RIGHT OF FIRST REFUSAL AGREEMENT
Exhibit 10.4.1
RIGHT OF FIRST REFUSAL AGREEMENT
THIS RIGHT OF FIRST REFUSAL AGREEMENT (this “Agreement”) is entered into the 18th day of August, 2004 (the “Effective Date”), by and between Covenant Place of Abilene, Inc., a Delaware corporation (“Covenant”), and Capital Senior Living Acquisition, LLC, a Delaware limited liability company (“Capital”).
1. Restrictions on Transfer and Certain Definitions.
(a) Covenant shall not Transfer any Property Interest without first complying with the terms and provisions of this Agreement.
(b) For the purposes of this Agreement, (i) “Property Interest” means (A) with respect to the Property, any interest in the Property or in any portion of the Property, (B) with respect to Covenant, any interest in Covenant, (C) with respect to an Affiliate Property (as defined in Section 2(d) below), any interest in the Affiliate Property or in any portion of the Affiliate Property, and (D) with respect to an Affiliate Owner (as defined in Section 2(d) below), any interest in such Affiliate Owner, and (ii) “Transfer” means to sell, assign, lease, or otherwise transfer to any person or entity other than the Transferor’s lender.
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(b) Capital Purchase Right. Capital shall have a prior right to purchase all of the Property Interest that is the object of the Offer (the “Capital Purchase Right”) on the terms and conditions set forth in this Agreement by sending written notice of Capital’s election to exercise the Capital Purchase Right (the “Capital Election Notice”) to Covenant within fifteen (15) days after Capital receives the Third Party Offer Notice. Exercise of the Capital Purchase Right in accordance with the terms and conditions of this Agreement shall entitle Capital to purchase the Property Interest on the identical terms and conditions set forth in the Offer except (i) with respect to the identity of the Purchaser, (ii) that the relevant time periods in the Offer (such as, for example, with respect to feasibility and due diligence periods, and closing) shall be extended by no more than thirty (30) days if Capital, j in its reasonable judgment, needs such additional time to close the purchase of the Property Interest and so notifies Covenant in a writing to such effect signed by an executive officer of Capital, and (iii) that if Capital delivers to Covenant the Capital Election Notice by no later than 5:00 p.m. Central Standard Time on February 18, 2007, the purchase price for the Property Interest subject to the Offer shall be the lesser of (i) the purchase price contained in the Offer, or (ii) Two Million Nine Hundred Seventy-Four Thousand One Hundred Forty-Three Dollars ($2,974,143) (the “Purchase Price”). The delivery to Covenant of a Capital Election Notice as provided herein shall constitute Capital’s obligation to purchase the applicable Property Interest in accordance with the terms and conditions of this Agreement and of the Definitive Agreement (as defined in subsection (c) below).
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l(b)(i)(B) above unless (A) the Offer includes a Transfer of an analogous Property Interest in all Affiliate Owners, and (B) Transfer of the Property Interest and of all such analogous Property Interests of all such Affiliate Owners are consummated simultaneously. Notwithstanding anything in this Agreement or in any other agreement; to the contrary, the Capital Purchase Right shall apply only in the event that Capital duly exercises such right (or an analogous right) with respect to all Property Interests that are the subject of the Offer.
(a) the written agreement of Covenant and Capital (or, to the extent applicable, of their respective successors and permitted assigns);
(b) upon the Transfer of Covenant of all of a Property Interest in accordance with the terms and conditions of this Agreement, such that Covenant no longer owns, directly or indirectly, any of such Property Interest;
(c) Capital shall have delivered a Capital Exercise Notice to Covenant as to a Property Interest and thereafter shall have failed to consummate the closing of the purchase and sale of the subject Property Interest in violation of the terms and conditions of the Definitive Agreement; and
(d) the expiration of the Refusal Period.
7. Alternative Dispute Resolution.
(a) In the event of any dispute, controversy, or claim arising out of or in connection; with this Agreement or with the transactions contemplated hereby, or with
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the breach or alleged breach hereof, in each case whether sounding in contract, tort, or otherwise (each a “Dispute”), the parties shall settle such Dispute in accordance with the provisions of this Section 7.
(b) Upon the occurrence and during the continuation of a Dispute, the parties agree first to attempt to settle such Dispute amicably through consultation and negotiation between their respective executive officers.
