Exhibit 10.9


 


DEVELOPMENT SERVICES
RIGHTS AND MANAGEMENT SERVICES RIGHTS

CONTRIBUTION AGREEMENT

(PORTALS III)


 


THIS DEVELOPMENT SERVICES
RIGHTS AND MANAGEMENT SERVICES RIGHTS CONTRIBUTION AGREEMENT (this “Agreement”) is entered into as of September 23rd, 2005
by and among REPUBLIC PROPERTIES CORPORATION, a District of Columbia
corporation (“RPC”), RICHARD L. KRAMER (“Kramer”), STEVEN A. GRIGG (“Grigg”,
together with Kramer and RPC, the “General Partners”)
and REPUBLIC PROPERTY LIMITED PARTNERSHIP, a Delaware limited partnership (the “Operating Partnership”).


 


WHEREAS, in connection with
the initial public offering (the “IPO”) of the
common shares of beneficial interest, par value $.01 per share, of Republic
Property Trust, a Maryland real estate investment trust (“Republic”),
Republic and the Operating Partnership and their affiliates will complete a
series of related transactions (collectively with the IPO, the “IPO Transactions”);


 


WHEREAS, pursuant to that
certain Development Services Agreement (the “Development
Services Agreement”), made and entered into as of June 2, 2004,
between Parcel 47D LLC, a Delaware limited liability company (“Owner”), and Portals Development Associates Limited
Partnership, a Delaware limited partnership (“PDA”),
the General Partners through PDA provide development services to Owner in
connection with the construction, development, leasing and operation of an
office building with a street address of 1201 Maryland Avenue, S.E.,
Washington, D.C. (the “Improvements”)
that Owner is constructing or intends to construct on real property located in
the District of Columbia, which real property is described on Exhibit A
attached to the Development Services Agreement (the “Land”
and together with the Improvements, the “Property”), and
pursuant to which PDA is entitled to receive the Project Development Fee (as
defined in the Development Services Agreement);


 


WHEREAS, each General
Partner, as a general partner of PDA and pursuant to the Limited Partnership
Agreement of PDA (the “PDA Partnership Agreement”),
have the right to provide development services to Owner with respect to the
Property in return for certain fees payable by PDA to each General Partner;


 


WHEREAS, pursuant to the PDA
Partnership Agreement, upon completion of the Improvements, the General
Partners, through PDA, shall have the right to provide property management
services for the Property in return for certain fees payable by PDA to each
General Partner;


 


WHEREAS, in connection with
the IPO Transactions, each General Partner desires to contribute to the
Operating Partnership its right to provide development services under the PDA
Partnership Agreement, as such services


 





















 


relate to the Development
Services Agreement, and its right to receive a specified percentage of the fees
that it is entitled to receive from PDA for providing such services in exchange
for units of limited partnership interest in the Operating Partnership (“Units”); and


 


WHEREAS, in connection with
the IPO Transactions, each General Partner desires to contribute to the
Operating Partnership its right to provide property management services for the
Property under the PDA Partnership Agreement and its right to receive a
specified percentage of the fees that it is entitled to receive from PDA for
providing such services in exchange for units of limited partnership interest
in the Operating Partnership.


 


NOW THEREFORE, in
consideration of the foregoing and the mutual covenants and conditions set
forth herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:


 


ARTICLE I:  CONTRIBUTION; PAYMENT OF FEES


 


1.1           Contribution.


 


(a)           Subject to the terms and conditions hereof,
the General Partners shall contribute to the Operating Partnership the
following:


 


(x) (i) all rights of
each General Partner, through PDA as a general partner of PDA, to provide to
Owner development services under the Development Services Agreement, including,
without limitation, the provision of the Services (as defined in Article III
of the Development Services Agreement) and (ii) all rights of each General
Partner, through PDA as a general partner of PDA, to indemnification under Article VII
of the Development Services Agreement (the foregoing (i) and (ii), the “Development Services Rights”); and


 


(y) all rights of each
General Partner, through PDA as a general partner of PDA, to provide to Owner
property management services for the Property upon completion of the
Improvements (the “Management Services Rights”).


 


1.2           Issuance of Units


 


(a)           Subject to the terms and conditions of this
Agreement, in exchange for the Development Services Rights and the Management
Services Rights, the Operating Partnership shall issue to each of the General
Partners, and the General Partners shall receive, an aggregate of 66,982 Units,
in a transaction intended to qualify for nonrecognition of gain to the General
Partners pursuant to Section 721 of the Internal Revenue Code of 1986, as
amended (the “Code”).  The rights of holders of the Units as of the
Closing will be as set forth in the Amended


 


2





















 


and Restated Agreement of Limited Partnership
of the Operating Partnership (the “Partnership Agreement”).


