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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
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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 Commission. Seller h
