Exhibit 10.2


 


AGREEMENT
AND PLAN OF MERGER


 


AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of September 23, 2005 by and
among RKB Holding L.P., a Delaware limited partnership (“Holdco”),
Republic Property Trust, a Maryland real estate investment trust (“Republic”) and Republic Property Limited Partnership, a
Delaware limited partnership (the “Operating Partnership”)
and wholly owned operating partnership subsidiary of Republic.


 


RECITALS


 


WHEREAS, Republic and the Operating Partnership are
considering engaging in a series of related transactions pursuant to which,
among other things, (i) the Operating Partnership would acquire interests
in various limited liability companies that own real estate properties, and (ii) Republic
would effect an initial public offering of its common shares of beneficial
interest, par value $0.01 per share (“REIT Shares”),
and contribute the proceeds therefrom for a like number of units of partnership
interest in the Operating Partnership (the “IPO”,
and together with the other transactions in connection therewith, the “IPO Transaction”);


 


WHEREAS, the parties hereto have determined that, in
order to facilitate the IPO, it is in their respective best interests, on the
terms and subject to the conditions hereinafter set forth, that (i) Holdco
be merged with and into the Operating Partnership, with the Operating
Partnership surviving, (ii) the outstanding limited partnership interests
in Holdco (the “Limited Partnership Interests”)
and the outstanding general partnership interest in Holdco (collectively with
the Limited Partnership Interests, the “Partnership Interests”)
be converted into the right to receive the Merger Consideration (as defined
below), (iii) the
Operating Partnership succeed to the liabilities of Holdco, including (a) an
outstanding loan (the “Finco Loan”) owed
by Holdco to RKB Finance L.P., a Cayman exempted limited partnership (“Finco”), and (b) any tax liabilities incurred by Holdco
arising as a result of the Merger (as defined below), and (iv) the Operating
Partnership repay the Finco Loan with a combination of REIT Shares and/or cash;


 


WHEREAS, RKB Washington Property Fund I (General
Partner) LLC, a Delaware limited liability company and the general partner of
Holdco (the “General Partner”), has determined
that the Merger, including this Agreement, is advisable, fair to, and in the
best interest of holders of Limited Partnership Interests (the “Limited Partners”, and collectively with the General
Partner, the “Holdco Partners”), and has
approved the Merger and this Agreement, and resolved to recommend that the
Limited Partners approve the Merger and this Agreement, pursuant to a written
consent of the General Partner dated as of July 21, 2005;


 


WHEREAS, Republic, as the general partner of the
Operating Partnership, has determined that the Merger, including this
Agreement, is advisable, fair to and in the best interests of the Operating
Partnership and its sole 


 





















 


limited partner, approved
the Merger and this Agreement, and directed that the Merger and this Agreement
be submitted for consideration by the sole limited partner of the Operating
Partnership, pursuant to a unanimous written consent of the board of trustees
of Republic dated as of September 23, 2005;


 


WHEREAS, as of the date hereof, Limited Partners who,
in the aggregate, hold more than fifty percent (50%) of the percentage interest
in the profits of Holdco have approved the Merger pursuant to a Merger Consent
and Consideration Election Form (the “Election Form”),
a form of which was attached to the Confidential Solicitation of Consents and
Information Statement, as amended (the “Information Statement”)
previously delivered by Holdco, Republic and Finco to each Limited Partner on July 22,
2005; and


 


WHEREAS, the sole limited partner of the Operating
Partnership approved and adopted the Merger, including this Agreement, on the
terms and subject to the conditions set forth herein, pursuant to a written
consent dated as of September 23, 2005.


 


NOW, THEREFORE, for good and valuable consideration
and in consideration of the foregoing and of the representations, warranties,
covenants and agreements contained herein, the parties, each intending to be
legally bound hereby, agree as follows:


 


ARTICLE 1


 


THE MERGER; CLOSING; EFFECTIVE
TIME


 


1.1.          THE MERGER.  Subject
to the terms and conditions of this Agreement, and in accordance with the
provisions of the Delaware Revised Uniform Limited Partnership Act (the “DRULPA”), at the Effective Time (as defined below), Holdco
shall be merged with and into the Operating Partnership and the separate
existence of Holdco shall thereupon cease (the “Merger”).
The Operating Partnership shall be the surviving entity in the Merger
(sometimes hereinafter referred to as the “Surviving Company”)
and shall continue to be governed by the laws of the State of Delaware, and the
separate existence of the Operating Partnership as a Delaware limited
partnership, with all its rights, privileges, immunities, powers and
franchises, shall continue unaffected by the Merger.  The Merger shall have the effects specified
in the DRULPA.


