EXHIBIT 10.23.1.
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SERIES H CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This agreement to purchase stock (this "Agreement"), is entered into as
of July 13th, 2001, by and among Greenbriar Corporation, a Nevada corporation
(the "Company"), and Wedgwood Partners, Ltd., Limited Partnership, a Nevada
limited partnership (the "Purchaser").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchaser and the
Purchaser desires to purchase from the Company for an aggregate purchase price
of $9,600,000, 6,000,000 shares of the Company's Series H Convertible Preferred
Stock, par value $0.10 per share (the "Preferred Stock"), having the rights,
restrictions, privileges and preferences set forth in the Certificate of
Designation of Rights and Preferences of Series H Preferred Stock attached
hereto as Exhibit A (the "Certificate of Designation"), and which are
convertible into shares of the Company's common stock, $0.01 par value per share
(the "Common Stock").
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchaser agree
as follows:
ARTICLE I
PURCHASE AND SALE
1.1 The Purchase. The Company has, or before the Closing (as
hereinafter defined) will have, authorized the issuance and sale of up to
6,000,000 shares of the Preferred Stock, having the rights, restrictions,
privileges and preferences as set forth in the Certificate of Designation.
Subject to the terms and conditions set forth in this Agreement, the Company
shall issue and sell to the Purchaser and the Purchaser shall purchase from the
Company 6,000,000 shares of Preferred Stock at a purchase price of $1.60 per
share, for an aggregate purchase price of $9,600,000. The closing of the
purchase and sale of the Preferred Stock (the "Closing") shall take place at the
offices of the Company, immediately following the execution hereof or such later
date as the Company and Purchasers may agree. The date of the Closing is
hereinafter referred to as the "Closing Date."
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1.2 Closing. At the Closing, the Company shall deliver to
Purchaser this Agreement and a certificate for the shares of Preferred Stock
registered in such Purchaser's name. At the Closing, Purchaser shall deliver to
the Company this Agreement, an executed version of the note as attached hereto
as Exhibit B, and an executed version of the note as attached hereto as Exhibit
C.
Certain Defined Terms. For purposes of this Agreement:
"Business Day" shall mean any day except Saturday,
Sunday and any day which shall be a federal legal holiday or a day on which
banking institutions in the State of Texas are authorized or required by law or
other governmental action to close;
"Person" means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind;
"Transaction Documents" shall mean this Agreement,
the Certificate of Designations and the Certificate representing the Preferred
Stock.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to the Purchaser:
(a) Organization and Qualification. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada with the requisite corporate power and authority to
own and use its properties and assets and to carry on its business as currently
conducted. The Company is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, could not, individually or in the aggregate, adversely affect the legality,
validity or enforceability of the Securities (as defined below) or the
Transaction Documents, or have or result in a material adverse effect on the
results of operations, assets, prospects, or condition (financial or otherwise)
of the Company (a "Material Adverse Effect").
(b) Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of each
of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company, and no further action is required by the
Company. Each of the Transaction Documents has been duly executed by the Company
and, when delivered (or filed, as the case may be) in accordance with the terms
hereof and thereof, will constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their terms.
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(c) Issuance of the Preferred Stock. The shares of
Preferred Stock are duly authorized and, when issued and paid for in accordance
with the terms hereof, will be duly and validly issued, fully paid and
non-assessable, free and clear of all liens, encumbrances and rights of first
refusal of any kind (collectively, "Liens"). The Company has on the date hereof
and will, at all times while the Preferred Stock is outstanding, maintain an
adequate reserve of duly authorized shares of Common Stock, reserved for
issuance to the holders of the Preferred Stock, to enable it to perform its
conversion and other obligations under the Transaction Documents with respect to
the Preferred Stock. The shares of Common Stock issuable upon conversion of the
Preferred Stock are referred to herein as the "Underlying Shares." The shares of
Preferred Stock and the Underlying Shares are collectively referred to herein
as, the "Securities." When issued upon conversion of the Preferred Stock, the
Underlying Shares will be duly authorized, validly issued, fully paid and
nonassessable, free and clear of all Liens. Assuming the representations and
warranties of the Purchasers contained in Article 2.2 are true, (i) the offer
and sale of the Preferred Stock by the Company, complies with or is exempt from
all applicable Federal and state securities laws and Purchaser will not have a
right of rescission or damages with respect thereto and (ii) the issuance of the
Underlying Shares upon conversion of the Preferred Stock will comply with or be
exempt from all applicable Federal and state securities laws and no Purchaser
will have a right of rescission or damages with respect thereto.
