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<PAGE>
EXHIBIT 10.42
CONTRIBUTION AGREEMENT
(THE ATRIUM BUILDING)
BY AND BETWEEN
CARR CAPITAL REAL ESTATE INVESTMENTS, LLC
A VIRGINIA 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................................................................
10
5.1
Notices.............................................................
10
5.2 Entire Agreement; Modifications and Waivers; Cumulative
Remedies.... 10
5.3
Exhibits............................................................
11
5.4 Successors and
Assigns.............................................. 11
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 Capital Real Estate
Investments, LLC, a
Virginia limited liability company ("Contributor"); and Columbia
Equity, LP, a
Virginia limited partnership ("Acquirer").
RECITALS
A. Atrium Building, LLC, a Virginia limited liability company
(the "LLC")
is the owner of certain land located at 277 S. Washington Street
in Alexandria,
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 Atrium Building.
B. Carr Capital Atrium, LLC, a Virginia limited liability
company ("Carr
Atrium") is the record and beneficial owner of Fifteen and
00/100 percent (15%)
of the membership interests in the LLC.
C. Contributor is the record and beneficial owner of Six and
67/100
percent (6.67%) of the membership interests in Carr Atrium (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
Carr Atrium's operating agreement (the "Carr Atrium 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
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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 fourteen percent (14%) IRR (as
defined in the
LLC's operating agreement), based on a minimum of a six month
investment holding
period for Seller's Capital Contribution (as defined in Carr
Atrium 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.
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(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 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
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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 limited liability company
under the laws of
the Commonwealth of Virginia. 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
Membership
Interest on the date hereof and will have good title to the
Membership Interest
on the Closing Date (other than the Carr Atrium 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, p
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