CONTRIBUTION AGREEMENT Between FIRST STATES GROUP, L.P. And THE PARTNERS IN FIRST STATES PARTNERS II, LP Dated as of October 26, 2005
Exhibit 10.54
Between
FIRST STATES GROUP, L.P.
And
THE PARTNERS IN
FIRST STATES PARTNERS II, LP
Dated as of October 26, 2005
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE
TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES REFERENCED HEREIN
HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME
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THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of the
26th day of October, 2005 (the “Contract Date”), by and among each holder of a
partnership interest in FIRST STATES PARTNERS II, LP, a Delaware limited partnership (the “Owner”),
as named on Exhibit A hereto (each such holder is a “Contributor” and, collectively, are the
“Contributors”) and FIRST STATES GROUP, L.P., a Delaware limited partnership (the “FSG”).
Background
A. Owner is the owner of a property commonly referred to as ▇▇▇ ▇. ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇.
B. By letter dated ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇ made on an offer to each Contributor to purchase all
of the limited partnership interest in the Owner that it did not already own (the “Contributed
Interests”).
C. FSG and the Contributors desire to enter into this Agreement relating to the contribution
and conveyance of the Contributed Interests to FSG in exchange for OP Units (as defined below).
Agreement
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in
this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, intending to be legally bound, the parties agree as follows:
1. DEFINITIONS.
All terms which are not otherwise defined in this Agreement shall have the meaning set forth
in this Section 1.
1.1 “Accredited Investor” shall have the meaning set forth in Regulation D promulgated under
the Securities Act of 1933, as amended.
1.2 “General Partner” shall mean First States Group, LLC, the sole general partner of FSG, the
operating partnership of the REIT.
1.3 “Partnership Agreement” shall mean the Amended and Restated Agreement of Limited
Partnership of FSG dated September 10, 2002, as amended from time to time prior to and including
the Contract Date.
1.4 “REIT” means American Financial Realty Trust, a publicly-traded Maryland real estate
investment trust.
1.5 “SEC” shall mean the Securities and Exchange Commission.
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1.6 “Securities Act” shall mean the Securities Act of 1933, as amended.
2. CONTRIBUTION.
The Contributors agree to contribute and convey to FSG, and FSG shall accept and take from the
Contributors, on the terms and conditions set forth in this Agreement, all of the Contributor’s
right, title and interest in and to the Contributed Interests.
3. PURCHASE PRICE.
3.1 Payment of Purchase Price. In consideration of the contribution of the
Contributed Interests to FSG, and subject to the terms of this Agreement, FSG shall pay the total
purchase price of 303,425 units of limited partnership interest in FSG (“OP Units”) to the
Contributors (the “Purchase Price”) for all of the Contributed Interests.
3.1.1 The payment of the Purchase Price by FSG shall be made through the issuance to each
Contributor the number of OP Units set forth on Exhibit A next to the name of such Contributor in
exchange for their contribution to the FSG of the portion of the Contributed Interests that they
own. FSG and the Contributors stipulate and agree that a true and correct calculation of the
Purchase Price is set forth on Exhibit A hereto.
4. OP UNITS; INVESTOR MATERIALS.
4.1 OP Units.
4.1.1 The OP Units shall be redeemable for shares of beneficial interest of the REIT or cash
(or a combination thereof) at the discretion of the General Partner and in accordance with the
procedures described herein and in the Partnership Agreement.
4.1.2 Each Contributor hereby directs FSG to deliver the OP Units as a book entry in its stock
ledger issued in the names of, and for distribution to, those Contributors set forth on Exhibit A
attached hereto. Each Contributor shall receive the number and type of OP Units set forth on said
Exhibit.
4.1.3
Each Contributor shall provide or cause to be provided to FSG any information and
documentation as may reasonably be requested by the FSG in furtherance of the issuance of the OP
Units as contemplated hereby, including any representation letter
affirming the Contributor’s status as an Accredited Investor (the “Investor Materials”).