 


(b)           The Operating Partnership shall issue the
Units to the General Partners (or at the option of the General Partners,
directly to the General Partners’ designees), in accordance with written
instructions provided to the Operating Partnership by the General Partners
setting forth the name and address of, and the number of Units received by,
each designee, provided that each such designee (i) makes each of the
representations and warranties set forth in Sections 2.5, 2.9 and 2.12 hereof
and (ii) has executed and delivered the Limited Partner Acceptance
attached hereto as Exhibit A (the “Limited
Partner Acceptance”) pursuant to Section 1.3 hereof.  The name of the General Partner or, if
applicable, each designee, and the number of Units issued to each General
Partner or, if applicable, each designee, shall be recorded in the books and
records of the Operating Partnership.


 


1.3           Admission as a Limited Partner.  Upon execution and delivery of the Limited Partner Acceptance by the General
Partners and, if their designees will receive the Units pursuant to Section 1.2(b) above,
each of such designees, at the Closing, and subject to the completion of the
Closing, the General Partners and if applicable, their designees, shall be
admitted as limited partners of the Operating Partnership and, as such, shall
be subject to, and bound by, the Partnership Agreement, including the power of
attorney granted therein and all the terms and conditions thereof.


 


1.4           Payment of Fees.  In
consideration of the performance of the Development Services and the Management
Services by the Operating Partnership (or its affiliates), the General Partners
shall pay or cause to be paid the following fees to the Operating Partnership
(or its affiliates):


 


(i)            a development services fee (the “Development Services Fee”) in an amount equal to three
percent (3%) of the remaining development costs of the Improvements (as of the
consummation of the Closing (as defined below) net of land acquisition,
interest and loan expenses and cash concessions to tenants of the Improvements;
the General Partners shall pay or cause to be paid the Development Services Fee
to the Operating Partnership on a monthly basis on the fifteenth day of each
calendar month in the amount of three percent (3%) of such costs expended in
the prior calendar month;


 


(ii)           pursuant to the Management Agreement (as
hereinafter defined) and in consideration of the performance of the property
management services by the Operating Partnership (or its affiliates) pursuant
to the Management Services Rights, the Operating Partnership (or its
affiliates) shall be paid a management fee (the “Management
Fee”) equal to one percent 1% of the


 


3





















 


gross rental receipts of the Property
together with periodic payments for the cost of labor and personnel overhead to
provide such services.


 


1.5           Management Agreement.  Upon
completion of the Improvements, the General Partners shall cause Owner and PDA
to enter into a property management agreement (the “Management
Agreement”) in the form attached hereto as Exhibit B.  For purposes of this Agreement, “completion
of the Improvements” shall be deemed to have occurred upon the “Project
Completion,” as that term is defined in the Development Services Agreement.


 


1.6           Prohibition on Funding/Fee Disputes


 


(a)           Republic acknowledges that it and its
affiliates (including the Operating Partnership) shall be prohibited from
providing any funding, payments, credit, equity investments or any other
financial assistance to Owner or its affiliates, and that Republic shall
undertake all commercially reasonable efforts to promptly collect all monies
due pursuant to the terms hereof.


 


(b)           In the event that any material fee dispute
arises with respect to any of the services to be provided to Owner or its
affiliates pursuant to the terms hereof, the “independent” members of the Board
of Trustees of Republic (as defined in Republic’s bylaws) shall undertake all
commercially reasonable efforts to promptly resolve any such fee dispute.


 


ARTICLE II:  REPRESENTATIONS AND WARRANTIES 

OF GENERAL PARTNERS


 


As a material inducement to
the Operating Partnership to enter into this Agreement and to consummate the
transactions contemplated hereby, each of the General Partners hereby makes to
the Operating Partnership each of the representations, warranties and covenants
set forth in this Article II (other than any specific representations,
warranties or covenants relating solely to RPC).  Each Investor (as defined below), severally
and not jointly, hereby makes to the Operating Partnership, as to itself, each
of the representations, warranties and covenants set forth in Sections 2.5, 2.9
and 2.12 hereof.  The representations and
warranties set forth in this Article II are true and correct as of the
date hereof.


