EXHIBIT 10.4 MEMBERSHIP INTEREST SALE AGREEMENT BY AND BETWEEN HOLUALOA GREENBRIAR, LLC, AN ARIZONA LIMITED LIABILITY COMPANY, AS SELLER AND COLUMBIA EQUITY LP, A VIRGINIA LIMITED PARTNERSHIP, AS PURCHASER

 

<PAGE>

 

                                                                    EXHIBIT 10.4

 

                       MEMBERSHIP INTEREST SALE AGREEMENT

 

                                 BY AND BETWEEN

 

                            HOLUALOA GREENBRIAR, LLC,

                      AN ARIZONA LIMITED LIABILITY COMPANY,

 

                                    AS SELLER

 

                                       AND

 

                               COLUMBIA EQUITY LP,

                         A VIRGINIA LIMITED PARTNERSHIP,

 

                                  AS PURCHASER

 

<PAGE>

 

                                TABLE OF CONTENTS

 

<TABLE>

<S>                                                                                                              <C>

ARTICLE I  THE SALE.......................................................................................        1

 

     1.1    Sale of Membership Interest...................................................................        1

     1.2    Purchase Price................................................................................        2

 

ARTICLE II  REPRESENTATIONS AND COVENANTS.................................................................        2

 

     2.1    Representations by Purchaser..................................................................        2

     2.2    Representations by Seller.....................................................................        3

     2.3    Covenants of Purchaser........................................................................        4

     2.4    Covenants of Seller...........................................................................        5

 

ARTICLE III  Conditions Precedent to the Closing..........................................................        6

 

     3.1    Conditions to Purchaser's Obligations.........................................................        6

     3.2    Conditions to Seller's Obligations............................................................        6

 

ARTICLE IV  Closing and Closing Documents.................................................................        7

 

     4.1    Closing.......................................................................................        7

     4.2    Seller's Deliveries...........................................................................        7

     4.3    Purchaser's Deliveries........................................................................        8

     4.4    Fees and Expenses; Closing Costs..............................................................        8

     4.5    Adjustments...................................................................................        8

 

ARTICLE V  Miscellaneous..................................................................................        9

 

     5.1    Notices......................................................................................         9

     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..............................................................................        12

</TABLE>

 

EXHIBITS

     A      Assignment

 

<PAGE>

 

                       MEMBERSHIP INTEREST SALE AGREEMENT

 

      THIS MEMBERSHIP INTEREST SALE AGREEMENT (this "Agreement") is made as of

this 12th day of October, 2004 by and between Holualoa Greenbriar, LLC, an

Arizona limited liability company ("Seller"); and Columbia Equity, LP, a

Virginia limited partnership ("Purchaser").

 

                                    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.    Carr Capital/Holualoa Greenbriar, LLC, a Virginia limited liability

company (the "Liquidating LLC") is the record and beneficial owner of Sixteen

and 32/100 percent (16.32%) of the membership interests in the LLC.

 

      C.    Seller is the record and beneficial owner of ninety-six and 79/100

percent (96.77%) of the membership interests in the Liquidating LLC.

 

      D.    The members of the Liquidating LLC, Seller and Carr Capital Real

Estate Investments, LLC, a Virginia limited liability company, ("Carr" and

collectively with Seller, the "Liquidating LLC Members") intend to liquidate the

Liquidating LLC and each of the Liquidating LLC Members, shall be admitted as

members of the LLC, with Seller receiving a Fifteen and 79/100 percent (15.79%)

("Seller's Share") membership interest in the LLC (the "Membership Interest")

and Carr receiving a 53/100 percent (.53%) membership interest in the LLC (the

"Liquidation Transaction"). Seller desires to sell the Membership Interest to

Purchaser, on the terms and conditions hereinafter set forth.

 

      E.    Purchaser desires to purchase the Membership Interest from Seller,

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 SALE

 

      1.1   Sale of Membership Interest. Seller agrees to sell, transfer, assign

and convey the Membership Interest to Purchaser, and Purchaser agrees to

purchase 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 Purchaser free and clear of all liens, encumbrances,

 

                                      -1-

<PAGE>

 

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")).

