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EXHIBIT 10.8
CONTRIBUTION AGREEMENT
BY AND BETWEEN
CARR HOLDINGS, LLC
A MARYLAND LIMITED LIABILITY COMPANY,
AS CONTRIBUTOR
AND
COLUMBIA EQUITY, LP,
A VIRGINIA LIMITED PARTNERSHIP,
AS ACQUIRER
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TABLE OF CONTENTS
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ARTICLE I THE
CONTRIBUTION........................................................................................
1
1.1
Contribution of Membership
Interest........................................................
1
1.2
Consideration..............................................................................
1
1.3
Redemption Rights for
Units................................................................
2
1.4
Tax Consequences to
Contributor............................................................
2
ARTICLE II
REPRESENTATIONS AND
COVENANTS..........................................................................
2
2.1
Representations by
Acquirer................................................................
2
2.2
Representations by
Contributor.............................................................
4
2.3
Covenants of
Acquirer......................................................................
6
2.4
Covenants of
Contributor...................................................................
6
ARTICLE III Conditions
Precedent to the
Closing...................................................................
7
3.1
Conditions to Acquirer's
Obligations.......................................................
7
3.2
Conditions to Contributor's
Obligations....................................................
7
ARTICLE IV Closing and
Closing
Documents..........................................................................
8
4.1
Closing....................................................................................
8
4.2
Contributor's
Deliveries...................................................................
8
4.3
Acquirer's
Deliveries......................................................................
9
4.4
Fees and Expenses; Closing
Costs...........................................................
9
4.5
Adjustments................................................................................
9
ARTICLE V
Miscellaneous...........................................................................................
9
5.1
Notices....................................................................................
9
5.2
Entire Agreement; Modifications and Waivers; Cumulative
Remedies........................... 10
5.3
Exhibits...................................................................................
10
5.4
Successors and
Assigns.....................................................................
10
5.5
Article
Headings...........................................................................
11
5.6
Governing
Law..............................................................................
11
5.7
Counterparts...............................................................................
11
5.8
Survival...................................................................................
11
5.9
Severability...............................................................................
11
5.10
Attorneys'
Fees............................................................................
11
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EXHIBITS
A
Assignment and Assumption Agreement
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CONTRIBUTION AGREEMENT
THIS
CONTRIBUTION AGREEMENT (this "Agreement") is made as of this 31st
day
of January, 2005 by and between Carr Holdings, LLC, a Maryland
limited liability
company ("Contributor"); and Columbia Equity, LP, a Virginia
limited partnership
("Acquirer").
RECITALS
A.
Meadows
IV, LLC, a Virginia limited liability company (the "LLC") is
the owner of certain land located in Chantilly, Virginia (the
"Land") and the
office building and related improvements located thereon (the
"Improvements"),
which Land and Improvements (collectively, the "Property") are more
commonly
known as the Meadows IV Building.
B.
Meadows IV
Investors, LLC, a Virginia limited liability company
("Meadows IV Investors") is the direct and indirect owner of One
Hundred and
00/100 percent (100.00%) of the membership interests in the
LLC.
C.
Contributor is the record and beneficial owner of Five and
91/100
percent (5.91%) of the membership interests in Meadows IV Investors
(the
"Membership Interest").
D.
Contributor desires to contribute the Membership Interest to
Acquirer, on the terms and conditions hereinafter set forth.
E.
Acquirer
desires to acquire the Membership Interest from
Contributor, on the terms and conditions hereinafter set forth.
AGREEMENT
NOW,
THEREFORE, for and in consideration of the mutual covenants
herein
contained, the parties hereto agree as follows:
ARTICLE I
THE CONTRIBUTION
1.1
Contribution of
Membership Interest. Contributor agrees to
contribute, transfer, assign and convey the Membership Interest to
Acquirer, and
Acquirer agrees to acquire and accept transfer of the Membership
Interest
pursuant to the terms and conditions set forth in this Agreement.
The Membership
Interest shall be transferred to Acquirer free and clear of all
liens,
encumbrances, security interests, prior assignments or conveyances,
conditions,
restrictions, voting agreements, claims, and any other matters
affecting title
thereto (other than LLC's operating agreement (the "LLC Operating
Agreement")).
1.2
Consideration.