 


2.1           Organization and Standing.  RPC
is a corporation duly organized, validly existing and in good standing under
the laws of the District of Columbia, is in good standing and is duly qualified
and authorized to transact the business which it presently conducts,  in all jurisdictions in which such
qualification is required.


 


2.2           Authority.  The General Partners have full
right, authority, power and/or capacity (a) to enter into this Agreement
and each agreement,


 


4





















 


document and instrument to be executed and
delivered pursuant to this Agreement; (b) to carry out the transactions
contemplated hereby and thereby; and (c) to transfer, sell and deliver all
of their respective Development Services Rights and Management Services Rights
to the Operating Partnership (or its designee) in accordance with this
Agreement.  This Agreement and each
agreement, document and instrument executed and delivered by or on behalf of
each General Partner pursuant to this Agreement constitutes, or when executed
and delivered will constitute, the legal, valid and binding obligation of such
General Partner, each enforceable in accordance with its respective terms.


 


2.3           Noncontravention.  Neither the entry into nor the performance
of, or compliance with, this Agreement by any General Partner has resulted, or
will result, in any violation of, or default under, or result in the
acceleration of, any obligation under its charter or any material mortgage,
indenture, lien agreement, note, contract, permit, judgment, decree, order,
restrictive covenant, statute, rule, or regulation applicable to such General
Partner or under the Development Services Agreement.


 


2.4           Litigation.  There is no litigation or
proceeding, either judicial or administrative, pending or, to General Partners’
knowledge, threatened, affecting all or any portion of the Development Services
Rights, the Management Services Rights or General Partners’ ability to
consummate the transactions contemplated hereby.  There is no outstanding order, writ,
injunction or decree of any court, government, governmental entity or authority
or arbitration against or affecting all or any portion of the Development
Services Rights or the Management Services Rights, which in any such case would
impair the General Partners’ ability to enter into and perform all of such
General Partner’s obligations under this Agreement.


 


2.5           Status as a United States Person.  Each
of RPC and each of RPC’s designees who receive Units hereunder (RPC and its
designees are referred to collectively as the “Investors”)
is not a foreign person within the meaning of Section 1445 of the Code (“Section 1445”). 
RPC’s U.S. taxpayer identification number that has previously been
provided to the Operating Partnership is correct.  RPC’s office address is that most recent
address previously provided to the Operating Partnership.  At the time of Closing, each Investor shall
provide to the Operating Partnership a certificate of non-foreign status
substantially in the form provided in Section 1.1445-5(b)(3)(D) of
the Treasury regulations.


 


2.6           No Insolvency Proceedings.  No
attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings are pending or, to
the knowledge of RPC, threatened against RPC, nor are any such proceedings
contemplated by any General Partner.


 


5





















 


2.7           No Brokers.  No General Partner has entered
into, and each General Partner covenants that it will not enter into, any
agreement, arrangement or understanding with any person or firm which will
result in the obligation of the Operating Partnership to pay any finder’s fee,
brokerage commission or similar payment in connection with the transactions
contemplated hereby (other than underwriting fees paid in connection with the
IPO).


 


2.8           Consents. 
Except as may otherwise be set forth in this Agreement, each consent,
approval, authorization, order, license, certificate, permit, registration,
designation, or filing by or with any governmental agency or third party,
including lender consents, necessary for the execution, delivery, and
performance of this Agreement or the transactions contemplated hereby by the
General Partners has been obtained or will be obtained on or before the
Closing.


 


2.9           Securities Law Matters; Transfer Restrictions.


 


(a)           The General Partners and each Investor, if any,
who receive Units hereunder, acknowledge that the Operating Partnership intends
for the offer and issuance of the Units to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities
Act”), and applicable state securities laws.


 


(b)           Each Investor acknowledges that it is an “accredited
investor” within the meaning of the federal securities laws.


 


(c)           Each Investor will acquire the Units for its
own account and not with a view to, or for sale in connection with, any “distribution”
thereof within the meaning of the Securities Act.