 


1.2.          THE CLOSING.  Subject
to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) shall take place (a) at the offices of Hogan &
Hartson L.L.P., 555 Thirteenth Street, N.W., Washington, D.C., 20004, on the
day upon which all of the conditions to the Merger shall have been 


 


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satisfied or waived in
writing, or (b) at such other time, date or place as Holdco, Republic and
the Operating Partnership may agree.  The
date on which the Closing occurs is hereinafter referred to as the “Closing Date.”


 


1.3.          EFFECTIVE TIME.  If
all the conditions to the Merger set forth in Article 7 shall have been
satisfied or waived in accordance herewith and this Agreement shall not have
been terminated as provided in Article 8, upon the Closing, the parties
hereto shall cause a certificate of merger substantially in the form attached
hereto as Exhibit A (the “Certificate of Merger”)
to be executed and filed with the Office of the Secretary of the State of
Delaware, as provided in Section 17-211(c) of the DRULPA.  The Merger shall become effective at the time
and on the date specified in the Certificate of Merger filed with the Secretary
of State of the State of Delaware or, absent any such indication, upon
acceptance of filing (the “Effective Time”).


 


ARTICLE 2


 


NAME, CERTIFICATE OF LIMITED
PARTNERSHIP


AND AGREEMENT OF LIMITED
PARTNERSHIP


OF THE SURVIVING COMPANY


 


2.1.          NAME AND LOCATION OF SURVIVING COMPANY.  The name of the Surviving Company, “Republic Property Limited Partnership,” shall continue
unchanged at the Effective Time.


 


2.2.          CERTIFICATE OF LIMITED PARTNERSHIP.  The certificate of limited partnership of the
Operating Partnership shall be the certificate of limited partnership of the
Surviving Company until thereafter changed or amended in accordance with the
provisions thereof and applicable law.


 


2.3.          AGREEMENT OF LIMITED PARTNERSHIP.  The Agreement of Limited Partnership of the
Operating Partnership as in effect immediately prior to the Effective Time
shall be the agreement of limited partnership of the Surviving Company until
thereafter changed or amended in accordance with the provisions thereof and
applicable law.


 


ARTICLE 3


 


GENERAL PARTNER OF THE SURVIVING
COMPANY


 


3.1.          GENERAL PARTNER. 
Republic, the general partner of the Operating Partnership immediately
prior to the Effective Time, shall be the general partner of the Surviving
Company immediately following the Effective Time.


 


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ARTICLE 4


 


EFFECT ON PARTNERSHIP INTERESTS


 


4.1           EFFECT ON PARTNERSHIP INTERESTS.  In connection with the Merger and related
transactions, Holdco and Republic have previously delivered to each Holdco
Partner the Information Statement, including the Election Form, pursuant to
which, among other things, in connection with the Merger and subject to certain
conditions and eligibility requirements set forth in the Information Statement,
Holdco and Republic offered each Holdco Partner the option to receive as
consideration in the Merger either (i) cash, (ii) REIT Shares, or (iii) a
combination of the two, in exchange for each such Holdco Partner’s Partnership
Interests.


 


At the Effective Time, by virtue of the Merger and the
duly executed Election Form submitted by each Holdco Partner as of the
date hereof, and without any further action on the part of any such Holdco
Partner (with certain terms defined in Exhibit B hereto):


 


(a)           Each
Holdco Partner shall be entitled to receive an amount of cash equal to (i) the
product of (A) the Holdco Partner’s Share of the Aggregate Exchange Amount
multiplied by (B) such Holdco Partner’s Cash Percentage multiplied by (C) 91.5%
minus (ii) the product of (A) such Holdco Partner’s Cash Percentage
multiplied by (B) such Holdco Partner’s percentage of Total Capital
Commitments (as defined in the Holdco limited partnership agreement) in Finco multiplied
by (C) the Finco Debt multiplied by (D) 8.5%.


