EXHIBIT 10.24.1.
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MASTER SETTLEMENT AGREEMENT
This Master Settlement Agreement (this "Agreement") is made as
of August 1, 2001, by and among LSOF Pooled Equity, L.P., a Delaware limited
partnership ("Lone Star"), Greenbriar Corporation, a Nevada corporation (the
"Company"), Berne Village, Inc., a North Carolina corporation ("Berne Village"),
Rose Tara Plantation, Inc., a North Carolina corporation ("RTP"), Windsor House
West, Incorporated, a South Carolina corporation ("Windsor"), The
Denison-Greenbriar, Inc., a Texas corporation ("DG"), The Terrace Retirement,
Inc., an Oregon corporation ("TRI"), Rose Garden Estates, Inc., a Nevada
corporation ("RGE"), Wedgwood Partners Ltd. Limited Partnership, a Nevada
limited partnership ("WPL"), Wedgwood Retirement Inns, Inc., a Washington
corporation ("Wedgwood"), and Transferco, Inc., a Nevada corporation
("Transferco," and together with Berne Village, RTP, Windsor, DG, TRI, WPL,
Wedgwood and RGE, each an "Assignor," and collectively the "Assignors").
RECITALS
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WHEREAS, in January 1998, Lone Star's ultimate predecessor in
interest, Lone Star Opportunity Fund, L.P., purchased shares of the Company's
Series F Senior Convertible Preferred Stock and shares of the Company's Series G
Senior Convertible Preferred Stock (collectively, the "Preferred Stock") for
$22,000,000, which Preferred Stock was convertible into shares of the Company's
common stock;
WHEREAS, on October 30, 2000, Lone Star delivered its notice
of conversion evidencing its desire to convert the Preferred Stock into shares
of the Company's common stock;
WHEREAS, a dispute arose between the Company and Lone Star as
to the conversion price of the Preferred Stock and the number of shares of the
Company's common stock into which the Preferred Stock would be convertible;
WHEREAS, all matters relating to the conversion of the
Preferred Stock are currently being litigated pursuant to the lawsuit styled:
LSOF Pooled Equity, L.P. v. Greenbriar Corporation, Cause No. 00-08824, in the
162nd Judicial District Court (the "District Court") of Dallas County, Texas
(the "Lawsuit") asserting claims against the Company and seeking legal and
equitable relief;
WHEREAS, on April 5, 2001, the District Court granted partial
summary judgment in favor of Lone Star;
WHEREAS, a trial will be scheduled for the near future;
WHEREAS, solely to avoid the prospect of prolonged, costly
litigation, Greenbriar and Lone Star desire to compromise and settle all claims
between them, including, but not limited to, all existing claims asserted or
existing claims that could have been asserted by any party;
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WHEREAS, each Assignor is a direct or indirect wholly-owned
subsidiary of the Company;
WHEREAS, in connection with this Agreement and in
consideration for the releases contained herein, (i) the Assignors are
transferring to Assignee all of their respective right, title and interest, in
and to the Assigned Assets, (ii) the Company will pay to Lone Star $4,000,000 in
immediately available funds, and (iii) for the same consideration, the Company
is redeeming all of Lone Star's Preferred Stock, any and all of the Company's
common stock into which Lone Star's Preferred Stock was purportedly converted,
together with all of Lone Star's right, title and interest to any and all claims
and rights with respect to its interest as a stockholder, equity interest holder
or otherwise; and
WHEREAS, this Agreement and the consideration transferred
pursuant hereto is to compromise and settle all disputed claims and to buy
peace, and no payment, release or other consideration given constitutes an
admission of liability by any party hereto, all such liability being expressly
denied.
NOW, THEREFORE, in consideration of the foregoing premises,
the mutual agreements contained in this Agreement and other consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:
AGREEMENT
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ARTICLE I
DEFINITIONS
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"Affiliate" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, five percent (5%) or more of the
Capital Stock having ordinary voting power in the election of directors of such
Person, (b) each Person that controls, is controlled by or is under common
control with such Person and (c) in the case of individuals, the immediate
family members, spouses and lineal descendants of individuals who are Affiliates
of the Person. For the purposes of this definition, "control" of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract, by virtue of being an executive officer or a director
or otherwise.
"Agreement" means this Master Settlement Agreement, as
amended, supplemented or otherwise modified from time to time.
"Assigned Assets" shall have the meaning assigned in Section
2.2.
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"Assignee" shall mean Lone Star or its designated assignees in
accordance with Section 9.11.
"Assignee Party" shall have the meaning assigned in Section
7.2.
"Assignor" or "Assignors" shall have the meaning assigned in
the Preamble.
"Assignor Party" shall have the meaning assigned in Section
7.3.
"Assumed Liabilities" shall have the meaning assigned in
Section 2.3.
"Assumption Agreement" means that certain Assumption Agreement
to be executed by the Assignee and each of the Assignors substantially in the
form of Exhibit C hereto.
"Berne Village" shall have the meaning assigned in the
Preamble.
"Bill of Sale" means that certain Bill of Sale to be executed
by each of the Assignors substantially in the form of Exhibit B hereto.
"Business" shall mean with respect to (i) Berne Village, the
operation and ownership of the assisted living facility and community known as
Berne Village located in New Bern, North Carolina; (ii) RTP, the operation and
ownership of the assisted living facility and community known as Rosa Tara
Plantation located in King, North Carolina; (iii) Windsor (or its assignee), the
operation and ownership of the assisted living facility and community known as
Windsor House West located in Spartanburg, South Carolina; (iv) DG, the
operation and ownership of the assisted living facility and community known as
Greenbriar at Denison located in Denison, Texas; (v) TRI, the operation and
ownership of the assisted living facility and community known as The Terrace
located in Portland, Oregon; (vi) RGE, the operation and ownership of the
assisted living facility and community known as Rose Garden Estates located in
Ritzville, Washington; (vii) Transferco, the operation and ownership of the
assisted living facilities and communities known as Villa de Sol and
Meadowbrook, each located in Roswell, New Mexico; (viii) WPL, the operation and
ownership of the assisted living facilities and communities known as Camelot
Assisted Living located in Harlingen, Texas and La Villa located in Roswell, New
Mexico; and (ix) Wedgwood, the operation and ownership of the assisted living
facility and community known as Summer Hill located in Oak Harbor, Washington.
"Capital Stock" shall mean all shares, options, warrants,
general or limited partnership or membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or other Person, whether voting or nonvoting, including common
stock, preferred stock or any other "equity security" (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended).
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"Claims" means all claims and causes of actions that either
were or could have been asserted in the Lawsuit as more specifically set forth
in the Mutual Release.
"Closing" has the meaning set forth in Section 2.4.
"Closing Date" has the meaning set forth in Section 2.4.
"Code" has the meaning assigned in Section 2.3(b).
"Company" shall have the meaning assigned in the Preamble.
"Consent Agreement" shall mean that certain Consent Agreement
of even date herewith executed by certain stockholders of the Company, including
each of the directors of the Company and Intervenors attached hereto as Exhibit
D.
"Crowne Point Escrow" shall have the meaning set forth in
Section 2.10(b).
"Crowne Point Proceeds" shall have the meaning set forth in
Section 2.10(b).
"DG" shall have the meaning assigned in the Preamble.
"Direct Claim" shall have the meaning set forth in Section
7.4(d).
"District Court" shall have the meaning assigned in the
Recitals.
"Employee" shall have the meaning assigned in Section 3.1(r).
"Employee Benefit Plans" shall have the meaning assigned in
Section 3.1(r).
"Environmental Laws" shall have the meaning assigned in
Section 3.1(p).
"ERISA" shall have the meaning set forth in Section 4.4.
"ERISA Affiliate" shall have the meaning set forth in Section
3.1(r).
"Escrow Amounts" shall have the meaning set forth in Section
2.10(b).
"Excluded Assets" shall have the meaning assigned in Section
2.2.
"Facility" shall mean any assisted living facility or
community that is an Assigned Asset.
"Facility Leases" shall have the meaning assigned in Section
3.1(j)(v).
"Former Employee" shall have the meaning assigned in Section
3.1(r).
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"GAAP" generally accepted accounting principles in the United
States of America.
"Greenbriar Parties" shall mean the Company and each Assignor.
"Harlingen" shall have the meaning assigned in the Preamble.
"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person (i) for borrowed money, (ii) evidenced
by bonds, debentures, notes or other similar instruments, (iii) constituting
capitalized lease obligations, (iv) incurred or assumed as the deferred purchase
price of property, or pursuant to conditional sale obligations and title
retention agreements, (v) for the reimbursement of any obligor on any letter of
credit, bankers' acceptance or similar credit transaction, (vi) for Indebtedness
of others guaranteed by such Person, (vii) for interest swap obligations,
commodity agreements and currency agreements and (viii) for Indebtedness of any
other Person of the type referred to in clauses (i) through (vii) which are
secured by any Lien on any property or asset of such first referred to Person,
the amount of such Indebtedness being deemed to be the lesser of the value of
such property or asset or the amount of the Indebtedness so secured.
"Indemnifiable Losses" means any and all damages, losses,
liabilities, obligations, costs, and expenses, and any and all claims, demands,
or suits (by any person), including the costs and expenses of any and all
actions, suits, proceedings, demands, assessments, judgments, settlements, and
compromises relating thereto and including reasonable attorneys' fees and
expenses in connection therewith.
"Indemnifying Party" means any person required to provide
indemnification under this Agreement.
"Indemnitee" means any person entitled to indemnification
under this Agreement.
"Indemnity Payment" means any amount of Indemnifiable Losses
required to be paid pursuant to this Agreement.
"Intervenors" American Realty Trust, Inc., Basic Capital
Management, Inc., One Realco Corporation (in its own capacity and as successor
in interest to Nanook Partners, L.P.), Tacco Financial Corporation,
International Health Products, Inc.
"Law" shall mean any law (including common law), constitution,
statute, regulation, rule, ordinance, order, injunction, writ, decree or award
of any governmental authority of competent jurisdiction or of any arbitrator
(including ERISA, the Code, the Uniform Commercial Code, any applicable tax law,
product safety law, occupational safety or health law, Environmental Law and/or
securities laws).
"Lawsuit" shall have the meaning assigned in the Recitals.
"Leased Tangible Property" shall have the meaning assigned in
Section 3.1(k).
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"Licensed Intangible Properties" shall have the meaning
assigned in Section 3.1(l).
"Lien" shall mean any mortgage, pledge, hypothecation, lien
(statutory or other), judgment lien, security interest, security agreement,
charge or other encumbrance, or other security arrangement of any nature
whatsoever, including any installment contract, conditional sale or other title
retention arrangement, any sale of accounts receivable or chattel paper, any
assignment, deposit arrangement or lease (including capital leases) intended as,
or having the effect of, security and the filing of any financing statement
under the UCC or comparable law of any jurisdiction.
"Lone Star" shall have the meaning assigned in the Preamble.
"Lone Star Parties" shall mean Lone Star and Assignee.
"Mutual Release" shall mean the Mutual Release substantially
in the form of Exhibit A and all related exhibits thereto, including the Agreed
Motion to Dismiss and the Agreed Order Granting Motion to Dismiss.
"Organizational Documents" shall mean with respect to a
corporation, the certificate or articles of incorporation and by-laws of such
corporation; with respect to a partnership, the certificate of partnership (or
limited partnership, as applicable) and partnership agreement, together with the
analogous documents for any corporate or partnership general partner; with
respect to a limited liability company, the certificate of formation or articles
of organization and operating agreement; and, in any case, any other document
governing the formation and conduct of business by such Person.
"Owned Tangible Property" shall have the meaning assigned in
Section 3.1(k).
"Owned Intangible Property" shall have the meaning assigned in
Section 3.1(l).
"Permitted Liens" means those liens set forth on Schedule 1.1,
liens for ad valorem taxes and assessments not yet due and payable, mechanics
liens incurred in the ordinary course of the Business consistent with past
practice, and other minor encumbrances which do not and will not adversely
affect the transferability, use or value of the Real Property as it is currently
being used in connection with such Assignor's Business.
"Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or department or other agency
or political subdivision thereof.
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"Pre-Closing Escrow Agent" shall have the meaning assigned in
Section 2.10(a).
"Pre-Closing Escrow Agreement" shall have the meaning assigned
in Section 2.10(a).
"Pre-Closing Escrow Amount" shall have the meaning assigned in
Section 2.10(a).
"Preferred Stock" has the meaning assigned in the Recitals.
"Real Property" shall have the meaning assigned in Section
3.1(j)(i).
"RGE" shall have the meaning assigned in the Preamble.
"RTP" shall have the meaning assigned in the Preamble.
"Solvent" shall mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person; (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small amount of capital.
The amount of contingent liabilities (such as litigation, guarantees and pension
plan liabilities) at any time shall be computed as the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can reasonably be expected to become an actual or matured liability.
"Stock Certificates" shall mean any and all stock certificates
evidencing the Company's common stock into which Lone Star's Preferred Stock was
purportedly converted.
"Subject Employee" shall have the meaning assigned in Section
3.1(w).
"Subsidiary" shall mean with respect to any Person, (a) any
corporation (i) of which an aggregate of more than fifty percent (50%) of the
outstanding Capital Stock having ordinary voting power to elect a majority of
the Board of Directors of such corporation (irrespective of whether, at the
time, Capital Stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned legally or beneficially by such Person
and/or one or more Subsidiaries of such Person or (ii) with respect to which any
such Person has the right to vote or designate the vote of fifty percent (50%)
or more of such Capital Stock, whether by proxy, agreement, operation of law or
otherwise and (b) any partnership or limited liability company (i) in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%) or (ii) of which any such Person
is a general partner or manager or may exercise the powers of a general partner
or manager.
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"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other charges of any
nature whatsoever, including interest and penalties, imposed by any governmental
authority.
"Terminating Assignee's Breach" shall have the meaning
assigned in Section 6.1(c).
"Terminating Assignor's Breach" shall have the meaning
assigned in Section 6.1(b).
"Third Party Claim" means any claim, action, or proceeding
made or brought by any Person who is not a party to this Agreement or an
Affiliate of a party to this Agreement.
"Transaction Documents" shall mean this Agreement, the Mutual
Release, the Bill of Sale, the Assumption Agreement, the Consent Agreement, and
all other agreements, instruments, documents and certificates now or hereafter
delivered to Lone Star or its Affiliates by the Company or its Affiliates
pursuant to or in connection with any of the foregoing.
"Transferco" shall have the meaning assigned in the Preamble.
"TRI" shall have the meaning assigned in the Preamble.
"Wedgwood" shall have the meaning assigned in the Preamble.
"Windsor" shall have the meaning assigned in the Preamble.
"WTP" shall have the meaning assigned in the Preamble.
ARTICLE II
TRANSFER OF CONSIDERATION
2.1 Consideration.
(a) Subject to the terms hereof, (i) the Company agrees to (A) on the
Closing Date, pay to Lone Star, a cash payment of Four Million Dollars
($4,000,000) in immediately available funds; and (B) cause each of the
Assignors to assign, convey and transfer to Assignee on the Closing
Date, the Assigned Assets as set forth below in Section 2.2; and (ii)
the Company and the Intervenors shall fully and finally release all
claims the Company or any of its Subsidiaries, stockholders (including,
without limitation, the Intervenors), directors, officers, employees,
representatives, agents or any of their Affiliates may have against the
Lone Star Parties or any of their Affiliates pursuant to the terms and
conditions of the Mutual Release.
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(b) Subject to the terms hereof, Lone Star agrees to accept (i) the cash
payment referenced in clause (i)(A) above, and (ii) the transfer of the
Assigned Assets in consideration of the following:
(i) the redemption by the Company of (A) all of Lone Star's right, title
and interest in and to Lone Star's Capital Stock in the Company,
including (1) Lone Star's Preferred Stock and all attendant rights,
including conversion rights and default dividend claims, (2) Lone
Star's 1,054,202 shares of the Company's common stock, and (3) all
other equity interests in the Company that may be held by Lone Star;
and (B) all reimbursable expenses (other than the expenses related to
the transactions contemplated by the Transaction Documents) due Lone
Star by the Company and such reimbursable expenses shall be
compromised, waived and discharged;
(ii) the assumption by Lone Star of the Assumed Liabilities as set forth in
Section 2.3 below; and
(iii) the full and final release of all Claims that Lone Star or any of its
Subsidiaries, stockholders, directors, officers, employees,
representatives, agents or any of their Affiliates (including, but not
limited to Lone Star Opportunity Fund, L.P. and LSOF Greenbriar L.L.C.)
may have against the Company, or any of its Subsidiaries, stockholders,
directors, officers, employees, representatives, agents or their
Affiliates pursuant to the terms and conditions of the Mutual Release.