(d) No Conflicts. The execution, delivery and performance
of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby do not and will not (i)
conflict with or violate any provision of the Company's certificate or articles
of incorporation, bylaws or other charter documents (each as amended through the
date hereof), or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Company debt or otherwise) or other
understanding to which the Company is a party or by which any property or asset
of the Company is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected. Subject to the accuracy of the
representations and warranties of the Purchaser set forth in Article 2.2, no
registration or filing with, or consent or approval of or other action by, any
Federal, state or other governmental agency or instrumentality, domestic or
foreign, under laws and regulations thereof as now in effect is or will be
necessary for the valid execution, delivery and performance by the Company of
any of the Transaction Documents (other than the filing of the Certificate of
Designations), the issuance, sale and delivery of the Securities, other than
filings pursuant to state securities laws (all of which filings have been made
by the Company or will be made within the period of time required by such state
securities laws) in connection with the sale of shares of Preferred Stock under
this Agreement.
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(e) Filings, Consents and Approvals. The Company is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than the filing of the Certificate of Designations with the
Nevada Secretary of State.
(f) Litigation; Proceedings. There is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an "Action") and/or which adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities.
(g) Private Offering. Assuming the accuracy of the
representations and warranties of the Purchaser set forth in Sections
2.2(b)-(g), the offer, issuance and sale of the Securities to the Purchaser as
contemplated hereby are exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). Neither the Company
nor any Person acting on its behalf has taken or is, to the knowledge of the
Company, contemplating taking any action which could subject the offering,
issuance or sale of the Securities to the registration requirements of the
Securities Act including soliciting any offer to buy or sell the Securities by
means of any form of general solicitation or advertising.
(h) Disclosure. The Company understands and confirms that
the Purchasers shall be relying on the representations set forth in the
Transaction Documents in effecting transactions in securities of the Company.
All disclosure, including, without limitation, that set forth in the Transaction
Documents and the Schedules to this Agreement (which are incorporated into and
made a part of this Agreement), provided to the Purchasers regarding the
Company, its business and the transactions contemplated by the Transaction
Documents, furnished by or on behalf of the Company are true and correct and do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made herein and therein,
in light of the circumstances under which they were made, not misleading.
(i) Financial Information. The Company has furnished the
Purchaser with the Company's financial statements and other disclosures about
the Company in its public documents as filed with the Securities and Exchange
Commission. Such information is materially true and correct and includes all
information required to be filed with the SEC.
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(j) Insurance. The Company carries insurance with
financially sound and reputable insurance companies or associations, in such
amounts and covering such risks as are adequate and customary for the type and
scope of its property and business, but in any event in amounts sufficient to
prevent the Company from becoming a co-insurer.
(k) No Broker. The Company has no contract, arrangement
or understanding with any broker, finder, agent, financial advisor or other
intermediary with respect to the transactions contemplated by this Agreement.
(l) Books and Records. The books of account, ledgers,
order books, records and documents of the Company accurately and completely
reflect all material information relating to the business of the Company, the
nature, acquisition, maintenance, location and collection of the assets of the
Company, and the nature of all transactions giving rise to the obligations or
accounts receivable of the Company.
(m) Environmental Matters. The Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational safety and health, and, to the best knowledge of the
Company, no material expenditures will be required in order to comply with any
such statute, law or regulation.
(n) Issuance Taxes. All taxes imposed by law in
connection with the issuance, sale and delivery of the Shares have been fully
paid, and all laws imposing such taxes have been fully complied with.
2.2 Representations and Warranties of the Purchaser. Purchaser
hereby represents and warrants to the Company as follows:
(a) Organization; Authority. Purchaser has the requisite
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The purchase by Purchaser of shares of Preferred Stock
hereunder has been duly authorized by all necessary action on the part of
Purchaser. This Agreement has been duly executed by Purchaser and, when
delivered (or filed, as the case may be) in accordance with the terms hereof and
thereof, will constitute valid and binding obligations of the Purchaser
enforceable against the Purchaser in accordance with their terms.
(b) Investment Intent. Purchaser is acquiring shares of
Preferred Stock as principal for its own account for investment purposes only
and not with a view to or for distributing or reselling any such shares of
Preferred Stock. Purchaser is acquiring shares of Preferred Stock hereunder in
the ordinary course of its business. Purchaser does not have any agreement or
understanding, directly or indirectly, with any person to distribute such Shares
of Preferred Stock.
(c) Purchaser Status. At the time Purchaser was offered
shares of Preferred Stock, it was, and at the date hereof it is, an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Purchaser has not
been formed solely for the purpose of acquiring the Securities.
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(d) Experience of Purchaser. Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.
(e) Ability of Purchaser to Bear Risk of Investment.
Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.