 


(d)           Each Investor has sufficient knowledge and experience in financial, tax and
business matters to enable it to evaluate the merits and risks of investment in
the Units.  Each Investor has the ability
to bear the economic risk of acquiring the Units.  Each Investor acknowledges that (i) the
transactions contemplated by this Agreement involve complex tax consequences
for the Investor, and each Investor is relying solely on the advice of such
person’s own tax advisors in evaluating such consequences, (ii) the
Operating Partnership has not made (nor shall it be deemed to have made) any
representations or warranties as to the tax consequences of such transaction to
the Investor, and (iii) references in this Agreement to the intended tax
effect of the transactions contemplated hereby shall not be deemed to imply any
representation by the Operating Partnership as to a particular tax effect that
may be obtained by the Investor.  The
Investor remains solely responsible for all tax matters relating to such
persons.


 


(e)           Each Investor has been supplied with, or had
access to, information to which a reasonable investor would attach significance
in making an


 


6





















 


investment decision to acquire the Units and
any other information such Investor has requested.


 


(f)            Each Investor acknowledges that there are
substantial restrictions on the transferability of the Units and that the Units
will not be registered under the Securities Act or any state securities laws,
and the Investor has no right to require that they be so registered.  Each Investor agrees that any Units it
acquires will not be sold in the absence of registration unless such sale is
exempt from registration under the Securities Act and applicable state
securities laws.


 


(g)           Each Investor understands that no federal
agency (including the Securities and Exchange Commission) or state agency has
made or will make any finding or determination as to the fairness of an
investment in the Units (including as to the number of Units (and their value)
issued pursuant hereto).


 


(h)           Each Investor understands that there is no
established public, private or other market for the Units acquired by such
Investor hereunder and it is not anticipated that there will be any public,
private or other market for such Units in the foreseeable future.


 


(i)            Each Investor understands that Rule 144
promulgated under the Securities Act is not currently available with respect to
the sale of Units.


 


2.10         Status of the Property.  To
the best knowledge of the General Partners, (i) Owner has good and valid
fee simple marketable title to the Property subject only to those liens,
encumbrances and other matters of record, none of which would materially impair
the construction of the Improvements as a 504,800 square foot office building, (ii) the
Property is subject to no mortgages or other similar liens of record (iii) Owner
has all permits, licenses and other governmental authorizations necessary for
the ownership, use and operation of the Property, (iv) Owner and the
Property are in compliance with all applicable zoning, subdivision, and other
laws, statutes, regulations and ordinances and building codes applicable to
Owner and the Property and have received no notices of violation thereof, (v) the
Property is served by all necessary public utilities, (vi) all taxes
imposed upon the Property or upon the operation of the Property have been paid
and all returns required to be filed in connection therewith have been filed, (vii) there
has been no disposal, spill, discharge, emission or release of any Hazardous
Material on the Property and there are no Hazardous Materials located in, at,
on, or under, the Property, in each case that is reasonably likely to require
investigation, removal, remedial or corrective action, or the incurrence of any
liability, by Owner under any Environmental Law, (viii) there has not been
any underground or aboveground storage tank or other underground storage
receptacle or related piping, or any impoundment or other storage, treatment or
disposal area


 


7





















 


containing Hazardous Materials located on the
Property, and no asbestos or polychlorinated biphenyls have been used or
disposed of, or have been located at, on, or under the Property, and (ix) no
lien has been recorded against the Property under any Environment Law.


 


For the purposes of this Section 2.10
the term “Environmental Laws” shall mean any laws
(including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act), including any plans, other criteria, or
guidelines promulgated pursuant to such Laws, now or hereafter in effect
relating to the generation, production, installation, use, storage, treatment,
transportation, release, threatened release, or disposal of Hazardous
Materials, noise control, or the protection of human health, safety, natural resources,
animal health or welfare, or the environment and the term “Hazardous
Materials” shall mean any wastes, substances, radiation, or
materials (whether solids, liquids or gases) (i) which are hazardous,
toxic, infectious, explosive, radioactive, carcinogenic, or mutagenic; (ii) which
are or become defined as a “pollutants” “contaminants”, “hazardous materials,” “hazardous
wastes,” “hazardous substances,” “toxic substances,” “radioactive materials,” “solid
wastes,” or other similar designations in, or otherwise subject to regulation
under, any Environmental Laws; (iii) the presence of which on the Property
cause or threaten to cause a nuisance pursuant to applicable statutory or
common law upon the Property or to adjacent properties; (iv) without
limitation, which contain polychlorinated biphenyls (PCBs), asbestos and
asbestos-containing materials, lead-based paints, urea-formaldehyde foam
insulation, and petroleum or petroleum products (including, without limitation,
crude oil or any fraction thereof) or (v) which pose a hazard to human
health, safety, natural resources, industrial hygiene, or the environment, or
an impediment to working conditions.