4.1.4 Each Contributor hereby covenants and agrees that it shall deliver or shall cause each
of its partners, shareholders and members to deliver to FSG, or
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to any other party designated by FSG, any documentation that may be required under the
Partnership Agreement or any charter document of the REIT, and such other information and
documentation as may reasonably be requested by FSG, at such time as any OP Units are redeemed for
common shares of beneficial interest of the REIT (“Conversion Shares”).
4.2 Certain Informational Materials. Each Contributor hereby acknowledges and agrees
that the ownership of OP Units by them and their respective rights and obligations as limited
partners of FSG (including their right to transfer, encumber, pledge and exchange OP Units) shall
be subject to all of the express limitations, terms, provisions and restrictions set forth in this
Agreement and in the Partnership Agreement. In that regard, each Contributor hereby covenants and
agrees that it shall execute any and all documentation reasonably required by FSG and the REIT to
formally memorialize the foregoing. Each Contributor acknowledges that it has received and
reviewed copies of the Partnership Agreement, as amended to date, the declaration of trust and
bylaws of the REIT and the REIT’s Annual Report to Shareholders for the year ended December 31,
2004. Each Contributor also acknowledges that Form 10-Qs for the quarters ended March 31, 2005
and June 30, 2005, all Form 8-Ks that have been filed by the REIT with the SEC since June 25, 2003
and copies of all material press releases, proxy statements and reports to shareholders issued
since June 25, 2003 have been made available through the REIT’s website at ▇▇▇.▇▇▇▇.▇▇▇ and the
SEC’s website at ▇▇▇.▇▇▇.▇▇▇, and has otherwise had an opportunity to conduct a due diligence
review of the affairs of FSG and the REIT and has been afforded the opportunity to ask questions
of, and receive additional information from, the REIT regarding the business, operations,
conditions (financial or otherwise) and the current prospects of the REIT and FSG.
4.3 Transfer Requirements. Each Contributor may only sell, transfer, assign, pledge
or encumber, or otherwise convey any or all of the OP Units delivered to it and, if applicable, any
Conversion Shares, in strict compliance with this Agreement, the Partnership Agreement, the charter
documents of the REIT, the Securities Act (and the rules
promulgated thereunder), any state securities laws and the rules of the New York Stock Exchange, in each case as may be applicable. A legend may be placed on
the face of the certificates evidencing the Conversion Shares to notify the holder of the
restrictions on transfer under applicable federal or state securities laws.
5. CONTRIBUTORS’ DELIVERIES. Each Contributor shall make available to FSG, at reasonable
times and upon reasonable notice, all documents, contracts, information, Records and exhibits that
are in the possession of, or under the control of, Contributor that are pertinent to the
transaction that is the subject of this Agreement.
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6. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS.
6.1 Each Contributor confirms that there exists no financing statements, tax liens (or other
liens), encumbrances or judgments against such Contributor encumbering the Contributed Interests
which will not be released on or prior to October 26, 2005.
7. REPRESENTATIONS AS TO SECURITIES AND RELATED MATTERS.
7.1 Contributors. Each Contributor represents and warrants to FSG that the following
matters are true and correct as of the date of this Agreement, and covenant as follows:
7.1.1 Each Contributor represents that its OP Units are being acquired by it with the present
intention of holding such OP Units for purposes of investment, and not with a view towards sale or
any other distribution. Each Contributor recognizes that it may be required to bear the economic
risk of an investment in the OP Units for an indefinite period of time. Each Contributor is an
Accredited Investor. Each Contributor has such knowledge and experience in financial and business
matters so as to be fully capable of evaluating the merits and risks of an investment in the OP
Units. No OP Units will be issued, delivered or distributed to any person or entity who is other
than an Accredited Investor. Each Contributor has been furnished with the informational materials
described in Section 4.2 above (collectively, the “Informational Materials”), and has read and
reviewed the Informational Materials and understands the contents thereof. The Contributors have
been afforded the opportunity to ask questions of those persons they consider appropriate and to
obtain any additional information they desire in respect of the OP Units and the business,
operations, conditions (financial and otherwise) and current prospects of FSG and the REIT. The
Contributors have consulted their own financial, legal and tax advisors with respect to the
economic, legal and tax consequences of delivery of the OP Units and have not relied on the
Informational Materials, FSG, the REIT or any of their officers, directors, affiliates or
professional advisors for such advice as to such consequences. No Contributor requires the consent
of any other party to consummate the transactions contemplated by this Agreement. Exhibit A
accurately sets forth the direct ownership interest of each Contributor in the Owner.
