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Exhibit 10.51
TABLE OF CONTENTS
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ARTICLE I CONTRIBUTION OF
PROPERTY............................................................1
I.1.
Contribution and Acquisition of Contributed
Property................................1
I.2.
Closing.............................................................................1
I.3.
Contributor
Representative..........................................................1
ARTICLE II EXCHANGE
AMOUNT.....................................................................2
II.1. Exchange
Amount.....................................................................2
ARTICLE III REPRESENTATIONS AND
WARRANTIES OF THE
CONTRIBUTORS..................................2
III.1. Organization and
Standing...........................................................2
III.2. Authorization; No
Conflicts.........................................................2
III.3. Binding
Obligations.................................................................3
III.4. No
Litigation.......................................................................3
III.5. Contributed
Property................................................................3
III.6. Securities Law
Matters..............................................................3
ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF ACADIA AND THE
REIT...............................5
IV.1. Organization and
Standing...........................................................5
IV.2. Authorization;
No
Conflicts.........................................................5
IV.3. Binding
Obligations.................................................................5
IV.4. No
Litigation.......................................................................5
IV.5. The
Units...........................................................................6
IV.6. No Tax
Audits.......................................................................6
IV.7. Tax
Reporting.......................................................................6
IV.8.
Capitalization......................................................................6
IV.9. Governmental
Consents and
Approvals.................................................6
IV.10. Absence of Certain
Changes or Events; Undisclosed Liabilities and
Agreements........6
ARTICLE V
COVENANTS...........................................................................9
V.1.
Contributors
Covenants..............................................................9
V.2.
Survival...........................................................................10
ARTICLE VI CONDITIONS PRECEDENT
TO THE
CLOSING................................................10
VI.1. Conditions to
Obligations of
Contributors..........................................10
VI.2. Conditions to
Obligations of
Acadia................................................11
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(continued)
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ARTICLE VII
DELIVERIES.........................................................................11
ARTICLE VIII SURVIVAL;
INDEMNIFICATION..........................................................13
VIII.1.
Survival...........................................................................13
VIII.2. Agreement of Contributors to
Indemnify.............................................13
VIII.3. Agreement of Acadia to
Indemnify...................................................13
VIII.4. Limitation of
Liability............................................................14
VIII.5. Conditions of
Indemnification......................................................14
ARTICLE IX INTENTIONALLY
OMITTED..............................................................15
ARTICLE X CONFIDENTIALITY;
TAX
MATTERS.......................................................15
X.1.
Confidentiality....................................................................15
X.2. No
Representation with Regard to Tax
Treatment.....................................16
ARTICLE XI
MISCELLANEOUS......................................................................16
XI.1. Additional
Actions and
Documents...................................................16
XI.2.
Expenses...........................................................................16
XI.3.
Assignment.........................................................................17
XI.4. Entire
Agreement;
Amendment........................................................17
XI.5.
Waiver.............................................................................17
XI.6.
Severability.......................................................................17
XI.7. Governing
Law......................................................................17
XI.8.
Notices............................................................................18
XI.9.
Headings...........................................................................19
XI.10. Execution in
Counterparts..........................................................19
XI.11. Attorneys'
Fees....................................................................19
XI.12. Waiver of Jury
Trial...............................................................19
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EXHIBITS
Exhibit A - Form of Registration Rights
Agreement
Exhibit B - Form of Investor
Questionnaire
Exhibit C - Form of Certificate of
Units
Exhibit D - Acadia Partnership
Agreement
Exhibit E - Form of Assignment of
Contributed Property
Exhibit F - Form of Acadia's Opinion of
Counsel
Exhibit G - Form of Contributors' Opinion
of Counsel
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AGREEMENT OF CONTRIBUTION
BY AND AMONG
ACADIA REALTY LIMITED PARTNERSHIP,
ACADIA REALTY TRUST,
KLAFF REALTY, LP
AND
KLAFF REALTY, LIMITED
FEBRUARY 15, 2005
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AGREEMENT OF CONTRIBUTION
THIS AGREEMENT OF CONTRIBUTION (the "Agreement") is entered
into
as of February 15, 2005 by and among Acadia
Realty Limited Partnership, a
Delaware limited partnership ("Acadia"),
Acadia Realty Trust, a Maryland real
estate investment trust (the "REIT"), Klaff
Realty, LP, a Delaware limited
partnership, and Klaff Realty, Limited, an
Illinois corporation (each a
"Contributor," and collectively, the
"Contributors").
