Exhibit 99.7
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COINVESTMENT AGREEMENT
BY AND BETWEEN
BERKSHIRE PARTNERS LLC
AND
GREENBRIAR EQUITY GROUP LLC
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DATED AS OF NOVEMBER 1, 1999
COINVESTMENT AGREEMENT, dated as of November 1, 1999 (this "Agreement"),
by and between BERKSHIRE PARTNERS LLC, a Massachusetts limited liability company
("Berkshire"), and GREENBRIAR EQUITY GROUP LLC, a Delaware limited liability
company ("Greenbriar").
WHEREAS, Greenbriar has established the Greenbriar Equity Fund, L.P., a
Delaware limited partnership (the "Greenbriar Fund"), to make equity investments
in transportation and related companies;
WHEREAS, Berkshire has a long history of making private equity
investments, including investments in the transportation sector through private
investment funds sponsored and managed by Berkshire;
WHEREAS, the parties desire to enter into a strategic relationship to
pursue jointly investment opportunities in the transportation industry and
believe that pooling their efforts in a joint venture for the purpose of
investing in transportation and related investments will be mutually beneficial;
and
WHEREAS, Berkshire desires to support the activities of the Greenbriar
Fund by (i) causing the Berkshire Funds (as hereinafter defined) to co-invest in
each portfolio investment of the Greenbriar Fund, (ii) allocating all its
transportation-related investment opportunities of coinvestment by the
Greenbriar Fund and Berkshire, and (iii) serving on the Greenbriar Investment
Committee (as defined herein), all on the terms and subject to the conditions
specified herein;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which are acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms.
As used in this Agreement, terms defined in the headings and the
recitals shall have their respective assigned meanings, and the following
capitalized terms shall have the meanings set forth below. Capitalized terms
used but not defined herein shall have the meanings set forth in the Greenbriar
Partnership Agreement.
"Affiliate" shall mean, with respect to any person, any person
directly or indirectly controlling, controlled by or under common control with
such person. For purposes of this definition, "control" of a person means the
power, either directly or indirectly, either (i) to vote 50% or more of the
securities (or ownership interest) having ordinary voting power for the election
of directors (or other managers) or such person or (ii) to direct or cause the
direction of the management and policies, or investment decisions (by contract
or otherwise), of such person.
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"Agreement" shall mean this Coinvestment Agreement, as the same
shall be amended, supplemented or otherwise modified from time to time.
"Berkshire" shall mean Berkshire Partners LLC, a Massachusetts
limited liability company.
"Berkshire Funds" shall mean Berkshire Fund V, Limited partnership,
a Massachusetts limited partnership, and any successor or companion private
investment fund sponsored and managed by Berkshire or its Affiliates. For the
purposes of this Agreement, Berkshire Funds shall also be deemed to include any
coinvestment vehicle formed by the Berkshire principals for the purpose of
coinvesting with the Berkshire Funds pursuant to their coinvestment commitment
to the Berkshire Funds.
"Break-Up Fee" shall mean any fee, reimbursement or other form of
compensation payable by a third party as a result of the failure to consummate
an Investment.
"Consulting Fee" shall mean any fee, reimbursement or other form of
compensation payable by a third party as a result of advisory services rendered
by Greenbriar or Berkshire.
"Greenbriar" shall mean Greenbriar Equity Group LLC, a Delaware
limited liability company.
"Greenbriar Fund" shall mean Greenbriar Equity Fund, L.P., a
Delaware limited partnership. For purposes of this Agreement, the Greenbriar
Fund shall also be deemed to include any coinvestment vehicle formed by the
Greenbriar Principals for the purpose of coinvesting with the Greenbriar Fund
pursuant to their coinvestment commitment to the Greenbriar Fund.
"Greenbriar Investment Committee" shall have the meaning set forth
in Section 3.1.
"Greenbriar Partnership Agreement" shall mean the Amended and
Restated Agreement of Limited Partnership of Greenbriar Equity Fund, L.P.
"Greenbriar Principals" shall mean each of Xxxx X. Xxxxxxx, Xxxxxx
Xxxxxxxxx and Xxxxxxxx X. Xxxxx, III for so long as he is actively involved in
the affairs of the Greenbriar Fund.
"Investment" shall mean any investment made by the Greenbriar Fund
in a Portfolio Company.