(c) All parties to this Agreement agree for federal income tax purposes to
treat all consideration payable to Lone Star (except for reimbursable
expenses referenced in Section 2.1(b)(i)(B), if any) as a payment to
Lone Star in redemption of its Capital Stock of the Company.
Subject to the terms and conditions of this Agreement, it is
the express intent of the Company and Lone Star to fully and finally
resolve all disputes between them, including without limitation the
Lawsuit, in a manner that settles and discharges all past and present
differences of any kind or character and, to the greatest extent
allowed by law.
2.2 Transfer of Assets. Subject to the provisions of this Agreement, the
Company agrees to cause each of the Assignors, and each Assignor hereby
agrees, to assign to Assignee and Assignee hereby agrees to accept from
each Assignor, all of such Assignor's assets and properties of every
kind and nature, real, personal or mixed, tangible or intangible,
wherever situated, including all land, buildings, improvements,
fixtures, machinery, tooling, furniture, vehicles, equipment, tools,
inventory, supplies, indemnification rights, technology, know-how,
patents, trademarks, tradenames, proprietary information, trade
secrets, computer programs, copyrights, customer lists, resident lists,
resident deposits refundable to residents held by the Company or any of
its Subsidiaries related to the Businesses, demographic information,
customer data, goodwill and other intangible property rights of any
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kind whatsoever, licensing agreements and other contractual rights, and
all of such Assignor's books and records relating to the operations of
such Assignor's Business, as each of the foregoing exists as of the
Closing Date (such assets being sold by the Assignors are collectively
referred to herein as the "Assigned Assets"); excluding, however, cash,
cash equivalents, marketable securities, accounts receivable, notes
receivable, loan receivables, deferred income taxes and prepaid income
taxes, income tax refunds, accrued interest receivables, utility
deposits, insurance policies and claims thereunder (other than the
proceeds of any claims which relate to the Assigned Assets), and the
other assets listed on Schedule 2.2 (collectively, the "Excluded
Assets"). The Assigned Assets shall be sold and transferred to Assignee
"as is" free and clear of all Liens, other than Permitted Liens.
2.3 Assumption of Liabilities. Subject to the provisions of this Agreement,
the Assignee, in consideration of the other agreements related thereto
or entered into in connection therewith, shall assume the payment,
performance and discharge of the Assumed Liabilities. For purposes
hereof, "Assumed Liabilities" means only (i) the specific liabilities
of each Assignor under the contracts, purchase commitments, sales
orders and arrangements listed on Schedule 2.3 to the extent such
obligations accrue following the Closing Date, (ii) the Indebtedness
specifically set forth on Schedule 2.3, and (iii) all liabilities,
obligations, costs and expenses incurred in the ordinary course of
business consistent with past practices prior to the Closing Date for
goods or services to be used by any of the Businesses after the Closing
Date in an aggregate amount not to exceed $250,000. Assignee does not
and shall not agree to pay, assume, perform, or discharge any of such
Assignor's debts, obligations, or liabilities (whether known or
unknown, direct or indirect, absolute or contingent, matured or
unmatured, or otherwise), whether the same currently exist or come to
exist in the future, except the Assumed Liabilities. For the avoidance
of doubt, "Assumed Liabilities" shall not include any of the following:
(a) any of the Assignor's liabilities for which assumption by Assignee
would be prohibited under the terms of such contracts, commitments,
orders or arrangements;
(b) any of the Assignor's liabilities or obligations with respect to the
employment or termination of employment of any employee of any
Assignor, payment of salary or severance or provision of benefits,
including but not limited to the benefits payable under any Employee
Benefit Plan with respect to the employment by any Assignor of any
employee or independent contractor of any Assignor or of any former
employee of any Assignor, and any liabilities or obligations of any
Assignor arising out of or resulting from any Employee Benefit Plan or
any other employee benefit agreement, arrangement, understanding,
program or practice, including any liabilities or obligations arising
under Section 4980B of the Internal Revenue Code of 1986, as amended
(the "Code");
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(c) except as specifically set forth on Schedule 2.3, any of such
Assignor's liabilities for Indebtedness;
(d) any of the Assignor's liabilities or obligations for Taxes other than
those Taxes that shall be prorated as set forth in Section 2.5 and the
special assessment described on Schedule 2.3 with respect to the
Facility known as "The Terrace";
(e) any of the Assignor's liabilities or obligations under contracts
relating to any Assignor's equity or any Assignor's equityholders;
(f) any of the Assignor's liabilities or obligations with respect to any
litigation or other claims arising in connection with the pre-Closing
operations of the Assigned Assets or such Assignor's Business;
(g) any of the Assignor's liabilities or obligations arising out of
Environmental Laws arising in connection with the pre-Closing
operations of the Assigned Assets or the Business (including, without
limitation, any off-site disposal activities) or the Real Property or
any other real property (including previously-owned real property)
owned, leased or operated by any Assignor or any predecessor of any
Assignor or any prior owner of all or part of their respective business
or assets (including, but not limited to, any liability under
Environmental Laws as a result of hazardous materials present at, on or
under any such real property as of or prior to the Closing).
2.4 Closing. The consummation of the transactions contemplated herein (the
"Closing") shall take place at 10:00 a.m., local time, on the earlier
to occur of (i) three (3) business days after all of the conditions to
Closing set forth in Article V have been satisfied or waived, and (ii)
August 31, 2001 at the offices of Weil, Gotshal & Manges LLP, 100
Crescent Court, Suite 1300, Dallas Texas 75201, or at such other time
or place as the Lone Star and the Company may agree in writing (the day
on which the Closing takes place being referred to herein as the
"Closing Date"). At the Closing, the Company shall deliver or cause to
be delivered to the Lone Star Parties (i) $4,000,000 payable in
immediately available funds to an account designated by Lone Star, (ii)
the Assigned Assets, and (iii) the other documents required to be
delivered by the Greenbriar Parties pursuant to Article V hereof,
including without limitation the Mutual Release. At the Closing, Lone
Star shall deliver to the Company the Mutual Release, the Assumption
Agreement and the Stock Certificates.
2.5 Prorations. Utility charges, ad valorem taxes and property taxes and
personal property taxes on the Assigned Assets and rents and other
charges payable with respect to leases and other contracts assumed by
Assignee will be prorated between the respective Assignor, on the one
hand, and Assignee, on the other hand, as of 12:01 a.m. on the Closing
Date. To the extent practicable, all such prorations and payments will
be made on the Closing Date, with the balance to be made as soon as
practicable following the Closing Date in one or more payments.
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2.6 Allocation of Consideration. For federal income and other applicable
tax purposes, the consideration shall be allocated among the Assigned
Assets as set forth in Schedule 2.6, such allocation to be made as
provided in Section 1060 of the Code. Assignors and Assignee shall each
file Form 8594 (Asset Acquisition Statement Under Section 1060) on a
timely basis reporting the allocation of the consideration consistent
with the allocation in Schedule 2.6. Schedule 2.6 also reflects the
aggregate fair market values for the Assigned Assets, as such terms are
defined in regulations promulgated pursuant to Section 1060 of the
Code. Assignors and Assignee shall file on a timely basis any
amendments required to such Form 8594 as a result of a subsequent
adjustment of the consideration. Assignors and Assignee shall not take
any position on their respective federal income or other applicable tax
returns that is inconsistent with the allocation of the consideration
as agreed to in Schedule 2.6 or as adjusted as a result of a subsequent
increase or decrease in the consideration. The Assignors and Assignee
shall each indemnify, defend and hold harmless the other from and
against any and all claims, losses, liabilities, damages, cost and
expenses that may be incurred as a result of the failure to file Form
8594, the failure to file such Form 8594 on a timely basis or the
failure to file its tax returns in the manner required by this Section
2.6.
2.7 Damages. The consideration exchanged by the parties pursuant to this
Agreement, and the allocation of consideration described herein,
reflects a mutual compromise and may not be indicative of the damages
or losses that will result from the breach of this Agreement or any of
the Transaction Documents.
2.8 Intentionally Deleted.
2.9 Filings. Immediately after the execution and delivery of this
Agreement, the Company shall file a Current Report on 8-K with the
Securities and Exchange Commission and Lone Star shall file an
amendment to its Schedule 13D with the Securities and Exchange
Commission relating to the transactions contemplated herein, the
contents of which shall be subject to the reasonable approval of both
Company and Lone Star, but shall comply in all respect with all
applicable law, rules, and regulations, including, without limitation,
all regulations of the Securities and Exchange Commission.
2.10 Pre-Closing Escrow.
(a) Upon the execution hereof, the Company shall pay Two Million Dollars
($2,000,000) (the "Pre-Closing Escrow Amount") to American Escrow (the
"Pre-Closing Escrow Agent"), and the Pre-Closing Escrow Agent shall
hold the Pre-Closing Escrow Amount under the terms of an escrow
agreement in the form of Exhibit E hereto (the "Pre-Closing Escrow
Agreement").
(b) Upon the consummation of the sale of the assisted living facility and
community known as Crowne Point, the Company shall pay an additional
Two Million Dollars ($2,000,000) (the "Crowne Point Proceeds") to the
Pre-Closing Escrow Agent, and the Pre-Closing Escrow Agent shall hold
the Crowne Point Proceeds in a separate escrow account (the "Crowne
Point Escrow") pursuant to an escrow agreement between the Company and
the Pre-Closing Escrow Agent. Such escrow agreement shall provide that
the Pre-Closing Escrow Agent shall provide Lone Star with evidence
satisfactory to Lone Star that the Crowne Point Proceeds have been
deposited into the Crowne Point Escrow and will immediately notify Lone
Star of any distributions from the Crown Point Escrow Account.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Assignors. Each of the Greenbriar
Parties represents and warrants, for and on behalf of itself and with
respect to each Assignor and the Assigned Assets purported to be owned
by each such Assignor, to the Lone Star Parties as follows:
(a) Organization. Each of the Greenbriar Parties is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has the requisite power and authority
to own, lease or otherwise hold the assets owned, leased or otherwise
held by it and to carry on its business as presently conducted by it.
Each of the Greenbriar Parties is in good standing and duly qualified
to conduct business as a foreign entity in every jurisdiction in which
its ownership or lease of property or conduct of the business makes
such qualification necessary. All of the jurisdictions in which the
Greenbriar Parties are in good standing and duly qualified to conduct
business as a foreign entity are listed on Schedule 3.1(a).
(b) Authorization and Effect of Agreement. Each of the Greenbriar Parties
has the requisite corporate power and authority to execute, deliver and
perform its obligations under each of the Transaction Documents
executed or to be executed by such Greenbriar Party. The execution,
delivery and performance by each Greenbriar Party of each of the
Transaction Documents executed or to be executed by such Greenbriar
Party has been duly authorized by all requisite corporate action as
applicable. This Agreement has been duly executed and delivered by each
of the Greenbriar Parties. This Agreement constitutes, and each of the
other Transaction Documents to be executed by a party hereto will
constitute, the valid and binding obligation of such Greenbriar Party,
enforceable against such Greenbriar Party in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
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(c) Conflicts. Neither the execution, delivery, nor performance of any
Transaction Document executed or to be executed by any Greenbriar Party
will (i) violate any material Law applicable to such Greenbriar Party,
(ii) violate, conflict with, permit the cancellation or acceleration
of, or give rise to a loss of any benefit under, any material agreement
or commitment to which such Greenbriar Party is a party or by which any
of its properties are bound, or (iii) violate or conflict with any
provision of such Greenbriar Party's Organizational Documents. Neither
the Company nor any the Assignors have entered into, or is aware of,
any agreement pursuant to which any person or entity has obtained the
right to acquire any assets of the Company any of its Subsidiaries.
(d) Consents. Except as set forth on Schedule 3.1(d), no material actions,
consents, or approvals of, or filings with, any governmental
authorities or any third parties are required in connection with the
execution, delivery or performance by any of the Greenbriar Parties of
the Transaction Documents.
(e) Stockholder Matters. The Consent Agreement has been signed by those
officers, directors and holders of the Company's Capital Stock
(including the Intervenors) signatory thereto, and no action has been
taken by an such party to amend, modify of rescind the Consent
Agreement.
(f) Absence of Certain Changes and Events. Except as contemplated or
expressly permitted by this Agreement and except as set forth on
Schedule 3.1(f) or disclosed in any filing with the Securities Exchange
and Commission prior to the date hereof, since March 31, 2001, there
has not been (i) any material damage, destruction or loss of any kind
with respect to any of the Assigned Assets, nor has there been any
event or circumstance which has had or reasonably could be expected to
have a material adverse effect on the financial condition or business
operations of such Assignor; (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any of the Assignors' outstanding capital
stock; (iii) any cancellation or compromise of any debt or claim, or
waiver or release of any right, except in the ordinary course of
business consistent with past practices; (iv) any sale, assignment,
lease or disposition of assets of any of the Assignors (or a commitment
to do any of the foregoing), except in the case of obsolete equipment
or in connection with the acquisition of replacement property that has
substantially the same value and utility; (v) any Lien created or
assumed upon the Assigned Assets (other than Permitted Liens); (vi) any
capital expenditures, or commitments to make such capital expenditures,
in excess of $100,000 (in the aggregate); (vii) the execution of any
agreement with any director, officer, employee or independent
contractor of any of the Assignors providing for his/her employment, or
any increase in compensation or severance or termination of benefits
payable or to become payable by an Assignor to such director, officer,
employee, or independent contractor, or any increase in benefits under
any collective bargaining agreement or other Employee Benefit Plan of
any of the Assignors, except in the ordinary course of business
consistent with past practices; (viii) any distributions to its
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stockholders in respect of its Capital Stock or loans to any Person; or
(ix) any transaction with any Affiliate required to be disclosed under
Item 404 of Regulation S-K promulgated under the Securities Act of
1933, as amended. Since March 31. 2001 such Assignor has not conducted
the Business other than in the ordinary course, consistent with such
Assignor's past practice. Since March 31, 2001, there has not been any
material adverse change in the Business or the financial condition or
results of operations of the Business. Since December 31, 2000, there
has not been any change by any of the Company or any of its
Subsidiaries in their financial or tax accounting principles or
methods, except insofar as required by GAAP, applicable law or
circumstances which did not exist as of the date of the December 31,
2000 audited financial statements.
(g) Subsidiaries. The Company has previously provided to Lone Star copies
of all Organizational Documents of the Company and each Assignor, and
such copies are true and correct in all respects.
(h) Litigation; Decrees. Except as disclosed on Schedule 3.1(h)(1) and the
Lawsuit, there are no lawsuits, claims or administrative or other
proceedings or investigations pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened by, against or affecting
(i) any of the Company or its Subsidiaries, including without
limitation, the Assignors, relating to the Businesses, where the
uninsured amount exceeds $200,000, individually or in the aggregate, or
(ii) this Agreement, the other Transaction Documents or the
transactions contemplated hereby or thereby. Except as disclosed on
Schedule 3.1(h)(1), neither the Company nor any of its Subsidiaries,
including the Assignors, is a party to or subject to the provisions of
any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or authority
relating to the Businesses, this Agreement, the other Transaction
Documents or the transactions contemplated hereby or thereby. Except as
disclosed on Schedule 3.1(h)(2), none of the litigation described on
Schedule 3.1(h)(1), affects or could affect the Assigned Assets or such
Assignor's Business.
(i) Deposits. Schedule 3.1(i) sets forth a true and complete list all
resident deposits being held by the Company or any of its Subsidiaries
and all cash of the Company or any of its Subsidiaries which are
related to the Assignors' Businesses.
(j) Real Property.
