SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 1)1
GREENBRIAR CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
393648-10-0
-----------------------------------
(CUSIP Number)
Lone Star Opportunity Fund, L.P.
600 North Pearl Street, Suite 1550
Dallas, Texas 75201
Attention: Sam Hines
(214) 754-8300
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with copy to:
J.D. Dell
Lone Star Opportunity Fund, L.P.
600 North Pearl Street, Suite 1550
Dallas, Texas 75201
(214) 754-8300
April 6, 2000
-----------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
- ---------------------
1 The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Page 1 of 20 Pages)
DA1:\212955\06\4KBF06!.DOC\53338.0005
<PAGE>
CUSIP NO. 393648-10-0
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LSOF Pooled Equity, L.P.
- -----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- -----------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,105,656*
SHARES -----------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
-----------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
1,105,656*
PERSON -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,105,656*
(Page 2 of 20 Pages)
<PAGE>
- -----------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
[ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- -----------------------------------------------------------------------------
*Beneficial ownership amounts disclosed herein assume conversion of shares of
Series F Senior Convertible Preferred Stock and Series G Senior Non-Voting
Convertible Preferred Stock of Greenbriar Corporation ("Greenbriar") into shares
of common stock of Greenbriar.
(Page 3 of 20 Pages)
<PAGE>
CUSIP NO. 393648-10-0
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LSOF GenPar, Inc.
- ----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -----------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,105,656*
SHARES -----------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
-----------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
1,105,656*
PERSON -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,105,656*
(Page 4 of 20 Pages)
<PAGE>
- -----------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
[ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- -----------------------------------------------------------------------------
*Beneficial ownership amounts disclosed herein assume conversion of shares of
Series F Senior Convertible Preferred Stock and Series G Senior Non-Voting
Convertible Preferred Stock of Greenbriar Corporation ("Greenbriar") into shares
of common stock of Greenbriar. The reporting person expressly disclaims
beneficial ownership with respect to any shares.
(Page 5 of 20 Pages)
<PAGE>
CUSIP NO. 393648-10-0
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Lone Star Opportunity Fund, L.P.
- ----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -----------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,105,656*
SHARES -----------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
-----------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
1,105,656*
PERSON -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,105,656*
(Page 6 of 20 Pages)
<PAGE>
- -----------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
[ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- -----------------------------------------------------------------------------
*Beneficial ownership amounts disclosed herein assume conversion of shares of
Series F Senior Convertible Preferred Stock and Series G Senior Non-Voting
Convertible Preferred Stock of Greenbriar Corporation ("Greenbriar") into shares
of common stock of Greenbriar. The reporting person expressly disclaims
beneficial ownership with respect to any shares.
(Page 7 of 20 Pages)
<PAGE>
CUSIP NO. 393648-10-0
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Lone Star Partner, L.P.
- ----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -----------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,105,656*
SHARES -----------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
-----------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
1,105,656*
PERSON -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,105,656*
(Page 8 of 20 Pages)
<PAGE>
- -----------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
[ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- -----------------------------------------------------------------------------
*Beneficial ownership amounts disclosed herein assume conversion of shares of
Series F Senior Convertible Preferred Stock and Series G Senior Non-Voting
Convertible Preferred Stock of Greenbriar Corporation ("Greenbriar") into shares
of common stock of Greenbriar. The reporting person expressly disclaims
beneficial ownership with respect to any shares.
(Page 9 of 20 Pages)
<PAGE>
CUSIP NO. 393648-10-0
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Lone Star Management Co., Ltd.
- ----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -----------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,105,656*
SHARES -----------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
-----------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
1,105,656*
PERSON -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,105,656*
(Page 10 of 20 Pages)
<PAGE>
- -----------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
[ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- -----------------------------------------------------------------------------
*Beneficial ownership amounts disclosed herein assume conversion of shares of
Series F Senior Convertible Preferred Stock and Series G Senior Non-Voting
Convertible Preferred Stock of Greenbriar Corporation ("Greenbriar") into shares
of common stock of Greenbriar. The reporting person expressly disclaims
beneficial ownership with respect to any shares.
(Page 11 of 20 Pages)
<PAGE>
CUSIP NO. 393648-10-0
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Hudson Advisors, L.L.C.
- ----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -----------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,105,656*
SHARES -----------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
-----------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
1,105,656*
PERSON -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,105,656*
(Page 12 of 20 Pages)
<PAGE>
- -----------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
[ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- -----------------------------------------------------------------------------
*Beneficial ownership amounts disclosed herein assume conversion of shares of
Series F Senior Convertible Preferred Stock and Series G Senior Non-Voting
Convertible Preferred Stock of Greenbriar Corporation ("Greenbriar") into shares
of common stock of Greenbriar. The reporting person expressly disclaims
beneficial ownership with respect to any shares.