"Portfolio Company" shall mean any company or other issuer in which
the Greenbriar Fund makes an investment in accordance with the Investment
Guidelines and Restrictions (attached to the Greenbriar Partnership Agreement as
Exhibit A).
"Standard Coinvestment Ratio" shall have the meaning set forth in
Section 3.1.
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"Ten Percent Carve-Out" shall mean the provision of the Greenbriar
Partnership Agreement that permits the Greenbriar Fund to invest up to 10% of
its aggregate capital commitments in Investments which are unrelated to
transportation.
"Transaction Fee" shall mean any fee, reimbursement, or other form
of compensation payable by a portfolio Company in connection with any
Investment.
"Transportation or Related Deal" shall mean any investment
opportunity in which knowledge of the transportation system or transportation
market or relationships within the transportation industry is essential to
source, evaluate, develop or make the investment. The determination whether a
particular investment opportunity originated by Berkshire is a Transportation or
Related Deal shall be made in accordance with the provisions of Section 2.2.
ARTICLE II
COINVESTMENT OBLIGATION: ALLOCATION OF INVESTMENTS
Section 2.1 Coinvestment by Berkshire.
(a) During the term of the Greenbriar Fund, Berkshire shall cause one or
more of the Berkshire Funds to co-invest with the Greenbriar Fund in each
Investment approved by the Greenbriar Investment Committee. Except as expressly
provided in Sections 2.1(c) and 2.2, Berkshire Funds shall invest an amount
equal to one dollar for every two dollars invested by the Greenbriar Fund (the
"Standard Coinvestment Ratio"). For example, in the case of a $30 million
investment opportunity, the Greenbriar Fund will invest $20 million and the
Berkshire Funds will invest $10 million. Berkshire's coinvestment obligation
shall arise with respect to all Investments, Committed Investments and Bridge
Financings), shall be satisfied in cash and shall be made on the same terms,
same price and in securities identical to the securities purchased by the
Greenbriar Fund.
(b) Berkshire may sell securities purchases pursuant to its coinvestment
obligation to non-Affiliates only if a pro rata portion of the securities
purchased by the Greenbriar Fund have been or are being sold by the Greenbriar
fund. Greenbriar may sell securities purchased pursuant to its coinvestment
obligation to non-Affiliates only if a pro rata portion of the securities
purchased by the Berkshire Funds have been or are being sold by the Berkshire
funds.
(c) If the amount available for investment in a particular transaction
exceeds the amount which the Greenbriar Investment Committee determines is
appropriate for the Greenbriar Fund to invest, the Berkshire funds shall be
offered the opportunity to coinvest in such transaction up to such additional
amount, unless Greenbriar, after consultation with Berkshire, determines for any
business reasons to first offer all or a portion of such coinvestment
opportunity to one or more third parties, including limited partners in the
Greenbriar Fund.
Section 2.2 Allocation of Investments.
(a) Berkshire shall allocate all Transportation or Related Deals to
Greenbriar during the Commitment Period of the Greenbriar Fund. In determining
whether a particular investment opportunity originated by Berkshire is a
Transportation or Related Deal, the parties shall take
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into account all relevant factors, including (i) the nature of the investment
and attendant drivers of value, (ii) the mutual histories of Greenbriar's and
Berkshire's respective relationships to the opportunity, (iii) the nature of the
disposition process and (iv) the potential value-added which Greenbriar provides
in assessing and executing the investment and in developing the business of the
Portfolio Company post-closing. Both parties affirm as the guiding principle in
making such allocation their joint objective to establish a common investment
track record in transportation and related investments and a clear and
consistent brand in the transportation and private equity marketplaces. In the
event of any disagreement between Greenbriar and Berkshire a to whether a
particular investment opportunity originated by Berkshire is a Transportation or
Related Deal, Berkshire shall make the final determination.
(b) For each Transportation or Related Deal originated by Berkshire and
approved by the Greenbriar Investment Committee, the Berkshire Funds and the
Greenbriar Fund shall coinvest in such transaction in accordance with the
Standard Coinvestment Ratio, unless the parties jointly determine that a
different investment ratio is appropriate in view of the mix of transportation
and non-transportation elements in such transaction; provided that the Berkshire
funds shall always coinvest an amount not less than is required by the Standard
Coinvestment consultation using the same relevant factors used in determining
whether an opportunity is a Transportation or Related Deal. In the event an
agreement cannot be reached, Berkshire shall have the right to make the final
determination in good faith, consistent with the principles set forth in Section
2.2(a).
