Exhibit 99.6
Letter Agreement dated January 31, 2000 between LSOF Greenbriar and Greenbriar
January 31, 2000
Greenbriar Corporation
Attention: Xxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Re: Preferred Stock Redemption
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Ladies and Gentlemen:
This letter sets forth our understanding of the agreement between Greenbriar
Corporation ("Greenbriar") and LSOF Greenbriar, L.L.C. ("Lone Star") regarding
Greenbriar's agreement to redeem shares of Greenbriar's Series F Senior
Convertible Preferred Stock (the "Series F Stock") and Series G Senior
Non-Voting Convertible Preferred Stock (the "Series G Stock," and together with
the Series F Stock, the "Preferred Stock") held by Lone Star.
1. Redemption. Greenbriar and Lone Star agree that on February 1, 2000,
Greenbriar will redeem 189,381 shares of Series G Stock, as calculated in
accordance with Exhibit A attached hereto, for an aggregate redemption price of
$2.5 million (the "Redeemed Stock"). Within three (3) business days after
receipt of funds for such redemption, Lone Star will tender its certificate
representing the Redeemed Stock. Greenbriar shall issue a new certificate for
the balance of the unredeemed shares.
2. Future Redemptions. Greenbriar and Lone Star further agree that
within five business days after (i) the sale of any capital assets, or (ii) the
refinancing of any capital assets, including without limitation, the Beaverton
land sale, the Rose Garden Community sale or refinancing, the Texarkana land
sale and the office building sale (the "Specific Transactions"), Greenbriar
shall use all proceeds, after payment of reasonable out-of-pocket expenses (the
"Net Proceeds"), to redeem additional shares of Preferred Stock. All redemptions
will be: (i) of Series G Stock until all Series G Stock has been redeemed, and
thereafter of Series F Stock and (ii) for that number of shares determined in
the same manner as the number of shares of Redeemed Stock is calculated in
Exhibit A, provided that the determination of the 20% IRR Lookback will be made
as of the date immediately preceding the applicable redemption date. Greenbriar
will use its best efforts to consummate each of the Specified Transactions as
promptly as is reasonably practicable.
3. Capital Expenditure Curtailment. Greenbriar agrees to curtail all
capital expenditures other than those which are necessary and essential, pending
the complete redemption of the Preferred Stock.
4. Governing Law. This letter agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
principles of conflicts of law.
If the above understanding is satisfactory to Greenbriar, please sign
this letter in the space indicated below and return a signed copy to Lone Star
at the address set forth above, attention: Xxx Xxxxx, whereupon this letter
agreement shall become a binding agreement upon the parties hereto and their
respective survivors and assigns.
LSOF GREENBRIAR, L.L.C.
By: /s/Xxx X. Xxxxx, Xx.
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Name: Xxx X. Xxxxx, Xx.
Title: Vice President
Acknowledged and Agreed to by:
GREENBRIAR CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President
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Exhibit A
Preferred Stock Redemption Calculation:
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Preferred Stock Investment: $22,000,000
20% IRR Lookback (as of 2/1/00): $7,042,000
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Total as of 2/1/00: $29,042,000
Preferred Stock Investment (as % of Total): 75.75%
Pro-Rata Share of Current Redemption Allocated to
Preferred Stock: $1,893,809
Number of Shares Redeemed (10:1): 189,381
Pro-Rata Share of Current Redemption Allocated to Lookback: $606,191
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