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EXHIBIT 10.1
ESTOPPEL AGREEMENT
THIS ESTOPPEL AGREEMENT (this "Agreement") is made and entered into as
of the 2nd day of January, 1998, by and among HEALTHDYNE INFORMATION
ENTERPRISES, INC. ("HIE"), a Georgia corporation, Xxxxx Xxxxx, a resident of
Texas ("Xxxxx"), Xxxxxx Xxxxxxx, a resident of Texas ("Xxxxxxx"), Xxxxx Xxxxxx,
a resident of Mississippi ("Xxxxxx"), Xxxxx Xxxxxxx, a resident of Colorado
("Xxxxxxx"), Xxxxx Xxxxxx, a resident of Texas ("Fraser"), JMS Charitable Trust,
JMS Inheritance Trust; ESS Charitable Trust, ESS Inheritance Trust, MLS
Charitable Trust, MLS Inheritance Trust, and CBS Charitable Trust (collectively,
the "Trusts"; Scott, Schwend, Voigts, Streepy, Fraser and the Trusts may be
hereinafter collectively referred to as the "Shareholders"), and Xxxxx, in his
separate capacity as agent for the Shareholders (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, Matria Healthcare, Inc., a Delaware corporation and successor
by merger to Healthdyne, Inc., a Georgia corporation ("Matria"), HIE, Healthcare
Communications, Inc., a Texas corporation ("HCI"), the Shareholders, the Agent
and certain other shareholders of HCI entered into that certain Settlement
Agreement dated as of December 31, 1995 (the "Settlement Agreement"); and
WHEREAS, in connection with the Settlement Agreement, HIE executed that
certain Non-Negotiable Convertible Promissory Note dated as of December 31, 1995
(the "Original Note") and payable to the Agent in the original principal amount
of $5,061,824.82; and
WHEREAS, also in connection with the transactions contemplated by the
Settlement Agreement, Xxxxx executed that certain Promissory Note dated as of
December 31, 1995 (the "Xxxxx Note") and payable to HCI in the original
principal amount of $300,000; and
WHEREAS, to secure HIE's performance under the Original Note, HIE and
the Agent entered into that certain Pledge Agreement dated as of December 31,
1995 (the "Pledge Agreement"), pursuant to which HIE pledged to the Agent the
"Pledged Stock" and the other "Collateral", each as more fully described in the
Pledge Agreement; and
WHEREAS, HIE, the Shareholders and the Agent entered into that certain
Agreement Concerning Prepayment and Agency Agreement dated as of November 15,
1996 (the "Initial Agreement Concerning Prepayment"), pursuant to which, among
other things, HIE prepaid a portion of the indebtedness to Scott, Schwend and
Xxxxxxx evidenced by the Original Note; and
WHEREAS, in connection therewith, the Agent delivered the Original Note
to HIE, and in exchange therefore, HIE delivered to the Agent that certain
Non-Negotiable Amended and
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Restated Convertible Promissory Note dated as of November 15, 1996, in the
original principal amount of $4,335,843.43 (the "First Amended Note"); and
WHEREAS, HIE, Xxxxx and the Agent entered into that certain Agreement
Concerning Prepayment dated as of April 30, 1997, pursuant to which HIE prepaid
a portion of the indebtedness owed to Xxxxx evidenced by the First Amended Note;
and
WHEREAS, in connection therewith, the Agent delivered the First Amended
Note to HIE, and in exchange therefore, HIE delivered to the Agent that certain
Non-Negotiable Second Amended and Restated Convertible Promissory Note dated as
of April 30, 1997, in the original principal amount of $3,960,462.39 (the
"Second Amended Note"); and
WHEREAS, HIE, Xxxxx and the Agent entered into that certain Third
Agreement Concerning Prepayment dated as of September 15, 1997, pursuant to
which HIE prepaid a portion of the indebtedness owed to Xxxxx evidenced by the
Second Amended Note; and
WHEREAS, in connection therewith, the Agent delivered the Second
Amended Note to HIE, and in exchange therefore, HIE delivered to the Agent that
certain Non-Negotiable Third Amended and Restated Convertible Promissory Note
dated as of September 15, 1997, in the original principal amount of
$3,830,598.20 (the "Third Amended Note"); and
WHEREAS, the indebtedness owing under the Third Amended Note is due and
payable on January 2, 1998; and
WHEREAS, HIE has asserted that it has claims against the Shareholders
related to breaches of the representations and warranties of the Shareholders
contained in the Settlement Agreement (the "HIE Claims"), which HIE Claims are
disputed by the Shareholders; and
WHEREAS, subject to the terms and conditions hereof, HIE and the
Shareholders have agreed that HIE will waive the HIE Claims in exchange for a
reduction of the remaining obligations owing by HIE to the Shareholders under
the Settlement Agreement and the Third Amended Note;
NOW, THEREFORE, for and in consideration of the premises, the terms and
conditions set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEFINED TERMS. Defined terms used herein, as indicated by the
initial capitalization thereof, shall have the same respective meanings ascribed
to such terms in the Settlement Agreement unless otherwise specifically defined
herein.
2. REDUCTIONS OF AMOUNTS OWING UNDER SETTLEMENT AGREEMENT AND THIRD
AMENDED NOTE.