 


(b)           Each
Holdco Partner shall be entitled to receive a number of REIT Shares equal to (i) the
product of (A) the Holdco Partner’s Share of the Aggregate Exchange Amount
multiplied by (B) such Holdco Partner’s REIT Share Percentage divided by (ii) the
initial public offering price of a share of Republic.


 


(c)           A “Holdco Partner’s Share of the Aggregate Exchange Amount”
means the product of (i) the Aggregate Exchange Amount multiplied by (ii) such
Holdco Partner’s percentage of Total Capital Commitments (as defined in the
Holdco limited partnership agreement) in Holdco.


 


(d)           A “Holdco Partner’s Cash Percentage” means the percentage of
the consideration that such Holdco Partner is entitled to receive in cash in
accordance with such Holdco Partner’s Election Form, subject to Section 4.1(f) hereof.


 


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(e)           A “Holdco Partner’s REIT Share Percentage” means the percentage
of the consideration that such Holdco Partner is entitled to receive in REIT
Shares in accordance with such Holdco Partner’s Election Form, subject to Section 4.1(f) hereof.


 


(f)            Any
Limited Partner that (i) does not
complete both the Election Form and an investor questionnaire, a form of
which was attached as an exhibit to the Information Statement (the “Investor Questionnaire”), and return them to Holdco on or
before the deadline for voting on the Merger set forth in the Information
Statement (the “Consent Deadline”), subject to the
right of the Operating Partnership, in its sole and absolute discretion, to
accept such forms after the Consent Deadline and prior to the initial filing by
Republic of its registration statement, to the extent practicable, (ii) is
not an Eligible Limited Partner (as defined in the Information Statement), or (iii) votes
on the Merger on or before the Consent Deadline, but does not specify a desired
form of consideration to be received in the Merger, and, in each case, the
requisite level of consent is received and the Merger is consummated, such
Limited Partner will be deemed to have elected to receive the Cash
Consideration, and no REIT Shares will be issued to such Limited Partner.


 


(g)           Each
Partnership Interest shall no longer be outstanding and shall be canceled and
retired and shall cease to exist.


 


(h)           The
aggregate amount of consideration to be paid to Holdco Partners pursuant to
Sections 4.1(a) and 4.1(b) hereof shall be referred to as the “Merger Consideration.”


 


4.2           RIGHTS UPON EXCHANGE.


 


(a)           The
aggregate amount of the Merger Consideration paid upon the surrender for
exchange of Partnership Interests in accordance with the terms hereof shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such Partnership Interests.


 


(b)           At and
after the Effective Time, there shall be no transfers on the books and records
of Holdco of Partnership Interests which were outstanding immediately prior to
the Effective Time.


 


(c)           No
fractional REIT Shares shall be issued pursuant hereto.  The number of REIT Shares issued to any
holder of Partnership Interests immediately prior to the Effective Time shall
be rounded to the nearest whole REIT Share.


 


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ARTICLE 5


 


REPRESENTATIONS AND WARRANTIES


 


5.1           REPRESENTATIONS AND WARRANTIES OF HOLDCO.  As a material inducement to the Operating
Partnership to enter into this Agreement and to consummate the transactions
contemplated hereby, Holdco hereby makes to each of Republic and the Operating
Partnership each of the representations and warranties set forth in this Article 5.1,
which representations and warranties are true and correct as of the date
hereof.


 


(a)           Organization
and Standing.  Holdco has been duly
formed and is validly existing as a limited partnership in good standing under
the DRULPA with the requisite partnership power and authority to own, lease and
operate its assets, conduct the business in which it is engaged and perform its
obligations under this Agreement.  Holdco
is duly qualified to transact business and is in good standing under the laws
of each jurisdiction in which it owns or leases assets, or conducts any
business, so as to require such qualification.


 


(b)           Authority.
Holdco has the requisite partnership power and authority to enter into this
Agreement and to consummate the Merger and the other transactions contemplated
by this Agreement.  The execution and
delivery of this Agreement by Holdco and the consummation by Holdco of the
Merger and the other transactions contemplated by this Agreement have been duly
authorized by all necessary action on the part of Holdco.  This Agreement has been duly executed and
delivered by Holdco and constitutes the legal, valid and binding agreement of
Holdco enforceable against Holdco in accordance with its terms, except as may
be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’
rights generally, and (b) equitable principles of general applicability
relating to the availability of specific performance, injunctive relief or
other equitable remedies.


