EXHIBIT 10.24
RIGHT OF FIRST OFFER AGREEMENT
(SOLANA)
THIS RIGHT OF FIRST OFFER AGREEMENT (this "Agreement") is made
on June 27, 2003, by and among ▇▇▇▇▇▇▇ Partners - Solana Limited Partnership,
a Texas limited partnership ("Solana Development Owner"), ▇▇▇▇▇▇▇ Partners -
Solana Land, L.P.- Land, a Texas limited partnership ("Solana Land Owner") and
▇▇▇▇▇▇▇ Properties, L.P., a Maryland limited partnership ("Optionee"). Each of
Solana Development Owner and Solana Land Owner may be referred to herein as an
"Optionor."
RECITALS
A. Solana Development Owner is the owner of that certain
real property described in Exhibit A hereto and the buildings, structures, and
other improvements situated or hereinafter constructed or acquired on such real
property (collectively, the "Solana Development") and that certain adjacent
undeveloped land parcel described in Exhibit B hereto (the "Solana Land" and,
together with the Solana Development, "Solana").
B. Solana Development Owner and Solana Land Owner have
agreed that, contemporaneously with the execution of this Agreement, Solana
Development Owner will transfer to Solana Land Owner all of its right, title and
interest in the Solana Land.
C. Optionee desires to acquire, and each of Solana
Development Owner and Solana Land Owner desires to grant to Optionee, a right of
first offer with respect to Solana Development and Solana Land.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and conditions set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Optionor and Optionee agree as follows:
1. Grants of Rights of First Offer. Each Optionor hereby grants
to Optionee a right of first offer to acquire all, or any applicable portion, of
such Optionor's right, title and interest in Solana (each, a "Right of First
Offer"), on the terms and conditions set forth herein.
1.1 Effectiveness of Right of First Offer. This Agreement
and the Rights of First Offer granted hereby shall become effective only upon,
and concurrently with, the closing (the "Closing") of the initial public
offering of the common stock (the "Public Offering") of ▇▇▇▇▇▇▇ Properties,
Inc., a Maryland corporation and the general partner of Optionee (the
"Company").
1.2 Commencement of Rights of First Offer. Optionee shall
have the right to exercise either or both of the Rights of First Offer at any
time after the Closing until the expiration of the Rights of First Offer
pursuant to Section 1.3 below.
1.3 Term of Rights of First Offer. Except for assignments
effected in accordance with Section 3 below, this Agreement and the Rights of
First Offer granted hereunder shall remain in effect and binding on each
Optionor and each of their successors and assigns until the expiration or
earlier termination of that certain Noncompetition Agreement by and between
▇▇▇▇▇▇▇ Properties, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III dated as of June____, 2003.
1.4 Subordination. The Rights of First Offer granted by
this Agreement and the rights of the Optionee hereunder are and shall be
subordinate to any unaffiliated third party financing or mortgage on the Solana
Development and/or the Solana Land, as applicable, whether already or hereafter
existing. To effectuate the purposes of the foregoing, Optionee agrees, upon
request by any lender under any such financing or mortgage, to execute one or
more commercially reasonable subordination agreements in forms reasonably
satisfactory to Optionee.
2. Exercise of Rights of First Offer.
2.1 Right of First Offer Notice. If at any time during
the Term, an Optionor intends to offer its interests in Solana or any portion
thereof (as to each such Optionor, the "Subject Property") for sale to third
parties or to accept an offer of a third party to purchase the Subject Property,
then such Optionor shall first give written notice to Optionee (the "Right of
First Offer Notice"). If an Optionor is in receipt of an offer from a third
party that such Optionor intends to accept, the Right of First Offer Notice
shall contain the purchase price and other material economic and other terms
(including allocation of closing costs) of such offer (the "Third Party Terms").