(i) Schedule 3.1(j) sets forth a true and complete list of all real
property owned by each Assignor (the "Real Property"). Such Assignor
has, and Assignee will be transferred, good and indefeasible title to
the Real Property, free and clear of any Liens (other than Permitted
Liens). Such Assignor does not lease, as lessee, any real property.
Such Assignor has provided to Assignee correct and complete copies of
all title insurance policies issued to such Assignor or in such
Assignor's possession relating to the Real Property.
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(ii) The Real Property of such Assignor constitutes all real property used
in connection with such Assignor's Business. Neither the Company nor
such Assignor has knowledge that the Real Property, any improvements
thereon, or the use by such Assignor thereof, fails to conform to (i)
all applicable Laws, including but not limited to zoning requirements
and the Americans With Disabilities Act, and (ii) all restrictive
covenants, if any. There are no eminent domain proceedings pending, or
to such Assignor's knowledge, threatened against the Real Property. The
Real Property has adequate ingress or egress to public streets and
highways.
(iii) The Real Property is connected to and is served by water, solid waste
and sewage disposal, drainage, telephone, gas, electricity and other
utility equipment facilities and services necessary and sufficient for
the operation or use of the Real Property. To such Assignor's
knowledge, such facilities and services are adequate for the present
use and operation of the Real Property on a fully occupied basis, and
are installed and connected pursuant to valid permits and are in
material compliance with all governmental regulations. To such
Assignor's knowledge, no fact or condition exists which would result in
the termination or impairment in the furnishing of utility services to
the Real Property. With respect to the prior three sentences, such
Assignor has not received any written notice to the contrary.
(iv) Other than as set forth on Schedule 3.1(j), the Real Property has not
been damaged by fire or other casualty except for such damage which has
been fully repaired and restored prior to the date of this Agreement.
(v) Schedule 3.1(j) sets forth a true and complete list of all real
property leased by such Assignor, as lessor, and a true and correct
copy of the rent roll relating to each of the Assignor's Facilities
(the "Facility Leases").
(vi) There has not been (i) any threatened cancellation of any Facility
Leases not in the ordinary course of such Assignor's Business, (ii) any
outstanding disputes, of a material nature, under any Facility Leases
or (iii) to such Assignor's knowledge, any bases for any claim of
breach or default thereunder. Such Assignor has no reason to believe
that any of the Facility Leases that are renewable will not be renewed
by the other party on reasonable terms other than in the ordinary
course of such Assignor's Business.
(k) Physical Assets and Properties. Each Assignor owns or leases all
physical assets and personal properties necessary in the operation of
their respective Businesses. To the extent such Assignor owns such
physical assets and personal property, each Assignor has, and Assignee
will be transferred and have, good title to all tangible assets and
properties, whether personal or mixed, purported to be owned by such
Assignor and included in the Assigned Assets (the "Owned Tangible
Property"), free and clear of all Liens, other than Permitted Liens.
Schedule 3.1(m) sets forth a true and complete list of each lease or
other agreement under which such Assignor leases, licenses, holds, or
operates any item of physical property, other than the Owned Tangible
Property, that is included in the Assigned Assets (such leased tangible
property being referred to herein as the "Leased Tangible Property").
Such Assignor has valid and enforceable leasehold interests in the
Leased Tangible Property, free and clear of all Liens, other than
Permitted Liens. All Owned Tangible Property and Leased Tangible
Property is located on the Real Property.
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(l) Intangible Assets and Properties. Set forth on Schedule 3.1(l) is a
true and complete listing of all intangible assets and properties,
including, without limitation, all patents, copyrights, trademarks and
service marks, owned by such Assignor as of the date hereof (the "Owned
Intangible Properties"). Set forth on Schedule 3.1(l) is a true and
complete listing of all intangible assets and properties, including,
without limitation, all patents, copyrights, trademarks and service
marks, which such Assignor licenses from third parties (the "Licensed
Intangible Properties"). The Owned Intangible Properties and the
Licensed Intangible Properties constitute all intangible assets and
properties used in connection with the operation of such Assignor's
Business. Such Assignor has, and Assignee will be transferred and will
have, good and marketable title to the Owned Intangible Properties,
free and clear of all Liens. Such Assignor has, and except as set forth
on Schedule 3.1(i) and as provided in Section 8.1, Assignee will be
transferred and will have, the valid and enforceable right to use the
Licensed Intangible Properties in the manner the Licensed Intangible
Properties are used in connection with such Assignor's Business as
currently conducted, without the requirement for any payment therefor
and free and clear of all Liens. The operations of such Assignor's
Business do not, in any material respect, infringe on the intellectual
property rights of any other person or entity other than the litigation
with respect to the name "Greenbriar" disclosed on Page D-7 of Schedule
3.1(h).
(m) Contracts. Each Assignor has provided to Lone Star or has given Lone
Star access to accurate and complete copies of all of the following
agreements or documents to which such Assignor is subject and each of
which is listed on Schedule 3.1(m): (i) any lease (whether of real or
personal property); (ii) any agreement for the purchase of materials,
supplies, goods, services, equipment, or other assets (A) providing for
annual payments by such Assignor of $10,000 or more, (B) providing for
aggregate payments by such Assignor of $25,000 or more, or (C) not
terminable on thirty (30) days or less notice without penalty; (iii)
any partnership, joint venture, or other similar agreement or
arrangement; (iv) any instruments or documents evidencing the issuance
of any equity securities, warrants, rights or options to purchase
equity securities of such Assignor; (v) any management agreements; (vi)
any instruments or documents evidencing or relating to Indebtedness, or
guarantees of Indebtedness by such Assignor, and any security interest
granted by such Assignor with respect thereto; (vii) any option,
license, franchise, or similar agreement; (viii) any agency, dealer,
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sales representative, marketing, or other similar agreement; (ix) any
agreement that limits the freedom of any Assignor to compete in any
line of business or with any Person or in any area that would limit the
freedom of Assignee or any Affiliate of Assignee after the Closing
Date; (x) any agreement with a holder of any Assignor's capital stock;
(xi) any agreement with any director or officer of any Greenbriar
Party; or (xii) any other agreement, commitment, arrangement, or plan
not made in the ordinary course of business. All such agreements,
arrangements, commitments, guarantees and other instruments are legal,
valid and binding obligations of such Assignor, and to such Assignor's
knowledge, of the other parties thereto, enforceable in accordance with
their terms; all payments required to be made thereunder have been made
by the parties required to do so, except to the extent that any
payments are being contested in good faith and are listed as such on
Schedule 3.1(m); and no defenses, offsets or counterclaims thereto have
been asserted in writing, or, to such Assignor's knowledge, may be made
by any party thereto other than such Assignor, nor has such Assignor
waived any substantial rights thereunder.
(n) Contract Defaults. Except as disclosed on Schedule 3.1(n), such
Assignor has not received written notice of any default, and such
Assignor is not in default, under any material agreement, arrangement,
commitment, guarantee or other instrument relating to, binding, or
affecting such Assignor, such Assignor's Business or any of the
Assigned Assets, and there has not occurred any event which, with the
lapse of time or giving of notice, or both, would constitute a default
under any such material agreement. Except as set forth on Schedule
3.1(n), there has not been (i) any threatened cancellation of any
contract set forth on Schedule 3.1(m), (ii) any outstanding dispute
under such contracts listed on Schedule 3.1(m) or (iii) to the
knowledge of such Assignor, any bases for any claim of breach or
default thereunder. The execution, delivery and performance of this
Agreement will not entitle any other party to a contract specified on
Schedule 3.1(m) to cancel, suspend or terminate such contract or cause
a diminution of such Assignor's rights thereunder. Except as set forth
on Schedule 3.1(m), in the case of any such contracts (specified on
Schedule 3.1(m)) which such Assignor was not an original party, such
entities rights thereunder have been duly assigned to such Assignor by
written instrument, and where required, such assignment has been
consented to in writing by the other party or parties thereto, and such
Assignor has furnished Assignee with true and complete copies of all
such assignments and consents. Such Assignor has no reason to believe
that any of the contracts specified on Schedule 3.1(m) that are
renewable will not be renewed by the other party on reasonable terms.
(o) Compliance With Laws. Such Assignor is not in material violation of,
nor has such Assignor (or any predecessor of such Assignor), received
any written notice of any alleged material violation of, any Law in (i)
the conduct of its Business, or (ii) its execution, delivery or
performance of the Transaction Documents. Such Assignor is not in
default of or in violation in any material respect of any judgment,
order, injunction or decree of any court, administrative agency or
other governmental authority.
(p) Environmental Matters. Except as set forth in Schedule 3.1(p), (i) to
the knowledge of such Assignor, the Real Property is and has been in
compliance in all material respects with all applicable federal, state,
or local statutes, codes, rules, regulations, licenses or permits
relating to the environment, natural resources or public or employee
health or safety ("Environmental Laws") and Assignor is not aware of
any facts, circumstances or conditions relating to the Real Property or
the facilities or operations thereon that could reasonably be expected
to result in the owner or operator of the Real Property incurring any
material liability or loss under any Environmental Law; and (ii)
Assignor has provided Assignee with copies of all environmental health
and safety reports relating to the Real Property that are in Assignor's
possession, custody or control. There are no, and to the knowledge of
the Assignor, there never have been any underground storage tanks on
the Real Property.
Page 108 of 200
(q) Insurance. The assets, properties and operations of such Assignor are
insured under various policies of general liability and other forms of
insurance listed on Schedule 3.1(q), which policies are, in full force
and effect on the date hereof, valid and enforceable in accordance with
their terms.
(r) Employee Matters.
(i) Schedule 3.1(r) sets forth each "employee benefit plan," as defined in
Section 3(3) of the ERISA, and all other employee compensation and
benefit arrangements or payroll practices, including, without
limitation, all severance pay, sick leave, vacation pay, salary
continuation for disability, consulting or other compensation
agreements, retirement, deferred compensation, bonus, long-term
incentive, stock option, stock purchase, hospitalization, medical
insurance, life insurance, and scholarship plans or programs maintained
by such Assignor or any trade or business (whether or not incorporated)
which is under common control, or which is treated as a single
employer, with such Assignor under Section 414(b), (c), (m) or (o) of
the Code ("ERISA Affiliate") or to which such Assignor, any of its
Subsidiaries, or an ERISA Affiliate has contributed or is obligated to
contribute (all such plans or arrangements being hereinafter referred
to as the "Employee Benefit Plans") on account of any person presently
employed by such Assignor (an "Employee") or formerly so employed by
such Assignor (a "Former Employee"), or under which any Employee or
Former Employee participates or has accrued any rights. The terms
Employee and Former Employee will include, where applicable, the
beneficiaries and dependents of an Employee or Former Employee. Except
as disclosed on Schedule 3.1(r), no such Assignor or any ERISA
Affiliate has ever contributed to any plan subject to Section 413 of
the Code or to any multiple employer welfare arrangement, as defined in
Section 3(40) of ERISA. Such Assignor has no commitment or obligation
to establish or adopt any new or additional Employee Benefit Plans or
to materially increase the benefits under any existing Employee Benefit
Plan.
(ii) No Employee or Former Employee of such Assignor will be entitled to any
additional benefit or any acceleration of the time of payment or
vesting of any benefit under any of the Employee Benefit Plans set
forth on Schedule 3.1(r) as a result of the transactions contemplated
by this Agreement or the other Transaction Documents.
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(s) Labor Matters. Except as listed and described on Schedule 3.1(h),
Schedule 3.1(r) and Schedule 3.1(s), with respect to Employees and
Former Employees, (i) such Assignor has no written personnel policy
applicable to such Employees, (ii) such Assignor is and has been in
compliance in all material respects with all applicable Laws regarding
employment and employment practices, terms and conditions of
employment, wages and hours, occupational safety and health and
workers' compensation and is not engaged in any unfair labor practices,
(iii) such Assignor has no material grievances pending or, to the
knowledge of such Assignor, threatened against it and (iv) such
Assignor has no material charges or complaints pending or, to such
entity's knowledge, threatened against it before the National Labor
Relations Board, the Equal Employment Opportunity Commission or any
other federal, state or local agency responsible for the prevention of
unlawful employment practices. There is no labor strike, slowdown, work
stoppage or lockout actually pending or, to the knowledge of such
Assignor, threatened against or affecting such Assignor's Business.
Such Assignor is not a party to any collective bargaining agreement, no
such agreement determines the terms and conditions of any Employee or
Former Employee, and no collective bargaining agent has been certified
as a representative of any of the Employees or Former Employees. To
such Assignor's knowledge, no union organizational campaign is
currently pending with respect to any of the Employees or Former
Employees.
(t) Solvency. After giving effect to the transactions contemplated by the
Transaction Documents and the payment and accrual of all transaction
costs in connection with the foregoing, the Company and its
Subsidiaries, taken as a whole, are Solvent.
(u) Warranty and Product Liability Claims. Except as set forth on Schedule
3.1(u), such Assignor has not made any express warranties or guarantees
with respect to any services rendered in the operation of such
Assignor's Business.
(v) Licenses, Permits, Etc. Schedule 3.1(v) sets forth all governmental
licenses, franchises, permits and other authorizations held by such
Assignor. Such government licenses, franchises, permits and other
authorizations transferred to Assignee by such Assignor constitute all
government licenses, franchises, permits and other authorizations
necessary in the conduct of such Assignor's Business.
(w) Employees and Consultants. Schedule 3.1(w) hereto contains a complete
list of the employees of each Assignor (the "Subject Employees"), and
the total current compensation and benefits of each such employee. Such
Assignor has furnished the Assignee with true and complete copies of
any contracts with such Subject Employees, provided, however, Assignee
shall have no obligation to assume any such contract. Schedule 3.1(w)
also sets forth a true and complete list of all consulting, service or
commission agreements to which such Assignor (or the Company (or any of
its Subsidiaries) on behalf of such Assignor) is a party or otherwise
relating to such Assignor's Business.
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(x) Disclosure. No representation or warranty by the Greenbriar Parties
contained in this Agreement or in any Transaction Document and no
statement contained in any document furnished or to be furnished by or
on behalf of any Greenbriar Party, or any Affiliate thereof to any Lone
Star Party or any of Lone Star Party's representatives in connection
with the transactions contemplated hereby, contains or will contain any
untrue statement of a material fact, or omits or will omit to state any
material fact necessary, in light of the circumstances under which it
was or will be made, in order to make the statements herein or therein
not misleading.
(y) Taxes and Fees. Other than those Taxes that will be prorated on the
Closing Date as set forth in Section 2.5, each Assignor has paid and
discharged, or has caused to be paid and discharged, all Taxes for
which it is obligated and will pay and discharge all such Taxes which
will have become due and payable prior to or as of the Closing Date.
Each Assignor has duly filed or will file, or has caused or will cause
to be duly filed, with the appropriate federal, state and local
governmental agencies all returns and reports required to be filed by
such Assignor as of the Closing Date and with respect to any taxable
period prior to or which includes the Closing Date (each of which
fairly present or will present the information purported to be shown
and reflect or will reflect, all Tax liability of such entity for the
periods in question) and such Assignor has paid or will pay in full all
Taxes in respect of the periods for which such returns and reports were
filed. All necessary payments required to be withheld for the employees
(including, without limitation, for unemployment insurance) have been
properly withheld and paid.
(z) Finders. None of the Company, any of the Assignors, or any Affiliate of
such entity has made any agreement with any Person or taken any action
which would cause any Person to become entitled to an agent's,
broker's, or finder's fee or commission in connection with the
transactions contemplated hereby.
(aa) Books of Account. None of the Assignors have engaged in any
transaction, maintained any bank account or used any of the funds of
such Assignor except for transactions, bank accounts and funds which
have been and are reflected in the normally maintained books and
records of the Business.
(bb) Sufficiency of Assets. The Assigned Assets constitute all properties
and assets used by such Assignor in the conduct of such Assignor's
Business as currently conducted.
(cc) Cash Position. The cash balances shown on the Corporate Cash Report
dated as of July 26, 2001 certified by James Gilley and Gene Bertcher
represents the approximate total cash and cash equivalents for the
Company and its Subsidiaries. The uses of cash shown on the Corporate
Cash Requirements Report dated as of July 26, 2001 certified by James
Gilley and Gene Bertcher represents the approximate cash uses for the
Company and its Subsidiaries.