(Page 13 of 20 Pages)
<PAGE>
Item 1. Security and Issuer.
This statement relates to the common stock, $0.01 par value per share (the
"Common Stock"), of Greenbriar Corporation, a Nevada corporation ("Greenbriar").
The address of the principal executive offices of Greenbriar is 4265 Kellway
Circle, Addison, Texas 75244. Beneficial ownership of the Common Stock reported
in this statement is attributable to beneficial ownership of shares of the
Preferred Stock (defined below) which are convertible into shares of Common
Stock after the earlier of (i) January 13, 2000 or (ii) the occurrence of
certain events more fully described in the Stock Purchase Agreement dated as of
December 31, 1997 between Greenbriar and Lone Star filed as Exhibit 1 hereto
(the "Stock Purchase Agreement"), the Certificate of Voting Powers,
Designations, Preferences and Relative, Participating, Optional or other Special
Rights of Series F Senior Convertible Preferred Stock filed as Exhibit 2 hereto
(the "Series F Certificate of Designation") and the Certificate of Voting
Powers, Designations, Preferences and Relative, Participating, Optional or Other
Special Rights of Series G Senior Non-Voting Convertible Preferred Stock filed
as Exhibit 3 hereto (the "Series G Certificate of Designation," and together
with the Series F Certificate of Designation, the "Certificates of
Designation").
Item 2. Identity and Background.
This statement is filed on behalf of LSOF Pooled Equity, L.P., a Delaware
limited partnership ("Pooled Equity"). The general partner of Pooled Equity is
LSOF GenPar, Inc., a Delaware corporation ("GenPar"). The sole stockholder of
GenPar is Lone Star Opportunity Fund, L.P. ("Lone Star"). The general partner of
Lone Star is Lone Star Partner, L.P., a Delaware limited partnership
("Partner"). The general partner of Partner is Lone Star Management Co., Ltd., a
Delaware corporation ("Management"). Hudson Advisors, L.L.C., a Texas limited
liability company ("Hudson"), is the asset manager of the Common Stock, pursuant
to an Asset Management Agreement. John P. Grayken ("Grayken"), a resident of the
United Kingdom, is the sole stockholder, sole director and President of
Management and the sole beneficial owner of Hudson. However, Grayken disclaims
beneficial ownership in the Common Stock. GenPar, Lone Star, Partner, Management
and Hudson are herein referred to as "Control Persons."
The address of the principal offices and business address of Pooled Equity, Lone
Star, Partner, Management and Hudson is 600 North Pearl Street, Suite 1500,
Dallas, Texas 75201, and the business address of Grayken, is 50 Welbeck Street,
London, United Kingdom, W1M7HE.
Pooled Equity, GenPar, Lone Star, Partner, Management and Hudson are all part of
a private investment partnership investing in a broad range of primarily real
estate related investments. Lone Star's investors are primarily pension funds
and other institutional investors. Grayken's principal occupation is serving in
the aforementioned offices of Management.
None of Pooled Equity, GenPar, Lone Star, Partner, Management, Grayken or Hudson
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors).
None of Pooled Equity, GenPar, Lone Star, Partner, Management, Grayken or Hudson
has, during the last five years, been a party to a civil proceeding of a
(Page 14 of 20 Pages)
<PAGE>
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On January 13, 1998, Lone Star purchased (i) 1,400,000 shares of Greenbriar's
Series F Senior Convertible Preferred Stock (the "Series F Preferred"), $0.10
par value per share, at a purchase price of $10.00 per share and (ii) 800,000
shares of Greenbriar's Series G Senior Non-Voting Convertible Preferred Stock
$0.10 par value per share ("Series G Preferred"), at a purchase price of $10.00
per share. The Series F Preferred and Series G Preferred (collectively, the
"Preferred Stock") are convertible, subject to the terms of the Preferred Stock,
into shares of Common Stock, based on a conversion price of $17.50 per share of
Common Stock (subject to antidilution provisions). The aggregate purchase price
for the Preferred Stock was $22,000,000 and was funded by capital contributions
from Lone Star's partners. Lone Star assigned the Preferred Stock to LSOF
Greenbriar, L.L.C., a Delaware limited liability and wholly owned subsidiary of
Lone Star ("LSOF Greenbriar") pursuant to an Assignment and Assumption Agreement
dated January 13, 1998. On July 23, 1998, LSOF Greenbriar assigned the Preferred
Stock to Pooled Equity.