 


2.11         Development Services Agreement; Management
Agreement.  The Development Services Agreement is in full
force and effect and to the knowledge of any General Partner, neither PDA nor
Owner is in default thereunder.  Except
for the performance of the development services under the Development Services
Agreement from and after the Closing, the General Partners shall cause PDA to
timely perform all other obligations of PDA under the Development Services
Agreement.  Upon its execution pursuant
to Section 1.5 hereof, the General Partners shall cause PDA to timely
perform all of PDA’s obligations under the Management Agreement.


 


2.12         Reliance.  Each General Partner (and each
Investor, for purposes of Section 2.5 and 2.9 hereof) acknowledges that
the Operating Partnership may rely upon the representations and warranties in
this Article II in determining whether to enter into this Agreement.  Each General Partner (and each Investor, for
purposes of Section 2.5 and 2.9 hereof) agrees, severally and not jointly,
to indemnify, defend and hold harmless the Operating Partnership and the
officers, directors and affiliates thereof, and any employees or agents of any
of the


 


8





















 


foregoing, against any and
all loss, liability, claim, damage or expense whatsoever (including, but not
limited to, any and all expenses, including attorneys’ fees, reasonably
incurred in investigating, preparing or defending against any claim or
litigation commenced or threatened) due to or arising out of a breach by such
General Partner (and each Investor, for purposes of Section 2.5 and 2.9
hereof) of any such representations or warranties (other than with respect to
any representation, warranty or covenant relating solely to RPC).


 


ARTICLE III:  REPRESENTATIONS AND WARRANTIES

OF THE OPERATING PARTNERSHIP


 


As a material inducement to
the General Partners to enter into this Agreement and to consummate the
transactions contemplated hereby, the Operating Partnership hereby makes to the
General Partners each of the representations, warranties and covenants set
forth in this Article III.  The
representations and warranties set forth in this Article III are true and
correct as of the date hereof.


 


3.1           Organization and Standing.  The
Operating Partnership is a limited partnership duly organized, validly existing
and in good standing under Delaware law, and has the requisite partnership
power and authority to own and operate its assets, to carry on its business as
currently conducted, to execute and deliver this Agreement and to carry out the
transactions contemplated hereby.  The
Operating Partnership is duly qualified to conduct business as a foreign
partnership where necessary and is in good standing in the states in which it
is so qualified.


 


3.2           Authority.  The Operating Partnership has
full right, authority, power and capacity (a) to enter into this Agreement
and each agreement, document and instrument to be executed and delivered by or
on behalf of the Operating Partnership pursuant to this Agreement; (b) to
carry out the transactions contemplated hereby and thereby; and (c) transfer,
sell and deliver the Units to the General Partners (or their designees) in
accordance with this Agreement.  This
Agreement and each agreement, document and instrument executed and delivered by
or on behalf of the Operating Partnership pursuant to this Agreement
constitutes, or when executed and delivered will constitute, the legal, valid
and binding obligation of the Operating Partnership, each enforceable in
accordance with its respective terms.


 


3.3           Noncontravention.  Neither the entry into nor the performance
of, or compliance with, this Agreement by the Operating Partnership has
resulted, or will result, in any violation of, or default under, or result in
the acceleration of, any obligation under its agreement of limited partnership
or any material mortgage, indenture, lien agreement, note, contract, permit,
judgment, decree, order,


 


9





















 


restrictive covenant, statute, rule, or regulation applicable to the
Operating Partnership.


 


3.4.          Litigation.  There is no litigation or
proceeding, either judicial or administrative, pending or, to the Operating
Partnership’s knowledge, threatened, affecting all or any portion of the Units
or the Operating Partnership’s ability to consummate the transactions
contemplated hereby.  There is no
outstanding order, writ, injunction or decree of any court, government,
governmental entity or authority or arbitration against or affecting all or any
portion of the Units, which in any such case would impair the Operating Partnership’s
ability to enter into and perform all of the Operating
Partnership’s obligations under
this Agreement.


 


3.5           Units Validly Issued.  The Units, when issued, will have been duly
and validly authorized and issued, free of any preemptive or similar rights,
without any obligation to restore capital except as required by the Delaware
Revised Uniform Limited Partnership Act (the “Limited Partnership Act”) or as agreed between the Operating
Partnership and any limited partner in the Operating Partnership.


