exv10w1



 




Exhibit 10.1




Republic Properties Corporation




Commercially Sensitive & Confidential




10 March 2006




Mark Keller,

Chief Executive Officer

Republic Property TRS, LLC

1280 Maryland Avenue, SW, Suite 280

Washington, DC 20024





			
	     Re:	 	1201 Maryland Avenue — Portals Phase III (“Portals III”);

Parcel 47D LLC (“Parcel 47D”); Portals Interests LLC (“PILLC”); and

Portals Development Associates Limited Partnership (“PDA”)

Washington, DC — Recapitalization of Certain Loans





Dear Mr. Keller:



As you know, Parcel 47D is a wholly owned, single purpose entity established by PDA to develop and
own Portals III. PILLC is a wholly owned, single purpose entity established by PDA to facilitate a
$10 million credit line with iStar Financial used to fund the costs of Parcel 47D. Currently,
Republic Property TRS, LLC (the “TRS”), an indirect wholly owned subsidiary of Republic Property
Trust (“RPT”), provides development services to Portals III pursuant to that Development Services
Rights and Management Services Rights Contribution Agreement by and among Republic Property Limited
Partnership, Republic Properties Corporation, Richard L. Kramer and Steven A. Grigg, dated as of
September 23, 2005. This letter serves to document our agreement with regard to the exclusive
engagement of the TRS during the term of this letter agreement to provide additional services to
Parcel 47D and PILLC in connection with a recapitalization and extension of the construction loans
(including the i Star line of credit loan) for Portals III (the “Construction Loan Replacement”).





			
	     Objective	 	Parcel 47D seeks to promptly
recapitalize its existing construction
loan for Portals III with Corus Bank
and iStar Financial. PILLC seeks to
promptly recapitalize its $10 million
credit line with iStar Financial, which
has provided monies to Parcel 47D.





 




 




Republic Properties Corporation / 1280 Maryland Avenue, S.W./ Washington, DC 20024 / Voice- (202) 863-0300 FAX- (202) 863-4049




 









 





Commercially Sensitive & Confidential




Portals III Refinancing

Republic Property TRS, LLC

10 February 2006

Page 2




	 	    	 
	     Anticipated Structure

	 	Parcel 47D seeks adequate funds in a

comprehensive loan or loans to
	 
	 	 
	 

	 	i) Pay-off the amounts outstanding
under the Corus and iStar Financial
loans which have been used for Portals
III; and

ii) Provide funding for certain future
costs related to Portals III.

	 
	 	 
	     Compensation

	 	Upon the closing of the Construction
Loan Replacement, the TRS will be
entitled to a fee of one-half percent
(0.5%) of the aggregate amount of
financing, subject to a maximum fee of
$600,000 (the “Loan Placement Fee”).
This Loan Placement Fee will be
immediately payable upon the
consummation of the Construction Loan
Replacement.
	 
	 	 
	 

	 	Third-party expenses for reasonable
travel and other similar expenses will
be paid (promptly as incurred) by
Parcel 47D to the TRS.
	 
	 	 
	 

	 	Other than reimbursement of third party
expenses as aforesaid, no fee or other
compensation shall be payable to the
TRS unless the Construction Loan
Replacement is consummated.
	 
	 	 
	     Time

	 	The obligations of each party set forth
in this letter agreement shall continue
until May 31, 2006, unless extended in
writing by the parties (the “Expiration
Date”). If, however, (i) a loan
commitment or term sheet for the
refinancing of the loans has been
executed by Parcel 47D, PILLC or any
affiliate thereof and (ii) the closing
on the Construction Loan Replacement
under such loan commitment or term
sheet (or any modification thereof)
occurs within six (6) months after the
Expiration Date, TRS shall be paid its
Loan Placement Fee at such closing.






