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EXHIBIT 99.5
AGREEMENT
THIS AGREEMENT (this "Agreement") dated as of December 31, 1997, and
effective upon the date of issuance of shares of Series F Senior Convertible
Preferred Stock and Series G Senior Non-Voting Convertible Preferred Stock of
Greenbriar, is entered into by and between Greenbriar Corporation, a Nevada
corporation ("Greenbriar"), and Lone Star Opportunity Fund, L.P., a Delaware
limited partnership ("Lone Star").
Section 1. Definitions.
"5-day Average Price" per share of common stock, for purposes of any
provision herein at the date specified in such provision, means the average
closing price of such common stock on the American Stock Exchange, New York
Stock Exchange or Nasdaq National Market over the 5-trading day period
immediately prior to such date.
"20-day Average Price" per share of common stock, for purposes of any
provision herein at the date specified in such provision, means the average
closing price of such common stock on the American Stock Exchange, New York
Stock Exchange or Nasdaq National Market over the 20-trading day period
immediately prior to such date.
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Dividends" means dividends paid by Greenbriar and received by Lone
Star on the Series F Senior Preferred Stock and the Series G Senior Non-Voting
Preferred Stock.
"Fair Market Price" per share of common stock, for purposes of any
provision herein at the date specified in such provision, means the lesser of
(i) the 5-Day Average Price of such common stock or (ii) the 20-Day Average
Price of such common stock; provided, that if such common stock has not been
listed on the American Stock Exchange, New York Stock Exchange or Nasdaq
National Market for such periods, then the Fair Market Price per share of such
common stock shall be deemed to be the lesser of (i) the net book value per
share of common stock, determined in accordance with GAAP, or (ii) the fair
value per share of common stock determined pursuant to the Valuation Procedure.
"Greenbriar" means Greenbriar Corporation, a Nevada corporation.
"Greenbriar Common Stock" means the common stock, par value $0.01 per
share, of Greenbriar.
"Lone Star" has the meaning set forth in the preamble to this
Agreement.
"Make Whole Amount" means the greater of (i) Present Value # 1.2t and
(ii) zero. Please refer to Exhibit A for sample calculations of the Make Whole
Amount.
"Payment Date" means ten business days after the date on which all of
the Series F Senior Preferred Stock and all of the Series G Senior Non-Voting
Preferred Stock have been (i) converted to Greenbriar Common Stock or (ii)
repurchased by Greenbriar from Lone Star
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pursuant to the terms of Sections 8.4, 8.5 and 8.6 of the Series F Certificate
of Designation or Sections 8.3, 8.4 and 8.5 of the Series G Certificate of
Designation.
"Present Value" means $22,000,000 - Sigma ((Dividends(t) + Value
Received (t)) / 1.2(t))
"Series F Certificate of Designation" means the Certificate of
Designation of Greenbriar relating to the Series F Senior Preferred Stock.
"Series F Senior Preferred Stock" means the Series F Senior
Convertible Preferred Stock, par value $0.01 per share, of Greenbriar.
"Series G Certificate of Designation" means the Certificate of
Designation of Greenbriar relating to the Series G Senior Non-Voting Preferred
Stock.
"Series G Senior Non-Voting Preferred Stock" means the Series G Senior
Non-Voting Convertible Preferred Stock, par value $0.01 per share, of
Greenbriar.
"Special Sale Trigger" means any sale, lease, sale/leaseback,
assignment, transfer or other disposition of assets, which (i) has a total
aggregate consideration received for such dispositions in excess of $125
million of cash, indebtedness assumed, and potential earnouts and the present
fair value of any other consideration, and (ii) assigns or subleases
substantially all of Greenbriar's operated properties which are leased from
others, except where the consent is required from the landlord of such property
and such landlord fails to consent to such assignment or sublease. The
dispositions described above specifically include, but are not limited to,
sales of operating leases and management contracts and sales as a part of the
Syndication Program.
"Syndication Program" means a program of selling real estate to public
or private syndications consisting of partnerships, limited liability
companies, or limited liability partnerships where ownership of such entities
is offered to passive investors for cash and/or notes.
"t" means the time elapsed from the date hereof expressed in fractions
of years.
"Valuation Procedure" means a determination of fair value of any
property made in good faith by the Board of Directors; provided that, if Lone
Star objects to such determination within 10 days of receipt of written
notification thereof, then the fair value of such property shall be determined
in good faith by a recognized national investment bank selected by unanimous
vote or consent of the Board of Directors, which investment bank is not
reasonably objected to by Lone Star. The fees and expenses of such investment
bank shall be paid by one-half by Greenbriar and one-half by Lone Star.
