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 26 th 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
”).
A. Owner is
the owner of a property commonly referred to as 123 S. Broad St.,
Philadelphia, Pennsylvania.
B. By letter
dated October 14, 2005, FSG 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).
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:
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.
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.
3.1 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 .
4.1.1 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 www.af
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