 




 




Republic Properties Corporation / 1280 Maryland Avenue, S.W./ Washington, DC 20024 / Voice- (202) 863-0300 FAX- (202) 863-4049




 









 








Commercially Sensitive & Confidential




Portals III Refinancing

Republic Property TRS, LLC

10 February 2006

Page 3




[Intentionally left blank]




 




 




Republic Properties Corporation / 1280 Maryland Avenue, S.W./ Washington, DC 20024 / Voice- (202) 863-0300 FAX- (202) 863-4049




 









 








Commercially Sensitive & Confidential




Portals III Refinancing

Republic Property TRS, LLC

10 February 2006

Page 4




	 	    	 
	     Approval Condition

	 	The execution of this letter
agreement by the TRS and its
obligations to perform hereunder is
subject to the approval of a
majority of the disinterested
members of RPT’s board of trustees.
	 
	 	 
	     Disclosure Requirement

	 	The parties agree that RPT may, as
required, file with the Securities
and Exchange Commission (i) a
current report on Form 8-K that
will include a description of the
material terms and conditions of
this letter agreement, and (ii)
this letter agreement, either as an
exhibit to the 8-K or in a
subsequent public filing of RPT.
	 
	 	 
	     Application of Provisions

        under
Option Agreement

	 	The parties understand, acknowledge
and agree that, in accordance with
the provisions of the Option
Agreement dated November 28, 2005
between Parcel 47D and Republic
Property Limited Partnership (the
“Option Agreement”), the
Construction Loan Replacement
described in this letter agreement
shall constitute a “construction
loan” and not a “Refinancing”.
Accordingly, any Construction Loan
Replacement pursuant to this letter
agreement shall cause the
“Construction Loan Maturity Date”
under the Option Agreement to be
the actual maturity date (without
acceleration, but including
extensions thereof) of such
Construction Loan Replacement (the
“New Maturity Date”), and
the “Initial Option Period” shall
expire upon the earlier of (i) four
(4) years after the date on which a
certificate of occupancy for the
base building of the “Property” is
issued by the applicable District
of Columbia authorities or (ii)
sixty (60) days prior to the New
Maturity Date under the
Construction Loan Replacement (or
the maturity date, as described in
the Option Agreement, of the
construction loan or construction
loans obtained by or on behalf of
Parcel 47D for the “Property”).
Capitalized terms in quotes in this
paragraph shall have the meanings
ascribed to such terms in the
Option Agreement.






 




 




Republic Properties Corporation / 1280 Maryland Avenue, S.W./ Washington, DC 20024 / Voice- (202) 863-0300 FAX- (202) 863-4049




 









 





Commercially Sensitive & Confidential




Portals III Refinancing

Republic Property TRS, LLC

10 February 2006

Page 5




[Intentionally left blank.]

* * *




 




 




Republic Properties Corporation / 1280 Maryland Avenue, S.W./ Washington, DC 20024 / Voice- (202) 863-0300 FAX- (202) 863-4049




 









 




Republic Properties Corporation




     If the terms set forth in this letter agreement are acceptable to the TRS, please indicate
your concurrence by acknowledging this letter agreement and returning a copy for our records.


Sincerely,

PARCEL 47D LLC



/s/ Steven Grigg



Steven Grigg,

President



PORTALS INTERESTS LLC



/s/ Steven Grigg



Steven Grigg,

President





			
	cc:	 	James Dowdy

Joseph Fries, Esq.

Richard Kramer

Ronald D. Paul

Ronald Kramer

John Chalsty

Gregory Leisch




Agreed and Accepted

REPUBLIC PROPERTY TRS, LLC




	 	 	 	 	 
	/s/ Mark Keller
	 	 	 	 
	 
	 	 	 	 
	Mark Keller, Chief Executive Officer

	 	Date
	 	March 13, 2006            
	 

	 	 	 	 





 


Agreed and Accepted

REPUBLIC PROPERTY TRUST






	 	 	 	 	 
	/s/ Ronald Paul

	 	Date
	 	March 13, 2006            
	 

	 	 	 	 
	Name: Ronald D. Paul
	 	 	 	 
	Title: Independent Director
	 	 	 	 






 




 




Republic Properties Corporation / 1280 Maryland Avenue, S.W./ Washington, DC 20024 / Voice- (202) 863-0300 FAX- (202) 863-4049