Page 111 of 200
(dd) Bankruptcy. Neither the Company nor any of the Assignors has (i) filed
a petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other applicable federal,
state or foreign bankruptcy, debtor relief or other similar law, (ii)
consented to the institution of proceedings thereunder or to the filing
of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or
similar official) of such Greenbriar Party or of any substantial part
of any such Person's assets, (iii) made a general assignment for the
benefit of creditors, (iv) taken any corporate action to authorize any
of the foregoing or (v) admitted in writing its inability to, or shall
be generally unable to, pay its debts as such debts become due.
3.2 Representations and Warranties of Assignee. Lone Star represents and
warrants to the Greenbriar Parties as follows:
(a) Corporate Organization. Lone Star is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of
Delaware.
(b) Authorization and Effect of Agreement. Lone Star has the requisite
limited partnership power and authority to execute, deliver and perform
its obligations under each of the Transaction Documents executed or to
be executed by Lone Star. The execution, delivery and performance by
Lone Star of each of the Transaction Documents executed or to be
executed by Lone Star has been duly authorized by all requisite limited
partnership action. This Agreement has been duly executed and delivered
by Lone Star. This Agreement constitutes, and each of the other
Transaction Documents to be executed by Lone Star will constitute, the
valid and binding obligation of Lone Star, enforceable against Lone
Star in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at
law or in equity).
(c) Conflicts. Neither the execution, delivery, nor performance of any
Transaction Document executed or to be executed by Lone Star will (i)
violate any material Law applicable to Lone Star, (ii) violate,
conflict with, permit the cancellation or acceleration of, or give rise
to a loss of any benefit under, any material agreement or commitment to
which Lone Star is a party or by which any of its properties are bound,
or (iii) violate or conflict with any provision of Lone Star's
Organizational Documents.
(d) Consents. No actions, consents, or approvals of, or filings with, any
governmental authorities or any third parties are required in
connection with the execution, delivery or performance by Lone Star of
the Transaction Documents executed or to be executed by Lone Star.
(e) Finders. Neither Lone Star nor an Affiliate of Lone Star has made any
agreement with any person or taken any action which would cause any
person to become entitled to an agent's, broker's or finder's fee or
commission in connection with the transactions contemplated hereby.
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ARTICLE IV
AGREEMENTS
----------
4.1 Conduct of Business. From the date hereof through the Closing, the
Company and each of the Assignors will not to take any action
inconsistent with this Agreement. Without limiting the generality of
the foregoing, unless consented to by Assignee in writing, the Company
and each of the Assignors, will not, except as contemplated by this
Agreement:
(a) with respect to the Company, change or amend its Organizational
Documents, except as otherwise required by law in a manner that would
adversely affect its ability to consummate the transaction contemplated
hereby, and with respect to any Assignor, change or amend its
Organizational Documents, except as otherwise required by law;
(b) enter into, extend, materially modify, terminate or renew any contract
of a type required to be listed on Schedule 3.1(m), except in the
ordinary course of business;
(c) sell, assign, transfer, convey, lease or otherwise dispose of any
material assets or properties used or useful in any of the Businesses;
(d) except as otherwise required by law or consistent with past practices,
no Assignor shall take any action with respect to the grant of any
severance or termination pay which will become due and payable from
such Assignor on or after the Closing Date; make any change in the
management structure of such Assignor, including, without limitation,
the hiring of additional officers or the terminations of existing
officers, other than in the ordinary course of business;
(e) with respect to any Assignor, acquire by merger or consolidation with,
or merge or consolidate with, or purchase substantially all of the
assets of, or otherwise acquire any material assets or business of any
corporation, partnership, association or other business organization or
division thereof, except as contemplated by Section 9.11; and
(f) with respect to any Assignor, incur any Indebtedness.
4.2 Inspection. From time to time prior to Closing, the Company and the
Assignors shall afford to Assignee and its accountants, counsel and
other representatives reasonable access, during normal business hours,
to the properties, books, contracts, commitments, tax returns, records
and appropriate officers and employees of the Company and its
Subsidiaries, including the Assignors, and shall furnish such
representatives with all financial and operating data and other
information concerning the affairs of the Company and its Subsidiaries
as they may reasonably request.
Page 100 of 200
4.3 Litigation Standstill. The parties hereto agree not to seek a hearing
date, or, if applicable, agree to postpone any hearing date, on any
motions or pleadings in connection with the Lawsuit, including, without
limitation, Lone Star's Motion for Summary Judgment, until the earlier
to occur of the termination of this Agreement pursuant to Article 9 or
September 15, 2001. Lone Star's obligations under this Section 4.3 are
subject to no further motions or pleadings being made in connection
with the Lawsuit by the parties hereto or the subject matter of the
Lawsuit by any parties hereto attempting to intervene in the Lawsuit.
4.4 Employees.
(a) Assignor Obligations. Each Assignor acknowledges that notwithstanding
any benefits which Assignee may offer or provide to any Employee to
whom Assignee has extended an offer of employment, such Assignor has
certain obligations with respect to such Assignor's Employees under
Section 4980B of the Code and Section 601 et seq. of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA") and agree
to comply with those obligations. Each Assignor shall be responsible
for and shall cause to be discharged and satisfied in full all amounts
owed to any Employee or Former Employee, including wages, salaries,
accrued vacation, any employment, incentive, compensation or bonus
agreements or other benefits or payments on account of termination of
employment by such Assignor, and shall indemnify the Lone Star Parties
and hold the Lone Star Parties harmless from any losses thereunder.
Each Assignor shall be responsible for compliance with the COBRA notice
and continuation coverage requirements under Part 6 of Title I of the
ERISA, with respect to all employees (and their beneficiaries)
experiencing a qualifying event (as defined in Section 603 of ERISA) on
account of the transactions contemplated by this Agreement or occurring
prior to the Closing.
(b) Employment by Assignor. Assignee may, but is not obligated to, extend
offers of employment effective as of the Closing Date to any or none of
the Subject Employees on terms and conditions to be determined by
Assignee in its sole discretion. Assignee will notify the appropriate
Assignor within ten (10) days prior to the anticipated Closing Date of
which Subject Employees, if any, the Assignee intends to make offers of
employment. Assignor will have no liability for any claims made by any
Subject Employee subsequently employed or continued in employment by
Assignee and for which the initial event giving rise to such claim
occurred after the Closing Date and not as a result of the transactions
contemplated hereby. To the extent that Assignee does extend offers of
employment to any of the Subject Employees, each Assignor agrees to
terminate or release any such Subject Employee from such Subject
Employee's employment with Assignor.
4.5 Agreement to Forward Orders, Inquiries and Leads. The Company and each
Assignor hereby agrees that for a period of three (3) months they will
forward promptly to the Assignee any and all inquiries and sales leads
relating to the Businesses and the Facilities transferred in connection
therewith.
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4.6 Third Party Solicitations. From the date hereof until Closing, the
Company, its Affiliates, officers, directors, employees or
representatives will not initiate any transaction which could adversely
affect their obligations under this Agreement, and the Company shall
give Lone Star prompt written notice if the Company or any of its
Affiliates is approached by any Person or group of Persons about any
such transaction and a reasonable opportunity to participate in
discussions regarding the same; provided, however, nothing contained
herein shall prohibit the Company from entering into discussions or
negotiations with any Person or group of Persons concerning any merger,
sale of assets, sale of shares of Capital Stock or similar transaction
if such transaction could not adversely affect the Greenbriar Parties'
obligations under this Agreement.
4.7 Employee Solicitation.
(a) From the date hereof and for a period of one (1) year from the Closing
Date, without the prior written consent of Lone Star, neither the
Company nor any of its Subsidiaries shall, or shall knowingly permit
its Affiliates, officers, directors, representatives and agents to, (i)
prior to Closing, directly or indirectly offer, participate or initiate
negotiations with any Person employed at the Facilities with respect to
a transfer of such Person's employment to another facility owned or
operated by the Company, its Subsidiaries, or their respective
Affiliates, or (ii) directly or indirectly, hire, offer, participate
in, or initiate negotiations concerning, employment, with any officer
or employee of the Assignee or any Person that was employed at any
Facility within the year prior to Closing and was subsequently employed
by Assignee after Closing.
(b) From the date hereof and for a period of one (1) year from the Closing
Date, without the prior written consent of the Company, Lone Star shall
not, and shall not knowingly permit its Affiliates, officers,
directors, representatives and agents to, directly or indirectly, hire,
offer, participate in, or initiate negotiations concerning employment
with any officer or employee of the Company or any Assignor (or their
Affiliates) other than the Subject Employees or as otherwise
contemplated herein.
(c) Notwithstanding the foregoing, this Agreement shall not prohibit any
advertisement or general solicitation (or hiring as a result thereof)
that is not specifically targeted at such persons.
4.8 Non-Competition. For a period beginning on the Closing Date and ending
one (1) year after the date of Closing, neither the Company nor any of
its Subsidiaries or their respective Affiliates shall, without the
prior written consent of Lone Star, directly or indirectly, engage,
participate, make any financial investment in, manage or render
advisory other services to or for any Person engaged in the business of
owning, operating or managing assisted living facilities or communities
located within a twenty-mile radius of any of the Businesses, other
than the assisted living facilities and communities known as The
Greenbriar at Sherman located in Sherman, Texas, Villa de Rey located
in Roswell, New Mexico and Camelot Retirement located in Harlingen,
Texas. The Company and each of the Assignors acknowledges, in its own
behalf and on behalf of their respective Subsidiaries, that the scope
of prohibited activities, the geographic boundaries and the duration of
the obligations set forth herein are (i) reasonable and no broader than
necessary to protect the legitimate business interest of the Lone Star
Parties and (ii) do not and will not impose an unreasonable burden upon
such parties.
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4.9 Confidentiality. Except for any governmental filings required in order
to complete the transactions contemplated herein and as the Company and
the Lone Star Parities may otherwise agree or consent in writing, all
information received by the Lone Star Parties and the Greenbriar
Parties and their respective representatives in contemplation, or
pursuant to the terms, of this Agreement shall be kept in confidence by
the receiving party and its representatives; provided, however, that
any party hereto may disclose such information to its legal and
financial advisors, lenders, financing sources and their respective
legal advisors and representatives so long as such Persons agree to
maintain the confidentiality of such information in accordance with
this Section 4.9. If the transactions contemplated hereby shall fail to
be consummated, all copies of documents or extracts thereof containing
information and data as to one of the other parties, including all
information prepared by the receiving party's representatives may be
destroyed at the option of the receiving party, with notice of such
destruction (or return) to be confirmed in writing to the disclosing
party. Any information not so destroyed (or returned) will remain
subject to these confidentiality provisions (notwithstanding any
termination of this Agreement) until the second (2nd) anniversary of
the date of this Agreement. The foregoing confidentiality provisions
shall not apply to such portions of the information received which (i)
are or become generally available to the public through no action by
the receiving party or by such party's representatives, (ii) are or
become available to the receiving party on a non-confidential basis
from a source, other than the disclosing party or its representatives,
not known by the receiving party to be prohibited from disclosing such
portions to it by a contractual legal or fiduciary obligation, or (iii)
are required by law to be disclosed. In addition, the foregoing
confidentiality provisions shall not apply to any disclosure by the
Lone Star Parties after the Closing of any information disclosed to
them by the Greenbriar Parties.
Cooperation. The Company and each of the Assignors agrees to use its
reasonable best efforts to cooperate with the Lone Star Parties in obtaining any
third-party consents necessary to effectuate the transactions contemplated
hereby.
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ARTICLE V
CONDITIONS TO CLOSING
---------------------
5.1 Conditions to Obligations of Assignee and Assignor. The obligations of
the Lone Star Parties and the Greenbriar Parties to consummate, or
cause to be consummated, the transactions contemplated hereby are
subject to the condition that there not be in force any order or
decree, statute, rule or regulation nor shall there be on file any
complaint by a governmental agency seeking an order or decree,
restraining, enjoining or prohibiting the consummation of the
transactions contemplated hereby, and neither the Lone Star Parties nor
the Greenbriar Parties shall have received notice from any governmental
authority that it has determined to institute any suit or proceeding to
restrain or enjoin the consummation of the transactions contemplated
hereby or to nullify or render ineffective this Agreement if
consummated, or to take any other action which would result in the
prohibition or a material change in the terms of the transactions
contemplated hereby.
5.2 Conditions to Obligations of Assignee. The obligations of the Lone Star
Parties to consummate, or cause to be consummated, the transactions
contemplated by this Agreement are subject to the satisfaction of the
following additional conditions, any one or more of which may be waived
in writing by the Lone Star Parties:
(a) Each of the representations and warranties of the Greenbriar Parties
contained in this Agreement all of the other Transaction Documents
shall be true and correct in all material respects (other than the
representation set forth in Section 3.1(cc), which shall be true and
correct in all respects), both on the date hereof and as of the
Closing, as if made anew at and as of that time, and each of the
covenants and agreements of the Greenbriar Parties to be performed as
of or prior to the Closing shall have been duly performed and complied
with in all material respects, except in each case for changes after
the date hereof which are contemplated or expressly permitted by this
Agreement.
(b) Each Greenbriar Party shall have delivered to the Lone Star Parties a
certificate signed by an officer of such Greenbriar Party, dated as of
the date of Closing, certifying that, to the best of the knowledge and
belief of such officer, the conditions specified in Section 5.1, as
they relate to such Greenbriar Party, and Section 5.2(a) have been
fulfilled.
(c) Any consent required for the consummation of the transactions
contemplated shall have been obtained.
(d) The Lone Star Parties shall have received the following, and in form
and substance satisfactory to Lone Star Parties:
(i) a Warranty Deed executed by each of the Assignors conveying all of the
Real Property;
(ii) Title Insurance Policies covering all of the Real Property;
(iii) Surveys, certified to Assignee and the applicable title company, of the
Real Property reasonably acceptable to Lone Star and otherwise
satisfactory for the applicable title company to delete the survey
exception from the title insurance policy to be issued by such title
company, provided, Lone Star shall pay any costs charged by the title
company solely related to the deletion of the survey exception from the
title policy;
Page 117 of 200
(iv) a Bill of Sale duly executed by each of the Assignors; and
(v) the Assumption Agreement duly executed by each of the Assignors.
(e) Lone Star Parties shall have received the following opinions, all dated
the Closing Date and all in form and substance satisfactory to the Lone
Star Parties:
(i) a written opinion of (A) Glast, Phillips & Murray, in form and
substance satisfactory to Lone Star, and (B) with respect to matters of
local law, local counsel to the Company and its Subsidiaries (such
counsel to be reasonably satisfactory to Lone Star), each such opinion
as to such matters as shall be required by Lone Star or its counsel,
including the corporate good standing of the Greenbriar Parties, the
proper adoption of any corporate resolution required hereby, the
authority of the Person signing for the Greenbriar Parties, the
validity, binding nature and enforceability of this Agreement and the
other Transaction Documents;
(ii) a written opinion of Nevada counsel to the Company and its Subsidiaries
(such counsel to be reasonably satisfactory to Lone Star) (i) stating
that this Agreement, the other Transaction Documents, and the
consummation of the transactions contemplated hereby and thereby do not
require the approval of the holders of the Company's Capital Stock
under Nevada law or the Company's Organizational Documents, and (ii) as
to such other matters as shall be required by Lone Star or its counsel;
and
(iii) unless waived by Lone Star, the Company having obtained a solvency
opinion from Business Valuation Services, Inc. or another valuation
firm reasonably acceptable to Lone Star, on which the Lone Star Parties
may rely and which is reasonably satisfactory to Lone Star, to the
effect that after giving effect to the transactions contemplated by the
Transaction Documents and the payment and accrual of all transaction
costs in connection with the foregoing, the Company and its
Subsidiaries, taken as a whole, are Solvent.
(f) The Lone Star Parties shall have received lien searches from all
jurisdictions reasonably determined by the Lone Star Parties to be
appropriate, as of one (1) day prior to the Closing Date, with respect
to the Company and each of its Assignors reflecting no Liens (other
than Permitted Liens) or evidence satisfactory to Assignee of the
payment or release of any and all Lien.