"Value Received" means, as of any date that shares of the Series F
Senior Preferred Stock or the Series G Senior Non-Voting Preferred Stock are
converted, exchanged or repurchased, the sum of (i) the Fair Market Price of
Greenbriar Common Stock on the date such stock was converted multiplied by the
number of shares of Greenbriar Common Stock issued to Lone Star in connection
with the conversion of the Series F Senior Preferred Stock on such date, (ii)
the Fair Market Price of Greenbriar Common Stock on the date such stock was
exchanged multiplied by the number of shares of Greenbriar Common Stock
transferred
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to Lone Star in exchange for the Series G Senior Non-Voting Preferred Stock on
such date, (iii) the amount of cash received by Lone Star for the repurchase of
the Series F Senior Preferred Stock on such date and (iv) the amount of cash
received by Lone Star for the repurchase of the Series G Senior Non-Voting
Preferred Stock on such date.
Section 2. Payment Obligation. On the Payment Date, Greenbriar
shall pay to Lone Star cash in an amount equal to the Make Whole Amount by wire
transfer to an account designated by Lone Star at least two business days
before the Payment Date.
Section 3. Termination. This Agreement shall terminate upon the
earlier of:
(a) Payment in full of the payment obligation set forth
in Section 2 above;
(b) A determination pursuant to the terms of this
Agreement that the Make Whole Amount is zero (0) as of the Payment Date; and
(c) One year after the date on which Lone Star receives
written notice from Greenbriar of a Special Sale Trigger, but in no event
earlier than one year after the actual date upon which a Special Sale Trigger
occurs.
Section 4. Miscellaneous.
(a) Notices. All notices, notifications, demands,
requests, waivers, consents or other communications under this Agreement shall
be in writing and shall be deemed to have been duly given, unless explicitly
stated otherwise, (i) if mailed certified mail, postage prepaid, return receipt
requested, three days after being deposited in the mail; (ii) if sent via
overnight courier, the next business day after being deposited with such
courier; (iii) if sent by telecopier (with written confirmation of receipt), on
that day, or if telecopied on a day that is not a business day, the next day
that is a business day; provided that a copy is mailed by certified mail
(return receipt requested); or (iv) if delivered by hand (with written
confirmation of receipt) on that day, or if delivered on a day that is not a
business day, the next day that is a business day; in each case, to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the
other parties):
If to Greenbriar: Greenbriar Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
with copy to: Xxxx X. Xxxxxxx
00000 Xxxx Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
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If to Lone Star: Lone Star Opportunity Fund, L.P.
000 X. Xxxxx Xxxxxx
Xxxxx 0000, XX 161
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxx
Telecopy No.: (000) 000-0000
with copy to: Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: W. Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
(b) Successors and Assigns. Except as otherwise expressly
provided herein, this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties whether so expressed or
not.
(c) Amendment and Waiver, etc. This Agreement may be
amended only with the written consent of Greenbriar and Lone Star. No failure
or delay on the part of Greenbriar or Lone Star in exercising any right, power
or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to Greenbriar or Lone Star at law or in equity
or otherwise. No waiver of or consent to any departure by Greenbriar or Lone
Star from any provision of this Agreement shall be effective unless signed in
writing by the other parties.
(d) Duplicate Originals. Two or more duplicate originals
of this Agreement may be signed by the parties, each of which shall be an
original but all of which together shall constitute one and the same
instrument.
(e) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(f) Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Texas,
without respect to conflicts of laws principles.
(g) Entire Agreement. This Agreement constitutes the
entire agreement among the parties and no party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
(h) Headings Descriptive. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
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(i) Arbitration. THE PARTIES AGREE THAT IF ANY DISPUTE
SHOULD ARISE UNDER THE TERMS AND PROVISIONS OF THIS AGREEMENT, EACH PARTY
WAIVES ANY RIGHT TO COMMENCE LEGAL ACTION OR ARBITRATION OTHER THAN AS PROVIDED
UNDER THE TERMS OF THIS AGREEMENT, AND THIS AGREEMENT SHALL PROVIDE THE SOLE
AND EXCLUSIVE REMEDY FOR RESOLUTION OF DISPUTES.
(i) THE DETERMINATION OF THE ARBITRATOR SHALL BE
FINAL AND BINDING UPON EACH PARTY AND EACH PARTY SPECIFICALLY WAIVES
ANY RIGHT TO CLAIM THAT THE ARBITRATOR HAS EXCEEDED THE SCOPE OF THE
ARBITRATION, HAS DISREGARDED EVIDENCE OR PRINCIPLES OF LAW, AND
FURTHER WAIVES ANY RIGHT TO DISCLAIM THE QUALIFICATION OR FUNCTION OF
THE ARBITRATOR IN ANY MANNER OR FASHION.