 


(c)           Capital
Structure.  All outstanding
Partnership Interests are, and all such interests that may be issued prior to
the Effective Time will be when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to or issued in violation of any
purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DRULPA, the
Agreement of Limited Partnership of Holdco or any contract, lease, license,
indenture, note, bond or other agreement (a “Contract”)
to which Holdco is a party.  There are
not any options, warrants, calls, rights, convertible or exchangeable
securities, units, commitments, Contracts, arrangements or undertakings to
which Holdco is a party (x) obligating Holdco to issue, deliver or sell, or
cause to be issued, delivered or sold, additional Partnership Interests or
other equity interests in, or any security convertible or exercisable for or
exchangeable into any Partnership Interests or other equity interest in, Holdco
or 


 


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(y) obligating Holdco to
issue, grant, extend or enter into any such option, warrant, call, right,
security, unit, commitment, Contract, arrangement or undertaking.  As of the date of this Agreement, there are
no outstanding contractual obligations of Holdco to repurchase, redeem or
otherwise acquire any Partnership Interests. 
There are no agreements among Limited Partners, voting trusts or other
agreements or understandings to which Holdco is a party or to which it is bound
relating to the holding, voting or disposition of the Partnership Interests.


 


(d)           Litigation.  There is no litigation or
proceeding, either judicial or administrative, pending or, to Holdco’s knowledge, threatened, affecting its
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 Holdco, which in any such case would impair Holdco’s ability to enter into and perform all of
its obligations under this Agreement.


 


(e)           No Insolvency Proceedings.  No
attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings are pending or, to Holdco’s knowledge, threatened against
Holdco, nor are any such proceedings
contemplated by Holdco.


 


(f)            No Brokers. Holdco 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 Holdco 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).


 


(g)           Securities Laws
Matters. Holdco, for itself and
each of the Holdco Partners, acknowledges that (i) Republic and the
Operating Partnership intend the offer and issuance of any REIT Shares to any
Holdco Partner to be exempt from registration under the Securities Act of 1933,
as amended (the “Securities Act”), and applicable
state securities laws by virtue of either (A) the status of such Holdco
Partner as a “Non-U.S. Person” within the meaning of Rule 902(k) of
Regulation S (“Regulation S”) under the Securities
Act, and acquisition of the REIT Shares by such Holdco Partner in an “offshore
transaction” within the meaning of, and pursuant to, Regulation S, or (B) the status of such Holdco Partner as an “accredited
investor” within the meaning of Rule 501(a) of Regulation D under the
Securities Act (“Regulation D”) acquiring the REIT
Shares in a transaction exempt from registration pursuant to Rule 506 of
Regulation D, and (ii) in issuing any REIT Shares pursuant to the terms of
this Agreement, Republic and the Operating Partnership are relying on the
representations made by each Holdco Partner electing to receive REIT Shares as
consideration in the Merger, which 


 


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representations are set
forth in the Investor Questionnaire as set forth on Exhibit C
attached hereto.


 


(h)           Status as a United
States Person.  Holdco represents and warrants that it is not
a foreign person within the meaning of Section 1445 of the Code. Holdco’s
U.S. taxpayer identification number that has previously been provided to the
Operating Partnership is correct.  Holdco’s
office address is the most recent address previously provided to the Operating
Partnership.


 


(i)            Status as a Corporation for U.S. Federal
Income Tax Purposes.  Holdco represents that it has filed a Form 8832
to be treated as a corporation for U.S. federal income tax purposes, which has
not been revoked and that it is treated as a corporation for U.S. federal
income tax purposes.


 


5.2           REPRESENTATIONS AND WARRANTIES OF
REPUBLIC AND THE OPERATING PARTNERSHIP.  As a material inducement to Holdco
to enter into this Agreement and to
consummate the transactions contemplated hereby, Republic and the Operating
Partnership hereby make to Holdco each
of the representations and warranties set forth in this Article 5.2, which
representations and warranties are true and correct as of the date hereof.


 


(a)           Organization
and Standing of Republic. Republic has been duly formed and is validly
existing as a real estate investment trust in good standing under Maryland law
with the requisite power and authority to own, lease and operate its assets,
conduct the business in which it is engaged and perform its obligations under
this Agreement.   Republic is duly qualified
to transact business and is in good standing under the laws of each
jurisdiction in which it owns or leases assets, or conducts any business, so as
to require such qualification.