7.2 FSG. FSG represents and warrants to Contributor that the following matters are
true and correct as of the date of this Agreement:
7.2.1 FSG is a limited partnership duly authorized and validly existing under Delaware law.
The performance of this Agreement by FSG has been duly authorized by the General Partner in
accordance with the Partnership Agreement, this Agreement will be binding on FSG and enforceable
against it in accordance with its terms. FSG has been at all times, and presently intends to
continue to be, classified as a partnership or a publicly traded partnership taxable as a
partnership for federal income
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tax purposes and not an association taxable as a corporation or a publicly traded partnership
taxable as a corporation.
7.2.2 The General Partner is a limited liability company duly authorized and validly existing
under Delaware law. The performance of this Agreement by the General Partner, as general partner
of FSG, has been duly authorized by the REIT, and this Agreement is binding on the General Partner,
as general partner of FSG, and enforceable against it, as general partner of FSG, in accordance
with its terms.
8. FSG COVENANTS. Each Contributor acknowledges that is has received a copy of the
Partnership Agreement, and upon receipt of the OP Units agrees to be subject to and bound by all of
the provisions of the Partnership Agreement, including those provisions of the Partnership
Agreement applicable to limited partners. In accordance with Section 9.03(a)(v) of the Partnership
Agreement and upon receipt of the OP Units, each Contributor irrevocably appoints the General
Partner as its true and lawful attorney-in-fact, who may act for each Contributor and in its name,
place and stead, and for its use and benefit, to sign, acknowledge, swear to, deliver, file or
record, at the appropriate public offices, any and all documents, certificates and instruments as
may be deemed necessary or desirable by the General Partner to carry out fully the provisions of
the Partnership Agreement and the Delaware Revised Uniform Limited Partnership Act in accordance
with their terms, including amendments thereto. This provision for power of attorney is coupled
with an interest and shall survive the dissolution of the Contributor, or the transfer by the
Contributor of any part or all of its OP Units.
9. SUCCESSORS AND ASSIGNS. The terms, conditions and covenants of this Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective nominees,
successors, beneficiaries and permitted assigns. Neither party hereto shall have any right to
assign this Agreement or its rights hereunder; provided, however, that FSG shall have the right to
designate one or more subsidiaries or affiliate entities to take title to the Project.
10. NO BROKERAGE. FSG and the Contributors represent to the other that it has not dealt
with any broker or agent in connection with this transaction.
11. MISCELLANEOUS.
11.1 Entire Agreement. This Agreement constitutes the entire understanding between
the parties with respect to the transaction contemplated herein, and all prior or contemporaneous
oral agreements, understandings, representations and statements, and all prior written agreements,
understandings, letters of intent and proposals are merged into this Agreement. Neither this
Agreement nor any provisions hereof may be waived, modified, amended, discharged or terminated
except by an instrument in writing signed by the party against which the enforcement of such
waiver, modification, amendment, discharge or termination is sought, and then only to the extent
set forth in such instrument.
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11.2 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
11.3 Partial Invalidity. The provisions hereof shall be deemed independent and
severable, and the invalidity or partial invalidity or enforceability of any one provision shall
not affect the validity of enforceability of any other provision hereof.
11.4 Expenses. Except and to the extent as otherwise expressly provided to the
contrary herein, each party shall each bear its own respective costs and expenses relating to the
transactions contemplated hereby, including fees and expenses of legal counsel or other
representatives for the services used, hired or connected with the proposed transactions mentioned
above.
11.5 Counterparts. This Agreement may be executed in any number of identical
counterparts, any of which may contain the signatures of less than all parties, and all of which
together shall constitute a single agreement.