RECITALS:
A. The
Contributors are engaged in the retail management
services business (the "Retail Services
Business") and desire to become limited
partners in Acadia by contributing to
Acadia assets, including goodwill, related
to the Retail Services Business, as a going
concern (the "Contributed
Property"), and Acadia has agreed to admit
the Contributors as limited partners.
B. Acadia and
Contributors desire to enter into the
Agreement to set forth certain additional
terms and conditions upon which
Contributors will transfer the Contributed
Property to Acadia.
ARTICLE I
CONTRIBUTION OF PROPERTY
I.1.
CONTRIBUTION AND ACQUISITION OF CONTRIBUTED PROPERTY
Subject to the terms and conditions hereof, Contributors agree
to contribute to Acadia, and Acadia agrees
to acquire and accept from
Contributors, all of Contributors' right,
title and interest in and to the
Contributed Property in exchange for common
units of limited partnership
interest in Acadia with rights, preferences
and privileges as set forth in the
partnership agreement of Acadia (the
"Units") (the foregoing, together with all
other transactions contemplated by this
Agreement being referred to herein as
the "Contribution"). The Contributors have
provided, and Acadia acknowledges
receipt of, the Contributed Property as of
the Closing Date. The Contribution
shall be consummated, as set forth in
Article II hereof, in a transaction
intended to qualify for nonrecognition of
gain to Contributors pursuant to
Section 721 of the Internal Revenue Code of
1986, as amended (the "Code").
I.2.
CLOSING
The closing of the transactions contemplated by this Agreement
(the "Closing") shall be deemed to have
occurred on February 15, 2005 (the
"Closing Date") at the offices of Acadia,
upon satisfaction or waiver of the
conditions set forth in Article VI
hereof.
I.3.
CONTRIBUTOR REPRESENTATIVE
The Contributors hereby appoint Hersch M. Klaff as their
representative in connection with this
Agreement (the "Contributor
Representative") and with respect to
any
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decisions to be made by Contributors under
this Agreement, Acadia and the REIT
may rely exclusively on instructions from
the Contributor Representative.
ARTICLE II
EXCHANGE AMOUNT
II.1. EXCHANGE
AMOUNT
(a)
Units Delivered at Closing. In exchange for the
contribution of the Contributed Property,
the Contributors shall receive in the
aggregate, at the Closing, 250,000 Units.
Each Contributor shall be entitled to
receive the number of Units set forth in
Schedule 1 hereto.
(b)
Distribution of Units. At the Closing, Acadia shall
issue the Units to the Contributors in
accordance with written instructions
provided to Acadia by the Contributor
Representative at least two business days
prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
Contributors jointly and severally represent and warrant to
Acadia as follows:
III.1. ORGANIZATION
AND STANDING
Each Contributor is a limited partnership, corporation or a
limited liability company, duly formed,
validly existing and in good standing
under the laws of its jurisdiction of
organization and is duly qualified to do
business in each jurisdiction where the
conduct of its business requires
qualification. Each Contributor has the
full and unrestricted power and
authority to own, operate and lease its
assets, to carry on its business as
currently conducted, to execute and deliver
this Agreement, and each other
agreement, instrument or document relating
hereto or contemplated hereby or
thereby (the "Other Agreements") to which
it is a party and to carry out the
transactions contemplated hereby or
thereby.
