EXHIBIT 10.20
RIGHT OF FIRST REFUSAL AGREEMENT
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THIS RIGHT OF FIRST REFUSAL AGREEMENT ("Agreement") is made and
executed this 28th day of September, 1998, by and between CONSTELLATION
PROPERTIES, INC., ("CPI") and CORPORATE OFFICE PROPERTIES, L.P., its permitted
successor and assigns ("COPLP").
RECITALS
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CPI is the owner of real property ("Property") described more
specifically in Exhibit "A" attached hereto and by this reference made a part
hereof. CPI is desirous of selling the Property and will be engaged in marketing
same. COPLP may at some time be interested in purchasing the Property and is
accordingly desirous of obtaining a first refusal right with regard to the
Property.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the adequacy of which is acknowledged, CPI grants to
COPLP for the term as herein described a right of first refusal on the Property
on the terms and conditions as set forth and provided for herein, namely:
1. Term. The term of this Agreement shall commence as of the date
hereof and shall expire on that date which is two (2) years following ("Term").
2. Right to Inspect. From and after execution of this Agreement by both
CPI and COPLP, COPLP and COPLP's consultants shall have the right to enter upon
the Property and conduct, at COPLP's sole expense, any engineering tests,
development and land use studies, environmental analysis, soil tests,
topographical and other surveys, wetlands and flood plain delineations, and
other surveys, tests and studies (collectively, "Site Investigations") as COPLP
deems necessary. COPLP shall give CPI at least one (1) day's notice of its
desire to enter the Property to inspect and COPLP shall coordinate the
scheduling of such inspection with Seller, taking into account any work Seller
may be performing on the Property. All lands, trees, shrubs, grass and field
areas shall be restored as closely as possible to their pre-test condition.
COPLP and its consultants shall enter and test the Property at their own risk;
and COPLP and/or its consultants shall carry adequate commercial general
liability insurance of not less than $1,000,000 combined single limit naming CPI
as an additional insured. COPLP and/or its consultants shall provide CPI with a
certificate evidencing such insurance promptly upon request. Further, COPLP
shall indemnify and save CPI harmless from any and all suits, claims of injuries
and judgments, and reasonable attorneys' fees, in any way arising out of such
entry and testing of the Property, which indemnification and obligation to hold
CPI harmless shall survive any termination of this Agreement.
3. Right of First Refusal. CPI hereby agrees that during the Term of
this Agreement, if it receives a bona fide third-party expression of intent to
purchase the Property which CPI desires to accept, CPI shall first offer COPLP
the opportunity to purchase the
Property at the same price and upon the same terms and conditions as are
provided in the expression of intent in accordance with the following procedure:
(a) CPI shall cause the expression of intent to be reduced to writing,
which writing may take the form of a letter of understanding, term sheet or
other expression of interest which includes price and, in the opinion of counsel
for the CPI, sufficient other terms and conditions to describe the proposed
transaction (the "Offer"). CPI shall notify COPLP, in writing, of its desire to
accept the Offer (the "Initial Notice"). The Initial Notice shall set forth the
parcel or portion of the Property subject to the Offer and such other material
terms and conditions of the Offer as are reasonable for COPLP to analyze the
Offer, and shall be accompanied by a copy of the Offer.
(b) COPLP shall have the right, exercisable upon written notice to CPI
within fifteen (15) days after COPLP's receipt of the Initial Notice, to accept
or reject the offer contained in the Initial Notice. If by its reply COPLP
accepts the Offer of CPI, such reply notice shall be accompanied by the deposit
specified in the Offer, if any, and shall constitute an agreement binding on CPI
and COPLP to sell and purchase the Property or portion thereof or LLC interest,
at the price and upon the terms and conditions stated in the Initial Notice.
(c) If COPLP does not unconditionally accept the Offer of CPI contained
in the Initial Notice within such fifteen (15) day period or does not respond to
the Initial Notice within such fifteen (15) day period, time being of the
essence, then CPI shall have the right to sell the Property in accordance with
the terms and conditions specified in the Offer free and clear of COPLP's rights
hereunder. If the contemplated sale is not completed by the date set forth in
the Offer, in accordance with the terms of the Offer COPLP's right of first
refusal shall be reinstated and CPI shall be required to again comply with the
terms of this Agreement.
(d) In the event CPI does not consummate the sale of the Property or
any portion thereof or LLC interest subject to an Offer for any reason, after
COPLP shall have not exercised its right of first refusal on same, then in that
event the right of first refusal shall be reinstituted and CPI shall for the
continuing Term not sell the Property or portion thereof or LLC interest without
first reoffering same to COPLP pursuant to subparagraph (a), (b) and (c) above.