(a) HIE and Xxxxx hereby agree that the indebtedness and other
obligations owing to Xxxxx under the Settlement Agreement and the Third Amended
Note shall be reduced by an
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amount equal to the indebtedness owing by Xxxxx to HCI under the Xxxxx Note, in
exchange for which HCI shall cancel such promissory note and deliver the same to
Xxxxx on or promptly after the date hereof.
(b) Each of the Shareholders hereby (i) represents and warrants that
the total amount of indebtedness and other obligations owing to such Shareholder
under the Settlement Agreement, whether for principal, interest or otherwise,
and before giving effect to any reduction as contemplated hereby (but after
giving effect to the reduction in the obligations owing to Xxxxx as set forth in
paragraph (a) above), is properly set forth opposite such Shareholder's name in
the column labeled "Note Balances at 1/2/98" on the table attached hereto as
Exhibit A attached hereto and incorporated herein by reference, and (ii) agrees
that such amount shall be and is hereby reduced in the corresponding amount as
set forth on such Exhibit A, such reduced amount reflecting the aggregate amount
of all remaining indebtedness and other obligations owing to such Shareholder by
HIE under the Third Amended Note and the Settlement Agreement (such reduced
amount, as it relates to any such Shareholder, is hereinafter referred to as
such Shareholder's "Payoff Amount").
3. INSTRUCTIONS FOR PAYMENT. Each of the Shareholders hereby
authorizes and directs that HIE pay the applicable Payoff Amount by wire
transfer in accordance with the applicable instructions set forth on Exhibit B
attached hereto.
4. MUTUAL RELEASES.
(i) (a) Effective upon its receipt of the Third Amended Note and the
Pledged Stock, HIE hereby waives the HIE Claims, and each of HIE, HCI and Matria
hereby waives any and all other claims it has or may have against the
Shareholders, or any of them, arising out of any breach of the representations,
warranties and covenants contained in the Settlement Agreement and the
agreements, documents and instruments executed in connection therewith, other
than any claims arising out of a breach by any Shareholder of any of its
obligations under Section 9 and the employment agreements executed thereunder,
and/or Section 10 of the Settlement Agreement and the Xxxxx Distributor
Agreement (as defined in Section 10 of the Settlement Agreement), and (b)
effective upon receipt of the applicable Payoff Amount in accordance with the
terms hereof, each of the Shareholders and the Agent hereby waives any and all
claims it may have against HIE, HCI and/or Matria arising out of the breach of
representations, warranties and covenants contained in the Settlement Agreement
and each of the agreements, documents and instruments executed in connection
therewith.
(ii) Each of the Shareholders and the Agent hereby agrees that,
immediately upon his or its receipt of the applicable Payoff Amount in
immediately available funds in accordance with the payment instructions set
forth above:
(a) the HIE shall have no remaining obligations to such
Shareholder; and
(b) the Agent's security interest in the assets of the HIE,
including, without limitation, the Pledged Stock and the Collateral,
shall automatically terminate.
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The Shareholders hereby authorize the Agent to, and the Agent agrees
that it shall, deliver the Third Amended Note and the Pledged Stock to Xxxxxxxx
Xxxxxxx LLP ("Xxxxxxxx"), to be held in escrow prior to the delivery of the
Payoff Amounts. HIE hereby agrees that it shall deliver to Xxxxxxxx the Xxxxx
Note, to be held in escrow prior to the delivery of the Payoff Amounts. The
Shareholders and the Agent hereby authorize and direct Xxxxxxxx to release the
Third Amended Note and such Collateral to HIE, and HIE hereby authorizes and
directs Xxxxxxxx to release the Xxxxx Note to Xxxxx, in each case following
Xxxxxxxx'x receipt of confirmation reasonably satisfactory to it that the Payoff
Amount owing to each Shareholder has been delivered pursuant to the instructions
set forth on Exhibit B. Each of the parties hereto agrees that Xxxxxxxx shall
have no liability to any party hereto arising under this escrow arrangement.
5. FURTHER ASSURANCES. The Agent agrees to return any additional
Collateral pledged to it and, at HIE's expense, to provide termination
statements or other appropriate documentation, if any, as may be reasonably
necessary or appropriate to terminate of record all liens and security interests
held by the Agent in the assets of HIE, HCI and/or Matria, and, at HIE's
expense, to take any other actions reasonably necessary or desirable to
terminate its security interest in the assets of HIE, HCI and/or Matria.
6. LIMITATION OF AGREEMENT. Except as expressly set forth herein, this
Agreement shall not be deemed to waive, amend or modify any term or condition of
the Settlement Agreement, which is hereby ratified and reaffirmed, and which
shall remain in full force and effect without modification except as herein
provided.
7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute the same Agreement. Any signature page of any such
counterpart, or any electronic facsimile thereof, may be attached or appended to
any other counterpart to complete a fully executed counterpart of this
Agreement, and any telecopy or other facsimile transmission of any signature
shall be deemed an original and shall bind such party.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of, the respective successors and assigns of the
Shareholders, the Agent and HIE.
9. SECTION REFERENCES. Section titles and references used in this
Agreement shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.
10. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first written above.
HEALTHDYNE INFORMATION
ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, as Agent and individually
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
JMS CHARITABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Trustee
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JMS INHERITANCE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Trustee
ESS CHARITABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Trustee
ESS INHERITANCE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Trustee
MLS CHARITABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Trustee
MLS INHERITANCE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Trustee
CBS CHARITABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Trustee
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