On February 1, 2000 Greenbriar redeemed 189,381 shares of Series G Preferred
owned directly by Pooled Equity for an aggregate price of $2,500,000, which
equals a price of $13.20 per share. On February 4, 2000, Greenbriar redeemed
75,722 shares of Series G Preferred owned directly by Pooled Equity for an
aggregate price of $1,000,000, which equals a price of $13.20 per share.
Item 4. Purpose of the Transaction.
The transactions described in Item 3 above occurred as a result of privately
negotiated transactions with Greenbriar. Lone Star acquired the Preferred Stock
for investment purposes. In a letter agreement between LSOF Greenbriar and
Greenbriar dated January 31, 2000 (the "First Letter Agreement") filed as
Exhibit 6 hereto, Greenbriar agreed to use all proceeds, after payment of
reasonable out-of-pocket expenses, from the sale or refinancing of capital
assets to redeem shares of Preferred Stock. On March 1, 2000, LSOF Greenbriar
assigned all of its rights in such letter agreement to Pooled Equity pursuant to
an Assignment of Rights filed as Exhibit 8 hereto.
The terms of the Series F Preferred and the Series G Preferred are substantially
similar except that the terms of the Series F Preferred include the right of the
holders of the Series F Stock, acting separately as a class, to elect one member
of the Board of Directors of Greenbriar and the right to elect directors
constituting 70% of the Board of Greenbriar in the event Greenbriar breaches
certain covenants contained in the Stock Purchase Agreement and the Series F
Certificate of Designation which relates to the transaction described in the
first paragraph of Item 3 above. The terms of the Series F Preferred and the
Series G Preferred include the right of the holders of the Preferred Stock to
vote as classes on (i) any amendment, alteration or repeal of Greenbriar's
Articles of Incorporation of Bylaws, (ii) authorization, creation or issuance
of, or the increase in the authorized amount of, any securities ranking in
parity with or prior to the Preferred Stock in payment of dividends or in the
(Page 15 of 20 Pages)
<PAGE>
distribution of assets upon liquidation, dissolution or winding up of
Greenbriar, or any securities convertible into such securities, (iii) the merger
or consolidation of Greenbriar (subject to certain exceptions), or (iv) any
reorganization, restructuring, recapitalization, or other similar transaction of
Greenbriar (subject to certain exceptions). The terms of each class of Preferred
Stock also include certain other remedies available to the holders of the
Preferred Stock in the event Greenbriar breaches certain covenants contained in
the Stock Purchase Agreement and the Certificates of Designation, including, but
not limited to the right of the holders of the Preferred Stock or require
Greenbriar to repurchase the Preferred Stock.
Other than as described above, none of Pooled Equity or any Control Person has
any present plans or intentions which would result in or relate to any of the
transactions described in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
Item 5. Interest in Securities of the Issuer.
Pooled Equity and each Control Person beneficially owns and has the power to
vote and dispose of 1,105,656 shares of Common Stock as described above (which
is approximately 14.1% of the shares of Common Stock outstanding on September
30, 1999 based on Greenbriar's Form 10Q). Except as described in Item 3, none of
Pooled Equity or any Control Person has effected any transaction in any shares
of Common Stock during the past sixty days.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Certain rights relating to the Preferred Stock granted to Pooled Equity, as an
assignee of Lone Star and LSOF Greenbriar, by Greenbriar are set forth in the
Stock Purchase Agreement. Additional rights relating to the Preferred Stock
granted to Pooled Equity are set forth in the Certificates of Designation.
Certain registration rights granted to Pooled Equity are set forth in a
Registration Rights Agreement dated as of December 31, 1997 filed as Exhibit 4
hereto.
In connection with the purchase of the Preferred Stock, Greenbriar and Lone Star
entered into an Agreement filed as Exhibit 5 hereto which generally provides
that Greenbriar is obligated to make a cash payment to the holder of the
Preferred Stock sufficient to provide a 20% annual rate of return on Lone Star's
purchase of the Preferred Stock (including dividends received by such holder)
upon conversion of the Preferred Stock into Common Stock, or in certain other
events including, a repurchase of the Preferred Stock by Greenbriar based upon a
breach by Greenbriar of certain provisions in the Stock Purchase Agreement.
Pursuant to the First Letter Agreement Greenbriar has agreed to use all
proceeds, after payment of reasonable out-of-pocket expenses, from the sale or
refinancing of any capital assets to redeem shares of Preferred Stock.
