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EXHIBIT 10.1
MEMBERSHIP INTEREST SALE AGREEMENT
BY AND BETWEEN
KULEA, LLC,
A VIRGINIA LIMITED LIABILITY COMPANY,
AS SELLER
AND
COLUMBIA EQUITY LP,
A VIRGINIA LIMITED PARTNERSHIP,
AS PURCHASER
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TABLE OF CONTENTS
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ARTICLE I THE
SALE.............................................................
1
1.1 Sale of Membership
Interest...................................... 1
1.2 Purchase
Price................................................... 1
ARTICLE II REPRESENTATIONS AND
COVENANTS....................................... 2
2.1 Representations by
Purchaser..................................... 2
2.2 Representations by
Seller........................................ 3
2.3 Seller's
Indemnity............................................... 5
2.4 Purchaser's
Indemnity............................................ 5
2.5 Covenants of
Purchaser........................................... 5
2.6 Covenants of
Seller.............................................. 5
ARTICLE III Conditions Precedent to the
Closing................................ 7
3.1 Conditions to Purchaser's
Obligations............................ 7
3.2 Conditions to Seller's
Obligations............................... 7
ARTICLE IV Closing and Closing
Documents....................................... 8
4.1
Closing..........................................................
8
4.2 Seller's
Deliveries.............................................. 8
4.3 Purchaser's
Deliveries........................................... 9
4.4 Fees and Expenses; Closing
Costs................................. 9
4.5
Adjustments......................................................
9
ARTICLE V
Miscellaneous........................................................
11
5.1
Notices..........................................................
11
5.2 Entire Agreement; Modifications and Waivers; Cumulative
Remedies. 11
5.3
Exhibits.........................................................
12
5.4 Successors and
Assigns........................................... 12
5.5 Article
Headings................................................. 12
5.6 Governing
Law.................................................... 12
5.7
Counterparts.....................................................
12
5.8
Survival.........................................................
12
5.9
Severability.....................................................
12
5.10 Attorneys'
Fees.................................................. 12
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EXHIBITS
A Assignment
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MEMBERSHIP INTEREST SALE AGREEMENT
THIS MEMBERSHIP INTEREST SALE AGREEMENT (this "Agreement") is
made as of
this 12th day of October, 2004 by and between Kulea, LLC, a
Virginia 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. Seller is the record and beneficial owner of seventy-five
percent (75%)
("Seller's Share") of the membership interests in the LLC (the
"Membership
Interest"). Seller desires to sell the Membership Interest to
Purchaser, on the
terms and conditions hereinafter set forth.
C. Purchaser desires to purchase the Membership Interest from
Seller, on
the terms and conditions hereinafter set forth.
D. Immediately prior to such purchase and sale of the Membership
Interest,
Carr Capital/Holualoa Greenbriar, LLC, a Virginia limited
liability company,
shall liquidate and each of its 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 SALE
1.1 Sale of Membership Interest. Seller agrees to sell,
transfer, assign
and convey the Membership Interest to Purchaser, and Purchaser
agrees to 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, security
interests, prior
assignments or conveyances, conditions, restrictions, voting
agreements, claims,
and any other matters affecting title thereto.
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
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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's operating
agreement (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 an accrued interest on the
mortgage loan
secured by the Property (the "Mortgage Loan"). The hypothetical
sale shall be
based upon the assumption that the transfer taxes and recording
taxes shall not
be payable, that there is no brokerage fee and that other fees
and expenses
(subject to adjustment as set forth in Section 4.5) are as set
forth in Exhibit
A attached hereto.
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 to assume 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) could materially and adversely affect the
business, financial
position, or results of operations of Purchaser, (iii) could
materially and
adversely affect the ability of Purchaser to perform its
obligations hereunder,
or under any document to be delivered pursuant hereto.
(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.
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(e) 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 Commonwealth of Virginia. Seller 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 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.
(c) Litigation. There is no action, suit, claim, or
proceeding
pending or threatened against or affecting Seller 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) could
materially and adversely
affect the business, financial position or results of operations
of Seller, (C)
could materially and adversely affect the ability of Seller to
perform its
obligations hereunder, or under any document to be delivered
pursuant hereto,
(D) could create a lien on the Membership Interest, any part
thereof, or any
interest therein, or (E) could adversely affect the Membership
Interest, any
part thereof, or any interest therein.
(d) Good Title. (A) Seller is the sole owner of the
Membership
Interest, (B) Seller has good title to the Membership Interest,
(C) the
Membership Interests are free and clear of all liens,
encumbrances, pledges,
voting agreements and security interests whatsoever, and (D)
Seller has not
granted any other person or entity an option to purchase or a
right of first
refusal
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upon the Membership Interest nor are there any agreements or
understandings
between Seller and any other person or entity with respect to
the disposition of
the Membership Interest.
(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 contemplated
hereby by Seller
has been obtained or will be obtained on or before the Closing
Date.
(f) Tax Matters. Seller has filed within the time and in the
manner
prescribed by law all federal, state, and local tax returns and
reports,
including but not limited to income, gross receipts, intangible,
real property,
excise, withholding, franchise, sales, use, employment, personal
property, and
other tax returns and reports, required to be filed by Seller
under the laws of
the United States and of each state or other jurisdiction in
which Seller
conducts business activities requiring the filing of tax returns
or reports. All
tax returns and reports filed by Seller are true and correct in
all material
respects. Seller has paid in full all taxes of whatever kind or
nature for the
periods covered by such returns. Seller has not been delinquent
in the payment
of any tax, assessment, or governmental charge or deposit and
has no tax
deficiency or claim outstanding, assessed, threatened, or
proposed against it.
The charges, accruals, and reserves for unpaid taxes on the
books and records of
Seller as of the Closing Date are sufficient in all respects for
the payment of
all unpaid federal, state, and local taxes of Seller accrued for
or applicable
to all periods ended on or before the Closing Date. There are no
tax liens,
whether imposed by the United States, any state, local, or other
taxing
authority, outstanding against Seller or any of its assets. The
federal, state,
and local tax returns of Seller have not been audited, nor has
Seller received
any notice of any federal, state, or local audit.
(g) Bankruptcy with respect to Seller. No Act of Bankruptcy
has
occurred with respect to Seller. As used herein, "Act of
Bankruptcy" shall mean
if a party hereto or any member or manager thereof 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.
(h) Brokerage Commission. Seller has not engaged the services
of,
nor has it or will it or Purchaser 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 Seller. Seller hereby agrees to
indemnify and hold
Purchaser and its employees, directors, members, partners,
affiliates and
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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.
2.3 Seller's Indemnity. Seller agrees to indemnify and hold
Purchaser,
Columbia Equity Trust, Inc., a Maryland corporation (the
"REIT"), and their
respective employees, directors, members, partners, affiliates
and agents
harmless of and from all liabilities, losses, damages, costs,
and expenses
(including reasonable attorneys' fees) which Purchaser or the
REIT may suffer or
incur by reason of any breach of Seller's representations or
warranties
contained in this Agreement, and by reason of any act or cause
of action
occurring or accruing prior
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