The total consideration (the "Consideration") for
which Contributor agrees to contribute and assign the Membership
Interest to
Acquirer, and which Acquirer agrees to pay or deliver to
Contributor, subject to
the terms of this Agreement, shall be the issuance to Contributor
of a number of
units of limited partnership interests in Acquirer ("Units") equal
to (a) a
value of the Membership Interest providing the Contributor with a
twenty percent
(20%) IRR (as defined in the Meadows IV Investors operating
agreement (the
"Meadows
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IV Investors Operating Agreement")), based on a minimum of a six
month
investment holding period for Seller's Capital Contribution (as
defined in
Meadows IV Investors Operating Agreement), (b) divided by the price
per share at
which the common stock, $.01 par value per share, (the "Common
Stock") of
Columbia Equity Trust, Inc., a Maryland corporation and the general
partner of
Acquirer (the "REIT"), is offered to the public in the underwritten
initial
public offering of the Common Stock (the "IPO"). On the Closing
Date (as defined
below), the Units shall be issued to Contributor. Upon the request
of
Contributor, Acquirer shall issue certificates reflecting
Contributor's
ownership of Units. The certificates evidencing the Units will bear
appropriate
legends indicating (i) that the Units have not been registered
under the
Securities Act of 1933, as amended ("Securities Act"), and (ii)
that Acquirer's
Amended and Restated Agreement of Limited Partnership (the
"Partnership
Agreement") restricts the transfer of the Units. Upon receipt of
the Units and
execution and delivery of the Partnership Agreement, Contributor
shall become a
limited partner of Acquirer.
1.3
Redemption
Rights for Units. Each Unit shall be redeemable, at the
option of the holder, in accordance with, but subject to the
restrictions
contained in, the Partnership Agreement; provided, however, that
such redemption
option may not be exercised prior to the first anniversary of the
Closing Date.
1.4
Tax Consequences
to Contributor. Notwithstanding anything to the
contrary contained in this Agreement, including without limitation
the use of
words and phrases such as "sell," "sale," purchase," and "pay," the
parties
hereto acknowledge and agree that it is their intent that the
transaction
contemplated hereby be treated for federal income tax purposes as
the
contribution of the Membership Interest by Contributor to Acquirer
in exchange
for Units pursuant to Section 721 of the Internal Revenue Code of
1986, as
amended (the "Code"), and not as a transaction in which Contributor
is acting
other than in its capacity as a prospective partner of
Acquirer.
ARTICLE II
REPRESENTATIONS AND COVENANTS
2.1
Representations
by Acquirer. Acquirer hereby represents and warrants
unto Contributor that the following statements are true, correct,
and complete
in every material respect as of the date of this Agreement and will
be true,
correct, and complete as of the Closing Date:
(a) Organization
and Power. Acquirer is duly organized and validly
existing, under the laws of the Commonwealth of Virginia, and has
full right,
power, and authority to enter into this Agreement and to perform
all of its
obligations under this Agreement; and, the execution and delivery
of this
Agreement and the performance by Acquirer of its obligations under
this
Agreement have been duly authorized by all requisite action of
Acquirer and
require no further action or approval of Acquirer's partners or of
any other
individuals or entities in order to constitute this Agreement as a
binding and
enforceable obligation of Acquirer.
(b)
Noncontravention. Neither the entry into nor the performance
of, or compliance with, this Agreement by Acquirer has resulted, or
will result,
in any violation of, or default under, or result in the
acceleration of, any
obligation under the Partnership Agreement, or
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any mortgage, indenture, lien agreement, note, contract, permit,
judgment,
decree, order, restrictive covenant, statute, rule, or regulation
applicable to
Acquirer.
(c) Litigation.
There is no action, suit, or proceeding, pending
or known to be threatened, against or affecting Acquirer in any
court or before
any arbitrator or before any federal, state, municipal, or other
governmental
department, commission, board, bureau, agency or instrumentality
which (i) in
any manner raises any question affecting the validity or
enforceability of this
Agreement, (ii) would reasonably be expected to materially and
adversely affect
the business, financial position, or results of operations of
Acquirer, or (iii)
would reasonably be expected to materially and adversely affect the
ability of
Acquirer to perform its obligations hereunder, or under any
document to be
delivered pursuant hereto.