(g) Each Greenbriar Party shall have (A) delivered to Assignee (x) copies
certified by the appropriate governmental official of the jurisdiction
of its incorporation as of a date not more than five (5) days prior to
the Closing Date, of each Greenbriar Party's certificate of
incorporation and all amendments thereto and (y) copies, certified by
the Secretary or an Assistant Secretary of each Greenbriar Party, of
each Greenbriar Party's Bylaws; (B) deliver to Assignee a certificate
of good standing issued with respect to each Greenbriar Party by the
appropriate governmental official of the jurisdiction of its
incorporation as of a date not more than one (1) day prior to the
Closing Date; and (C) executed and delivered a secretary's certificate
relating to incumbency, corporate proceedings and the certificate of
incorporation and bylaws.
Page 118 of 200
(h) As of the Closing Date and prior to giving effect to the transactions
contemplated by the Transaction Documents, there shall not have
occurred any material adverse change in the business, results of
operations, financial condition of the Company or the Assignors between
the date hereof and the Closing Date.
(i) The Consent Agreement is in full force and effect and no action has
been taken to amend, modify or rescind such Agreement without the
consent of Lone Star.
(j) The Lone Star Parties shall have entered into employment contracts with
the executive director of each Facility on terms no less favorable than
such Persons' existing employment contracts.
(k) No Assignor shall have any Indebtedness outstanding (including, without
limitation, any trade payables for which such Assignor has received an
invoice prior to Closing, provided after Closing such Assignor shall
promptly pay any trade payables upon receipt of the invoice thereof),
other than the Assumed Liabilities, and no Assignor shall have any
creditors, other than those creditors whose claims arise directly from
the Assumed Liabilities, other than creditors whose claims are the
subject of a bona fide dispute.
(l) The bankruptcy case commenced by American Care Communities, Inc. shall
have been dismissed, or the Bankruptcy Court with jurisdiction over
such proceedings shall have issued an order permitting the transfer of
the assisted living facilities and communities known as Berne Village
and Rose Tara Plantation.
(m) All repairs necessitated by the existing damage to the assisted living
facility and community known as the Greenbriar at Dennison (including
roof and siding repairs) shall have been completed to the reasonable
satisfaction of Lone Star; provided, however, if such repairs have not
been completed prior to the Closing, the repairs will be completed by
the Company and/or its contractors at the Company's sole cost and
expense within thirty (30) days of the Closing Date.
5.3 Conditions to the Obligations of Assignor. The obligation of the
Greenbriar Parties to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following additional
conditions, any one or more of which may be waived in writing by the
Greenbriar Parties:
(a) Each of the representations and warranties of Lone Star contained in
this Agreement shall be true and correct in all material respects both
on the date hereof and as of the Closing, as if made anew at and as of
that time, and each of the covenants and agreements of Lone Star to be
performed as of or prior to the Closing shall have been duly performed
in all material respects, except in each case for changes after the
date hereof which are contemplated or expressly permitted by this
Agreement.
Page 119 of 200
(b) Lone Star shall have delivered to the Assignors a certificate signed by
an officer of Lone Star, dated the Closing, certifying that, to the
best of the knowledge and belief of such officer, the conditions
specified in Section 5.1, as they relate to Lone Star, and Section
5.3(a) have been fulfilled.
(c) Lone Star shall have delivered the Mutual Release and any Stock
Certificates.
(d) The Lone Star Parties shall have delivered the Assumption Agreement.
ARTICLE VI
TERMINATION
-----------
6.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned:
(a) By mutual written consent of the parties at any time prior to the
Closing.
(b) After August 15, 2001 and prior to the Closing, by written notice to
the Company from Assignee, if (i) there is any material breach of any
representation, warranty, covenant or agreement on the part of any
Greenbriar Party set forth in this Agreement, or (ii) if a
representation or warranty of the Greenbriar Parties shall be untrue in
any material respect, in either case, such that the condition specified
in Section 5.2(a) hereof would not be satisfied at the Closing (a
"Terminating Assignor's Breach") and, in each such case, such breach
has not been cured within seven (7) days after notice thereof by the
Assignee to the Company.
(c) After August 15, 2001 and prior to the Closing, by written notice to
Lone Star from the Company, if (i) there is any material breach of any
representation, warranty, covenant or agreement on the part of Lone
Star set forth in this Agreement, (ii) or if a representation or
warranty of Lone Star shall be untrue in any material respect, in
either case, such that the condition specified in Section 5.3 hereof
would not be satisfied at the Closing (a "Terminating Assignee's
Breach") and, in each such case, such breach has not been cured within
seven (7) days after notice thereof by the Company to Lone Star.
(d) By either the Company or Lone Star, after September 15, 2001, if the
Closing has not occurred prior to such date, provided that such
terminating party is not in breach of any of its representations,
warranties, covenants or agreements hereunder, and all of such
terminating party's conditions to Closing have been satisfied prior to
such date.
Page 120 of 200
(e) By either the Company or Lone Star on or before August 8, 2001, if the
sale of the assisted living facility and community known as Crowne
Point has not been consummated.
(f) By either the Company or Lone Star on or before August 14, 2001,
because Heller Financial has not consented to the transfer of the
assisted living facilities and communities known as Berne Village and
Rose Tara Plantation on terms satisfactory to each of the Company and
Lone Star.
(g) By Lone Star, after August 14, 2001, because any of the first mortgage
holders have not consented to the transfer of the assisted living
facilities and communities known as Greenbriar at Denison, Rose Garden
Estates, Windsor House West, The Terrace, Villa del Sol, La Villa,
Summer Hill, Meadowbrook or Camelot Assisted Living.
(h) By Lone Star, if the Company shall fail to put or at any time maintain
$2,000,000 from the Crowne Point closing, i.e. the Crowne Point
Proceeds, in the Crowne Point Escrow Account in accordance with Section
2.10(b).
(i) By Lone Star, if a case or proceeding commences against any Greenbriar
Party (i) seeking a decree or order in respect of any Greenbriar Party
under Title 11 of the United States Code, as now constituted or
hereafter amended or any other applicable federal, state or foreign
bankruptcy, debtor relief or other similar law, (ii) seeking the
appointment of a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any Greenbriar Party or of any
substantial part of any such Person's assets or (iii) seeking the
winding-up or liquidation of the affairs of any Greenbriar Party.
(j) By Lone Star, if any Greenbriar Party, subsequent hereto (i) files a
petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other applicable federal,
state or foreign bankruptcy, debtor relief or other similar law, (ii)
consents to the institution of proceedings thereunder or to the filing
of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or
similar official) of any Greenbriar Party or of any substantial part of
any such Person's assets, (iii) makes a general assignment for the
benefit of creditors, (iv) takes any corporate action to authorize any
of the foregoing or (v) admits in writing its inability to, or shall be
generally unable to, pay its debts as such debts become due.
6.2 Post-Termination Activity. In the event of the termination of the
Agreement pursuant to Section 6.1(and including any notice of
termination or acts in furtherance of a declared purpose to terminate
regardless of whether such termination is effective) or for any other
reason, either party agrees that it shall not, directly or indirectly:
Page 121 of 200
(a) contact the escrow agent or any other person to stop, inderdict or
delay the immediate release and return of the Escrow Amounts to the
appropriate party;
(b) file or sponsor any garnishment, attachment or other legal effort to
obtain control over all or any portion of the escrowed fund if it is
not the party entitled to such Escrow Amounts for a period which shall
end seven (7) days after all of the Escrowed Amounts shall have been
returned to the appropriate party free and clear of any claims by,
through, or under the other party for the possession or use of such
funds.
6.3 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 6.1, this Agreement shall forthwith become void and
have no effect, without any liability on the part of any party hereto
or their respective Affiliates, officers, directors or stockholders,
other than liability of the Greenbriar Parties or Lone Star as the case
may be, for breaches of this Agreement occurring prior to such
termination. The provisions of Sections 4.9, 9.7 and 9.8 hereof shall
survive any termination of this Agreement.
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
----------------------------
7.1 Survival of Representations, Warranties and Covenants. The
representations, warranties, agreement and covenants contained in this
Agreement shall survive the execution of this Agreement and remain for
two (2) years following the Closing Date; provided, however, the
representations and warranties set forth in each of (i) Sections
3.1(b), 3.1(e), 3.1(j)(i), 3.1(k), 3.1(l) shall survive indefinitely
and (ii) Sections 3.1(p), 3.1(r) and 3.1(y) shall survive until the
applicable statute of limitations has expired.
7.2 Indemnification by Assignor. The Company and each of the Assignors
shall, jointly and severally, indemnify and hold harmless each Assignee
Party (hereinafter defined) in respect of any and all Indemnifiable
Losses resulting from or relating to:
(a) any and all liabilities and obligations of the Greenbriar Parties of
any nature whatsoever, except for the Assumed Liabilities;
(b) any and all actions, suits, claims, or legal, administrative,
arbitration, governmental or other proceedings or investigations
against any Assignee Party that relate to the Greenbriar Parties, the
Businesses, the Assigned Assets or any affiliate of the Greenbriar
Parties in which the initial event giving rise thereto occurred prior
to the Closing or which results from or arise out of any action or
inaction prior to the Closing of the Greenbriar Parties, or any
director, officer, employee, agent, representative or subcontractor of
any Greenbriar Party, including without limitation, the litigation
described on Schedule 3.1(h)(2);
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(c) nonperformance or breach of any representation or warranty on the part
of any Greenbriar Party under this Agreement or any other Transaction
Document, or any misrepresentation in or omission from any certificate
furnished to the Lone Star Parties pursuant hereto;
(d) nonfulfillment of any covenant or agreement on the part of any
Greenbriar Party under this Agreement or any other Transaction
Document;
(e) any failure of the Company, any Assignor or Assignee to comply with any
bulk sales or transfer law (including the bulk sales provisions of the
Uniform Commercial Code in any jurisdiction) of any jurisdiction
applicable to the sale and transfer of the Assigned Assets contemplated
hereby;
(f) all sales or transfer taxes in respect of real or personal property
which may be due as a result of the sale taking place pursuant to this
Agreement;
(g) all actions, suits, proceedings, demands, assessments, judgments,
reasonable attorney's fees, court costs and expenses incident to any of
the foregoing; or
(h) any and all actions, suits, claims, or legal, administrative,
arbitration, governmental or other proceedings or investigations
against any Assignee Party that relate to this Agreement or any of the
other Transaction Documents or the transactions contemplated hereby and
thereby.
"Assignee Party" shall mean the Lone Star Parties, any Affiliate of the
Lone Star Parties, including, without limitation, the owners of Assignee or Lone
Star, and any officer, director, or employee of Assignee or the Lone Star
Parties or of any Affiliate thereof, including, without limitation, the owners
of the Lone Star Parties.
Indemnification by Lone Star Parties. The Lone Star Parties shall
indemnify and hold harmless each Assignor Party (hereinafter defined) in respect
of any and all Indemnifiable Losses resulting from or relating to:
(i) any and all Assumed Liabilities;
(j) nonperformance or breach of any representation or warranty on the part
of Lone Star under this Agreement or any other Transaction Document, or
any misrepresentation in or omission from any certificate furnished to
Assignor pursuant hereto;
(k) nonfulfillment of any covenant or agreement on the part of Lone Star
under this Agreement or any other Transaction Document;
(l) any and all actions, suits, claims, or legal, administrative,
arbitration, governmental or other proceedings or investigations
against any Assignor Party that relate to the Lone Star Parties, the
Business, the Assigned Assets or any Affiliate of the Lone Star Parties
in which the initial event giving use rise thereto occurred after the
Closing or which results from or arise out of any action or inaction
after the Closing of the Lone Star Parties or any director, officer,
employee, agent, representative or subcontractor of the Lone Star
Parties; or
Page 123 of 200
(m) all actions, suits, proceedings, demands, assessments, judgments,
reasonable attorney's fees, costs and expenses incident to any of the
foregoing.
"Assignor Party" shall mean the Company, the Assignors, any Affiliate
of Assignors, including, without limitation, the owners of Assignors, or any
officer, director, or employee of Assignors or of any Affiliate of Assignors,
including, without limitation, the owners of Assignors.
7.3 Defense of Claims.
(a) If any Indemnitee receives notice of assertion or commencement of any
Third Party Claim against such Indemnitee with respect to which an
Indemnifying Party is obligated to provide indemnification under this
Agreement, the Indemnitee will give such Indemnifying Party reasonably
prompt written notice thereof, but in any event not later than fifteen
(15) calendar days after receipt of such notice of such Third Party
Claim. Such notice will describe the Third Party Claim in reasonable
detail, will include copies of all material written evidence thereof
and will indicate the estimated amount, if reasonably practicable, of
the Indemnifiable Loss that has been or may be sustained by the
Indemnitee. The Indemnifying Party will have the right to participate
in, or, by giving written notice to the Indemnitee, to assume, the
defense of any Third Party Claim at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel (reasonably
satisfactory to the Indemnitee), and the Indemnitee will cooperate in
good faith in such defense.
(b) If, within ten (10) calendar days after giving notice of a Third Party
Claim to an Indemnifying Party pursuant to Section 7.4(a), an
Indemnitee receives written notice from the Indemnifying Party that the
Indemnifying Party has elected to assume the defense of such Third
Party Claim as provided in the last sentence of Section 7.4(a), the
Indemnifying Party will not be liable for any legal expenses
subsequently incurred by the Indemnitee in connection with the defense
thereof; provided, however, that if (i) the Indemnifying Party fails to
take reasonable steps necessary to defend diligently such Third Party
Claim within five (5) calendar days after receiving written notice from
the Indemnitee that the Indemnitee believes the Indemnifying Party has
failed to take such steps or if the Indemnifying Party has not
undertaken fully to indemnify the Indemnitee in respect of all
Indemnifiable Losses relating to the matter, (ii) the Indemnitee
believes that a conflict of interest exists between the Indemnitee and
Indemnifying Party, (iii) the Indemnitee is requested to participate,
at the request of the Indemnifying Party, or (iv) the Indemnifying
Party's elects not to defend such claim, the Indemnitee will be free,
without prejudice to any the Indemnitee's rights hereunder, to assume
its own defense, and the Indemnifying Party will be liable for all
reasonable costs or expenses paid or incurred in connection therewith.
Without the prior written consent of the Indemnitee, the Indemnifying
Party will not enter into any settlement of any Third Party Claim which
would lead to liability or create any financial or other obligation on
the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder.
Page 124 of 200
(c) A failure to give timely notice or to include any specified information
in any notice as provided in Section 7.4(a) or 7.4(b) will not affect
the rights or obligations of any party hereunder except and only to the
extent that, as a result of such failure, any person which was entitled
to receive such notice was deprived of its right to recover any payment
under its applicable insurance coverage or was otherwise materially
damaged as a result of such failure.
(d) The Indemnifying Party will have a period of ten (10) calendar days
within which to respond in writing to any claim by an Indemnitee on
account of an Indemnifiable Loss which does not result from a Third
Party Claim (a "Direct Claim"). If the Indemnifying Party does not so
respond within such ten (10) calendar day period, the Indemnifying
Party will be deemed to have rejected such claim, in which event the
Indemnitee will be free to pursue such remedies as may be available to
the Indemnitee.
ARTICLE VIII
TRANSITION SERVICES
-------------------
8.1 Use of Name. On and after the Closing Date, the Assignors agree to sign
or file such consents or other documents as Assignee shall reasonably
request in order to permit Assignee to use any Owned Intangible
Property or Licensed Intangible Property, including without limitation,
the names "Berne Village", "Rose Garden Estates", "Rose Tara
Plantation", "The Terrace", "Windsor House West", "Villa del Sol",
"Summer Hill", "La Villa", "Camelot Assisted Living", and "Meadowbrook
Place" and the Company and the Assignors shall immediately cease using
the same. The Assignee shall not use the name "Greenbriar" or any of
its related marks, and shall remove the name and mark of "Greenbriar"
from any of the Facilities' signage as soon as practicable after
Closing, but in no event later than 90 days after Closing.
8.2 Permits. Form the date hereof and after the Closing Date, the Assignors
agree to join and fully cooperate with the Assignee in the filing of
any application with any necessary federal, state or local governmental
authorities, requesting such governmental authority's approval for the
assignment or transfer to the Assignee (or any of its Affiliates) of
any or all permits issued to any Assignor (or its Subsidiaries) by such
governmental authority with respect to the Assignors' respective
Businesses and the operation thereof. Such cooperation shall include
without limitation the furnishing of any information that may be
required in connection with such applications.
