Common use of Right of First Opportunity Clause in Contracts

Right of First Opportunity. Management Company hereby covenants and agrees that, for a period commencing on the Effective Date and ending one (1) year following the expiration or earlier termination of this Agreement, Management Company shall not, and shall cause any Covered Person not to develop, acquire or lease a senior living facility within five (5) driving miles of the Facility (a “Competitive Property”) without first offering Tenant an opportunity to co-invest in the Competitive Property as set forth in this paragraph. If a Covered Person desires to develop, own, or lease a Competitive Property, Management Company shall deliver the following notices to Tenant: (1) written notice to Tenant promptly upon any Covered Person commencing substantive analysis, planning and or underwriting activities with respect to the potential development, acquisition or leasing of a Competitive Property (the “Competitive Property Notice”), including a detailed written description of the Competitive Property or, in the case of a potential development of a Competitive Property, a detailed written description of the proposed location of such Competitive Property and a general description, to the extent available, of the type, size and scope of the Competitive Property to be developed, and (2), upon finalizing the terms of the proposed investment in the Competitive Property that was subject to the Competitive Property Notice, written notice of such proposed investment including a detailed written description thereof (the “Investment Notice”), not less than thirty (30) days prior to the day on which the proposed investment is expected to close after commercially reasonable efforts by the applicable Covered Person to coordinate its process to give the Tenant maximum knowledge and information regarding such potential Competitive Property investment, together with any and all investment memoranda, investment summaries, projections, pro forma financial statements and other materials reasonably required to evaluate the proposed investment, including those that may be reasonably requested by the Tenant after its receipt of the Investment Notice (collectively, the “Investment Materials”). Following delivery of an Investment Notice, Tenant shall have the right, exercisable by delivering written notice to the Management Company within twenty (20) days after their receipt of the Investment Notice (the “Response Period”), to elect to, or to have an Affiliate, invest with such Covered Person (which investment shall be in place of any investment otherwise to have been made by any third party(ies)). In such event, the investment shall have the economic terms provided in the Investment Notice (which shall be no worse than the most favored terms provided prior to the expiration of the Response Period to any other unaffiliated potential or actual investor with respect to such potential Competitive Property investment). Throughout the Response Period, Management Company agrees to negotiate in good faith with the Tenant regarding the terms of and all other matters relating to such Competitive Property investment. If Tenant delivers written notice to the Management Company stating that it and/or its Affiliates have elected not to invest in the Competitive Property, or if the Tenant fails to deliver a written notice to the Management Company by the expiration of the Response Period stating that it and/or its Affiliates have elected to invest in the Competitive Property, then the Covered Person shall have the right to pursue the Competitive Property with a third party other than the Tenant and/or its Affiliates, so long as the economic terms of the investment do not demonstrably change favorably to the investor by more than seven percent (7%) (and if the terms do so change, a new right of first opportunity to Tenant shall be triggered hereunder). Tenant’s election (or deemed election) not to invest in a Competitive Property shall not be deemed an election by Tenant with respect to any future Competitive Property, and the Tenant’s right with respect to any such future Competitive Property shall be subject to the requirements of this Section 8.3(f). This provision, however, shall not apply following any termination of this Agreement arising out of Section 7.2, Section 7.6, or if the Agreement is deemed void ab initio pursuant to Section 7.9.