(c) Upon the occurrence and during the continuation of any Dispute that remains unresolved notwithstanding compliance with Section 7(ii) above, the parties agree to attempt to settle such Dispute through non-binding mediation conducted by a mediator with at least five (5) years of mediation experience who has been qualified under the Texas Alternative Dispute Resolution Act and who has knowledge regarding real estates operations (a “Mediator”). In the event that the parties cannot agree on a single Mediator, then each of the parties shall select a Mediator, and the two (2) Mediators thus selected shall select a single Mediator to hear the Dispute. Each of the parties shall pay one-half (1/2) of the aggregate fees and expenses of the mediation.
(d) Any Dispute that remains unresolved notwithstanding compliance with Sections 7(ii) and 7(iii) above, or any Dispute with respect to which one or more parties shall fail to comply in all material respects with the requirements of, such Sections 7(ii) and/or 7(iii) promptly following the written request of the other party, shall be settled by arbitration administered by the American Arbitration Association (“AAA”) under its “R-Series” Commercial Arbitration Rules, as supplemented and modified by its “E-Series” Commercial Arbitration Rules (or under such other AAA rules as may then apply with respect to Expedited arbitration), and judgment on the award (the “Award”) rendered by the arbitrators) (the “Arbitrator”) may be entered in any court having jurisdiction thereof. The parties] agree to and mutually request an oral hearing of the Dispute. The Arbitrator must have at least five (5) years of arbitration experience and have knowledge regarding real estate operations.
(e) The parties expressly agree that, prior to the appointment of the Arbitrator, nothing in this Agreement shall prevent a party from applying to a court that otherwise would be of competent jurisdiction solely to obtain a preliminary injunction or other similar provisional or interim relief to maintain the status quo. Upon appointment of the Arbitrator, the Arbitrator shall have sole jurisdiction to hear any such applications, except that any such provisional or interim measures that the Arbitrator may order may be immediately and specifically enforced by a court that otherwise would be of competent jurisdiction.
(f) Each of the parties shall pay one-half (1/2) of the aggregate fees and expenses of the arbitration, and all other fees and expenses (such as, for example, attorney and accounting fees, actuarial and other experts) shall be paid by the party incurring them; provided, however, that a party prevailing on substantially all of its claims shall be entitled to reasonable attorneys’ fees, costs, and other disbursements in addition to any other relief to which such party may be entitled.
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(g) The place of any arbitration instituted under this Section 7 shall be Dallas, Texas. Each party consents to jurisdiction in such forum.
| If to Grantor: | Copy to: | |||
| Covenant Place of Abilene, Inc. | Xxxxx X. Xxxxxx, Esq. | |||
| 0000 Xxxxxx Xxxxxx, Xxxxx 000 | Xxxxx X. Xxxxxx, P.C. | |||
| Xxxx Xxxxx, Xxxxx 00000 | 0000 Xxxxxxxxx Xxxxxx | |||
| Xxxx: Mr. Xxxxxx Xxxxxxx | Xxxx Xxxxx, Xxxxx 00000 | |||
| Fax: 000-000-0000 | Fax: 000-000-0000 | |||
| If to Grantee: | Copy to: | |||
| Capital Senior Living Acquisition, LLC | Xxxxxxx X. Xxxxxx, Esq. | |||
| 00000 Xxxxxx Xxxxxxx, Xxxxx 000 | Xxxxx, Xxxxxx & Xxxxxxx, P.C. | |||
| Xxxxxx, Xxxxx 00000 | 00000 Xxxxxx Xxxxxxx, Xxxxx 000 | |||
Attn:
|
Xx. Xxxxx X. Xxxxxx and | Xxxxxxx, Xxxxx 00000 | ||
| Xx. Xxxxx X. Xxxxxxxx | Fax: 000-000-0000 | |||
| Fax: 000-000-0000 | ||||
Either party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth.
10. Governing Law. This Agreement shall be governed by and construed in accordance with e domestic laws of the State of Texas without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas.
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18. No Restriction on Covenant’s Discretion with respect to Offer. Notwithstanding anything in this Agreement to the contrary, Covenant shall have the right, in its sole and absolute discretion and for any reason or for no reason, to refuse to enter into discussions with respect to, or to accept, any Offer, even though such refusal prevents Capital from being entitled to exercise the Capital Purchase Right.
IN WITNESS WHEREOF, the parties have entered into this Right of First Refusal Agreement as of the date first above written.
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| XXXXXXXX XXXXX XX XXXXXXX, INC. |
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| By: | /s/ Xxxxxx Xxxxxxx | |||
| Xxxxxx Xxxxxxx, Executive Vice President | ||||
| CAPITAL SENIOR LIVING ACQUISITION, LLC |
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| By: | /s/ Xxxxx X. Xxxxxx | |||
| Xxxxx X. Xxxxxx, Chairman of the Company | ||||
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