(e) COPLP shall have the right to assign this Agreement in whole or in
part without the consent of CPI (i) to any entity controlled by, controlling, or
under common control with COPLP or Corporate Office Properties Trust (where
control shall mean owning directly or indirectly fifty percent (50%) or more of
the voting stock or voting interest of such entity), (ii) to any person or
entity designated by COPLP as purchaser of the Property or any portion thereof
(with respect to such portion only) after COPLP has exercised its right of first
refusal with respect thereto, but provided that Buyer shall remain liable
hereunder, or (iii) to any successor entity of Buyer resulting from the
acquisition of Buyer by such entity or a merger of Buyer where such successor
entity is the surviving entity. COPLP shall not have any other right to assign
this Agreement in whole or in part without the prior written consent of CPI,
which consent shall not be unreasonably withheld or delayed.
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(f) The right of first refusal as herein granted and described shall
apply to the Property as a whole. CPI may, at any time, however, at CPI's sole
cost and expense, subdivide the Property, but upon doing so, the right of first
refusal and all of the terms and conditions of this Agreement shall thereafter
apply separately to each subdivided portion of the Property. If the right of
first refusal shall be exercised on only a subdivided portion of the Property,
same shall remain in effect as to the balance of the Property for the Term
hereof.
4. CPI's Warranties and Representations. CPI warrants, represents and
covenants to COPLP that the following items are true in all material respects
and shall be deemed to have been restated at the time(s) of COPLP's exercise of
its rights hereunder and at the time of closing on the sale of the Property,
namely:
(a) CPI is the fee simple owner of the Property, and has not entered
into any contract of sale, option agreement, right of first refusal or other
agreement for the sale of any part of the Property; and
(b) CPI has full power and authority to execute, deliver and perform
this Agreement in accordance with its terms; and
(c) To CPI's knowledge, as of the date of this Agreement, the Property
is generally zoned to permit its use for office and retail purposes and CPI
shall not join in or consent to any change in the zoning of the Property which
would prohibit its use for office and retail purposes.
(d) To CPI's knowledge, there are no underground storage tanks on the
Property.
(e) To its knowledge, CPI has not used, generated, stored or disposed,
and from and after the date of this Agreement, except to the extent consistent
with current real estate industry practices for such type of property,
consistent with use of the Property for office and retail purposes, and
permitted under governmental regulations, will not use, generate, store or
dispose, on, under or about the Property any hazardous waste, toxic substance or
related materials or any friable asbestos or substance containing asbestos.
5. Miscellaneous.
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(a) CPI and COPLP warrant that, in connection with this Agreement, they
have dealt with no broker, agent or other party who may be entitled to a
commission or finder's fee, and each party agrees to indemnify the other from
any claims or damages, including reasonable attorneys' fees, that the other may
incur as a result of the violation of this warranty, which warranty and
indemnification shall survive settlement and any termination of this Agreement.
(b) Any written notices required under the terms of this Agreement
shall be sent by Federal Express Delivery or other national overnight delivery
service and addressed as follows:
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To CPI: Constellation Properties, Inc.
250 West Pratt Street, 23rd Floor
Baltimore, MD 21201
Attention: Secretary
and
8815 Centre Park Drive, Suite 100
Columbia, MD 21045
Attention: Managing Director, CREI
To COPLP: Corporate Office Properties, L.P.
401 City Avenue, Suite 615
Bala Cynwyd, PA 19004
Attention: Clay W. Hamlin, III
with copies to: F. Michael Wysocki, Esquire
Saul, Ewing, Remick & Saul LLP
Center Square West
1500 Market Street - 38th Floor
Philadelphia, PA 19102
Any party hereto may change its notice address by giving notice of such change
in accordance with this paragraph. Notice shall be deemed to have occurred upon
actual delivery.
(c) Time shall be of the essence of this Agreement.
(d) If the last day of any time period specified herein, falls on a
Saturday, Sunday or holiday, the period for the required action shall be
extended until 5:00 PM on the next business day.
(e) This Agreement contains the final and entire agreement between the
parties thereto, and neither party shall be bound by any term, condition,
statement or representation not herein contained. The Agreement may not be
modified or changed orally, buy only by agreement in writing, signed by the
party against whom enforcement of any change is sought.
(f) The Agreement shall be governed by the laws of the State of
Maryland. The titles of the paragraphs are inserted as a matter of convenience
and for reference and in no way define, limit or describe the scope of this
Agreement or the intent of any provision hereof.
(g) Upon any expiration or termination of this Agreement and the right
of first refusal contained herein, each party hereto shall promptly execute such
instruments in recordable form as any party hereto may reasonably require to
confirm such expiration or termination. This Agreement may be recorded by either
party hereto.
(h) This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns.
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IN WITNESS WHEREOF, each of the parties hereto has executed or caused
this Right of First Refusal Agreement to be executed by its duly authorized
representative on the day and year first above written.
CONSTELLATION PROPERTIES, INC.
By: ____________________________________
Dan R. Skowronski, Secretary
CORPORATE OFFICE PROPERTIES, L.P.
By: Corporate Office Properties Trust, General
Partner
By: ____________________________________
Clay W. Hamlin, III, President and Chief
Executive Officer
EXHIBIT "A"
Description of the Property
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(Bond Street Property)
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