 

      1.2   Purchase Price. The purchase price (the "Purchase Price") for which

Seller agrees to sell and assign the Membership Interest to Purchaser, and which

Purchaser agrees to pay to Seller, subject to the terms of this Agreement, shall

be equal to the amount of Net Cash Flow (as such term is defined in the LLC

Operating Agreement) that Seller 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 ("Mortgage Loan").

 

                                   ARTICLE II

                          REPRESENTATIONS AND COVENANTS

 

      2.1   Representations by Purchaser. Purchaser hereby represents and

warrants to Seller 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. Purchaser is duly organized and

validly existing as a limited partnership under the laws of the Commonwealth of

Virginia, and has full right, power, and authority to enter into this Agreement

and perform all of its obligations under this Agreement; and, the execution and

delivery of this Agreement and the performance by Purchaser of its obligations

under this Agreement have been duly authorized by all requisite action of

Purchaser and require no further action or approval of Purchaser's partners or

of any other individuals or entities in order to constitute this Agreement as a

binding and enforceable obligation of Purchaser.

 

            (b)   Noncontravention. Neither the entry into nor the performance

of, or compliance with, this Agreement by Purchaser has resulted, or will

result, in any violation of, or default under, or result in the acceleration of,

any obligation under the partnership agreement of Purchaser, or any mortgage,

indenture, lien agreement, note, contract, permit, judgment, decree, order,

restrictive covenant, statute, rule, or regulation applicable to Purchaser.

 

            (c)   Litigation. There is no action, suit, or proceeding, pending

or known to be threatened, against or affecting Purchaser 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 Purchaser, (iii)

would reasonably be expected to materially and adversely affect the ability of

Purchaser to perform its obligations hereunder, or under any document to be

delivered pursuant hereto.

 

                                      -2-

<PAGE>

 

            (d)   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

Purchaser has been obtained.

 

            (e)   Bankruptcy with respect to Purchaser. No Act of Bankruptcy has

occurred with respect to Purchaser. 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.

 

            (f)   Brokerage Commission. Purchaser has not engaged the services

of, nor has it or will it or Seller 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 Purchaser. Purchaser hereby agrees to indemnify and

hold Seller 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 Seller. Seller hereby represents and warrants

unto Purchaser 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. Seller is duly organized, validly

existing, and in good standing as a limited liability company under the laws of

the State of Arizona. Seller 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 Seller of

its obligations hereunder have been duly authorized by all requisite action of

Seller and require no further action or approval of Seller's members or managers

or of any other individuals or entities in order to constitute this Agreement as

a binding and enforceable obligation of Seller.

 

            (b)   Noncontravention. Neither the entry into nor the performance

of, or compliance with, this Agreement by Seller 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 Seller or to the Membership Interest.

 

                                      -3-

<PAGE>

 

            (c)   Litigation. There is no action, suit, claim, or proceeding

pending or threatened against or affecting Seller, its membership interest in

the Liquidating LLC 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 Seller, (C) would

reasonably be expected to materially and adversely affect the ability of Seller

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) Seller has good title to its membership

interest in the Liquidating LLC on the date hereof and will have good title to

the Membership Interest on the Closing Date (other than the LLC Operating

Agreement), (B) its membership interest in the Liquidating LLC on the date

hereof is and the Membership Interest 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) Seller has not

granted any other person or entity an option to purchase or a right of first

refusal upon its membership interest in the Liquidating LLC or in the Membership

Interest nor are there any agreements or understandings between Seller and any

other person or entity with respect to the disposition of its membership

interest in the Liquidating LLC or in the Membership Interest (other than the

LLC Operating Agreement).

 

            (e)   No Consents. Each consent, approval, authorization, order,

license, certificate, permit, registration, designation, or filing by or with,

any governmental agency or body necessary of the execution, delivery, and

performance of this Agreement or the transactions con