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EXHIBIT 10.3
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...........................................................................
2
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................................................. 8
ARTICLE IV Closing and Closing
Documents...............................................................
9
4.1
Closing.................................................................................
9
4.2 Contributor's
Deliveries................................................................
9
4.3 Acquirer's
Deliveries...................................................................
10
4.4 Fees and Expenses; Closing
Costs........................................................
10
4.5
Adjustments.............................................................................
10
ARTICLE V
Miscellaneous................................................................................
12
5.1
Notices.................................................................................
12
5.2 Entire Agreement; Modifications and Waivers; Cumulative
Remedies........................ 12
5.3
Exhibits................................................................................
13
5.4 Successors and
Assigns..................................................................
13
5.5 Article
Headings........................................................................
13
5.6 Governing
Law...........................................................................
13
5.7
Counterparts............................................................................
13
5.8
Survival................................................................................
13
5.9
Severability............................................................................
13
5.10 Attorneys'
Fees.........................................................................
13
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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 12th day
of October, 2004 by and between Carr Holdings, LLC, a Maryland
limited liability
company ("Contributor"); and Columbia Equity, LP, a Virginia
limited partnership
("Acquirer").
RECITALS
A. Carr Capital Greenbriar, LLC, a Virginia limited liability
company
(the "LLC") is the owner of certain land located in Fairfax
County, 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 Greenbriar office building.
B. Contributor is the record and beneficial owner of 4.34%
("Contributor's Share") of the membership interests in the LLC
(the "Membership
Interest"). Contributor desires to contribute the Membership
Interest to
Acquirer, on the terms and conditions hereinafter set forth.
C. Acquirer desires to acquire the Membership Interest from
Contributor, on the terms and conditions hereinafter set
forth.
D. Immediately prior to such contribution and acquisition of
the
Membership Interest, Carr Capital/Holualoa Greenbriar, LLC, a
Virginia limited
liability company, shall liquidate and each of its members
(collectively, the
"Liquidating LLC Members"), Holualoa Greenbriar, LLC, an Arizona
limited
liability company and Carr Capital Real Estate Investments, LLC,
a Virginia
limited liability company, (collectively, the "Liquidating LLC
Members") shall
be admitted as members of the LLC, with a Fifteen and 79/100
percent (15.79%)
membership interest in the LLC and a 53/100 percent (.53%)
membership interest
in the LLC, respectively (the "Liquidation Transaction").
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 the LLC's operating agreement (the "LLC
Operating
Agreement").
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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) the
amount of Net Cash Flow (as defined in the LLC Operating
Agreement) that
Contributor would be entitled to receive pursuant to Section 3.1
of the LLC
Operating Agreement upon a hypothetical sale of the Property for
a sale price of
Fifteen Million Three Hundred Thousand Dollars ($15,300,000)
less the principal
of and accrued interest on the mortgage loan secured by the
Property (the
"Mortgage Loan"), (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:
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(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 assume
and 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 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
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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.
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 Maryland limited liability
company.
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
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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
Membership
Interest on the date hereof and will have good title to the
Membership Interest
on the Closing Date (other than the LLC Operating Agreement),
(B) the Membership
Interest on the date hereof is, and on the Closing Date will be,
free and clear
of all liens, encumbrances, pledges, voting agreements and
security interests
whatsoever (other than the LLC Operating Agreement), and (C)
Contributor has not
granted any other person or entity an option to purchase or a
right of first
refusal upon the Membership Interest nor are there any
agreements or
understandings between Contributor and any other person or
entity with respect
to the disposition of the Membership Interest (other than the
LLC Operating
Agreement).
(e) No Consents. Each consent, approval, authorization,
order,
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