Item 7. Material to be Filed as Exhibits.
1. Stock Purchase Agreement dated as of December 31, 1997 between
Greenbriar and Lone Star.
(Page 16 of 20 Pages)
<PAGE>
2. Certificate of Voting Powers, Designations, Preferences and Relative,
Participating, Optional or Other Special Rights of Series F Senior
Convertible Preferred Stock of Greenbriar Corporation.
3. Certificate of Voting Powers, Designations, Preferences and Relative,
Participating, Optional or Other Special Rights of Series G Senior
Non-Voting Convertible Preferred Stock of Greenbriar Corporation.
4. Registration Rights Agreement dated as of January 13, 1998 between
Greenbriar and Lone Star.
5. Agreement dated as of December 31, 1997 between Greenbriar and Lone
Star.
6. Letter Agreement dated as of January 31, 2000 between LSOF Greenbriar
and Greenbriar.
7. Letter Agreement dated as of February 4, 2000 between LSOF Greenbriar
and Greenbriar.
8. Assignment of Rights dated March 1, 2000 between LSOF Greenbriar and
Pooled Equity.
(Page 17 of 20 Pages)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Date: April 6, 2000 LSOF POOLED EQUITY, L.P.
By: LSOF GenPar, Inc., its General Partner
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
Date: April 6, 2000 LSOF GENPAR, INC.
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
Date: April 6, 2000 LONE STAR OPPORTUNITY FUND, L.P.
By: Lone Star Partner, L.P.,
its General Partner
By: Lone Star Management Co., Ltd.,
its General Partner
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
Date: April 6, 2000 LONE STAR PARTNER, L.P.
By: Lone Star Management Co., Ltd.,
its General Partner
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
(Page 18 of 20 Pages)
<PAGE>
Date: April 6, 2000 LONE STAR MANAGEMENT CO., LTD.
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
Date: April 6, 2000 HUDSON ADVISORS, L.L.C.
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
(Page 19 of 20 Pages)
<PAGE>
EXHIBIT INDEX
99.1 Stock Purchase Agreement dated as of December 31, 1997 between
Greenbriar and Lone Star.*
99.2 Certificate of Voting Powers, Designations, Preferences and Relative,
Participating, Optional or Other Special Rights of Series F Senior
Convertible Preferred Stock of Greenbriar Corporation.*
99.3 Certificate of Voting Powers, Designations, Preferences and Relative,
Participating, Optional or other Special Rights of Series G Senior
Non-Voting Convertible Preferred Stock of Greenbriar Corporation.*
99.4 Registration Rights Agreement dated as of January 13, 1998 between
Greenbriar and Lone Star.*
99.5 Agreement dated as of December 31, 1997 between Greenbriar and Lone
Star.*
99.6 Letter Agreement dated January 31, 2000 between LSOF Greenbriar and
Greenbriar.
99.7 Letter Agreement dated February 4, 2000 between LSOF Greenbriar and
Greenbriar.
99.8 Assignment of Rights dated March 1, 2000 between LSOF Greenbriar and
Pooled Equity.
* Incorporated by reference to the Schedule 13D filed on behalf of Lone Star
Opportunity Fund, L.P. on January 22, 1998.
(Page 20 of 20 Pages)
Exhibit 99.6
Letter Agreement dated January 31, 2000 between LSOF Greenbriar and Greenbriar
January 31, 2000
Greenbriar Corporation
Attention: Gene S. Bertcher
4265 Kellway Circle
Addison, Texas 75001
Re: Preferred Stock Redemption
--------------------------
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.
<PAGE>
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: Len Allen, 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/Les W. Allen, Jr.
----------------------------
Name: Les W. Allen, Jr.
Title: Vice President
Acknowledged and Agreed to by:
GREENBRIAR CORPORATION
By: /s/ Gene S. Bertcher
----------------------------------
Name: Gene S. Bertcher
Title: Executive Vice President
2
<PAGE>
Exhibit A
Preferred Stock Redemption Calculation:
- --------------------------------------
Preferred Stock Investment: $22,000,000
20% IRR Lookback (as of 2/1/00): $7,042,000
------------
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
3
Exhibit 99.7
Letter Agreement dated February 4, 2000 between LSOF Greenbriar and Greenbriar
February 4, 2000
Greenbriar Corporation
Attention: Gene S. Bertcher
4265 Kellway Circle
Addison, Texas 75001
Re: Preferred Stock Redemption from the Beaverton Land Sale
-------------------------------------------------------
Ladies and Gentlemen:
Reference is made to that certain letter agreement (the "Original Redemption
Letter") dated January 31, 2000 between Greenbriar Corporation ("Greenbriar")
and LSOF Greenbriar, L.L.C. ("Lone Star"). In Paragraph 2, of the Original
Redemption Letter, Greenbriar agreed to use all proceeds, after payment of
reasonable out-of-pocket expenses (the "Net Proceeds"), from the Beaverton land
sale to redeem, first, shares of its Series G Senior Non-Voting Convertible
Stock (the "Series G Preferred Stock"), and then, shares of its Series F Senior
Convertible Preferred Stock (the "Series F Preferred Stock," and together with
the Series G Preferred Stock, the "Preferred Stock").