III.2. AUTHORIZATION;
NO CONFLICTS
The execution and delivery of this Agreement and the Other
Agreements by each Contributor and the
performance by each Contributor of its
covenants and agreements under this
Agreement and the Other Agreements have
been, or at Closing will have been, duly
authorized by all necessary action on
the part of such Contributor. The
execution, delivery and performance by each
Contributor of this Agreement and each
Other Agreement to which such Contributor
is a party, the fulfillment of and
compliance with the respective terms and
provisions hereof and thereof, and the
consummation by such Contributor of the
transactions contemplated hereby and
thereby, do not and will not: (a) conflict
with, or violate any provision of the
organization documents of any Contributor;
(b) conflict with, or violate any provision
of, any statute, law, ordinance,
regulation, rule, order, writ or injunction
having applicability to any
Contributor, any of its assets or the
Contributed Property; (c) conflict with,
result in any breach of, or constitute
a
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default under the Contributed Property; (d)
result in or require the creation or
imposition of or result in the acceleration
of any indebtedness or of any
encumbrance of any nature upon, or with
respect to, the Contributed Property;
except (in the case of clauses (b), (c) and
(d) above) for such conflicts,
violations, breaches or defaults as will
not have a material adverse effect on
the Contributed Property or the business or
financial condition of any
Contributor or the consummation of this
transaction.
III.3. BINDING
OBLIGATIONS
This Agreement and each Other Agreement executed and delivered
by each Contributor on or prior to the date
hereof constitutes a valid and
binding obligation of such Contributor,
enforceable in accordance with its
terms; and each Other Agreement to be
executed by each Contributor pursuant
hereto or thereto, when executed and
delivered in accordance with the provisions
hereof or thereof, shall be a valid and
binding obligation of such Contributor,
enforceable in accordance with its
terms.
III.4. NO
LITIGATION
There are no actions, suits, claims, arbitrations, proceedings
or investigations pending or, to the
knowledge of any Contributor, threatened
against, affecting or involving the
Contributed Property, any Contributor or its
businesses or assets, or the transactions
contemplated by this Agreement, at law
or in equity, or before or by any court,
arbitrator or governmental authority,
domestic or foreign, that could reasonably
be expected to have a material
adverse effect on the Contributed Property
or the business or financial
condition of any Contributor or to
challenge or impair the ability of any
Contributor to consummate the
Contribution.
III.5. CONTRIBUTED
PROPERTY
(a)
The Contributed Property is wholly owned by the
Contributors, free and clear of all liens
and encumbrances.
(b)
The Contributed Property is in full force and effect and
is the legal, valid and binding obligation
of each of the parties thereto,
enforceable against such parties in
accordance with its terms. None of the
Contributors is in default, and there
exists no condition or act which with the
giving of notice or passage of time or
otherwise will cause a default with
respect to the Contributed Property. Except
as otherwise disclosed to Acadia, no
Fees under the Contributed Property for any
period after the Closing Date shall
have been paid prior to the Closing Date.
In no event, however, do the
Contributors represent, warrant, covenant
or guaranty the payment of any Fees to
Acadia or the amount of any Fees that
Acadia may receive in the future.
III.6. SECURITIES LAW
MATTERS
(a)
Each Contributor acknowledges that Acadia intends the
offer and issuance of the Units to be
exempt from registration under the
Securities Act and applicable state
securities laws by virtue of (i) the status
of each Contributor and each equity owner
of such Contributor as an Accredited
Investor (as defined below), and (ii)
Section 4(2) of the Securities
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Act of 1933, as amended (the "Securities
Act") and/or Regulation D promulgated
under Section 4(2) of the Securities Act
("Regulation D"), and that Acadia will
rely in part upon the representations and
warranties made by each Contributor in
this Agreement in making the determination
that the offer and issuance of the
Units qualify for exemption under Rule 506
of Regulation D as an offer and sale
only to Accredited Investors (as defined
below).
(b)
Each Contributor, each of such Contributor's equity
owners and each other person or entity who
has a right to vote upon or approve
the transactions contemplated hereby or who
will receive a distribution of Units
pursuant to Section II.1(b) are "accredited
investors" as defined in Regulation
501(a) under Regulation D ("Accredited
Investors"). Each Contributor has
provided to Acadia a true, correct and
complete copy of such Contributor's
organizational documents.