2.2 Optionee's Notice. Optionee shall have thirty (30)
days after receipt of any Right of First Offer Notice from an Optionor (each, an
"Optionee Election Date") to deliver a written notice to such Optionor of its
election to acquire the Subject Property ("Optionee's Election Notice") for
units of limited partnership of Optionee ("OP Units") with a "Market Value" (as
defined below) equal to the purchase price set forth in Optionee's Election
Notice or, if mutually agreed upon by the Optionee and such Optionor, cash. If a
Right of First Offer Notice includes Third Party Terms which such Optionor is
prepared to accept, Optionee's Election Notice shall accept such terms, without
condition or contingency, or Optionee's Election Notice will be deemed an
election by Optionee not to acquire the Subject Property. If a Right of First
Offer Notice does not include Third Party Terms which such Optionor is prepared
to accept, Optionee's Election Notice must contain the proposed purchase price
and other material economic and other terms (including allocation of closing
costs) under which Optionee is prepared to purchase the Subject Property. In
either event, Optionee's Election Notice shall constitute a written offer by
Optionee to purchase the Subject Property on the terms contained therein.
(a) Market Value of OP Units. The term "Market Value"
as used herein shall mean the average of the daily market price of the common
stock of the Company (or any successor thereto) (the "Common Stock") for the ten
(10) consecutive trading days immediately preceding the closing of the
transactions pursuant to Optionee's Election Notice. For purposes of determining
Market Value, one (1) OP Unit shall equal one (1) share of Common Stock, subject
to any adjustments required under the partnership agreement in effect for the
Optionee or to reflect stock splits, reclassifications, dividends in-kind, and
the like.
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(b) Rights Associated with OP Units. Pursuant to the
limited partnership agreement of the Optionee, the OP Units are exchangeable
into shares of the Common Stock. It is currently anticipated that such shares of
common stock will be entitled to certain registration rights consistent with the
Company's practice at the time such OP Units are issued and subject to any
restrictions or agreements affecting such rights to which the Company or the
Operating Partnership is bound.
2.3 Optionor's Election. An Optionor shall have thirty
(30) days from its receipt of an Optionee's Election Notice (the "Optionor
Election Date") to determine whether to sell the Subject Property to Optionee on
the terms specified therein.
2.4 Acceptance by Optionor. In the event an Optionor
accepts an Optionee's Election Notice and agrees to sell the Subject Property to
Optionee pursuant to its terms, Optionee shall deposit with such Optionor a
nonrefundable good faith deposit equal to five percent (5%) of the purchase
price reflected in Optionee's Election Notice within five (5) business days of
such Optionor's acceptance of Optionee's Election Notice and the acquisition of
the Subject Property shall close within ninety (90) days from the date upon
which such Optionor accepts Optionee's Election Notice in writing. The
acquisition of the Subject Property or any portion thereof shall be on an "as
is" basis with no representations, warranties or indemnities regarding the
Subject Property's physical condition, operations, development or management (an
"As-Is Basis"). Any failure by Optionee to close on the acquisition of the
Subject Property (other than a failure resulting from a breach by such Optionor)
following such Optionor's acceptance of Optionee's Election Notice shall
automatically and permanently terminate this Agreement as to the Subject
Property.
2.5 Rejection by Optionor. In the event an Optionor
elects not to accept an Optionee's Election Notice, Optionee's rights under this
Agreement with respect to the Subject Property shall expire and be of no further
force or effect; provided, however, that such rights shall be revived and
reinstated in favor of Optionee in the event such Optionor does not consummate a
sale of the Subject Property to a third party during the 120 day period
following the Optionor Election Date at a purchase price equal to or greater
than the purchase price set forth in Optionee's Election Notice and otherwise on
terms which are as good or more favorable to such Optionor than the terms set
forth in Optionee's Election Notice (including the sale of the Subject Property
on an As-Is Basis).
2.6 Failure to Make Election. If an Optionee fails to
deliver an Optionee's Election Notice on a timely basis or an Optionee's
Election Notice does not satisfy the requirements set forth above, it shall be
deemed an election by such Optionee not to acquire the Subject Property and, in
such event, such Optionee's rights under this Agreement with respect to the
Subject Property shall expire and be of no further force or effect; provided,
however, that such rights shall be revived and reinstated in favor of Optionee
in the event such Optionor has not consummated a sale of the Subject Property
during the 120 day period following the Optionee Election Date.
3. Assignment. Neither this Agreement nor the Rights of First
Offer granted hereunder shall be assignable by Optionee except to an affiliate
of Optionee or the Company. Upon any non-permitted assignment, each Optionor
shall have the immediate right to terminate
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this Agreement as between it and Optionee and/or terminate the Right of First
Offer granted by it hereunder.