8.3 Payment Received. Each Assignor agrees that it will hold and will
promptly transfer and deliver to the appropriate party, from time to
time as and when received by them, any cash, checks with appropriate
endorsements (using their best efforts not to convert such checks into
cash), or other property that they may receive which properly belongs
to another party, including any insurance proceeds, and will account to
the appropriate party for all such receipts. Assignee shall have the
right and authority to endorse the name of each Assignor (which
endorsement of the name of such Assignor shall include the words
"without recourse") on any check or any other evidences of indebtedness
received by Assignee on account of the Businesses and the Assigned
Assets transferred to Assignee hereunder.
Page 125 of 200
8.4 Copies of Records.
(a) Each of the Assignors shall preserve all records possessed by it (and
not otherwise transferred to Assignee) relating to the Assigned Assets,
Assumed Liabilities or operations of the Business and shall provide
Assignee with access, upon prior reasonable written request, during
regular business hours, to such books of account and records. Assignee
and its representatives shall have the right to make copies of such
books and records. Such records may nevertheless be destroyed by
Assignors if Assignors send Assignee written notice of their intent to
destroy records, specifying with particularity the contents of the
records to be destroyed. Such records may then be destroyed after the
90th day following delivery of such notice unless Assignee objects to
the destruction, in which case Assignors shall either agree to retain
such records or to deliver such records to Assignee.
(b) Assignee shall preserve all records of Assignors which were transferred
to Assignee relating to the time periods prior to the Closing, and
shall provide to each Assignor with access to such records (to the
extent related to such Assignor), upon prior reasonable written
request, during regular business hours. Assignors and their
representatives shall have the right to make copies of such books and
records. Such records may nevertheless be destroyed by Assignee if
Assignee sends the applicable Assignor written notice of its intent to
destroy such records, specifying with particularity the contents of the
records to be destroyed. Such records may then be destroyed after the
90th day following delivery of such notice unless the applicable
Assignor objects to the destruction, in which case Assignee shall
either agree to retain such records or to deliver such records to such
Assignor.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Notices. No notice or other communication shall be deemed given unless
sent in the manner, and to the persons, specified in this Section 9.1.
All notices and other communications hereunder shall be in writing and
shall be deemed given (a) upon receipt if delivered personally (unless
subject to clause (b)) or if mailed by registered or certified mail,
(b) at noon on the date after dispatch if sent by overnight courier or
(c) upon the completion of transmission (which is confirmed
telephonically by the receiving party) if transmitted by telecopy or
other means of facsimile which provides immediate or near immediate
transmission to compatible equipment in the possession of the
recipient, and in any case to the parties at the following addresses or
telecopy numbers (or at such other address or telecopy number for a
party as will be specified by like notice):
Page 126 of 200
if to any Greenbriar Party, to
Greenbriar Corporation
650 Centura Tower One
14185 Dallas Parkway
Dallas, Texas 75240
Attention: President
Telecopy: (972) 407-8420
with a copy (which shall not constitute notice) to
Henry W. Simon, Jr.
Simon, Warner & Doby, L.L.P.
1700 City Center Tower II
301 Commerce Street
Fort Worth, Texas 76102
Telecopy: (817) 810-5255
If to Lone Star, to
LSOF Pooled Equity, L.P.
600 N. Pearl Street
Suite 1550, LB 161
Dallas, Texas 76140
Attention: Len Allen
Telecopy: (214) 754-8401
with a copy (which shall not constitute notice) to
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Attention: Michael A. Saslaw
Telecopy: (214) 746-7777
Each party named above may change its address and that of its representative for
notice by the giving of notice thereof in the manner hereinabove provided.
9.2 Transfer Taxes. Assignors shall bear responsibility, jointly and
severally, for, and timely pay, all applicable Taxes, if any, due as a
result of the transfer of the Assigned Assets in accordance herewith.
Page 127 of 200
9.3 Non-Assignable Contracts. Nothing contained in this Agreement shall be
construed as an assignment or an attempted assignment of any contract
which is in law nonassignable without the consent of the other party or
parties thereto, unless such consent shall be given. To the extent that
all consents for the assignment of any contract shall not have been
obtained by Assignors, the applicable Assignor shall use commercially
reasonable efforts to (i) provide to Assignee the financial and
business benefits of such nonassignable contract and (ii) enforce, at
the request of Assignee, for the account of Assignee, any rights of
Assignor arising from any such nonassignable contract (including the
right to elect to terminate in accordance with the terms thereof upon
the request of Assignee).
9.4 Entire Agreement. This Agreement, the Transaction Documents and the
other agreements contemplated hereby set forth the entire agreement of
the parties with respect to the matters set forth herein or therein.
This Agreement shall not be modified except by written instrument
executed together or in counterparts by all of the parties hereto. All
exhibits and schedules referred to herein are intended to be and hereby
are specifically made a part of this Agreement.
9.5 Non-Waiver. The failure of any party to insist upon strict performance
of any provision hereof shall not constitute a waiver of, or estoppel
against asserting, the right to require such performance in the future,
nor shall a waiver or estoppel with respect to a later breach of a
similar nature or otherwise.
9.6 Curative Actions; Severability.
(a) If any of the covenants, terms or conditions of this Agreement are held
illegal by any court or administrative body of competent jurisdiction,
and any director or stockholder action, including, but not limited to,
the execution of any documents or instruments, will make such
covenants, terms or conditions valid and enforceable, each party hereby
agrees that it shall take or cause to be taken such action as may
reasonably be required to make any such covenant, term or condition
valid and enforceable.
(b) If any provision of this Agreement is held invalid, such invalidity
shall not affect the other provisions hereof which can be given effect
without the invalid provision, and to this end the provisions of this
Agreement are intended to be and shall be deemed severable.
9.7 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS. THE PARTIES HERETO HEREBY CONSENT TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN DALLAS
COUNTY, TEXAS AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH
COURTS. THE PARTIES ACCEPT FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENTS.
Page 128 of 200
9.8 WAIVER OF JURY TRAIL. EACH PARTY HERETO WAIVES ANY RIGHT TO TRAIL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR (ii) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT SUCH PARTY MAY FILE
AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
9.9 Construction. The headings in this Agreement are inserted for
convenience and identification only and are not intended to describe,
interpret, define or limit the scope, extent, or intent of this
Agreement or any provision hereof. Whenever the context requires, the
gender of all words used in this Agreement shall include the masculine,
feminine, and neuter, and the number of all words shall include the
singular and the plural. No provision of this Agreement will be
interpreted in favor of, or against, any of the parties hereto by
reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to
which any such provision is inconsistent with any prior draft hereof or
thereof.
9.10 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if each of the parties had signed
the same document. All counterparts shall be construed together and
shall constitute one and the same instrument.
9.11 Successors and Assigns. Except as provided to the contrary in this
Agreement, this Agreement shall apply to, and shall be binding upon
each of the parties, their respective successors and permitted assigns.
Neither this Agreement nor any rights, interests or obligations
hereunder may be assigned without the prior written consent of Lone
Star and the Company; provided, however, that Lone Star may assign its
rights and obligations hereunder to any designee or designees subject
to compliance by Lone Star of its obligations to execute and deliver
the Mutual Release; provided, further, that Windsor may assign its
rights and obligations hereunder to Windsor House Greenville LLC.
9.12 Cumulative Rights. The rights and remedies provided by this Agreement
are cumulative, and the use of any right or remedy by either party
shall not preclude or waive its right to use any or all other remedies.
Page 129 of 200
9.13 Costs; Expenses. The Company will pay all of the costs and expenses
incurred by itself and the Lone Star Parties incidental to this
Agreement and the Transaction Documents and in preparing to consummate
and consummating the transactions provided for herein and therein;
provided, however, such costs and expenses shall be limited to
$150,000.
9.14 No Third Party Beneficiaries. Nothing in this Agreement is intended to
confer upon any Person that is not a party hereto any rights or
remedies hereunder or otherwise.
9.15 Press Releases/Filings. The Greenbriar Parties, on the one hand, and
the Lone Star Parties, on the other hand, hereby acknowledge and agree
that the portion of any proposed press release or filing with the
Securities and Exchange Commission or any other governmental authority
by such party pertaining to the transactions contemplated hereby which
references either such transactions or other parties hereto by name
shall be coordinated with, and agreed upon, prior to the release or
publication of such press release or filing with the Securities and
Exchange Commission by the Lone Star Parties, on the one hand, and the
Company, on the other hand. With respect to filing with the Securities
and Exchange Commission, the contents of such filing shall be subject
to the reasonable approval of both the Company and Lone Star, but shall
comply in all respects with all applicable law, rules, and regulations,
including, without limitation, all regulations of the Securities and
Exchange Commission.
9.16 Time of the Essence. Time is of the essence to each and every provision
of this Agreement.
9.17 Acknowledgments. The parties hereto hereby acknowledge that: (a) each
such party has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Transaction Documents; and
(b) no joint venture is created hereby or by the other Transaction
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Greenbriar Parties and the Lone Star
Parties.
9.18 Assignment of Stock. The Greenbriar Parties hereby agree that should
Lone Star determine that it is advisable to accept an assignment of the
Capital Stock of any Assignor rather than the assignment of such
Assignor's assets, the Greenbriar Parties shall agree to enter into an
amendment (and cause the appropriate Subsidiary of Greenbriar to enter
into an amendment) of this Agreement to effectuate such change provided
such transaction shall not affect the economic terms as set forth
herein.
[The Remainder of this Page Is Intentionally Left Blank]
Page 130 of 200
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
as of August 1, 2001.
THE COMPANY
GREENBRIAR CORPORATION
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, Executive Vice President
and Chief Financial Officer
THE ASSIGNORS
WINDSOR HOUSE WEST, INCORPORATED
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
BERNE VILLAGE, INC.
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
ROSE TARA PLANTATION, INC.
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
THE DENISON - GREENBRIAR, INC.
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
Page 131 of 200
ROSE GARDEN ESTATES, INC.
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
THE TERRACE RETIREMENT, INC.
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
TRANSFERCO, INC.
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
WEDGWOOD PARTNERS LTD.,
LIMITED PARTNERSHIP
By: GRB, LLC, a Nevada limited
liability company, General Partner
By: Greenbriar Acquisition
Corporation, a Nevada
corporation, Manager
By: /s/ Gene S. Bertcher
--------------------------
Gene S. Bertcher, President,
Chief Executive Officer and
Treasurer
WEDGWOOD RETIREMENT INNS, INC.
By: /s/ Gene S. Bertcher
----------------------------------------------
Gene S. Bertcher, President, Chief
Executive Officer and Treasurer
Page 132 of 200
LSOF POOLED EQUITY, L.P.
By: LSOF GenPar, Inc., its General Partner
By: /s/ J. D. Dell
----------------------------------------------
J. D. Dell, Vice President
Page 133 of 200
MUTUAL RELEASE
--------------
This Mutual Release dated as of August ___, 2001 (this "Release") is
entered into by and among LSOF Pooled Equity, L.P. ("Lone Star"), Greenbriar
Corporation (the "Company"), American Realty Trust, Inc., Basic Capital
Management, Inc., One Realco Corporation (in its own capacity and as successor
in interest to Nanook Partners, L.P.) and Tacco Financial Corporation,
International Health Products, Inc. (collectively, the "Intervenors"), and James
R. Gilley, Gene S. Bertcher, Victor L. Lund, and Don C. Benton, in their
capacity as individuals, directors, officers, and stockholders of the Company
(collectively the "Directors") (Lone Star, the Company, Intervenors, and the
Directors may sometimes be individually referred to as a "Party" or collectively
as the "Parties").
RECITALS
WHEREAS, in January 1998, Lone Star's predecessor in interest, Lone
Star Opportunity Fund, L.P., purchased shares of the Company's Series F Senior
Convertible Preferred Stock and shares of the Company's Series G Senior
Convertible Preferred Stock (collectively, the "Preferred Stock") for
$22,000,000, which Preferred Stock was convertible into shares of the Company's
common stock;
WHEREAS, on October 30, 2000, Lone Star delivered its notice of
conversion evidencing its desire to convert the Preferred Stock into shares of
the Company's common stock;
WHEREAS, a dispute arose between the Company and Lone Star as to the
conversion price of the Preferred Stock and the number of shares of the
Company's common stock into which the Preferred Stock would be convertible;
WHEREAS, all matters relating to the conversion of the Preferred Stock
are currently being litigated pursuant to the lawsuit styled: LSOF Pooled
Equity, L.P. v. Greenbriar Corporation, Cause No. 00-08824, in the 162nd
Judicial District Court (the "District Court") of Dallas County, Texas (the
"Lawsuit") asserting claims against the Company and seeking legal and equitable
relief;
WHEREAS, on April 5, 2001, the District Court granted Lone Star partial
summary judgment in favor of Lone Star;
WHEREAS, on May 25, 2001, Intervenors filed an Original Petition in
Intervention, seeking to join the Lawsuit;
WHEREAS, a trial is scheduled for the near future;
WHEREAS, bona fide disputes and controversies exist between the
Parties, and solely to avoid the prospect of prolonged, costly litigation, the
Parties desire to compromise and settle all claims between them, including, but
not limited to, all existing claims asserted or existing claims that could have
been asserted by any party in the Lawsuit;
Page 134 of 200
NOW, THEREFORE, in consideration of the recitals, covenants, releases,
and agreements contained in this Release, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
ARTICLE I
CONSIDERATION
-------------
1.1 The Master Settlement Agreement and Transaction Documents. The
parties hereby incorporate by reference the terms of the Master
Settlement Agreement dated as of August 1, 2001 between Lone Star, the
Company, and certain individuals of the Company (the "Agreement") and
the Transaction Documents (as defined in the Master Settlement
Agreement) as consideration for this Release.
1.2 Dismissal of Lawsuit. Contemporaneously with the complete
execution and delivery of this Release, the Agreement, and the
Transaction Documents, counsel for Lone Star, the Company, and
Intervenors shall execute and file with the Court an original Agreed
Motion to Dismiss in the form attached hereto as Exhibit "A" and an
Agreed Order of Dismissal in the form attached hereto as Exhibit "B."
1.3 Release by Lone Star. Lone Star, for itself and its current
and former employees, officers, directors, stockholders, affiliates,
incorporators, successors, predecessors (including but not limited to
Lone Star Opportunity Fund, L.P. and LSOF Greenbriar L.L.C.), partners,
parent companies, subsidiaries, assigns, executors, agents, attorneys,
and representatives of any kind, if any, by this Release, hereby
RELEASES, SURRENDERS, REMISES, ACQUITS, and FOREVER DISCHARGES the
Company, Intervenors, the Directors and their respective current and
former employees, officers, directors, stockholders, affiliates,
successors, predecessors, partners, parent companies, subsidiaries,
assigns, executors, agents, attorneys, and representatives of any kind,
if any, from any and all offsets, claims, demands, damages, actions,
causes of action, suits in equity, liabilities, debts, accounts, costs,
expenses, contributions, bills, promises, covenants or warranties
(whether past, present, future, currently accrued, unaccrued, known or
unknown), and whether permanent, continuing, or otherwise, that either
were or could have been asserted in the Lawsuit, are directly or
indirectly related to Lone Star's Preferred Stock investment in the
Company or are otherwise directly or indirectly related to Lone Star's
entering into the Agreement and the Transaction Documents; provided,
however, that this Release does not in any way release, compromise,
surrender or acquit Lone Star's ability to enforce the provisions of
this Release, the Agreement, or the Transaction Documents in the event
of a breach or default hereunder or thereunder by another Party hereto
or thereto.
