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EXHIBIT 10.13
MEMBERSHIP INTEREST SALE AGREEMENT
BY AND BETWEEN
K(3) SHERWOOD, LLC,
AN ARIZONA LIMITED LIABILITY COMPANY,
AS SELLER
AND
COLUMBIA EQUITY LP,
A VIRGINIA LIMITED PARTNERSHIP,
AS PURCHASER
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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
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EXHIBITS
A Assignment and Assumption Agreement
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MEMBERSHIP INTEREST SALE AGREEMENT
THIS MEMBERSHIP INTEREST SALE AGREEMENT (this "Agreement") is
made as of
this 31st day of January, 2004 by and between K(3) Sherwood,
LLC, an Arizona
limited liability company ("Seller"); and Columbia Equity, LP, a
Virginia
limited partnership ("Purchaser").
RECITALS
A. Holualoa/Carr Capital Sherwood, LLC, a Virginia limited
liability
company (the "LLC") is the owner of certain land located at 9990
Lee Highway,
Fairfax, 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 Sherwood office
building.
B. Seller is the record and beneficial owner of ninety-five
percent (95%)
("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 REI Sherwood, LLC, a Virginia limited liability
company, shall
liquidate and each of its members, Hampton Sherwood, LLC, an
Arizona limited
liability company ("Hampton"), Clinton D. Fisch and Tracey E.
Fisch, as
tenants-by-the-entirety (collectively, "Fisch"), Gregory
Murdock, an individual
("Murdock") and Carr Capital Real Estate Investments, LLC, a
Virginia limited
liability company, ("Carr" and together with Hampton, Fisch and
Murdock, the
"Liquidating LLC Members") shall be admitted as members of the
LLC, with Hampton
receiving a Three and 23/100 percent (3.23%) membership interest
in the LLC,
Fisch receiving a 48/100 percent (.48%) membership interest in
the LLC, Murdock
receiving a 81/100 percent (.81%) membership interest in the LLC
and Carr
receiving a 48/100 percent (.48%) membership interest in the LLC
(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
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,
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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 Fourteen Million Six Hundred
Thousand Dollars
($14,600,000) less the principal of and accrued interest on the
mortgage loan
secured by the Property (the "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 to 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.
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(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.
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(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) 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 on the date hereof
and
will have good title on the Closing Date to the Membership
Interest (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) Seller 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 Seller
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,
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) Bankruptcy with respect to Seller. No Act of Bankruptcy
has
occurred with respect to Seller.
(g) Brokerage Commiss
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