Exhibit 10.39
FORM OF
RIGHT OF FIRST OFFER AGREEMENT
(SOLANA)
THIS RIGHT OF FIRST OFFER AGREEMENT (this "Agreement") is made on
__________, 2003, by and among ▇▇▇▇▇▇▇ Partners - Solana Limited Partnership, a
Texas limited partnership ("Solana Development Owner"), ▇▇▇▇▇▇▇ Partners -
Solana Land, L.P., 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 ______, 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 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
(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 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.
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partnership agreement in effect for the Optionee or to reflect stock splits,
reclassifications, dividends in-kind, and the like.
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 this Agreement as between it and Optionee
and/or terminate the Right of First Offer granted by it hereunder.
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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 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
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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 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
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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.
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 this ___ day of _________, 2003.
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:_____________________________
Name:___________________________
Title:__________________________
SOLANA DEVELOPMENT OWNER'S NOTICE ADDRESS
c/o Maguire Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
STATE OF CALIFORNIA
COUNTY OF ______________________________________} SS.
On _________________________before me,
_____________________________________________________________, personally
appeared ____________________________________________________________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature_______________________________________________________
S-2
SOLANA LAND OWNER:
▇▇▇▇▇▇▇ PARTNERS - SOLANA LAND, L.P.
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:______________________________
Name:____________________________
Title:___________________________
SOLANA LAND OWNER'S NOTICE ADDRESS
c/o Maguire Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
STATE OF CALIFORNIA
COUNTY OF ______________________________________} SS.
On _________________________before me,
_____________________________________________________________, personally
appeared ____________________________________________________________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature_______________________________________________________
S-4
OPTIONEE
▇▇▇▇▇▇▇ PROPERTIES, L.P.
a Maryland limited partnership
By: ▇▇▇▇▇▇▇ PROPERTIES, INC.
a Maryland corporation
Its General Partner
By:__________________________
Name:________________________
Title:_______________________
S-5
STATE OF CALIFORNIA
COUNTY OF ______________________________________} SS.
On _________________________before me,
_____________________________________________________________, personally
appeared ____________________________________________________________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature_______________________________________________________
S-6
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