(c) If Greenbriar originates an investment opportunity which is not a
Transportation ore Related Deal and which Greenbriar determines not to pursue
under its Ten Percent Carve-Out, Greenbriar shall first offer such investment
opportunity to Berkshire, unless Greenbriar, after consultation with Berkshire,
determines for any business reason to first offer all or a portion of such
investment opportunity to one or more third parties, including limited partners
in the Greenbriar Fund.
Section 2.3 Fees.
(a) The Berkshire funds shall not pay any management fee, carried interest
or other compensation to Greenbriar or its Affiliates in connection with any
coinvestments they make with the Greenbriar Fund. Berkshire shall not receive or
be entitled to participate in any share of the carried interest or management
fees paid by the Greenbriar fund to Greenbriar or its Affiliates.
(b) Any fees earned b Greenbriar, Berkshire or their Affiliates in
connection with actual or prospective Investments by the Greenbriar Fund will be
shared proportionately based on the actual ratio of investment in the case of
Transaction Fees and consulting Fees and on the planned ratio of investment in
the case of Break-up Fees.
Section 2.4 Expenses.
Expenses for outside professionals, including attorneys, consultants
and accountants, incurred in connection with potential investments that are not
consummated ("Broken Deals") shall be allocated to and paid by Greenbriar and
Berkshire proportionally
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based on the planned ratio of investment. All other expenses incurred by
Greenbriar and Berkshire in connection with Broken Deals shall be borne by the
respective firms.
ARTICLE III
INVESTMENT PROCESS
Section 3.1 Greenbriar Investment Committee.
All decisions relating to the acquisition and disposition of
Investments by the Greenbriar Fund shall be subject to the unanimous approval of
an investment committee (the "Greenbriar Investment Committee"). The Greenbriar
Investment Committee shall be comprised of representatives of Greenbriar
(initially the Greenbriar Principals) and one representative from Berkshire to
be designated by Berkshire. Xxxx Xxxxxxxxx shall serve as Berkshire's initial
representative on the Greenbriar Investment Committee.
Section 3.2 Evaluation of Investments.
Greenbriar and Berkshire shall investigate and evaluate investment
opportunities jointly, with both the Greenbriar Investment Committee and
Berkshire being kept up to date and apprised of developments as they occur.
Prior to any final decision by the Greenbriar Investment Committee with respect
to any potential Investment, some or all of the members of the deal team
responsible for such Investment shall make a presentation to, and shall solicit
the views of, Berkshire.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GREENBRIAR
Section 4.1 Organization, Powers and Good Standing.
Greenbriar is a limited liability company duly organized, validly
existing, and in good standing under the laws of the state of Delaware and has
all requisite power and authority to own and operate its properties and to carry
on its business as now conducted. Greenbriar has all requisite power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. Greenbriar possesses all franchises, certificates,
licenses, permits and other authorizations from governmental or regulatory
authorities that are necessary in any material respect to conduct its business
as now conducted, and Greenbriar is not in violation thereof in any material
respect.
Section 4.2 Authorization of Agreements.
The execution, delivery, and performance by Greenbriar of this
Agreement has been duly authorized by all necessary company action by
Greenbriar.
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Section 4.3 No Conflict.
The execution, delivery and performance by Greenbriar of this
Agreement does not and will not (i) violate any provision of federal, state or
local law or regulation applicable to Greenbriar, the organizational document of
Greenbriar, or any order, judgment, or decree of any court or other agency of
government binding on Greenbriar, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material agreement of Greenbriar, or (iii) require any approval or consent of
any person or entity under any agreement to which Greenbriar is a party.
Section 4.4 Government Consents.
Other than such as may have previously been obtained, the execution,
delivery and performance by Greenbriar of this Agreement does not and will not
require any registration with, consent or approval of, or notice to, or other
action with or by, and federal, state, foreign or other governmental authority
or regulatory body or other person or entity.
Section 4.5 Binding Obligations.
This Agreement, when executed and delivered by Greenbriar, will be
the legally valid and binding obligation of Greenbriar, enforceable against it
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or oth3er similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Section 4.6 Litigation.
(a) There is no action, suit, proceeding or arbitration at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of Greenbriar, threatened against
Greenbriar, which would result in any material adverse change in the business,
operations or condition (financial or otherwise) of Greenbriar, or which may
reasonably be expected to materially adversely affect Greenbriar's ability to
perform its obligations hereunder or as contemplated hereby.