 


3.6           No Brokers.  The Operating Partnership has
not entered into, and covenants that it will not enter into, any agreement,
arrangement or understanding with any person or firm which will result in the
obligation of the General Partners to pay any finder’s fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby.


 


3.7           Consents. Except as may otherwise be set forth in
this Agreement, each consent, approval, authorization, order, license,
certificate, permit, registration, designation, or filing by or with any
governmental agency or body necessary for the execution, delivery, and
performance of this Agreement or the transactions contemplated hereby by the
Operating Partnership has been obtained or will be obtained on or before the
Closing.


 


3.8           Reliance.  The Operating Partnership
acknowledges that the General Partners may rely upon the representations and
warranties in this Article III in determining whether to enter into this
Agreement.  The Operating Partnership
agrees to indemnify, defend and hold harmless the General Partners and the
officers, directors and affiliates thereof, and any employees or agents of any
of the foregoing, against any and all loss, liability, claim, damage or expense
whatsoever (including, but not limited to, any and all expenses, including
attorneys’ fees, reasonably incurred in investigating, preparing or defending
against any claim or litigation commenced or threatened) due to or arising out
of a breach of any such representations or warranties.


 


10





















 


ARTICLE IV:  CONDITIONS TO CLOSING


 


4.1           Conditions to the Operating Partnership’s
Obligation to Close.  The obligation of the Operating Partnership
to consummate the Closing is subject to the fulfillment, at or prior to the
Closing, of the following conditions (unless such conditions are waived in
writing by the Operating Partnership):


 


(a)           IPO Transactions.  The
IPO Transactions shall have occurred (or shall be occurring simultaneously with
the Closing).


 


(b)           Representations and Warranties.  The
representations and warranties made by RPC (and in the case of Section 2.5
and 2.9, the Investors) pursuant to this Agreement shall be true and correct in
all material respects when made, and on and as of the Closing, as though such
representations and warranties were made on the Closing.


 


(c)           Performance.  The General Partners shall
have performed and complied with all agreements and covenants that each of them
is required to perform or comply with pursuant to this Agreement prior to the
Closing in all material respects.


 


(d)           Legal Proceedings.  No
order, statute, rule, regulation, executive order, injunction, stay, decree, or
restraining order shall have been enacted, entered, promulgated or enforced by
any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated hereby, and no litigation or
governmental proceeding seeking such an order shall be pending or threatened.


 


(e)           Consents and Approvals.  All
necessary consents of governmental and private parties to effect the
transactions contemplated by this Agreement, including, without limitation,
consents of lenders, shall have been obtained.


 


(f)            Development Services Agreement.  The
Development Services Agreement shall be in full force and effect and neither of
the parties thereto shall be in default thereunder.


 


4.2           Conditions to the General Partners’
Obligation to Close.  The obligation of the General Partners to
consummate the Closing is subject to the fulfillment, at or prior to the Closing,
of the following conditions (unless such conditions are waived in writing by
the General Partners):


 


(a)           Representation and Warranties.  The
representations, warranties and covenants of the Operating Partnership
contained in this Agreement shall be true and correct as of the Closing.


 


11





















 


(b)           Performance.  The Operating Partnership
shall have performed and complied with all agreements and covenants that it is
required to perform or comply with pursuant to this Agreement prior to the
Closing in all material respects.


 


(c)           Legal Proceedings.  No
order, statute, rule, regulation, executive order, injunction, stay, decree, or
restraining order shall have been enacted, entered, promulgated or enforced by
any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated hereby, and no litigation or
governmental proceeding seeking such an order shall be pending or threatened.


 


(d)           Consents and Approvals.  All
necessary consents of governmental and private parties to effect the
transactions contemplated by this Agreement shall have been obtained.


 


4.3           Further Assurances.  Each
of the parties herein shall execute and deliver all such other and further
instruments and documents and take or cause to be taken all such other and
further actions that any other party may reasonably request in order to effect
the transactions contemplated by this Agreement.


 


ARTICLE V:  CLOSING


 


5.1           Closing.  The closing hereunder (the “Closing”) shall occur on the same day as the closing of the
IPO, as close in time to the closing of the IPO as is reasonably practicable
under the circumstances.