 


(b)           Organization
and Standing of the Operating Partnership. 
The Operating Partnership has been duly formed and is validly existing
as a limited partnership in good standing under the DRULPA with the requisite
partnership power and authority to own, lease and operate its assets, conduct
the business in which it is engaged and perform its obligations under this Agreement.
The Operating Partnership is duly qualified to transact business and is in good
standing under the laws of each jurisdiction in which it owns or leases assets,
or conducts any business, so as to require such qualification.


 


(c)           Authority.  Each of Republic and the Operating
Partnership has the requisite power and authority to enter into this Agreement
and to consummate the Merger and the other transactions contemplated by this
Agreement.  The execution and delivery of
this Agreement by Republic and the Operating Partnership and the consummation
by Republic and the Operating Partnership of the Merger and the other
transactions contemplated by this Agreement have been 


 


8





















 


duly authorized by all
necessary action on the part of Republic and the Operating Partnership.  This Agreement has been duly executed and
delivered by Republic and the Operating Partnership and constitutes the legal,
valid and binding agreement of Republic and the Operating Partnership enforceable
against each of them in accordance with its terms, except as may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, and (b) equitable
principles of general applicability relating to the availability of specific
performance, injunctive relief or other equitable remedies.


 


(d)           Capital
Structure.  All outstanding REIT Shares are duly
authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first
refusal, preemptive right, subscription right or any similar right under
Republic’s declaration of trust or bylaws or any contract to which Republic is a
party or otherwise bound.  There are no
bonds, debentures, notes or other indebtedness of Republic having the right to
vote with shareholders on any matters on which holders of REIT Shares may
vote.  There are not any options,
warrants, rights, contracts, arrangements or undertakings of any kind to which
Republic is a party or by which Republic is bound obligating it to issue,
grant, sell or cause to be issued, granted or sold, additional REIT Shares or
other equity interests in, or any security convertible or exercisable for or
exchangeable into REIT Shares or other equity interest in, Republic, other than
as disclosed in or contemplated by the Information Statement.  The REIT Shares issued in the Merger will be
duly authorized, validly issued, fully paid and nonassessable.


 


(e)           Litigation.  There is no litigation or
proceeding, either judicial or administrative, pending or, to Republic’s or the
Operating Partnership’s knowledge, threatened, affecting its 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 Republic or the Operating
Partnership, which in any such case would impair Republic or the Operating
Partnership’s ability to enter into and perform all of its obligations under
this Agreement.


 


(f)            No Insolvency Proceedings. No attachments, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending or, to Republic’s or the
Operating Partnership’s knowledge, threatened against Republic or the Operating
Partnership, nor are any such proceedings contemplated by the Operating
Partnership.


 


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(g)           No Brokers.  Neither of Republic or the
Operating Partnership has entered into, and each of them covenants that it will
not enter into, any agreement, arrangement or understanding with any person or
firm which will result in the obligation of Republic or 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).


 


ARTICLE 6


 


COVENANTS


 


6.1           CARRYING ON IN THE ORDINARY COURSE OF BUSINESS.  From the date hereof to the Closing Date,
each of the parties hereto shall conduct its business in the ordinary course in
all material respects, except that each party may take such actions and execute
such documents as may be required to effectuate the Merger, the IPO
Transactions and any related transactions.


 


6.2           CONTRIBUTION OF REIT SHARES AND CASH; REPAYMENT OF FINCO LOAN.  On or before the Closing Date, Republic will
contribute to the Operating Partnership, in exchange for a like number and
value of OP Units, the number of REIT Shares and amount of cash necessary for (a) payment
by the Operating Partnership of the aggregate amount of REIT Shares and cash
payable by the Operating Partnership pursuant to the terms of this Agreement
and (b) repayment by the Operating Partnership of the Finco Loan.  The Operating Partnership shall repay the
Finco Loan following the Merger and IPO Transactions.


 


6.3           FURTHER ASSURANCES. 
Holdco shall execute and deliver to Republic and the Operating
Partnership all such other and further instruments and documents and take or
cause to be taken all such other and further actions as either of them may
reasonably request in order to effect the Merger and the other transactions contemplated
by this Agreement.