4. Notices; Exercise of Rights of First Offer. Any notice or
demand which must or may be given under this Agreement (including the exercise
by the Optionee of a Right of First Offer) or by law shall, except as otherwise
provided, be in writing and shall be deemed to have been given (i) when
physically received by personal delivery (which shall include the confirmed
receipt of a telecopied facsimile transmission), or (ii) three business days
after being deposited in the United States certified or registered mail, return
receipt requested, postage prepaid, or (iii) one business day after being
deposited with a nationally known commercial courier service providing next day
delivery service (such as Federal Express).
Any such notice shall be addressed and delivered or telecopied
(a) in the case of a notice to the Optionee at the following address and
facsimile number:
▇▇▇▇▇▇▇ Properties, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone:(▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ Lammas
and (b), in the case of a notice to an Optionor, to the address and facsimile
number set forth on the applicable Signature Page hereof.
5. Dispute Resolution. The parties hereby agree that, in order to
obtain prompt and expeditious resolution of any disputes under this Agreement,
each claim, dispute or controversy of whatever nature, arising out of, in
connection with, or in relation to the interpretation, performance or breach of
this Agreement (or any other agreement contemplated by or related to this
Agreement or any other agreement between the parties), including without
limitation any claim based on contract, tort or statute, or the arbitrability of
any claim hereunder (an "Arbitrable Claim"), shall, subject to Section 5.1
below, be settled by final and binding arbitration conducted in Los Angeles,
California. The arbitrability of any Arbitrable Claims under this Agreement
shall be resolved in accordance with a two-step dispute resolution process
administered by Judicial Arbitration & Mediation Services, Inc. ("JAMS")
involving, first, mediation before a retired judge from the JAMS panel,
followed, if necessary, by final and binding arbitration before the same, or if
requested by either party, another JAMS panelist. Such dispute resolution
process shall be confidential and shall be conducted in accordance with
California Evidence Code Section 1119.
5.1 Mediation. In the event any Arbitrable Claim is not
resolved by an informal negotiation between the parties within fifteen (15) days
after either party receives written notice that a Arbitrable Claim exists, the
matter shall be referred to the Los Angeles, California office of JAMS, or any
other office agreed to by the parties, for an informal, non-binding mediation
consisting of one or more conferences between the parties in which a retired
judge will seek to guide the parties to a resolution of the Arbitrable Claims.
The parties shall
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select a mutually acceptable neutral arbitrator from among the JAMS panel of
mediators. In the event the parties cannot agree on a mediator, the
Administrator of JAMS will appoint a mediator. The mediation process shall
continue until the earliest to occur of the following: (i) the Arbitrable Claims
are resolved, (ii) the mediator makes a finding that there is no possibility of
resolution through mediation, or (iii) thirty (30) days have elapsed since the
Arbitrable Claim was first scheduled for mediation.
5.2 Arbitration. Should any Arbitrable Claims remain
after the completion of the mediation process described above, the parties agree
to submit all remaining Arbitrable Claims to final and binding arbitration
administered by JAMS in accordance with the then existing JAMS Arbitration
Rules. Neither party nor the arbitrator shall disclose the existence, content,
or results of any arbitration hereunder without the prior written consent of all
parties. Except as provided herein, the California Arbitration Act shall govern
the interpretation, enforcement and all proceedings pursuant to this
subparagraph. The arbitrator is without jurisdiction to apply any substantive
law other than the laws selected or otherwise expressly provided in this
Agreement. The arbitrator shall render an award and a written, reasoned opinion
in support thereof. Such award may include reasonable attorneys' fees to the
prevailing party. Judgment upon the award may be entered in any court having
jurisdiction thereof.
5.3 Costs. The parties shall bear their respective costs
incurred in connection with the procedures described in this Section 5, except
that the parties shall equally share the fees and expenses of the mediator or
arbitrator and the costs of the facility for the hearing.
5.4 Survivability. This dispute resolution process
contained in this Section 5 shall survive the expiration or earlier termination
of this Agreement. The parties expressly acknowledge that by signing this
Agreement, they are giving up their respective right to a jury trial.
6. Miscellaneous.
6.1 Amendments and Waivers. This Agreement may not be
amended nor any of its provisions waived except by an instrument in writing
signed by each of the parties; provided, however, that an Optionor and Optionee
may amend the Right of First Offer granted by such Optionor to Optionee, or
waive any provision of such Right of First Offer, by mutual written consent of
such Optionor to Optionee without the consent of the other Optionor.
