Agreement for Right of First Refusal and Other Matters
This Agreement is entered into as of this _____ day of _________, 1997 by
and between Residential Healthcare Properties, Inc. ("RHP") and Greenbriar
Corporation ("GBR").
W I T N E S S E T H :
WHEREAS RHP and GBR have determined that is in their best interest and mutual
benefit to enter into an agreement providing for the right of first refusal for
GBR to lease or manage at RHP's option, certain assisted living communities,
Alzheimer's care and/ or retirement living centers, or nursing homes
("Facility"or "Facilities") that may be owned, acquired, or developed by RHP;
and
WHEREAS RHP and GBR wish to set forth certain understandings regarding the sale
by means of real estate syndications of Facilities that may be leased by RHP, or
RHP's subsidiaries, to GBR, or its subsidiaries.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, it is agreed as
follows:
1. Term. The Term of this agreement shall commence on the date hereof and
shall expire at 5:00 p.m. Central Time on the day immediately preceding the
fifth (5th) anniversary of such date.
2. Grant of Right of First Refusal to Lease or Manage. In the event that
RHP desires to lease to a third party or engage the services of a third
party to manage any Facility acquired, constructed or developed by or for
RHP subsequent to the date hereof and during the term of this Agreement,
prior to leasing or entering into such agreements, RHP shall extend to GBR
the opportunity as determined by RHP, either to lease or to manage the
Facility upon the terms and condition as set forth below, prior to entering
into a lease or management agreement with any third party.
3. Management Agreement. The terms of the management agreement shall be
substantially in the form of Exhibit"A" attached hereto and shall provide
for a management fee of 6% of the Revenue of the Facility as defined in the
Management Agreement and shall be cancelable on 60-days prior written
notice and shall contain such other provisions as are consistent with the
terms of this Agreement.
4. Lease Agreement. The Lease Agreement shall be substantially in the form
of Exhibit"B" attached hereto and shall provide for a Rental amount equal
to the fair market
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rental as defined in the Lease Agreement and shall contain such other
provisions as are consistent with the terms of this Agreement.
5. Notification and Exercise of Option. RHP shall notify GBR of its intent
to enter into such third party lease agreement or management agreement by
written notice given in accordance with this Agreement. GBR shall have
twenty (20) days from the date of such notice in which to elect to enter
into the lease agreement or management agreement upon the terms set forth
in the notice, including the terms set forth in the attached Exhibits "A"
or "B." In the event that GBR has not notified RHP in writing within such
time period that GBR has elected the option to lease or manage the
Facility that is the subject of the notice, RHP shall be free to proceed to
lease the Facility or to enter into a management agreement for the
particular Facility as it sees fit.
6. Additional Right of First Refusal to Lease. GBR shall have the option,
during the term of any management agreement for a particular Facility,
should RHP desire to lease the facility to any third party, other than
pursuant to a financing lease or ground lease of the facility, to lease the
facility upon the terms and conditions as RHP shall be offered or is
willing to extend to a third party. RHP shall give GBR notice and GBR
shall exercise its option in accordance with the notice provision set forth
in Paragraph 5 above. In the event that GBR declines to exercise the
option granted in this Xxxxxxx 0, XXX shall be free to proceed to lease the
facility as it sees fit and the existing management agreement shall be
cancelable upon 30-days notice.
7. Certain Agreements Regarding Sale of Facilities to Real Estate
Syndications. The parties recognize that RHP as a real estate company
may, from time to time during the term of this Agreement, offer Facilities
that are owned by RHP and are subject to lease by GBR or its subsidiary for
sale to real estate syndications. GBR agrees to enter into a replacement
lease ("Replacement Lease") or cause its wholly-owned subsidiary to enter
into a Replacement Lease with the acquirer; provided the Replacement Lease
shall provide for an annual rental rate to be determined by multiplying
110% of the then current fair market value as determined by appraisal in
accordance with the appraisal provisions contained in the existing lease by
9.69%; a term not less than 10 years; tenant to be responsible for all
charges and expenses of ownership and operation of the Facility; and the
Replacement Lease provides for a right of first refusal for the tenant to
purchase the Facility should the acquirer elect to sell the Facility and to
participate in the appreciation of the Facility upon sale after the return
to the participants in the syndication of their original contribution.