Page 135 of 200
1.4 Release by the Company. The Company, for itself and its
respective current and former employees, officers, directors,
stockholders, affiliates, successors, predecessors, partners, parent
companies, subsidiaries, assigns, heirs, executors, agents, attorneys,
and representatives of any kind, if any, by this Release RELEASES,
SURRENDERS, REMISES, ACQUITS, AND FOREVER DISCHARGES Lone Star,
Intervenors, the Directors and their current and former employees,
officers, directors, stockholders, affiliates, successors, predecessors
(including, but not limited to, Lone Star Opportunity Fund, L.P. and
LSOF Greenbriar L.L.C.), partners, parent companies, subsidiaries,
assigns, executors, agents, attorneys, and representatives of any kind
from any and all claims, demands, damages, entitlements, actions,
causes of action, suits in equity, liabilities, debts, accounts, costs,
expenses, setoffs, contributions, payments, bills, promises, covenants
or warranties (whether past, present, future, currently accrued,
unaccrued, known or unknown), and whether permanent, continuing, or
otherwise, that either were or could have been asserted in the Lawsuit,
are directly or indirectly related to Lone Star's Preferred Stock
investment in the Company or are otherwise directly or indirectly
related to Lone Star's entering into the Agreement and the Transaction
documents; provided, however, that this Release does not in any way
release, compromise, surrender or acquit the Company's ability to
enforce the provisions of this Release, the Agreement, or the
Transaction Documents in the event of a breach or default hereunder or
thereunder by another Party hereto or thereto.
1.5 Release by Intervenors. Intervenors, for themselves and their
respective current and former employees, officers, directors,
stockholders, affiliates, successors, predecessors, partners, parent
companies, subsidiaries, assigns, heirs, executors, agents, attorneys,
and representatives of any kind, if any, by this Release RELEASE,
SURRENDER, REMISE, ACQUIT, AND FOREVER DISCHARGE Lone Star, the
Company, the Directors and their current and former employees,
officers, directors, stockholders, affiliates, successors, predecessors
(including but not limited to Lone Star Opportunity Fund, L.P. and LSOF
Greenbriar L.L.C.), partners, parent companies, subsidiaries, assigns,
executors, agents, attorneys, and representatives of any kind from any
and all claims, demands, damages, entitlements, actions, causes of
action, suits in equity, liabilities, debts, accounts, costs, expenses,
setoffs, contributions, payments, bills, promises, covenants or
warranties (whether past, present, future, currently accrued,
unaccrued, known or unknown), and whether permanent, continuing, or
otherwise, that either were or could have been asserted in the Lawsuit,
are directly or indirectly related to Lone Star's Preferred Stock
investment in the Company or are otherwise directly or indirectly
related to Lone Star's entering into the Agreement and the Transaction
documents; provided, however, that this Release does not in any way
release, compromise, surrender or acquit Intervenors' ability to
enforce the provisions of this Release or the Consent Agreement in the
event of a breach or default hereunder by another Party hereto.
Page 136 of 200
1.6 Release by the Directors. The Directors, for themselves and
their respective current and former employees, officers, directors,
stockholders, affiliates, successors, predecessors, partners, parent
companies, subsidiaries, assigns, heirs, executors, agents, attorneys,
and representatives of any kind, if any, by this Release RELEASE,
SURRENDER, REMISE, ACQUIT, AND FOREVER DISCHARGE Lone Star, the
Company, the Intervenors and their current and former employees,
officers, directors, stockholders, affiliates, successors, predecessors
(including but not limited to Lone Star Opportunity Fund, L.P. and LSOF
Greenbriar L.L.C.), partners, parent companies, subsidiaries, assigns,
executors, agents, attorneys, and representatives of any kind from any
and all claims, demands, damages, entitlements, actions, causes of
action, suits in equity, liabilities, debts, accounts, costs, expenses,
setoffs, contributions, payments, bills, promises, covenants or
warranties (whether past, present, future, currently accrued,
unaccrued, known or unknown), and whether permanent, continuing, or
otherwise, that either were or could have been asserted in the Lawsuit,
are directly or indirectly related to Lone Star's Preferred Stock
investment in the Company or are otherwise directly or indirectly
related to Lone Star's entering into the Agreement and the Transaction
documents; provided, however, that this Release does not in any way
release, compromise, surrender or acquit the Directors' ability to
enforce the provisions of this Release or the Consent Agreement in the
event of a breach or default hereunder by another Party hereto.
1.7 Attorneys' Fees and Expenses. Except as provided for in the
Agreement, the Parties hereby agree that they are solely responsible
for their own attorneys' fees, court costs and expenses related to the
Lawsuit.
ARTICLE II
INDEMNIFICATION
---------------
2.1 Each Party hereto represents and warrants that it has full and
express authority to settle all claims and demands as set forth in this
Release, to enter this Release that it has not made any assignment of
any one or more of those claims, and that it knows of no person or
entity that intends to assert a claim by, through, under, or on behalf
of such Party ("Known Claimants"). TO THE EXTENT THAT ANY CLAIM MAY BE
BROUGHT BY PERSONS OR ENTITIES CLAIMING BY, THROUGH, OR UNDER A PARTY
OR BY KNOWN CLAIMANTS, THE PARTY THROUGH WHICH SUCH CLAIM IS BROUGHT
AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OTHER PARTIES (AND
THE CURRENT AND FORMER EMPLOYEES, OFFICERS, DIRECTORS, STOCKHOLDERS,
AFFILIATES, SUCCESSORS, PREDECESSORS, PARTNERS, PARENT COMPANIES,
SUBSIDIARIES, ASSIGNS, EXECUTORS, AGENTS, ATTORNEYS, AND
REPRESENTATIVES OF ANY KIND OF EACH PARTY) FROM ANY COSTS OR EXPENSES,
INCLUDING LEGAL FEES, COURT COSTS, JUDGMENTS, OR REASONABLE SETTLEMENT
PAYMENTS ARISING FROM SUCH CLAIMS.
Page 137 of 200
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
3.1 Representations and Warranties of the Parties. As a condition
precedent to any obligations or liabilities of the Parties under this
Release, the Parties do hereby expressly represent and warrant to each
other that:
(a) Claims. Each Party (i) is the lawful owner of all claims herein
released; and (ii) no claim that they may have had, may now have, or
will hereinafter have, or claim to have against the other Party has
been assigned or transferred in any way to any other person, firm,
corporation or other entity in any manner, including, but not limited
to, assignment or transfer by subrogation or by operation of law.
(b) Organization. Each of the Parties hereto is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has the requisite power and authority
to own, lease or otherwise hold the assets owned, leased or otherwise
held by it and to carry on its business as presently conducted by it.
Each of the Parties hereto is in good standing and duly qualified to
conduct business as a foreign entity in every jurisdiction in which its
ownership or lease of property or conduct of the business makes such
qualification necessary.
(c) Authorization and Effect of Agreement. Each of the Parties hereto has
the requisite corporate power and authority to execute, deliver and
perform its obligations under this Release and each of the other
Transaction Documents executed or to be executed by such party. The
execution, delivery and performance by each party hereto of this
Release and each of the other Transaction Documents executed or to be
executed by such Party have been duly authorized by all requisite
corporate action as applicable. This Agreement has been duly executed
and delivered by each of the Parties hereto. This Release constitutes,
and each of the other Transaction Documents to be executed by a Party
hereto will constitute, the valid and binding obligation of such Party,
enforceable against such party in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(d) Conflicts. Neither the execution, delivery, nor performance of any
Transaction Document executed or to be executed by any Party hereto
will (i) violate any material Law applicable to such Party, (ii)
violate, conflict with, permit the cancellation or acceleration of, or
give rise to a loss of any benefit under, any material agreement or
commitment to which such Party is a party or by which any of its
properties are bound, or (iii) violate or conflict with any provision
of such Party's Organizational Documents.
Page 138 of 200
Nanook Partners, L.P. One Realco Corporation is the successor
in interest to Nanook Partners, L.P. and has all right and authority to
release the claims of Nanook Partners, L.P. against Lone Star and its
affiliates as provided herein.
The Parties agree and stipulate that the Parties are relying
upon these representations and warranties in entering into this
Release. These representations and warranties shall survive the
execution of this Release.
3.2 Consultation with Attorneys. The Parties represent to each
other that they have been represented by and consulted with attorneys
prior to executing this Release. The Parties further acknowledge that
they have been provided with a reasonable period of time to consider
and execute this Release.
ARTICLE IV
GENERAL COVENANTS
-----------------
4.1 Severability and Savings Clause. If any of the covenants,
terms or conditions of this Agreement are held illegal by any court or
administrative body of competent jurisdiction, and any director or
stockholder action, including, but not limited to, the execution of any
documents or instruments, will make such covenants, terms or conditions
valid and enforceable, each party hereby agrees that it shall take or
cause to be taken such action as may reasonably be required to make any
such covenant, term or condition valid and enforceable. If any
provision of this Agreement is held invalid, such invalidity shall not
affect the other provisions hereof which can be given effect without
the invalid provision, and to this end the provisions of this Agreement
are intended to be and shall be deemed severable.
4.2 GOVERNING LAW. THIS RELEASE SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS. THE PARTIES HERETO HEREBY CONSENT
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN DALLAS
COUNTY, TEXAS AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH
COURTS. THE PARTIES ACCEPT FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENTS.
Page 139 of 200
4.3 FORUM SELECTION; WAIVER OF JURY TRIAL. EACH PARTY HERETO
WAIVES ANY RIGHT TO TRAIL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY AND THAT SUCH PARTY MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
4.4 Entire Agreement. This Release, the Transaction Documents and
the other agreements contemplated hereby set forth the entire agreement
of the parties with respect to the matters set forth herein or therein.
This Release shall not be modified except by written instrument
executed together or in counterparts by all of the parties hereto. All
exhibits and schedules referred to herein are intended to be and hereby
are specifically made a part of this Release.
4.5 Non-Waiver. The failure of any party to insist upon strict
performance of any provision hereof shall not constitute a waiver of,
or estoppel against asserting, the right to require such performance in
the future, nor shall a waiver or estoppel with respect to a later
breach of a similar nature or otherwise.
4.6 Representation by and Reliance Upon Own Counsel. The Parties
have been represented by their own counsel in the preparation and
execution of this Release, and therefore stipulate and agree that this
Release shall not be construed against any Party as the drafter
thereof. All provisions of this Release have been negotiated by the
Parties at arm's length and no Party shall be deemed the scrivener of
this Release.
4.7 Construction. The headings in this Release are inserted for
convenience and identification only and are not intended to describe,
interpret, define or limit the scope, extent, or intent of this Release
or any provision hereof. Whenever the context requires, the gender of
all words used in this Release shall include the masculine, feminine,
and neuter, and the number of all words shall include the singular and
the plural. No provision of this Release will be interpreted in favor
of, or against, any of the parties hereto by reason of the extent to
which any such party or its counsel participated in the drafting
thereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof or thereof.
Page 140 of 200
4.8 Multiple Counterparts. This Release may be executed in
multiple counterparts, each of which shall be fully effective as an
original when all of the Parties have executed this Release.
4.9 No Admission of Fault. Neither the execution of this Release
nor compliance with its terms shall constitute an admission of any
fault or liability on the part of any of the Parties, or any of their
agents, attorneys, representatives, or employees, all such liability
being expressly denied.
4.10 Successors and Assigns. Except as provided to the contrary in
this Agreement, this Agreement shall apply to, and shall be binding
upon each of the parties, their respective successors and permitted
assigns.
4.11 Action to Enforce Release. Notwithstanding the releases
contained herein, any Party may bring an action to enforce this Release
or may interpose this Release by way of defense or counterclaim, and
reasonable attorneys' fees and expenses for such enforcement may be
recovered by the prevailing party.
4.12 Non-Disparagement. The Parties agree that they will make no
disparaging remarks (oral or written) concerning the other Party or
their parents, principals, partners, subsidiaries, affiliates,
officers, directors, stockholders, agents, representatives, or
employees, nor will the Parties make any disparaging remarks concerning
the policies, practices, and operations of the other Party. Further,
the Parties agree that they will engage in no conduct detrimental to
the interests and goodwill of the other Party, nor will they engage in
any conduct which reflects adversely on the reputation and/or goodwill
of the other Party, their principals, partners, parents, subsidiaries,
affiliates, officers, agents, directors, stockholders, representatives,
or employees. This paragraph does not prohibit either Party from making
factual truthful statements to any regulatory or other governmental
agencies pursuant to subpoena or, after written notice to the other
Party, in response to a written request for such testimony or
information.
4.13 Confidentiality. Except for any governmental filings required
in order to complete the transactions contemplated herein and as the
Company and Lone Star may otherwise agree or consent in writing, all
information received by the Parties and their respective
representatives in contemplation, or pursuant to the terms, of this
Release shall be kept in confidence by the receiving party and its
representatives; provided, however, that any party hereto may disclose
such information to its legal and financial advisors, so long as such
Page 141 of 200
persons agree to maintain the confidentiality of such information in
accordance with this Section 4.13. The foregoing confidentiality
provisions shall not apply to such portions of the information received
which (i) are or become generally available to the public through no
action by the receiving party or by such party's representatives, (ii)
are or become available to the receiving party on a non-confidential
basis from a source, other than the disclosing party or its
representatives, not known by the receiving party to be prohibited from
disclosing such portions to it by a contractual legal or fiduciary
obligation, or (iii) are required by law to be disclosed.
[Remainder of Page Intentionally Left Blank]
Page 142 of 200
SIGNATURE PAGE TO MUTUAL RELEASE
DATED AND EFFECTIVE this day of August, 2001.
LSOF POOLED EQUITY, L.P.
By:
----------------------------------
Name: J.D. Dell
Title: Vice-President
GREENBRIAR CORPORATION
By:
----------------------------------
Name: James R. Gilley
Title: President and CEO
AMERICAN REALTY TRUST, INC.
By:
----------------------------------
Name:
Title:
BASIC CAPITAL MANAGEMENT, INC.
By:
----------------------------------
Name:
Title:
Page 143 of 200
ONE REALCO CORPORATION
By:
----------------------------------
Name:
Title:
TACCO FINANCIAL CORPORATION
By:
----------------------------------
Name:
Title:
INTERNATIONAL HEALTH PRODUCTS INC.
By:
----------------------------------
Name:
Title:
JAMES R GILLEY
Name: James R. Gilley
GENE S. BERTCHER
Name: Gene S. Bertcher
Page 144 of 200
VICTOR L. LUND
Name: Victor L. Lund
DON C. BENTON
Name: Don C. Benton
LSOF POOLED EQUITY, L.P.
By:
----------------------------------
Name:
Title:
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
_______________________ as ______________________ of LSOF Pooled Equity, L.P.,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
_________________________________________
Notary Public, State of _________________
Printed Name: ________________________
My Commission Expires: _______________
GREENBRIAR CORPORATION
By:_________________________________
Name:
Title:
Page 145 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
_______________________ as ______________________ of Greenbriar Corporation,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
_________________________________________
Notary Public, State of _________________
Printed Name: ________________________
My Commission Expires: _______________
AMERICAN REALTY TRUST, INC.
By:_________________________________
Name:
Title:
Page 146 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
_______________________ as ________________________ of American Realty Trust,
Inc., known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said ____________________.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
BASIC CAPITAL MANAGEMENT
By:_________________________________
Name:
Title:
Page 147 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
_______________________ as ________________________ of Basic Capital Management,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said ____________________.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
ONE REALCO CORPORATION
By:_________________________________
Name:
Title:
Page 148 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
_______________________ as ________________________ of One Realco Corporation,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said ____________________.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
TACCO FINANCIAL CORPORATION
By:_________________________________
Name:
Title:
Page 149 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
_______________________ as ________________________ of Tacco Financial
Corporation, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein stated,
and as the act and deed of said ____________________.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
INTERNATIONAL HEALTH PRODUCTS, INC.
By:_________________________________
Name:
Title:
Page 150 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
_______________________ as ________________________ of International Health
Products, Inc., known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein stated,
and as the act and deed of said ____________________.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
Page 151 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
James R. Gilley, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
Page 152 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Gene S. Bertcher, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
Page 153 of 200
THE STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Don C. Benton, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
_______________. 2001.
[SEAL]
________________________________________
Notary Public, State of ________________
Printed Name: ________________________
My Commission Expires: _______________
Page 154 of 200
CAUSE NO. 00-08824
LSOF POOLED EQUITY, L.P. ss. IN THE DISTRICT COURT
ss.
Plaintiff, ss.
ss.
v. ss.
ss.
GREENBRIAR CORPORATION ss.
ss.
Defendant. ss.
ss.
AMERICAN REALTY TRUST, INC., ss.
BASIC CAPITAL MANAGEMENT, INC., ss.
