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EXHIBIT 10.5
CONTRIBUTION AGREEMENT
BY AND BETWEEN
THE OLIVER CARR COMPANY,
A DISTRICT OF COLUMBIA CORPORATION,
AS CONTRIBUTOR
AND
COLUMBIA EQUITY, LP,
A VIRGINIA LIMITED PARTNERSHIP,
AS ACQUIRER
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TABLE OF CONTENTS
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ARTICLE I THE
CONTRIBUTION..................................................................................
1
1.1
Contribution of Membership
Interest...........................................................
1
1.2
Consideration.................................................................................
2
1.3
Redemption Rights for
Units...................................................................
2
1.4
Tax
Consequences to
Contributor...............................................................
2
ARTICLE II REPRESENTATIONS AND
COVENANTS....................................................................
2
2.1
Representations by
Acquirer...................................................................
2
2.2
Representations by
Contributor................................................................
4
2.3
Covenants of
Acquirer.........................................................................
6
2.4
Covenants of
Contributor......................................................................
6
ARTICLE III Conditions Precedent to the
Closing.............................................................
7
3.1
Conditions to Acquirer's
Obligations..........................................................
7
3.2
Conditions to Contributor's
Obligations.......................................................
8
ARTICLE IV Closing and Closing
Documents....................................................................
9
4.1
Closing.......................................................................................
9
4.2
Contributor's
Deliveries......................................................................
9
4.3
Acquirer's
Deliveries.........................................................................
9
4.4
Fees
and Expenses; Closing
Costs..............................................................
10
4.5
Adjustments...................................................................................
10
ARTICLE V
Miscellaneous.....................................................................................
11
5.1
Notices.......................................................................................
11
5.2
Entire Agreement; Modifications and Waivers; Cumulative
Remedies.............................. 12
5.3
Exhibits......................................................................................
12
5.4
Successors and
Assigns........................................................................
12
5.5
Article
Headings..............................................................................
13
5.6
Governing
Law.................................................................................
13
5.7
Counterparts..................................................................................
13
5.8
Survival......................................................................................
13
5.9
Severability..................................................................................
13
5.10
Attorneys'
Fees...............................................................................
13
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EXHIBITS
A
Assignment and Assumption Agreement
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CONTRIBUTION AGREEMENT
THIS
CONTRIBUTION AGREEMENT (this "Agreement") is made as of this 12th
day
of October, 2004 by and between The Oliver
Carr Company, a District of Columbia
corporation ("Contributor"); and Columbia
Equity, LP, a Virginia limited
partnership ("Acquirer").
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.
Contributor is the record and beneficial owner of 4.34%
("Contributor's
Share") of the membership interests in the
LLC (the "Membership Interest").
Contributor desires to contribute the
Membership Interest to Acquirer, on the
terms and conditions hereinafter set
forth.
C.
Acquirer desires to acquire the Membership Interest from
Contributor,
on the terms and conditions hereinafter set
forth.
D.
Immediately prior to such contribution and acquisition of the
Membership Interest, Carr Capital/Holualoa
Greenbriar, LLC, a Virginia limited
liability company, shall liquidate and each
of its members (collectively, the
"Liquidating LLC 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 CONTRIBUTION
1.1
Contribution of Membership Interest. Contributor agrees to
contribute,
transfer, assign and convey the Membership
Interest to Acquirer, and Acquirer
agrees to acquire 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 Acquirer 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").
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1.2
Consideration. The total consideration (the "Consideration") for
which
Contributor agrees to contribute and assign
the Membership Interest to Acquirer,
and which Acquirer agrees to pay or deliver
to Contributor, subject to the terms
of this Agreement, shall be the issuance to
Contributor of a number of units of
limited partnership interests in Acquirer
("Units") equal to (a) the amount of
Net Cash Flow (as defined in the LLC
Operating Agreement) that Contributor 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 and accrued
interest on the mortgage loan secured by
the Property (the "Mortgage Loan"), (b)
divided by the price per share at which the
common stock, $.01 par value per
share, (the "Common Stock") of Columbia
Equity Trust, Inc., a Maryland
corporation and the general partner of
Acquirer (the "REIT"), is offered to the
public in the underwritten initial public
offering of the Common Stock (the
"IPO"). On the Closing Date (as defined
below), the Units shall be issued to
Contributor. Upon the request of
Contributor, Acquirer shall issue certificates
reflecting Contributor's ownership of
Units. The certificates evidencing the
Units will bear appropriate legends
indicating (i) that the Units have not been
registered under the Securities Act of
1933, as amended ("Securities Act"), and
(ii) that Acquirer's Amended and Restated
Agreement of Limited Partnership (the
"Partnership Agreement") restricts the
transfer of the Units. Upon receipt of
the Units and execution and delivery of the
Partnership Agreement, Contributor
shall become a limited partner of
Acquirer.