(c)
Each Contributor and each other person or entity who
will receive a distribution of Units
pursuant to Section II.1(b) will acquire
the Units for their own account and not
with a view to or for sale in connection
with any "distribution" thereof within the
meaning of the Securities Act.
(d) Each Contributor
and its equity owners have sufficient
knowledge and experience in financial, tax
and business matters to enable them
to evaluate the merits and risks of
investment in the Units. Each Contributor
and its equity owners have the ability to
bear the economic risk of acquiring
the Units. Each Contributor acknowledges
that (i) the transactions contemplated
by this Agreement and the Other Agreements
involve complex tax consequences for
each Contributor and its equity owners, and
each Contributor and its equity
owners are relying solely on the advice of
their own tax advisors in evaluating
such consequences, (ii) neither Acadia nor
the REIT has made (or shall be deemed
to have made) any representations or
warranties as to the tax consequences of
such transaction to any Contributor or any
of its equity owners, and (iii)
references in this Agreement to the
intended tax effect of the Contribution and
the other matters described herein shall
not be deemed to imply any
representation by Acadia or the REIT as to
a particular tax effect that may be
obtained by any Contributor or its equity
owners. Each Contributor and its
equity owners remain solely responsible for
all tax matters relating to each
Contributor and its equity owners.
(e) Each Contributor
and each other person or entity who
will receive a distribution of Units
pursuant to Section II.1(b) has been
supplied with, or had access to,
information to which a reasonable investor
would attach significance in making an
investment decision to acquire the Units
and any other information they have
requested. Each Contributor and each other
person or entity who will receive a
distribution of Units pursuant to Section
II.1(b) has had an opportunity to ask
questions of and receive information and
answers from Acadia and the REIT concerning
Acadia, the REIT, the Units, and the
common shares of beneficial interest
("Common Shares") into which the Units may
be exchanged, and to assess and evaluate
any information supplied to them by
Acadia or the REIT, and all such questions
have been answered and all such
information has been provided to their full
satisfaction.
(f)
Each Contributor and each other person or entity who
will receive a distribution of Units
pursuant to Section II.1(b) acknowledges
that the Units are not registered
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under the Securities Act or any state
securities laws and cannot be resold
without registration thereunder or
exemption therefrom.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACADIA AND THE REIT
A. Acadia
Representations. Acadia represents and warrants
to Contributors as follows:
IV.1.
ORGANIZATION AND STANDING
Acadia is a limited partnership duly organized, validly
existing
and in good standing under the laws of the
State of Delaware and has the full
and unrestricted partnership power and
authority to own, operate and lease its
assets and to carry on its business as
currently conducted. Acadia is duly
qualified to conduct business as a foreign
limited partnership and is in good
standing in each jurisdiction where the
nature of the business conducted by
Acadia or the character of the assets
owned, leased or otherwise held by it
makes any such qualification necessary,
except where the failure to be so
qualified would not have a material adverse
effect upon the business of Acadia
as currently conducted.
IV.2.
AUTHORIZATION; NO CONFLICTS
The execution, delivery and performance by Acadia of this
Agreement and each Other Agreement to which
Acadia is a party, the fulfillment
of and compliance with the respective terms
and provisions hereof and thereof,
and the consummation by Acadia of the
transactions contemplated hereby and
thereby, do not and will not: (a) conflict
with, or violate any provisions of,
the certificate of limited partnership or
agreement of limited partnership of
Acadia; (b) conflict with, or violate any
provision of, any statute, law,
ordinance, regulation, rule, order, writ or
injunction having applicability to
Acadia or any of its assets; or (c)
conflict with, result in any breach of, or
constitute a default under any agreement to
which Acadia is a party or by which
it or any of its assets are bound; except
(in the case of clauses (b) and (c)
above) for such conflicts, violations,
breaches or defaults as will not have a
material adverse effect on the business or
financial condition of Acadia or the
consummation of the Acquisition.