(b) Greenbriar is not (i) in violation of any applicable law in a manner
which would reasonably be expected to materially adversely affect the business,
operations or condition (financial or otherwise) of Greenbriar or (ii) subject
to or in default with respect to any final judgment, writ, injunction, decree,
rule, or regulation of any court or foreign, federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
in a manner which would reasonably be expected to have a material adverse effect
on the business, operations or condition (financial or otherwise) of Greenbriar.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BERKSHIRE
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Section 5.1 Organization, Powers and Good Standing.
Berkshire is a limited liability company duly organized, validly
existing, and in good standing under the laws of the commonwealth of
Massachusetts and has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted. Berkshire has all
requisite power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby. Berkshire possesses all franchises,
certificates, licenses, permits and other authorizations from governmental or
regulatory authorities that are necessary in any material respect to conduct its
business as now conducted, and Berkshire is not in violation thereof in any
material respect.
Section 5.2 Authorization of Agreements.
The execution, delivery, and performance by Berkshire of this
Agreement has been duly authorized by all necessary company action by Berkshire.
Section 5.3 No Conflict.
The execution, delivery and performance by Berkshire of this
Agreement does not and will not (i) violate any provision of federal, state or
local law or regulation applicable to Berkshire, the organizational documents of
Berkshire, or any order, judgment, or decree of any court or other agency of
government binding on Berkshire, (ii) conflict with, result in a breach of, or
constitute (with due notice of lapse of time or both) a default under any
material agreement of Berkshire, or (iii) require any approval of stockholders
or any approval or consent of any person or entity under any agreement to which
Berkshire is a party.
Section 5.4 Government Consents.
Other than such as may have previously been obtained, the execution,
delivery and performance by Berkshire of this Agreement does not and will not
require any registration with, consent or approval of, or notice to, or other
action with or by, any federal, state, foreign or other governmental authority
or regulatory body or other person or entity.
Section 5.5 Binding Obligations.
This Agreement, when executed and delivered by Berkshire, will be
the legally valid and binding obligation of Berkshire, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Section 5.6 Litigation.
(a) There is no action, suit, proceeding or arbitration at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of Berkshire, threatened against
Berkshire, which would result in any material adverse change in the business,
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operations or condition (financial or otherwise) of Berkshire, or which may
reasonably be expected to materially adversely affect Berkshire's ability to
perform its obligations hereunder or as contemplated hereby.
(b) Berkshire is not (i) in violation of any applicable law in a manner
which would reasonably be expected to materially adversely .affect the business,
operations or condition (financial or otherwise) of Berkshire or (ii) subject to
or in default with respect to any final judgment, writ, injunction, decree,
rule, or regulation of any court or foreign, federal, state, municipal or ocher
governmental department, commission, board, bureau, agency or instrumentality,
in a manner which would reasonably be expected to have a material adverse effect
on the business, operations or condition (financial or otherwise) of Berkshire.
ARTICLE VI
BOOKS AND RECORDS
At all times during the term of this Agreement, the parties shall
maintain at their respective principal places of business a complete and
accurate set of files, books and records of all business activities and
operations conducted by each of them in connection with this Agreement. Each
party shall have the right during normal business hours to examine such books
and records.
ARTICLE VII
CONFIDENTIALITY
(a) Greenbriar agrees, for itself and on behalf of all persons retained or
employed by it, to hold in confidence and not to use or disclose to others any
confidential or proprietary information of Berkshire heretofore or hereafter in
the possession of or known to Greenbriar, including, but not limited to, any
data, information, plans, programs or processes which may come within the
knowledge of Greenbriar in the performance of, or as a result of, Greenbriar's
obligations hereunder, except where (i) disclosure is required by law, (ii) such
information becomes public (other than as a result of any breach hereof), (ii)
Berkshire in writing specifically authorizes Greenbriar to disclose any of the
foregoing to others, or (iv) disclosure is made to Greenbriar's agents and
advisers in connection with the performance of its duties hereunder.
(b) Berkshire agrees, for itself and on behalf of all persons retained or
employed by it, to hold in confidence and not to use or disclose to others any
confidential or proprietary information of Greenbriar or the Greenbriar Fund
heretofore or hereafter in the possession of or known to Berkshire, including,
but not limited to, any data, information, plans, programs or processes which
may come within the knowledge of Berkshire in the performance of, or as a result
of, Berkshire's obligations hereunder, except where (i) disclosure is required
by law, (ii) such information becomes public (other than as a result of any
breach hereof), (iii) Greenbriar in writing specifically authorized Berkshire to
disclose any of the foregoing to others, or (iv) disclosure is made to
Berkshire's agents and advisers in connection with the performance of its duties
hereunder.
