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EXHIBIT 10.16
MEMBERSHIP INTEREST SALE AGREEMENT
BY AND BETWEEN
HAMPTON 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>
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ARTICLE I THE
SALE..............................................................................................
2
1.1
Sale of Membership
Interest..................................................................
2
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.......................................................................
5
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...........................................................
7
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..................................................................................
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..............................................................................
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, 2005 by and
between Hampton 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. Carr
Capital REI Sherwood, LLC, a Virginia limited liability company
(the "Liquidating LLC") is the record and
beneficial owner of Five and 00/100
percent (5.00%) of the membership interests
in the LLC.
C. Seller
is the record and beneficial owner of sixty-four and 52/100
percent (64.52%) of the membership
interests in the Liquidating LLC.
D. The
members of the Liquidating LLC, 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
Seller (collectively, 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 Three and 23/100 percent
(3.23%) ("Seller's Share") membership
interest in the LLC (the "Membership
Interest") 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"). 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:
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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, 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") (with the Liquidating LLC Members
being entitled to any disproportionate
distribution of Net Cash Flow that the
Liquidating LLC would be entitled to if it
had not liquidated).
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.
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(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.
(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
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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, 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 t
