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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 ac
