generally and by
the availability of equitable remedies and will not contravene or conflict with
any material agreement binding upon Teveit or his properties or, to the
knowledge of Teveit, any material provision of law or any applicable material
judgment, ordinance, regulation or order of any court or governmental agency.
(b) Teveit has good, valid and marketable title,
beneficially and of record, to the Shareholder's Criterion Shares owned by him,
free and clear of any and all restrictions, claims, pledges, liens, charges,
security interests and other encumbrances (collectively "Liens") other than
Liens pursuant to any of the Ancillary Agreements, and, at the Closing, will
transfer to the Company good, valid and marketable title thereto free and clear
of all Liens. The
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Shareholder's Criterion Shares represent, and on the Closing Date will
represent, all of Teveit's interest in the Company.
(c) There are no options, warrants or other rights to
purchase shares of the Criterion Common Stock except (i) as set forth on Exhibit
A to this Agreement and (ii) the Criterion Debentures.
(d) No consent, waiver, approval or other authorization and
filing or registration with any private or public authority is required for the
execution, delivery and performance by Teveit of this Agreement or the
consummation by Teveit of the transactions contemplated hereby, except such as
have been obtained or will be obtained hereunder.
(e) Teveit has been provided with the HIE Form 10-K for the
year ended December 31, 1996 and the HIE Form 10-Q for the quarter ended March
31, 1997 (the "SEC Documents") and has been provided ample opportunity to review
the SEC Documents.
10. Miscellaneous.
(a) Governing Law; Severability. This Agreement shall be
governed by and construed in accordance with the laws of the State of Georgia.
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
(b) Successor and Assigns. This Agreement shall inure to
the benefit and shall be binding upon the parties, their legal representatives
and permitted assigns, subject to the limitations otherwise set forth in this
Agreement.
(c) Counterparts. For the convenience of the parties, any
number of counterparts of this Agreement may be executed and all such
counterparts or facsimile copy thereof shall be deemed to be an original
instrument.
(d) Notices. Any notice or other communication by any party
hereto to the other parties shall be in writing and shall be given, and be
deemed to have been given, if either delivered personally, by overnight delivery
service or mail, postage prepaid, registered or certified mail, return receipt
requested, addressed as follows:
(i) to HIE: Healthdyne Information Enterprises, Inc.
0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President and CEO
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(ii) to Teveit: Xxxxxxx X. Xxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
(iii) to the Company: Criterion Health Strategies, Inc.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
Any party may change the address for notice by notifying the other parties in
writing of the new address.
(e) Specific Performance. The parties hereto acknowledge and agree
that the benefits to them under this Agreement are unique, that they are willing
to enter into this Agreement only upon performance by each other of all of their
obligations hereunder and that they will not have an adequate remedy at law if
the other fails to perform any of its obligations hereunder. Accordingly, the
parties hereby agree that each shall have the right, in addition to any other
rights or remedies it may have at law or in equity, to specific performance or
equitable relief by way of injunction if the other party fails to perform any of
its obligations hereunder.
(f) Modification or Waiver. No change, modification or waiver of any
term of this Agreement shall be valid or binding upon the parties hereto unless
such change, modification or waiver shall be in writing signed by all parties
hereto.
(g) Headings. The headings and captions used in this Agreement are
used for convenience of reference only and shall not be considered in construing
or interpreting this Agreement. All references in this Agreement to sections,
paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto, all of which are incorporated
herein by this reference.
(h) Entire Agreement. This Agreement and the other instruments
specified herein constitute the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof and supersede all prior
discussions, understandings and agreements with respect thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
HEALTHDYNE INFORMATION ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Chief
Financial Officer
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxx
CRITERION HEALTH STRATEGIES, INC.
By: /s/ H. Xxxxxxx Xxxxx
--------------------------------------
Name: H. Xxxxxxx Xxxxx
Title: Chairman and Chief Executive
Officer
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EXHIBIT A
Outstanding Options to Purchase Criterion Health Strategies, Inc. Common Stock
as of June 3, 1997
Number of
Name of Optionee Option Shares Amount Vested
---------------- ------------- -------------
Xxxxxxx Xxxx 60,000 27,500
Xxxxxx Xxxxxx 50,000 25,000
Xxxx X'Xxxxxxx 7,500 1,250
Xxx Xxxxxxxxxxx 6,000 2,500
Xxx Xxxxxx 15,000 0
Xxxxx Xxxxxxx 500 0
Xxxxx Xxxxxx 100 0
Xxxx X. Xxxxxxx 25,000 12,500
------ ------
Total options outstanding 164,100 85,000
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EXHIBIT B
Employment Arrangements between the Company and Xxxxxxx X. Xxxxxx
TERM OF EMPLOYMENT A period of six months from the date of the
Closing, unless extended by mutual agreement.
DUTIES Assume the lead role in the Company's sales
efforts.
LOCATION Primarily at the Company's principal offices in
Nashville, Tennessee, and such other
locations as may be reasonably requested.
COMPENSATION Base salary at the rate of $50,000 per annum,
payable in arrears in equal installments not
less frequently than bi-weekly, in
accordance with the Company's payroll
practices; $65,000 per annum draw against
commissions and a 10% commission on Company
sales.
COVENANTS Noncompetition, nonsolicitation and
nondisclosure covenants will be included.
OPTION An option for 60,000 shares of HIE common stock
at exercise price of $2.88, vesting 50% on
grant date and 50% on 1st anniversary.