 


5.2           Closing Deliveries by the General Partners.  At
the Closing, the General Partners shall deliver to the Operating Partnership
the following:


 


(i)            a duly executed Assignment and Assumption
Agreement, substantially in the form attached hereto as Exhibit C (“Assignment
Agreement”), pursuant to which the General Partners shall convey to the Operating
Partnership or its designee the Development Services Rights and the Management
Services Rights;


 


(ii)           a duly executed Limited Partner Acceptance
executed by the appropriate Investor;


 


(iii)          a certificate of non-foreign status in a form
acceptable to the Operating Partnership (in the case of RPC only); and


 


(iv)          an undertaking by Owner in form and substance
reasonably acceptable to the Operating Partnership that acknowledges and


 


12





















 


confirms that the Operating Partnership shall
have rights to indemnification from Owner under Article VII of the
Development Services Agreement.


 


5.3           Closing Deliveries by the Operating
Partnership.  At the Closing, the Operating Partnership
shall deliver to the General Partners or, if applicable, the Investors the
following:


 


(i)            the Units;


 


(ii)           a duly executed Assignment Agreement.


 


ARTICLE VI:  MISCELLANEOUS


 


6.1           Term of Agreement.  This Agreement may be terminated by the
mutual consent of the parties at any time before the Closing.  If the Closing does not occur by September 30,
2006, this Agreement shall be deemed terminated and shall be of no further
force and effect and neither the Operating Partnership nor the General Partners
or any Investor shall have any further obligations pursuant to this Agreement
except as specifically set forth in this Agreement.


 


6.2           Amendment; Consent of Independent Trustees; Waiver.  Any
amendment hereto shall be effective only if signed by all parties hereto.  Any amendment hereto after the date of
Closing is subject to the pre-approval of a majority of the “independent”
members of the Board of Trustees of Republic (as defined in Republic’s bylaws),
as general partner of the Operating Partnership, and no amendment may occur
without such pre-approval.  No waiver of any provisions of this Agreement
shall be valid unless in writing and signed by the party against whom
enforcement is sought.


 


6.3           Entire Agreement; Counterparts; Applicable
Law.  This Agreement (a) shall, together with
the Partnership Agreement, constitute the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among 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 one and the same instrument, and (c) shall be governed in
all respects, including validity, interpretation and effect, by the laws of the
State of Delaware without giving effect to the conflict of law provisions
thereof.


 


6.4           Assignability.  This
Agreement shall be binding upon, and shall be enforceable by and inure to the
benefit of, the parties hereto and their respective successors and assigns;
provided, however, that this Agreement may not be assigned (except by operation
of law) by any party without the prior written consent of the other party, and
any attempted assignment without such consent shall be void and of no effect;
provided further, that this Agreement may be assigned by the Operating Partnership,
without the prior written of the General Partners, in whole or in part to
Republic Property TRS, LLC, a Delaware limited liability company and


 


13





















 


wholly owned subsidiary of the Operating
Partnership, or to or among any other affiliate of the Operating Partnership,
and upon such assignment, the assignee shall have the exclusive right and
obligation to provide any services hereunder.


 


6.5           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.


 


6.6           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 State of
Delaware (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.


 


6.7           Survival.  It is the express intention
and agreement of the parties hereto that the representations, warranties and
covenants of the parties set forth in this Agreement shall survive the
consummation of the transactions contemplated hereby.


 


6.8           Third Party Beneficiary.  Except as specifically set forth in this
Agreement, no provision of this Agreement is intended, nor shall it be
interpreted, to provide or create any third party beneficiary rights or other
rights of any kind in any customer, affiliate, stockholder, partner, member,
director, officer, or employee of any party to this Agreement or any other
person or entity.


 


6.9           Termination
of Development Services Agreement Upon a Change of Control.


 


(a)           Upon
the occurrence of a “Change of Control” (hereafter defined) of Republic, the
General Partners shall have the right to terminate the Development Services
Rights by delivering notice of termination to Republic (or successor) within
thirty (30) days after such Change of Control.


 


(b)           For
purposes hereof, a “Change of Control”
of Republic shall mean:


 


(i)            Any “Person” (having the meaning ascribed to
such term in Section 3(a)(9) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)
and used in Sections 13(d) and 14(d) thereof, including a “group”
within the meaning of Section 13(d)(3)) has or acquires beneficial
ownership (within the


 


14





















 


meaning
of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%)
percent or more of the combined voting power of Republic’s then outstanding
voting securities entitled to vote generally in the election of trustees (“Voting Securities”); provided, however,
that in determining whether a Change in Control has occurred, Voting Securities
which are held or acquired by the following: (1) Republic, Richard L.
Kramer (“Kramer”), Steven A. Grigg
(“Grigg”) or Mark R. Keller or any
of their Affiliates (as defined below) or (2) an employee benefit plan (or
a trust forming a part thereof) maintained by Republic or any of its Affiliates
(the persons or entities described in (1) and (2) shall collectively
be referred to as the “Excluded Group”),
shall not constitute a Change in Control.