The Beaverton land sale has occurred and Greenbriar has $1 million of Net
Proceeds from such sale. This letter sets forth our understanding of the
agreement between Greenbriar and Lone Star regarding the required redemption of
Preferred Stock for the Beaverton land sale pursuant to Paragraph 2 of the
Original Redemption Letter.
5. Redemption. Greenbriar and Lone Star agree that on February 4, 2000,
Greenbriar will redeem 75,722 shares of Series G Stock, as calculated in
accordance with Exhibit A attached hereto, for an aggregate redemption price of
$1 million. Greenbriar shall issue a new certificate for the balance of the
unredeemed shares after giving effect to the redemption pursuant to Paragraph 1
of the Original Redemption Letter and redemption described in this letter.
6. Original Redemption Letter in Effect. Nothing in this letter shall
be deemed an amendment, release or waiver of the Original Redemption Letter. The
Original Redemption Letter shall remain in full force and effect.
7. 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.
<PAGE>
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: Len Allen, 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/ Les W. Allen, Jr.
----------------------------------
Name: Les W. Allen, Jr.
Title: Vice President
Acknowledged and Agreed to by:
GREENBRIAR CORPORATION
By: /s/ Gene S. Bertcher
-----------------------------------
Name: Gene S. Bertcher
Title: Executive Vice President
2
<PAGE>
Exhibit A
Preferred Stock Redemption Calculation:
- --------------------------------------
Preferred Stock Investment (as of 2/4/00): $20,106,191
20% IRR Lookback (as of 2/4/00): $6,446,388
------------
Total as of 2/4/00: $26,552,579
Preferred Stock Investment (as % of Total): 75.72%
Pro-Rata Share of Current Redemption Allocated to
Preferred Stock: $757,222
Number of Shares Redeemed (10:1): 75,722
Pro-Rata Share of Current Redemption Allocated to Lookback: $242,778
3
Exhibit 99.8
Assignment of Rights dated March 1, 2000 between LSOF Greenbriar and Greenbriar
ASSIGNMENT OF RIGHTS
This Assignment of Rights (this "Assignment") is dated as of March 1, 2000
between LSOF Greenbriar, L.L.C., a Delaware limited liability company ("LSOF
Greenbriar"), and LSOF Pooled Equity, L.P., a Delaware limited partnership
("Pooled Equity").
WHEREAS, LSOF Greenbriar and Greenbriar Corporation, a Nevada corporation
("Greenbriar") entered into two separate letter agreements on January 31, 2000
and February 4, 2000 (collectively, the "Letter Agreements") regarding the
redemption by Greenbriar of its Series F Senior Convertible Preferred Stock and
Series G Senior Non-Voting Convertible Preferred Stock (collectively, the
"Preferred Stock");
WHEREAS, LSOF Greenbriar assigned its ownership in the Preferred Stock to Pooled
Equity; and
WHEREAS, due to Pooled Equity's ownership of the Preferred Stock, LSOF
Greenbriar intends to assign all of its right, title and interests in the Letter
Agreements to Pooled Equity.
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, effective as of the date hereof LSOF Greenbriar hereby
assigns all of its right, title and interest in and to the Letter Agreements to
Pooled Equity. Furthermore, all references in the Letter Agreements to LSOF
Greenbriar shall be deemed references to Pooled Equity.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this assignment to be executed on
the date first written above.
LSOF GREENBRIAR, L.L.C.
By: Lone Star Opportunity Fund, L.P.,
its Managing Member
By: Lone Star Partner, L.P.
its General Partner
By: Lone Star Management Co., Ltd.,
its General Partner
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
CONSENTED AND AGREED TO:
LSOF POOLED EQUITY, L.P.
By: LSOF GenPar, Inc., its
General Partner
By: /s/ Benjamin D. Velvin, III
---------------------------
Benjamin D. Velvin, III
Vice President