1.3
Redemption Rights for Units. Each Unit shall be redeemable, at
the
option of the holder, in accordance with,
but subject to the restrictions
contained in, the Partnership Agreement;
provided, however, that such redemption
option may not be exercised prior to the
first anniversary of the Closing Date.
1.4 Tax
Consequences to Contributor. Notwithstanding anything to the
contrary contained in this Agreement,
including without limitation the use of
words and phrases such as "sell," "sale,"
purchase," and "pay," the parties
hereto acknowledge and agree that it is
their intent that the transaction
contemplated hereby be treated for federal
income tax purposes as the
contribution of the Membership Interest by
Contributor to Acquirer in exchange
for Units pursuant to Section 721 of the
Internal Revenue Code of 1986, as
amended (the "Code"), and not as a
transaction in which Contributor is acting
other than in its capacity as a prospective
partner of Acquirer.
ARTICLE II
REPRESENTATIONS AND COVENANTS
2.1
Representations by Acquirer. Acquirer hereby represents and
warrants
unto Contributor 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. Acquirer is duly organized and
validly
existing, under the laws of the
Commonwealth of Virginia, and has full right,
power, and authority to
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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 Acquirer of its obligations
under this Agreement have been duly
authorized by all requisite action of
Acquirer and require no further action or
approval of Acquirer's partners or of any
other individuals or entities in order
to constitute this Agreement as a binding
and enforceable obligation of
Acquirer.
(b) Noncontravention. Neither the entry into nor the performance
of,
or compliance with, this Agreement by
Acquirer has resulted, or will result, in
any violation of, or default under, or
result in the acceleration of, any
obligation under the Partnership Agreement,
or any mortgage, indenture, lien
agreement, note, contract, permit,
judgment, decree, order, restrictive
covenant, statute, rule, or regulation
applicable to Acquirer.
(c) Litigation. There is no action, suit, or proceeding, pending
or
known to be threatened, against or
affecting Acquirer 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 Acquirer, or (iii)
would reasonably be expected to materially
and adversely affect the ability of
Acquirer to perform its obligations
hereunder, or under any document to be
delivered pursuant hereto.
(d) Units Validly Issued. The Units, when issued, will have
been
duly and validly authorized and issued,
free of any preemptive or similar
rights, and will be fully paid and
nonassessable, without any obligation to
restore capital except as required by the
Virginia Revised Uniform Limited
Partnership Act (the "Limited Partnership
Act"). Upon execution and delivery of
the Partnership Agreement by Contributor,
Contributor shall be admitted as a
limited partner of Acquirer as of the
Closing Date and shall be entitled to all
of the rights and protections of a limited
partner under the Limited Partnership
Act and the provisions of the Partnership
Agreement, with the same rights,
preferences, and privileges as all other
limited partners on a pari passu basis.
(e) 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
Acquirer has been obtained.
(f) Bankruptcy with respect to Acquirer. No Act of Bankruptcy
has
occurred with respect to Acquirer. 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
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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.
(g) Brokerage Commission. Acquirer has not engaged the services
of,
nor has it or will it or Contributor 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 Acquirer. Acquirer
hereby agrees to indemnify and hold
Contributor 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 Contributor. Contributor hereby represents
and
warrants unto Acquirer 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. Contributor is duly organized,
validly
existing, and in good standing as a
District of Columbia corporation.
Contributor 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 Contributor of
its obligations hereunder have been duly
authorized by all requisite action of
Contributor and require no further action
or approval of Contributor's members
or managers or of any other individuals or
entities in order to constitute this
Agreement as a binding and enforceable
obligation of Contributor.
(b) Noncontravention. Neither the entry into nor the performance
of,
or compliance with, this Agreement by
Contributor 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 Contributor or to the
Membership Interest.
(c) Litigation. There is no action, suit, claim, or proceeding
pending or threatened against or affecting
Contributor 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 Contributor, (C) would
reasonably be expected to materially and
adversely affect the ability of Contributor
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.
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(d) Good Title. (A) Contributor has good title to the
Membership
Interest on the date hereof and will have
good title to the Membership Interest
on the Closing Date (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) Contributor 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 Contributor and any
other person or entity with re