6.2 Entire Agreement: Counterparts: Applicable Law. This
Agreement (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof, (b) may be executed in one or more
counterparts, each of which will be deemed an original and all of which shall
constitute but one and the same instrument and (c) shall be governed in all
respects by the laws of California without giving effect to the conflict of law
provisions thereof.
6.3 Severability. If any provision of this Agreement, or
the application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to
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replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision and to
execute any amendment, consent or agreement deemed necessary or desirable by the
Optionee to effect such replacement.
6.4 Binding Effect. This Agreement shall be binding upon,
and shall be enforceable by and inure to the benefit of, each Optionor and the
Optionee and their respective successors and permitted assigns, and each
Optionor covenants and agrees to make the existence of this Agreement and its
binding nature known to any successors and assigns of Optionor in any portion of
Solana.
6.5 Equitable Remedies. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement was not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any federal or state court located in the
California (as to which the parties agree to submit to jurisdiction for the
purposes of such action), this being in addition to any other remedy to which
they are entitled at law or in equity.
6.6 Books and Records. Each Optionor shall maintain a
copy or other evidence of this Agreement in its books and records relating to
such Optionor and the Property.
6.7 Reliance. Each party to this Agreement acknowledges
and agrees that it is not relying on tax advice or other advice from the other
party to this Agreement, and that it has or will consult with its own advisors.
6.8 Survival. Except as otherwise provided in this
Agreement, it is the intention of the parties hereto that the provisions of this
Agreement that contemplate performance after the Closing and the obligations of
the parties not fully performed on the Closing shall survive the Closing and
shall not be deemed to be merged into or waived by the instruments executed as
of the Closing.
(Signature Page Follows)
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RIGHT OF FIRST OFFER AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement as of the date and year first set forth above.
SOLANA DEVELOPMENT OWNER:
▇▇▇▇▇▇▇ PARTNERS - SOLANA LIMITED PARTNERSHIP
a Texas limited partnership
By: ▇▇▇▇▇▇▇ PARTNERS - SOLANA GP LIMITED LIABILITY COMPANY
a Delaware limited liability company
Its General Partner
By: ▇▇▇▇▇▇▇ PARTNERS - SOLANA BUSINESS TRUST
a Delaware business trust
Its sole member and manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Managing Trustee
SOLANA DEVELOPMENT OWNER'S NOTICE ADDRESS
c/o Maguire Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
S-1
STATE OF CALIFORNIA
COUNTY OF Los angeles } SS.
On 6.16.03 before me, ▇▇▇▇ ▇. ▇▇▇▇, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
personally known to me to the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------
[SEAL]
S-2
SOLANA LAND OWNER:
▇▇▇▇▇▇▇ PARTNERS - SOLANA LAND, L.P. - LAND
a Texas limited partnership
By: ▇▇▇▇▇▇▇ PARTNERS - SOLANA LAND GP, LLC
a Delaware limited liability company
Its General Partner
By: ▇▇▇▇▇▇▇ PARTNERS - SOLANA LAND BUSINESS TRUST
a Delaware business trust
Its sole member and manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Managing Trustee
SOLANA LAND OWNER'S NOTICE ADDRESS
c/o Maguire Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ }SS.
On 6.16.03 before me, ▇▇▇▇ ▇. ▇▇▇▇, personally appeared
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III personally known to me to the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Signature ▇▇▇▇ ▇. ▇▇▇▇
[SEAL]
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OPTIONEE
▇▇▇▇▇▇▇ PROPERTIES, L.P.
a Maryland limited partnership
By: ▇▇▇▇▇▇▇ PROPERTIES, INC.
a Maryland corporation
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Co-Chief Executive Officer
S-2
STATE OF CALIFORNIA
COUNTY OF Los Angeles } SS.
On. 6.17.03 before me, ▇▇▇▇ ▇. ▇▇▇▇, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
personally known to me to the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted,executed the instrument.
WITNESS my hand and official seal.
Signature ▇▇▇▇ ▇.▇▇▇▇
[SEAL]
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EXHIBIT A
TO
RIGHT OF FIRST OFFER AGREEMENT
Legal Description of Solana Development
EXHIBIT B
TO
RIGHT OF FIRST OFFER AGREEMENT
Legal Description of Solana Land