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(c) Greenbriar and Berkshire each agrees that to the extent it may receive
contacts or inquiries from any print, television or other media source regarding
Greenbriar, Investments, this Agreement, the Greenbriar Fund, any Affiliate of
Greenbriar, any Transportation or Related Deal, or any other matter relating to
any of the foregoing, Greenbriar and Berkshire shall consult with each other to
determine the appropriate manner of response.
ARTICLE VIII
TERM
This Agreement shall terminate if (i) the Greenbriar Fund dissolves
and terminates, (ii) the commitment period of Berkshire Fund V, Limited
Partnership or any successor or companion fund expires and Berkshire does not
sponsor or organize another private investment fund or (iii) Berkshire ceases to
manage Berkshire funds. This Agreement may not be earlier terminated, and may
not be extended, amended or modified, without the prior written consent of both
parties. Berkshire `s obligation to co-invest with the Greenbriar Fund shall
terminate if the Greenbriar Fund is put into a Continuity Mode pursuant to
Section 6.5 of the Greenbriar Partnership Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notice.
Any notice or demand required or permitted to be given or made to or
upon any party hereto pursuant to any provision of this Agreement shall be
deemed to have been duly given or made for all purposes if (i) in writing and
delivered by hand against receipt, or sent by certified or registered mail,
postage prepaid, return receipt requested, or (ii) sent by telegram, telecopy,
telex or other electronic means and followed by a copy delivered or sent in the
manner provided in clause (i) above, to such party at the following address:
To Greenbriar at:
Greenbriar Equity Group LLC
000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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To Berkshire at:
Berkshire Partners LLC
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or such other address as any party hereto may at any time, or from time to time,
direct by notice given to the other party in accordance with this Section 9.1.
The date of giving or making of any such notice or demand shall be the earlier
of the date of actual receipt, or five business days after such notice or demand
is sent, or, if sent in accordance with clause (ii), the business day next
following the day such notice or demand is actually transmitted.
Section 9.2 Entire Agreement.
This Agreement contains, and is intended as, a complete statement of
all of the terms of the arrangements between the parties with respect to the
matters provided for, supersedes any previous agreement and understandings
between the parties with respect to those matters, and cannot be changed or
terminated orally.
Section 9.3 Waiver.
Any party may waive compliance by another with any of the provisions
of this Agreement. No waiver of any provision shall be construed as a waiver of
any other provision. Any waiver must be in writing and must be signed by the
party waiving any provision hereof.
Section 9.4 Remedies.
Each of the parties acknowledges that the subject matter of this
Agreement is of a special, unique and extraordinary character, and that any
violation of this Agreement by any party to this Agreement would be likely to be
highly injurious to the other party. Each of the parties agrees that if either
party defaults in the performance of its obligations under this Agreement, the
other party shall be entitled, in addition to any other remedies that it may
have, to enforce this Agreement by a decree of specific performance in a court
of competent jurisdiction requiring such party to perform its obligations under
this Agreement.
Section 9.5 Separability.
If any provision of this Agreement shall be held to be invalid or
unenforceable by any court of competent jurisdiction, the balance of this
Agreement shall remain in effect.
Section 9.6 Counterparts.
This Agreement may be executed in or more counterparts, and each
such counterpart shall together constitute the same Agreement.
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Section 9.7 Further Assurances.
Each of Berkshire and Greenbriar will take such further actions as
may be necessary and appropriate to effectuate the terms of this Agreement.
Section 9.8 Assignment.
None of the provisions of this Agreement shall be for the benefit of
or enforceable by any creditor of Greenbriar or Berkshire or any other third
party. This Agreement and the rights and obligations hereunder may not be
assigned without the prior written consent of the other party.
Section 9.9 Headings.
The section headings of this Agreement are for reference purposes
only and are to be given no effect in the construction of interpretation of this
Agreement.
Section 9.10 Governing Law.
This Agreement shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivery by their respective duly authorized officers as of the
date first above written.
BERKSHIRE PARTNERS LLC
By:_____________________________________
Name:
Title:
GREENBRIAR EQUITY GROUP LLC
By:_____________________________________
Name:
Title
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