IV.3. BINDING
OBLIGATIONS
This Agreement and each Other Agreement executed and delivered
by Acadia constitutes a valid and binding
obligation of Acadia, enforceable in
accordance with its terms; and each Other
Agreement to be executed by Acadia
pursuant hereto or thereto, when executed
and delivered in accordance with the
provisions hereof or thereof, shall be a
valid and binding obligation of Acadia,
enforceable in accordance with its
terms.
IV.4. NO
LITIGATION
There are no actions, suits, claims, arbitrations, proceedings
or investigations pending or, to the
knowledge of Acadia, threatened against,
affecting or involving Acadia or its
business or assets or the transactions
contemplated by this Agreement, at law or
in equity, or
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before or by any court, arbitrator or
governmental authority, domestic or
foreign, that could reasonably be expected
to have a material adverse effect on
the business or financial condition of
Acadia or challenge or impair the ability
of Acadia to consummate the
Contribution.
IV.5. THE
UNITS
At the Closing, the Units to be issued to Contributors pursuant
to Article II hereof will be duly
authorized for issuance by Acadia to
Contributors and upon issuance in
accordance with this Agreement will be validly
issued, fully paid and non-assessable
IV.6. NO TAX
AUDITS
Acadia is not a party to any pending action, audit or
proceeding
by any taxing authority for any assessment
or collection of any federal, state
or local taxes.
IV.7. TAX
REPORTING
Acadia will treat the transfer of the Contributed Property to
Acadia for federal income tax purposes as a
contribution that qualifies for
nonrecognition of gain pursuant to Section
721 of the Code. Acadia, however,
makes no representation or warranty that
these positions will be respected.
IV.8.
CAPITALIZATION
As of September 30, 2004, 29,691,479 common units of limited
partnership ("Common OP Units") were issued
and outstanding, of which 29,299,224
Common OP Units are held by the REIT and
392,255 Common OP Units are held by the
limited partners of Acadia. In addition,
1,580 Series A Preferred Units are
issued and outstanding with an aggregate
liquidation preference of $1,580,000
and 4,000 Series B Preferred OP Units
issued and outstanding with aggregate
liquidation preference of $4,000,000 and
will rank pari passu with the Series B
Preferred Units.
IV.9.
GOVERNMENTAL CONSENTS AND APPROVALS
Acadia has obtained each and every consent, approval, permit or
order of, and has made each and every
filing with, any individual, partnership,
corporation, trust or other entity,
government agency or political subdivision
required to be obtained or made in
connection with: (A) its execution, delivery
and performance of this Agreement and (B)
its consummation of the transactions
contemplated hereby.
IV.10. ABSENCE OF
CERTAIN CHANGES OR EVENTS; UNDISCLOSED
LIABILITIES AND AGREEMENTS
Since September 30, 2004:
(a)
there has not been any material adverse change in the
financial position or results of operations
of Acadia from that reflected in the
consolidated financial statements of the
REIT as of September 30, 2004, or any
material adverse change in the business,
assets or
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prospects of Acadia (including the
imposition of any material adverse regulatory
requirements or the loss of any material
permits, licenses or franchises).
(b)
there has not been any material damage, destruction or
other casualty loss with respect to
property owned or leased by Acadia not
covered by insurance.
(c)
Acadia has not conducted its business otherwise than in
the ordinary course.
B.
REIT
Representations. The REIT hereby represents and
warrants to the Contributors as
follows:
(i)
Organization, Good Standing, Corporate Power and
Authorization. The REIT is a real estate investment trust duly
organized, validly existing and in good standing under the laws of
the
State of Maryland and has full right, power and authority to enter
into
this Agreement and to assume and perform all of its obligations.
The
REIT is duly qualified to conduct business as a foreign real
estate
investment trust and is in good standing in each jurisdiction where
the
nature of the business conducted by the REIT or the character of
the
assets owned, leased or otherwise held by it makes any such
qualifica