Should GBR's subsidiary be the Tenant under any Replacement Lease, GBR
agrees to unconditionally guarantee the payment and performance of all
obligations of the tenant under the Replacement Lease. The parties agree
to incorporate an appropriate provision in all leases between GBR or its
subsidiaries and RHP to reflect the agreement of the parties contained
herein.
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8. Transfer, Assignment, and Change of Control.
A. Because of the trust and confidence that RHP places in the management
and ownership of GBR as it is presently constituted, RHP shall have the
right to terminate this agreement in the event that there is a material
change in the principal officers of GBR or change of control of GBR
resulting from the acquisition by any Person, or two or more Persons acting
in concert, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission) of 50% or more, or rights, options
or warrants to acquire 50% or more, of the outstanding shares of voting
stock of GBR. For purposes hereof "Person' shall mean any individual
(whether acting alone or in concert with others), any corporation,
partnership, trust, limited liability company, or any other legal entity no
matter how constituted.
B. Notwithstanding Paragraph B above, after making an election to
exercise the right of first refusal to lease or manage given pursuant to
this agreement, GBR may assign it interest in the particular right
exercised to a wholly-owned subsidiary of GBR. In the event that a
wholly-owned subsidiary of GBR should enter into a lease pursuant to this
agreement, GBR shall guaranty the payment and performance in accordance
with the "Unconditional and Continuing Lease Guaranty" in the form of
Exhibit "C" attached hereto.
9. Miscellaneous.
A. Saturdays, Sundays and Holidays.
For purposes of this Agreement, should any date specified herein as a
deadline fall on a Saturday, Sunday, or holiday, such date shall
automatically be extended to the next following day which is not a
Saturday, Sunday, or holiday.
B. Notice.
Any notice required or permitted to be delivered under this Agreement
shall be deemed received when sent by United States mail, postage
prepaid, certified mail, return receipt requested or by overnight
courier addressed to RHP or GBR, as the case may be, at the address
set forth below:
If to RHP: ______________________________________
______________________________________
______________________________________
Attention: __________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
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With a copy to:______________________________________
______________________________________
______________________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
If to GBR: ______________________________________
______________________________________
______________________________________
Attention: ________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
With a copy to:______________________________________
______________________________________
______________________________________
(___) ______________________(Telephone)
(___) _______________________(Facsimile)
C. Applicable Law.
This Agreement shall be construed under and in accordance with the
laws of the state where the Property is located.
D. Parties Bound.
Subject to the prohibition contained elsewhere in this Agreement, this
Agreement shall be binding upon and inure to the benefit of the
parties to this Agreement and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
E. Construction.
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In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement, and this Agreement
shall be construed as if such invalid, illegal and unenforceable
provision had never been contained in this Agreement. Captions used
in this Agreement are for the convenience of the parties and shall not
be used in construing or interpreting any provision hereof.
F. Time of Essence.
Time is of the essence in the performance of the undertakings and
obligations of the parties under this Agreement.
G. Gender.
Words of any gender used in this Agreement shall be held and construed
to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context
requires otherwise.
10. Alternative Dispute Resolution.
A. Mediation. The parties agree that if a claim, controversy or
dispute arising out of or related to this Agreement cannot be resolved
by negotiation they will in good faith submit to mediation as a
condition precedent to initiation of arbitration. Mediation shall be
initiated by a party requesting same in writing, and shall be
conducted in accord with the Commercial Mediation Rules of the
American Arbitration Association (the "AAA") or other such body as the
parties may agree to. If the parties do not agree to a mediator
within three (3) days of the written request for mediation, the party
requesting mediation shall request a list of mediators from the AAA
and the AAA's procedures for selection of a mediator shall apply. If
the dispute has not been resolved within 30 calendar days of the
written request for mediation, either party shall be free to initiate
arbitration as herein provided Each party shall bear its respective
costs incurred and the parties shall share equally the fees and
expenses of the mediator.
