Exhibit 10.7


 


MANAGEMENT SERVICES RIGHTS
CONTRIBUTION AGREEMENT


(PORTALS I)


 


THIS MANAGEMENT SERVICES
RIGHTS CONTRIBUTION AGREEMENT (this “Agreement”) is
entered into as of October 24, 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 Property Management Agreement (the “Management
Agreement”), made and entered into as of March 26, 1996 between
Parcel 47B Limited Partnership, a District of Columbia limited partnership (“Owner”), and Portals Development Associates Limited
Partnership, a District of Columbia limited partnership (“PDA”),
the General Partners through PDA provide management services (the “Management Services”) to Owner in connection with the
property management of an office building with a street address of 445 Twelfth
Street, SW, Washington, D.C.  20554, and
known as the “Portals I” building (the “Improvements”),
located on real property located in the District of Columbia, which real
property is described on Schedule I attached to the Management Agreement
(the “Land”, and together with the
Improvements, the “Property”), and
pursuant to which PDA is entitled to receive certain property management fees
(the “Management Fee”);


 


WHEREAS, in connection with
the IPO Transactions, each General Partner desires to contribute to the
Operating Partnership its right to provide Management Services for the Property
pursuant to the Management Agreement, and its right to receive a specified
percentage of the fees that it is entitled to receive from PDA for providing
such services; and


 


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.  Subject
to the terms and conditions hereof, the General Partners shall contribute to
the Operating Partnership (i) all rights


 





















 


of each General Partner,
through PDA as a general partner of PDA, to provide to Owner the Management
Services pursuant to the Management Agreement, and (ii) all rights of each
General Partner, through PDA as a general partner of PDA, to indemnification
pursuant to Section 13 of the Management Agreement (the foregoing (i) and
(ii), the “Management Services Rights”).


 


1.2           Payment of Fees.  In
consideration of the performance of the Management Services by the Operating
Partnership (or its affiliates), the General Partners shall pay or cause to be
paid a management fee (the “Management Fee”)
equal to one percent (1%) of the gross rental receipts of the Property together
with periodic payments for the cost of labor and personnel overhead to provide
such services.


 


1.3           Prohibition on Funding/Fee Disputes


 


(a)           Republic acknowledges that it and its subsidiaries
(including the Operating Partnership) shall be prohibited from providing any
funding, payments, credit, equity investments or any other financial assistance
to Owner, 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 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).  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.


 


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


 


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 Management Services
Rights or the 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 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           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.


 


2.6           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).


 


2.7           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 third party necessary
for the execution, delivery, and performance of this


 


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Agreement or the transactions contemplated hereby by the General
Partners has been obtained or will be obtained on or before the Closing.


 


2.8           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, (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 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 2.9
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,


 


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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.


 


2.9           Management Agreement.  The
General Partners shall cause PDA to timely perform all of PDA’s obligations
under the Management Agreement.


 


2.10         Reliance.  Each General Partner
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 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 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 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; and (b) to
carry out the transactions contemplated hereby and thereby.  This Agreement


 


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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, 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 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 which would materially impair the Operating Partnership’s ability
to enter into and perform all of the Operating Partnership’s obligations
under this Agreement.


 


3.5           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.


 


3.6           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.


 


3.7           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.


 


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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 the General Partners 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 shall have been obtained.


 


(f)            Management Agreement.  The
Management 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.


 


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(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 Delivery by the General Partners.  At
the Closing, the General Partners shall deliver to the Operating Partnership a
duly executed Assignment and Assumption Agreement, substantially in the form
attached hereto as Exhibit A (the “Assignment
Agreement”), pursuant to which the General Partners shall convey to
the Operating Partnership or its designee the Management Services Rights.


 


5.3           Closing Delivery by the Operating Partnership.  At
the Closing, the Operating Partnership shall deliver to the General Partners 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


 


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Partnership nor the General Partners 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 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


 


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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 Management Services Rights. 
Notwithstanding anything to the contrary herein, either the General
Partners, together, or the Operating Partnership shall have the right to
terminate its obligations with respect to the Management Services Rights upon
thirty (30) days written notice to the other party.


 


 


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blank]


 


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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 I Management Services Rights Contribution Agreement]


 





















 


	
   

  	
  REPUBLIC PROPERTY TRUST (solely for

  purposes of Section 1.3)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Mark R. Keller

  
	
   

  	
  Name: Mark R. Keller

  
	
   

  	
  Title: Chief Executive Officer

  



 


 


[Signature Page to Portals
I Management Services Rights Contribution Agreement]