(f) Access to Information. Purchaser acknowledges that it
has reviewed such information about the Company it has deemed necessary and has
been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities and the
merits and risks of investing in the Securities; (ii) access to information
about the Company and the Company's financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment; and (iii) the opportunity to obtain such additional
information which the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with
respect to the investment and to verify the accuracy and completeness of the
information it has reviewed. Neither such inquiries nor any other investigation
conducted by or on behalf of Purchaser or its representatives or counsel shall
modify, amend or affect Purchaser's right to rely on the truth, accuracy and
completeness of the any of the Company's disclosures to each Purchaser,
including, without limitation, representations and warranties contained in the
Transaction Documents.
(g) General Solicitation. Purchaser is not purchasing
shares of Preferred Stock as a result of or subsequent to any advertisement,
article, notice or other communication regarding the Securities published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
(h) Reliance. Purchaser understands and acknowledges that
(i) shares of preferred stock are being offered and sold to it without
registration under the Securities Act on the basis of an exemption from the
registration provisions of the Securities Act and (ii) the availability of such
exemption, depends in part on, and the Company will rely upon the accuracy and
truthfulness of, the foregoing representations.
The Company acknowledges and agrees that Purchaser does not
make or has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in this
Section 2.2.
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions. (a) Securities may only be disposed of
pursuant to an effective registration statement under the Securities Act, to the
Company or pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities Act, and in
compliance with any applicable federal and state securities laws. In connection
with any transfer of Securities other than pursuant to an effective registration
statement or to the Company, except as otherwise set forth herein, the Company
may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred securities under the
Securities Act.
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(b) The Purchaser agrees to the imprinting, so long as is required
by this Section 3.1(b), of the following legend on the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE, HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.
3.2 Furnishing of Information. As long as Purchaser owns
Securities, the Company covenants to provide such Purchaser (i) with quarterly
financial statements, including year-to-date statements, of the Company within
45 days after the end of each fiscal quarter, and (ii) an annual financial
statement within 120 days after the end of each fiscal year audited by an
accounting firm approved by the Purchasers. All such financial statements shall
be prepared and formatted in accordance with generally accepted accounting
principles, except that quarterly financial statements may lack footnotes and
usual year-end adjustments.
3.3 Possible Purchase Price Per Share Adjustment. All agreements
between the Purchasers and the Company, whether now existing or hereafter
arising and whether written or oral, are hereby limited so that in no
contingency, whether by unilateral or mutual mistake or otherwise, shall the
purchase price per share of $1.60 per share of the Preferred Stock be less than
the greater of book or market value of five shares of Greenbriar common stock.
If it is determined, from any circumstance whatsoever, that the purchase price
per share of $1.60 per share of the Preferred Stock is less than the book or
market value of five shares of Greenbriar common stock, the number of number of
shares of Preferred Stock held by such holder of the Preferred Stock or secured
party, where the Preferred Stock is collateral, shall be reduced until the
purchase price per share of Preferred Stock is equal to the book or market value
of five shares of Greenbriar common stock. Any holder or subsequent holder of
the Preferred Stock or any secured party, where the Preferred Stock is
collateral, shall surrender such excess shares to the Company on a timely basis.
Purchasers shall require any subsequent holder of the Preferred Stock or any
secured party, where the Preferred Stock is collateral, to agree in writing to
be bound by the terms of this paragraph of the Agreement. This paragraph shall
control all agreements between the Purchasers and the Company.
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ARTICLE IV
MISCELLANEOUS
4.1 Entire Agreement; Amendments. The Transaction Documents,
together with the Exhibits and Schedules thereto contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
4.2 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 4:00 p.m. (Dallas
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 4:00 p.m. (Dallas time)
on any date and earlier than 11:59 p.m. (Dallas time) on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as follows:
If to the Company: Greenbriar Corporation
650 Centura Tower One
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With copies to: Glast, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
2200 One Galleria Tower
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to Purchaser: Wedgwood Partners, Ltd., Limited Partnership
650 Centura Tower One
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & LaJone, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
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4.3 Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Purchaser or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
4.4 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
4.5 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Purchaser. Except as set
forth in Section 3.1(a), the Purchaser may not assign this Agreement or any of
the rights or obligations hereunder without the consent of the Company.
4.6 No Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
4.7 Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Nevada, without regard to the principles of conflicts of law thereof.
4.8 Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery and
conversion or exercise (as the case may be) of the Preferred Stock.
4.9 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
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4.10 Severability. In case any one or more of the provisions of
this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Series
H Preferred Stock Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.
GREENBRIAR CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
WEDGWOOD PARTNERS, LTD.
LIMITED PARTNERSHIP
BY GBR, LLC, ITS GENERAL
PARTNER
BY ITS SOLE MEMBER & MANAGER:
Greenbriar Acquisition
Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice-President
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