ONE REALCO CORPORATION, TACCO ss. 162nd JUDICIAL DISTRICT
FINANCIAL CORPORATION, ss.
INTERNATIONAL HEALTH PRODUCTS, ss.
INC. and NANOOK PARTNERS, L.P., ss.
ss.
Intervenors, ss.
ss.
v. ss.
ss.
LSOF POOLED EQUITY, L.P. and ss.
GREENBRIAR CORPORATION, ss.
ss.
Intervention Defendants. ss.
ss. DALLAS COUNTY, TEXAS
AGREED MOTION TO DISMISS
------------------------
TO THE HONORABLE JUDGE OF SAID COURT:
Plaintiff LSOF Pooled Equity, L.P. ("Pooled Equity"), Greenbriar
Corporation ("Greenbriar"), and American Realty Trust, Inc., Basic Capital
Management, Inc., One Realco Corporation, Tacco Financial Corporation,
International Health Products, Inc., and Nanook Partners, L.P. (collectively the
"Intervenors") (Pooled Equity, Greenbriar, and the Intervenors shall
collectively be referred to as the "Parties") file this their Agreed Motion to
Dismiss, and would respectfully show the Court as follows:
1. Currently pending is Cause No. 00-08824; LSOF Pooled Equity,
L.P. v. Greenbriar Corporation, in the District Court of Dallas County, Texas,
162nd Judicial District (the "Lawsuit").
2. The Parties have agreed to dismiss the Lawsuit.
3. Accordingly, the Parties respectfully request that the Court
grant this Agreed Motion to Dismiss and enter the attached Agreed Order Granting
Motion to Dismiss.
Page 155 of 200
Respectfully submitted,
______________________________________
T. Ray Guy
State Bar No. 08648500
K. Todd Phillips
State Bar No. 24002767
J. Brian Williams
State Bar No. 24028222
WEIL, GOTSHAL & MANGES LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Telephone: (214) 746-7700
Facsimile: (214) 746-7777
ATTORNEYS FOR PLAINTIFF
LSOF POOLED EQUITY, L.P.
Page 156 of 200
AGREED AS TO FORM AND SUBSTANCE:
LYNCH LAW FIRM
By:
-----------------------------------------
Jeffrey S. Lynch
State Bar No. 12727500
Quorum Drive
Dallas, Texas 75240
Telephone: (972) 991-0000
Facsimile: (972) 991-4611
ATTORNEYS FOR PLAINTIFF
SUSMAN GODFREY L.L.P.
By:
-----------------------------------------
Terrell W. Oxford
State Bar No. 15390500
Mark A. Evetts
State Bar No. 00793709
Kenneth E. Gardner
State Bar No. 07656825
Salvador Espino
State Bar No. 00795007
901 Main Street, Suite 4100
Dallas, Texas 75202
Telephone: (214) 754-1908
Facsimile: (214) 665-0853
ATTORNEYS FOR DEFENDANT
Page 157 of 200
BRADEN W. SPARKS, P.C.
By:
-----------------------------------------
Braden W. Sparks
State Bar No. 18874500
8117 Preston Road, Suite 800
Dallas, Texas 75225
Telephone: (214) 696-3200
Facsimile: (214) 696-5971
ATTORNEYS FOR INTERVENORS
FRIEDMAN & DRIEGERT
By:
-----------------------------------------
Lawrence J. Friedman
State Bar No. 07469300
Amy Ganci
State Bar No. 07611600
5301 Spring Valley Road, Suite 200
Dallas, Texas 75240
Telephone: (972) 788-1400
Facsimile: (972) 788-2667
ATTORNEYS FOR INTERVENORS
Page 158 of 200
CAUSE NO. 00-08824
LSOF POOLED EQUITY, L.P. ss. IN THE DISTRICT COURT
ss.
Plaintiff, ss.
ss.
v. ss.
ss.
GREENBRIAR CORPORATION ss.
ss.
Defendant. ss.
ss.
AMERICAN REALTY TRUST, INC., ss.
BASIC CAPITAL MANAGEMENT, INC., ss.
ONE REALCO CORPORATION, TACCO ss. 162nd JUDICIAL DISTRICT
FINANCIAL CORPORATION, ss.
INTERNATIONAL HEALTH PRODUCTS, ss.
INC. and NANOOK PARTNERS, L.P., ss.
ss.
Intervenors, ss.
ss.
v. ss.
ss.
LSOF POOLED EQUITY, L.P. and ss.
GREENBRIAR CORPORATION, ss.
ss.
Intervention Defendants. ss.
ss. DALLAS COUNTY, TEXAS
AGREED ORDER OF DISMISSAL
-------------------------
The Court, having considered the Agreed Motion to Dismiss (the
"Motion") filed by Plaintiff LSOF Pooled Equity, L.P., Greenbriar Corporation,
and American Realty Trust, Inc., Basic Capital Management, Inc., One Realco
Corporation, Tacco Financial Corporation, International Health Products, Inc.,
and Nanook Partners, L.P., is of the opinion that the Motion should be GRANTED.
It is therefore ORDERED that all claims that either were or could have
been asserted by any party in the above-styled and numbered cause are hereby
DISMISSED.
It is further ORDERED that the above-styled and numbered lawsuit is
hereby DISMISSED in its entirety.
It is further ORDERED that all relief not expressly granted herein is
DENIED. SIGNED: ______________, 2001.
Page 159 of 200
___________________________
HONORABLE JUDGE PRESIDING
Page 160 of 200
AGREED AS TO SUBSTANCE AND FORM AND ENTRY REQUESTED:
WEIL, GOTSHAL & MANGES LLP
By:
-----------------------------------------
T. Ray Guy
State Bar No. 08648500
K. Todd Phillips
State Bar No. 24002767
J. Brian Williams
State Bar No. 24028222
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Telephone: (214) 746-7700
Facsimile: (214) 746-7777
ATTORNEYS FOR PLAINTIFF
SUSMAN GODFREY L.L.P.
By:
-----------------------------------------
Terrell W. Oxford
State Bar No. 15390500
Mark A. Evetts
State Bar No. 00793709
Kenneth E. Gardner
State Bar No. 07656825
Salvador Espino
State Bar No. 00795007
901 Main Street, Suite 4100
Dallas, Texas 75202
Telephone: (214) 754-1908
Facsimile: (214) 665-0853
ATTORNEYS FOR DEFENDANT
Page 161 of 200
LYNCH LAW FIRM
By:
-----------------------------------------
Jeffrey S. Lynch
State Bar No. 12727500
Quorum Drive
Dallas, Texas 75240
Telephone: (972) 991-0000
Facsimile: (972) 991-4611
ATTORNEYS FOR INTERVENORS
BRADEN W. SPARKS, P.C.
By:
-----------------------------------------
Braden W. Sparks
State Bar No. 18874500
8117 Preston Road, Suite 800
Dallas, Texas 75225
Telephone: (214) 696-3200
Facsimile: (214) 696-5971
ATTORNEYS FOR INTERVENORS
FRIEDMAN & DRIEGERT
By:
-----------------------------------------
Lawrence J. Friedman
State Bar No. 07469300
Amy Ganci
State Bar No. 07611600
5301 Spring Valley Road, Suite 200
Dallas, Texas 75240
Telephone: (972) 788-1400
Facsimile: (972) 788-2667
ATTORNEYS FOR INTERVENORS
Page 162 of 200
FORM OF
BILL OF SALE
------------
THIS BILL OF SALE (this "Bill of Sale") is made and delivered this ___
day of August, 2001, by [__________________________], a ________ corporation
("Assignor") to ___________________________________ ("Assignee"). Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in the Settlement Agreement (as hereinafter defined).
WHEREAS, Assignor and Assignee are parties to that certain Master
Settlement Agreement dated as of August 1, 2001 (the "Settlement Agreement") by
and among Greenbriar Corporation, a Nevada corporation, LSOF Pooled Equity,
L.P., a Delaware limited partnership, the Assignors named therein and the
Intervenors named therein, the terms of which are incorporated herein by
reference, which provides, among other things, for the transfer and assignment
by Assignor to Assignee of certain Assigned Assets.
NOW, THEREFORE, in consideration of the mutual promises contained in
the Settlement Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Assignor, and
subject to the terms and conditions of the Settlement Agreement:
1. Assignor does hereby bargain, sell, grant, assign,
transfer, convey and deliver unto Assignee, and its successors and assigns,
forever, all of Assignor's right, title and interest in and to the Assigned
Assets.
TO HAVE AND TO HOLD such Assigned Assets with all
appurtenances thereto, unto Assignee, and its successors and assigns, for its
use forever.
2. This Bill of Sale shall inure to the benefit of and be
binding upon Assignor and its successors and assigns.
3. Nothing in this Bill of Sale, express or implied, is
intended to or shall be construed to expand or vary in any way the terms of the
Settlement Agreement. To the extent there is any difference between this Bill of
Sale and the Settlement Agreement, the Settlement Agreement shall govern.
4. This Bill of Sale is executed and delivered pursuant to the
Settlement Agreement.
5. This Bill of Sale, the Transaction Documents and the other
agreements contemplated hereby set forth the entire agreement of the parties
with respect to the matters set forth herein or therein. This Bill of Sale shall
not be modified except by written instrument executed together or in
counterparts by the Assignor and Assignee.
6. The failure of Assignee to insist upon strict performance
of any provision hereof shall not constitute a waiver of, or estoppel against
asserting, the right to require such performance in the future, nor shall a
waiver or estoppel with respect to a later breach of a similar nature or
otherwise.
Page 163 of 200
7. If any of the covenants, terms or conditions of this Bill
of Sale are held illegal by any court or administrative body of competent
jurisdiction, and any director or stockholder action, including, but not limited
to, the execution of any documents or instruments, will make such covenants,
terms or conditions valid and enforceable, each party hereby agrees that it
shall take or cause to be taken such action as may reasonably be required to
make any such covenant, term or condition valid and enforceable. If any
provision of this Bill of Sale is held invalid, such invalidity shall not affect
the other provisions hereof which can be given effect without the invalid
provision, and to this end the provisions of this Bill of Sale are intended to
be and shall be deemed severable.
8. THIS BILL OF SALE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS. ASSIGNOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN DALLAS COUNTY, TEXAS AND IRREVOCABLY AGREES THAT
ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS BILL OF SALE SHALL
BE LITIGATED IN SUCH COURTS. THE ASSIGNOR ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS BILL OF SALE OR ANY OTHER TRANSACTION DOCUMENTS.
9. ASSIGNOR HEREBY WAIVES ANY RIGHT TO TRAIL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS BILL OF SALE OR
ANY OF THE OTHER TRANSACTION DOCUMENTS OR (ii) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
BILL OF SALE OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. ASSIGNOR HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ASSIGNEE MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS BILL OF SALE WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE ASSIGNOR HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
10. Whenever the context requires, the gender of all words
used in this Bill of Sale shall include the masculine, feminine, and neuter, and
the number of all words shall include the singular and the plural. No provision
of this Bill of Sale will be interpreted in favor of, or against, any of the
parties hereto by reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or thereof.
Page 164 of 200
11. Nothing in this Bill of Sale is intended to confer upon
any Person that is not a party hereto (other than Assignee) any rights or
remedies hereunder or otherwise.
12. Time is of the essence to each and every provision of this
Bill of Sale.
13. Assignor hereby acknowledges that: (a) it has been advised
by counsel in the negotiation, execution and delivery of this Bill of Sale and
the other Transaction Documents; and (b) no joint venture is created hereby or
by the other Transaction Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Assignor and the Assignee.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
Assignor has caused this Bill of Sale to be executed and delivered as of the day
and year first above written.
_________________________________
By:______________________________
Name:____________________________
Title:___________________________
Page 165 of 200
FORM OF
ASSUMPTION AGREEMENT
--------------------
THIS ASSUMPTION AGREEMENT (this "Agreement") is made and entered into
this ___ day of August [___], 2001 by and between [__________________________],
a [_____________________________] ("Assignor"), and
[__________________________], a [_____________________________] (or its
permitted assigns) ("Assignee"). Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Settlement Agreement (as
hereinafter defined).
WHEREAS, Assignor and Assignee are parties to that certain Master
Settlement Agreement dated as of August 1, 2001 (the "Settlement Agreement"), by
and among Greenbriar Corporation, a Nevada corporation, LSOF Pooled Equity,
L.P., a Delaware limited partnership, the Assignors named therein, and the
Intervenors named therein, the terms of which are incorporated herein by
reference, which provides, among other things, for the assignment and transfer
by Assignor to Assignee of certain Assigned Assets of Assignor; and
WHEREAS, pursuant to the terms and conditions of the Settlement
Agreement, Assignor desires to transfer to Assignee, and Assignee desires to
assume from Assignor, the Assigned Assets and the Assumed Liabilities.
NOW, THEREFORE, in consideration of the mutual promises contained in
the Settlement Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Assignor, and
subject to the terms and conditions of the Settlement Agreement:
1. Assignment and Assumption. Assignee hereby assumes the Assumed
Liabilities.
2. Successors. All of the covenants, terms and conditions set forth
herein shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective heirs, successors and assigns.
3. Counterparts. This Agreement may be executed in multiple
counterparts, all of which together shall for all purposes constitute one and
the same instrument.
4. Entire Agreement. This Agreement, the Transaction Documents and the
other agreements contemplated hereby set forth the entire agreement of the
parties with respect to the matters set forth herein or therein. This Agreement
shall not be modified except by written instrument executed together or in
counterparts by all of the parties hereto.
Page 166 of 200
5. Non-Waiver. The failure of any party to insist upon strict
performance of any provision hereof shall not constitute a waiver of, or
estoppel against asserting, the right to require such performance in the future,
nor shall a waiver or estoppel with respect to a later breach of a similar
nature or otherwise.
6. Curative Actions; Severability. If any of the covenants, terms or
conditions of this Agreement are held illegal by any court or administrative
body of competent jurisdiction, and any director or stockholder action,
including, but not limited to, the execution of any documents or instruments,
will make such covenants, terms or conditions valid and enforceable, each party
hereby agrees that it shall take or cause to be taken such action as may
reasonably be required to make any such covenant, term or condition valid and
enforceable. If any provision of this Agreement is held invalid, such invalidity
shall not affect the other provisions hereof which can be given effect without
the invalid provision, and to this end the provisions of this Agreement are
intended to be and shall be deemed severable.
7. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAWS. THE PARTIES HERETO HEREBY CONSENT TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN DALLAS COUNTY, TEXAS AND IRREVOCABLY
AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. THE PARTIES ACCEPT FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM
NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENTS.
8. WAIVER OF JURY TRAIL. EACH PARTY HERETO WAIVES ANY RIGHT TO TRAIL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT SUCH PARTY MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
Page 167 of 200
9. Construction. The headings in this Agreement are inserted for
convenience and identification only and are not intended to describe, interpret,
define or limit the scope, extent, or intent of this Agreement or any provision
hereof. Whenever the context requires, the gender of all words used in this
Agreement shall include the masculine, feminine, and neuter, and the number of
all words shall include the singular and the plural. No provision of this
Agreement will be interpreted in favor of, or against, any of the parties hereto
by reason of the extent to which any such party or its counsel participated in
the drafting thereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof or thereof.
10. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if each of the parties had signed the same
document. All counterparts shall be construed together and shall constitute one
and the same instrument.
11. No Third Party Beneficiaries. Nothing in this Agreement is intended
to confer upon any Person that is not a party hereto any rights or remedies
hereunder or otherwise.
12. Time of the Essence. Time is of the essence to each and every
provision of this Agreement.
13. Acknowledgments. The parties hereto hereby acknowledge that: (a)
each such party has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Transaction Documents; and (b) no joint
venture is created hereby or by the other Transaction Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Assignor and
the Assignee.
[Remainder of Page Intentionally Left Blank]
Page 168 of 200
IN WITNESS WHEREOF, and intending to be legally bound hereby, each of
Assignor and Assignee has caused this Agreement to be executed and delivered by
its duly authorized representative as of the day and year first above written.
ASSIGNOR ASSIGNEE
- -------- --------
[_________________] [_________________]
By:_______________________ By:_______________________
Name:_____________________ Name:_____________________
Title:____________________ Title:____________________
Page 169 of 200