 


(ii)           Kramer or Grigg ceases to be a member of the
Republic Board of Trustee (the “Board”)
for any reason other than (1) death or voluntary resignation by Kramer or
Grigg, as the case may be, (2) removal of Kramer or Grigg for cause in
accordance with Republic’s charter, or (3) resignation following a
termination by Republic of the employment of Kramer or Grigg, as the case may
be, for “Cause” pursuant to any Employment Agreement executed by Kramer or
Grigg, as the case may be.


 


(iii)          The individuals who are members of the Board
as of date of the IPO (the “Incumbent Board”)
cease for any reason to constitute more than fifty (50%) percent of the Board;
provided, however, that any individual who becomes a member of the Board
subsequent to the IPO, whose election, or nomination for election by the REIT’s
shareholders, was approved by a vote of at least two-thirds of those
individuals who are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this provision) shall be considered as
though such individual were a member of the Incumbent Board; and provided
further, however, that any such individual whose initial assumption of office
occurs as a result of or in connection with an actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board shall not be considered a member of the Incumbent Board.


 


(iv)          A consummation of a merger, consolidation or
reorganization or similar event involving the REIT, whether in a single
transaction or in a series of transactions (“Business
Combination”), unless, following such Business Combination:


 


(1)           the Persons with Beneficial Ownership of
Republic, immediately before such Business Combination, have Beneficial
Ownership of more than fifty (50%) percent of the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors of the corporation (or in the election of a comparable governing
body of any other type of entity) resulting from such Business Combination
(including, without limitation, an entity which as a result of such transaction
owns Republic or all or substantially all


 


15





















 


of
Republic’s assets either directly or through one or more subsidiaries) (the “Surviving Company”);


 


(2)           the individuals who were members of the
Incumbent Board immediately prior to the execution of the initial agreement
providing for such Business Combination constitute more than fifty (50%)
percent of the members of the board of directors (or comparable governing body
of a noncorporate entity) of the Surviving Company; and


 


(3)           no Person (other than a member of the
Excluded Group or any Person who immediately prior to such Business Combination
had Beneficial Ownership of thirty percent (30%) or more of the then Voting
Securities) has Beneficial Ownership of fifty percent (50%) percent or more of
the then combined voting power of the Surviving Company’s then outstanding
voting securities;


 


(v)           The assignment, sale, conveyance, transfer,
lease or other disposition of all or substantially all of the assets of the
REIT to any Person (other than the REIT or any of its Affiliates, or an
employee benefit plan (or related trust) sponsored or maintained by the REIT or
any of its Affiliates) unless, immediately following such disposition, the
conditions set forth in paragraph (iv)(1), (2) and (3) above will be
satisfied with respect to the entity which acquires such assets.  For purposes of this Agreement, “Affiliate”
shall mean any entity that is directly or indirectly controlled by, in control
of or under common control with Republic; or


 


(vi)          The occurrence of a liquidation or
dissolution of the REIT not in connection with any transaction described in
paragraphs (d) and (e) above.


 


6.10         Termination of Management Services Rights. 
Notwithstanding anything to the contrary herein, either party shall have
the right to terminate their obligations with respect to the Management
Services Rights upon thirty (30) days written notice to the other party.


 


[Remainder
of page intentionally left blank]


 


16





















 


IN WITNESS WHEREOF, each of the parties hereto has
executed and delivered this Agreement, or caused the Agreement to be duly
executed and delivered on its behalf, as of the date first set forth above.


 


 


	
   

  	
  REPUBLIC PROPERTIES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Steven A. Grigg

  	
   

  
	
   

  	
  Name: Steven A. Grigg

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REPUBLIC PROPERTY LIMITED

  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Republic Property
  Trust, its General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mark R. Keller

  	
   

  
	
   

  	
  Name: Mark R. Keller

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Richard L. Kramer

  	
   

  
	
   

  	
  RICHARD L. KRAMER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Steven A. Grigg

  	
   

  
	
   

  	
  STEVEN A. GRIGG

  



 


 


[Signature Page to
Portals III Development


Services Rights and
Management Services Rights Contribution Agreement]