 


6.4           CONDITIONAL NATURE OF TRANSACTION.  Holdco acknowledges and understands that it
is a condition to the Operating
Partnership’s obligations to close the transactions contemplated hereby
that the other IPO Transactions shall have occurred (or are occurring
simultaneously with the Closing), that the occurrence of any of the other IPO
Transactions is wholly within the sole and absolute discretion of Republic and
the Operating Partnership, and 


 


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that Holdco has no right
to force any of the IPO Transactions to occur, on any terms.


 


ARTICLE 7


 


CONDITIONS


 


7.1           CONDITIONS TO THE OPERATING
PARTNERSHIP’S OBLIGATIONS TO EFFECT THE MERGER.  The
obligations of Republic and the Operating Partnership to effect the Merger and
the other transactions contemplated by this Agreement are 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 and Republic):


 


(a)           IPO.  The IPO, in such form as
Republic, in its sole and absolute discretion, shall have determined to be
acceptable, shall have occurred (or is occurring simultaneously with the
Closing).


 


(b)           RPT 1425.  The contribution of interests
in RPT 1425 Investors L.P. in
such form as Republic, in its sole and absolute discretion, shall have
determined to be acceptable shall have occurred.


 


(c)           Representations and Warranties.  The
representations and warranties made by Holdco pursuant to this Agreement shall be true and correct in all material
respects when made, and on and as of the Closing Date, as though such
representations and warranties were made on the Closing Date.


 


(d)           Performance.  Holdco 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.


 


(e)           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 Merger, and no litigation or governmental proceeding
seeking such an order shall be pending or threatened.


 


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


 


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(g)           Reliance on Regulation S and/or Regulation D. 
Republic shall, based on the advice of its counsel and the
representations made by any Holdco Partner electing to receive REIT Shares as
Merger Consideration in such Holdco Partner’s Investor Questionnaire, be
reasonably satisfied that the issuance and the contemplated distribution of
REIT Shares to any such Holdco Partner may be made without registration under
the Securities Act in reliance on either Regulation S and/or Regulation D under
the Securities Act.


 


(h)           Certification of Non-Foreign Status. 
Holdco shall complete and provide to the Operating Partnership a
certificate of non-foreign status substantially in the form provided in Section 1.1445-2(b)(2)(iv)(B) of
the Treasury regulations.


 


(i)            USRPHC
Certificate.  Holdco shall complete
and provide to the Operating Partnership a certificate pursuant to Treasury
Regulation Section 1.1445-2(c)(3), signed by Holdco and dated as of the
date of the Closing to the effect that Holdco will cease to be a United States
real property interest under Section 897(c)(1)(B) of the Internal
Revenue Code prior to the deemed liquidation of Holdco for federal income tax
purposes.


 


7.2           CONDITIONS TO HOLDCO’S OBLIGATION TO EFFECT THE
MERGER.  The obligation of Holdco to effect the Merger and the other
transactions contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of the following conditions (unless such conditions
are waived in writing by Holdco):


 


(a)           Representations and Warranties.  The
representations and warranties made by Republic and the Operating Partnership
pursuant to this Agreement shall be true and correct in all material respects
when made, and on and as of the Closing Date, as though such representations
and warranties were made on the Closing Date.


 


(b)           Performance. Republic and the Operating Partnership shall have performed and complied with all agreements and covenants
that they each are 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 Merger, and no litigation or governmental proceeding
seeking such an order shall be pending or threatened.


 


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(d)           Consents and Approvals.  All
other necessary consents of governmental and private parties to effect the
Merger and other transactions contemplated by this Agreement, including,
without limitation, consents of any lenders, shall have been obtained;
provided, that the foregoing condition shall be deemed to have been satisfied
if Republic or the Operating Partnership shall have agreed to fully indemnify
the Partners from any loss, liability, claim, damage or expense arising out of
the Operating Partnership proceeding to effect the Merger without having
obtained a necessary consent.


 


ARTICLE 8


 


TERMINATION


 


8.1           TERMINATION AND ABANDONMENT BY
THE OPERATING PARTNERSHIP.  Republic or the Operating Partnership
shall have the right to terminate this Agreement and abandon the Merger at any
time prior to the filing of the Certificate of Merger, before or after approval
by the Holdco Limited Partners or Republic, as the general partner of the Operating Partnership, following
the occurrence of any of the following events:


 


(i)            the determination by Republic, in its sole
and absolute discretion, not to proceed with the IPO Transactions; or


 


(ii)           at any time on or after September 30,
2006, for any reason.