(ii) APPOINTMENT OF THE ARBITRATOR SHALL BE MADE
BY MUTUAL AGREEMENT OF THE PARTIES. IF THE PARTIES CANNOT AGREE UPON
THE IDENTIFICATION OF THE ARBITRATOR WITHIN THIRTY (30) DAYS FROM THE
MAILING OF THE OBJECTION, A PETITION FOR APPOINTMENT OF ARBITRATOR
SHALL BE FILED WITH THE SUPERIOR COURT OF THE COUNTY OF DALLAS, TEXAS.
THE ARBITRATION SHALL BE HELD IN DALLAS, TEXAS PURSUANT TO THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION.
(iii) THE ARBITRATOR'S FEES AND FEES AND COSTS OF
PETITIONING FOR THE APPOINTMENT OF THE ARBITRATOR SHALL BE PAID BY
GREENBRIAR. THE ARBITRATOR UPON RENDERING ITS AWARD SHALL DETERMINE
THE PARTY THAT PREVAILED BASED UPON WRITTEN STATEMENTS MADE BY EACH
PARTY AT THE COMMENCEMENT OF THE ARBITRATION AS TO THE POSITION OF THE
PARTIES AND THEIR ALTERNATIVES FOR SETTLING THE MATTER. A STATEMENT OF
A PROPOSED SETTLEMENT SHALL NOT BE BINDING UPON ANY PARTY AND SHALL
NOT BE CONSIDERED AS EVIDENCE BY THE ARBITRATOR EXCEPT TO THE EXTENT
THAT THE ARBITRATOR UPON MAKING ITS SOLE AND INDEPENDENT DETERMINATION
SHALL DETERMINE THE PARTY WHICH PREVAILED BASED UPON THE PROPOSALS FOR
SETTLEMENT OF THE MATTER MADE BY EACH PARTY AND SHALL DETERMINE THAT
THE NON-PREVAILING PARTY SHALL PAY SOME OR ALL OF THE COSTS OF
ARBITRATION INCLUDING ANY COSTS INCURRED BY THE ARBITRATOR AND IN
EMPLOYING EXPERTS TO ADVISE THE ARBITRATOR IN REGARD TO SPECIFIC
SUBJECTS OR QUESTIONS. THE ARBITRATOR MAY FURTHER AWARD THE COST OF
ATTORNEYS FEES OR EXPERT WITNESSES CONSULTED OR EMPLOYED IN THE
PREPARATION OR PRESENTATION OF EVIDENCE TO THE ARBITRATOR BY THE
PREVAILING PARTY IF, IN THE ARBITRATOR'S DETERMINATION, THE POSITION
OF THE NONPREVAILING PARTY WAS NOT REASONABLY TAKEN OR MAINTAINED OR
WAS BASED UPON A FAILURE TO PROPERLY EXCHANGE OR COMMUNICATE
INFORMATION WITH THE PREVAILING PARTY IN REGARD TO THE SUBJECT
SUBMITTED TO ARBITRATION.
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(iv) THE ARBITRATOR'S DETERMINATION MAY FURTHER
PROVIDE FOR PROSPECTIVE ENFORCEMENT AND DIRECTIONS FOR THE PARTIES TO
COMPLY WITH INCLUDING WITHOUT LIMITATION PERMANENT INJUNCTIVE RELIEF
OR SPECIFIC PERFORMANCE. UNDER SUCH CIRCUMSTANCES, THE ARBITRATOR'S
AWARD SHALL BE BINDING UPON THE PARTIES AND SHALL BE UNDERTAKEN AND
PERFORMED BY EACH OF THE PARTIES UNTIL SUCH TIME AS THE ARBITRATOR'S
DIRECTIONS TO THE PARTY SHALL LAPSE BY THEIR TERM, OR THE ARBITRATOR
SHALL NOTIFY THE PARTIES THAT THOSE TERMS ARE NO LONGER IN FORCE OR
EFFECT OR SHALL MODIFY THOSE TERMS.
(v) NOTWITHSTANDING THE FOREGOING, ANY PARTY MAY
APPEAL THE ARBITRATOR'S DETERMINATION IF SUCH APPEAL IS BASED SOLELY
ON THE BASIS THAT THE ARBITRATOR HAS MADE AN INCORRECT INTERPRETATION
OF LAW.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
GREENBRIAR CORPORATION,
a Nevada corporation
By: /s/ XXXX X. XXXXXXXX
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Name: Xxxx X. Xxxxxxxx
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Title: Executive Vice President
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LONE STAR OPPORTUNITY FUND, L.P.,
a Delaware limited partnership
By: Lone Star Partners, L.P., its
General Partner
By: Lone Star Management Co., Ltd.,
its General Partner
By: /s/ XXXXX XXXXXXX
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Name: Xxxxx Xxxxxxx
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Title: Vice President
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