11.6 Partial Execution. If this Agreement is executed by FSG and one or more, but
less than all, of the Contributors, this Agreement shall nevertheless be effective and binding upon
FSG and such Contributors as are parties to this Agreement as to the Contributed Interests held by
such Contributors, and the lack of joinder by one or more non-executing Contributors shall not
alter or impair the effectiveness of this Agreement upon the executing parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Contribution Agreement to be executed
as of the day and year first above written.
| FSG: | ||||||||
| FIRST STATES GROUP, L.P. | ||||||||
| By: | FIRST STATES GROUP, LLC, its general partner |
|||||||
| By: | ||||||||
President and General Counsel |
||||||||
| CONTRIBUTORS: | ||||||||
| ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III | ||||||||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | ||||||||
| ▇▇▇▇▇▇▇ ▇▇▇▇ | ||||||||
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| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||||||||
| ▇▇▇▇▇ ▇▇▇▇▇▇ | ||||||||
| MEADOW COURT TRUST | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Its: | ||||||||
| IRREVOCABLE AGREEMENT OF TRUST OF ▇▇▇▇▇ ▇. ▇▇▇▇ | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Its: | ||||||||
| ESTATE OF ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, III | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Its: | ||||||||
| L.D.D. INVESTMENT COMPANY | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Its: | ||||||||
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| HIDDEN ▇▇▇▇ TRUST | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Its: | ||||||||
| ARLINGTON CEMETERY GROUP | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Its: | ||||||||
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Exhibit A
| Purchase Price per Contribution Agreement, net of True-Up | $24,549,815 | |||||||||||||||||||||||
| Partnership | Percent of | Allocation of | Conversion to | |||||||||||||||||||||
| Interest | Retained Interest | Purchase Price | Multiplier | Cash Value | OP Units (at $10.00) | |||||||||||||||||||
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
5.01 | % | 45.50 | % | $ | 11,171,169 | 0.1235955 | $ | 1,380,706.30 | ▇▇▇,▇▇▇ | ||||||||||||||
▇▇▇▇▇▇ ▇▇▇▇▇ Trust |
0.81 | % | 7.36 | % | 1,806,117 | 0.1235955 | 223,227.96 | 22,323 | ||||||||||||||||
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
0.43 | % | 3.91 | % | 958,803 | 0.1235955 | 118,503.73 | 11,850 | ||||||||||||||||
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
0.39 | % | 3.54 | % | 869,612 | 0.1235955 | 107,480.13 | 10,748 | ||||||||||||||||
Irrevocable Agreement of
Trust of ▇▇▇▇▇ ▇. ▇▇▇▇ |
0.72 | % | 6.54 | % | 1,605,437 | 0.1235955 | 198,424.86 | 19,842 | ||||||||||||||||
Estate of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, III |
0.74 | % | 6.72 | % | 1,650,033 | 0.1235955 | 203,936.66 | 20,394 | ||||||||||||||||
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ |
0.48 | % | 4.36 | % | 1,070,292 | 0.1235955 | 132,283.24 | 13,228 | ||||||||||||||||
▇▇▇▇▇▇▇ ▇▇▇▇ |
0.32 | % | 2.91 | % | 713,528 | 0.1235955 | 88,188.83 | 8,819 | ||||||||||||||||
L.D.D. Investment Company |
0.25 | % | 2.27 | % | 557,444 | 0.1235955 | 68,897.52 | 6,890 | ||||||||||||||||
Hidden ▇▇▇▇ Trust |
0.73 | % | 6.63 | % | 1,627,735 | 0.1235955 | 201,180.76 | 20,118 | ||||||||||||||||
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
0.20 | % | 1.82 | % | 445,955 | 0.1235955 | 55,118.02 | 5,512 | ||||||||||||||||
▇▇▇▇▇ ▇▇▇▇▇▇ |
0.63 | % | 5.72 | % | 1,404,758 | 0.1235955 | 173,621.75 | 17,362 | ||||||||||||||||
Arlington Cemetery Group |
0.30 | % | 2.72 | % | 668,932 | 0.1235955 | 82,677.02 | 8,268 | ||||||||||||||||
| 11.01 | % | 100.00 | % | $ | 24,549,815 | $ | 3,034,247 | 303,425 | ||||||||||||||||