 


8.2           TERMINATION AND ABANDONMENT BY
HOLDCO.  Holdco shall have the right to terminate this Agreement and abandon the
Merger at any time and for any reason on or after September 30, 2006 but
prior to the filing of the Certificate of Merger, whether or not such
termination occurs before or after approval by the Limited Partners.


 


8.3           EFFECT OF TERMINATION AND
ABANDONMENT.   Upon the termination of this Agreement and
abandonment of the Merger pursuant to Section 8.1 or 8.2 hereof, this
Agreement shall become void and have no effect, and no party shall have any
liability to the other in connection with the transactions contemplated hereby,
including the Merger, or as a result of the termination of this Agreement;
provided, that the foregoing shall not relieve a party of any liability as a
result of a breach of any of the terms of this Agreement.


 


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ARTICLE 9


 


GENERAL PROVISIONS


 


9.1           ENTIRE AGREEMENT. 
This Agreement, the Exhibits and any documents delivered by the parties
in connection herewith constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.  No addition to or modification of any
provision of this Agreement shall be binding upon any party hereto unless made
in writing and signed by all parties hereto.


 


9.2           AMENDMENT.  This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.


 


9.3           GOVERNING LAW.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.


 


9.4           COUNTERPARTS.  This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.  Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all of the
parties hereto.


 


9.5           HEADINGS.  Headings of
the Articles and Sections of this Agreement are for the convenience of the
parties only, and shall be given no substantive or interpretive effect
whatsoever.


 


9.6           INCORPORATION.  All
Exhibits attached hereto and referred to herein are hereby incorporated herein
and made a part hereof for all purposes as if fully set forth herein.


 


9.7           SEVERABILITY.  Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction.  If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.


 


9.8           WAIVER OF CONDITIONS. 
The conditions to each of the parties’ obligations to consummate the
Merger are for the sole benefit of such party and may be waived by such party
in whole or in part to the extent permitted by applicable law.


 


14





















 


9.9           NO THIRD-PARTY BENEFICIARIES.  This Agreement is not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder.


 


15





















 


IN WITNESS WHEREOF, the parties have executed this
Agreement and caused the same to be duly delivered on their behalf as of the
day and year first written above.


 


 


	
   

  	
  Republic Property Trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
                /s/
  Mark R. Keller

  	
   

  
	
   

  	
   

  	
  Name: Mark R. Keller

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Republic Property
  Limited

  Partnership

  
	
   

  	
   

  
	
   

  	
  By: Republic Property
  Trust,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
                /s/
  Mark R. Keller

  	
   

  
	
   

  	
   

  	
  Name: Mark R. Keller

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RKB Holding L.P.

  
	
   

  	
   

  
	
   

  	
  By: RKB Washington
  Property I

  
	
   

  	
  (General Partner) LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
                /s/
  Mark R. Keller

  	
   

  
	
   

  	
   

  	
  Name: Mark R. Keller

  
	
   

  	
   

  	
  Title: Manager

  



 


 


[Signature
Page to Holdco Merger Agreement]


 





















 


Exhibit B


 


MERGER CONSIDERATION FORMULA


 


Definitions
(to the extent not defined in the Merger Agreement):


 


Aggregate Exchange Amount
= (11,090,411 * HSR * PPS) – (TXC+FD)


 


	
  HSR

  	
  =

  	
  Holdco Share of RKB
  Proceeds

  
	
  TXC

  	
  =

  	
  Tax Cost

  
	
  FD

  	
  =

  	
  Finco Debt

  
	
  PPS

  	
  =

  	
  Price Per Share

  



 


“Holdco Share of RKB
Proceeds” means, at the time of the IPO, the percentage of proceeds distributed
to Holdco or its successor in accordance with the partnership agreement of RKB
Washington Property Fund I L.P. (the “Fund”) upon a liquidation of the Fund
following the contribution of the assets of RKB Washington Property Fund I L.P.


 


“Tax Cost” means the
expected tax liabilities of Holdco as determined at the time of the IPO that
will be assumed by the OP.


 


“Finco Debt” means the
sum of the principal and interest outstanding on the loan between Holdco and
Finco at the time of the IPO.


 


“Price Per Share” means
the price per REIT Share in the IPO.