B. Arbitration. Any claim, controversy or dispute which cannot be
resolved by negotiation or mediation shall be resolved conclusively by
binding arbitration before three arbitrators in accord with the
Commercial Arbitration Rules of the American Arbitration Association
and the provisions of this Article. Each party shall appoint an
arbitrator and the two arbitrators so appointed shall appoint a third
arbitrator. In the event of any inconsistency between the provisions
of this Article and the Commercial Arbitration Rules of the American
Arbitration Association, this Article shall control, subject to the
right to appeal as hereinafter set forth. Judgment on the award may
be entered in any court having jurisdiction thereof. In the event
either party requests injunctive relief, the AAA shall forthwith
appoint a single arbitrator to promptly hear such claim and such
arbitrator shall have the authority to grant any provisional remedy
which would be
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available in a court of competent jurisdiction. The arbitrator shall
resolve all matters in accordance with applicable substantive law. The
arbitrator shall have authority to determine (whether on a provisional or
final basis) who shall bear the responsibility for arbitration fees,
arbitrators' fee, and attorneys' fees. All arbitration shall be commenced
within thirty (30) days of the demand therefor and any decision or award
shall be rendered within sixty (60) days thereafter. The award shall be
rendered in writing and shall set forth findings of fact and conclusions
of law. A party shall be entitled to appeal any error of law in
connection with the award of the arbitrators.
C. Location of Mediation or Arbitration. Proceedings for mediation or
arbitration hereunder shall be conducted in Dallas, Texas.
D. Reservation of Rights. Nothing in this Agreement shall be deemed to
limit the applicability of any otherwise applicable statutes of limitations
or repose and any waivers contained in this Agreement; limit the right of a
party to exercise self help remedies; or preclude a party from initiating
litigation for provisional or ancillary remedies such as injunctive relief
to prevent irreparable injury. The exercise of any remedy or the
institution of any action permitted by this provision shall not constitute
a waiver of the right of any party, including the plaintiff in any such
action, to arbitrate the merits of the controversy or claim giving rise to
such remedies.
E. Attorney-Client Privilege; Confidentiality. Any attorney-client
privilege or other protection against disclosure of confidential
information, including without limitation any protection afforded the
work-product of any attorney, that could otherwise be claimed by any party
shall be available to, and may be claimed by, any party in arbitration
proceedings. No party waives any attorney-client privilege or any other
protection against disclosure of confidential information by reason of
anything contained in or done pursuant to or in connection with this
Article. Each party agrees to keep all controversies and claims for
mediation or arbitration and related proceedings strictly confidential,
except for disclosures of information required by applicable law or
regulation. In addition all conduct, statements, offers and opinions,
whether written or oral, made in the course of any mediation shall be
deemed made for the purpose of compromise and settlement.
G. Third Parties. No arbitration or mediation proceeding arising out of
or related to this Agreement shall include by consolidation, joinder or in
any other manner, an additional person or entity not a party to this
Agreement, except by written consent containing specific reference to this
Agreement signed by the parties hereto and any other person or entity
sought to be joined. Consent to arbitration involving an additional person
or entity shall not constitute consent to arbitrate or mediate any claim
not described in the written consent or with a person or entity not named
or described therein.
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H. Attorneys' Fees and Costs. In the event of arbitration arising
out of the interpretation or enforcement of this Agreement, the prevailing
party shall be entitled to receive, in addition to any other award, his
reasonable costs of proceeding, including reasonable attorneys' fees.
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Executed on behalf of the parties by their duly authorized officers as of the
day and year first written.
RESIDENTIAL HEALTHCARE PROPERTIES, INC.
By: _______________________________
Name: __________________________
Title: __________________________
GREENBRIAR CORPORATION
By: ______________________________
Name: _________________________
Title: _________________________
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