(d) Units
Validly Issued. The Units, when issued, will have been
duly and validly authorized and issued, free of any preemptive or
similar
rights, and will be fully paid and nonassessable, without any
obligation to
restore capital except as required by the Virginia Revised Uniform
Limited
Partnership Act (the "Limited Partnership Act"). Upon execution and
delivery of
the Partnership Agreement by Contributor, Contributor shall be
admitted as a
limited partner of Acquirer as of the Closing Date and shall be
entitled to all
of the rights and protections of a limited partner under the
Limited Partnership
Act and the provisions of the Partnership Agreement, with the same
rights,
preferences, and privileges as all other limited partners on a pari
passu basis.
(e) Consents.
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
Acquirer has been obtained.
(f) Bankruptcy
with respect to Acquirer. No Act of Bankruptcy has
occurred with respect to Acquirer. As used herein, "Act of
Bankruptcy" shall
mean if a party hereto shall (A) apply for or consent to the
appointment of, or
the taking of possession by, a receiver, custodian, trustee or
liquidator of
itself or of all or a substantial part of its property, (B) admit
in writing its
inability to pay its debts as they become due, (C) make a general
assignment for
the benefit of its creditors, (D) file a voluntary petition or
commence a
voluntary case or proceeding under the Federal Bankruptcy Code (as
now or
hereafter in effect), (E) be adjudicated bankrupt or insolvent, (F)
file a
petition seeking to take advantage of any other law relating to
bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment
of debts,
(G) fail to controvert in a timely and appropriate manner, or
acquiesce in
writing to, any petition filed against it in an involuntary case or
proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect),
or (H) take
any action for the purpose of effecting any of the foregoing.
(g) Brokerage
Commission. Acquirer has not engaged the services
of, nor has it or will it or Contributor become liable to, any real
estate
agent, broker, finder or any other person or entity for any
brokerage or
finder's fee, commission or other amount with respect to the
transactions
described herein on account of any action by Acquirer. Acquirer
hereby agrees to
indemnify and hold Contributor and its employees, directors,
members, partners,
affiliates and agents harmless against any claims, liabilities,
damages or
expenses arising out of a breach of the foregoing. This
indemnification shall
survive Closing or any termination of this Agreement.
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2.2
Representations
by Contributor. Contributor hereby represents and
warrants unto Acquirer that each and every one of the following
statements is
true, correct, and complete in every material respect as of the
date of this
Agreement and will be true, correct, and complete as of the Closing
Date:
(a) Organization
and Power. Contributor is duly organized, validly
existing, and in good standing as a limited liability company under
the laws of
the State of Maryland. Contributor has full right, power, and
authority to enter
into this Agreement and to assume and perform all of its
obligations under this
Agreement; and the execution and delivery of this Agreement and the
performance
by Contributor of its obligations hereunder have been duly
authorized by all
requisite action of Contributor and require no further action or
approval of
Contributor's members or managers or of any other individuals or
entities in
order to constitute this Agreement as a binding and enforceable
obligation of
Contributor.
(b)
Noncontravention. Neither the entry into nor the performance
of, or compliance with, this Agreement by Contributor has resulted,
or will
result, in any violation of, or default under, or result in the
acceleration of,
any obligation under any limited liability company agreement,
operating
agreement, regulation, mortgage, indenture, lien agreement, note,
contract,
permit, judgment, decree, order, restrictive covenant, statute,
rule, or
regulation applicable to Contributor or to the Membership
Interest.
(c) Litigation.
There is no action, suit, claim, or proceeding
pending or threatened against or affecting Contributor or the
Membership
Interest in any court, or before any arbitrator, or before any
federal, state,
municipal or other governmental department, commission, board,
bureau, agency or
instrumentality which (A) in any manner raises any question
affecting the
validity or enforceability of this Agreement, (B) would reasonably
be expected
to materially and adversely affect the business, financial position
or results
of operations of Contributor, (C) would reasonably be expected to
materially and
adversely affect the ability of Contributor to perform its
obligations
hereunder, or under any document to be delivered pursuant hereto,
(D) would
reasonably be expected to create a lien on the Membership Interest,
any part
thereof, or any interest therein, or (E) would reasonably be
expected to
adversely affect the Membership Interest, any part thereof, or any
interest
therein.
(d) Good Title.
(A) Contributor has good title to the Membe
