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EXHIBIT 10.7
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.......................................................................
1
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.............................................
7
ARTICLE IV Closing and Closing
Documents...................................................................
8
4.1
Closing.............................................................................
8
4.2
Contributor's
Deliveries............................................................
8
4.3
Acquirer's
Deliveries...............................................................
9
4.4
Fees and Expenses; Closing
Costs....................................................
9
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.....................................................................
11
5.11
Section 8.4
Rights..................................................................
11
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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 31st
day
of January, 2005 by and between The Oliver
Carr Company, a District of Columbia
corporation ("Contributor"); and Columbia
Equity, LP, a Virginia limited
partnership ("Acquirer").
RECITALS
A.
Meadows
IV, LLC, a Virginia limited liability company (the "LLC") is
the owner of certain land located in
Chantilly, 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 Meadows IV Building.
B.
Meadows IV
Investors, LLC, a Virginia limited liability company
("Meadows IV Investors") is the record and
beneficial owner of One Hundred and
00/100 percent (100.00%) of the membership
interests in the LLC.
C.
Contributor is the direct and indirect owner of Five and 91/100
percent (5.91%) of the membership interests
in Meadows IV Investors (the
"Membership Interest").
D.
Contributor desires to contribute the Membership Interest to
Acquirer, on the terms and conditions
hereinafter set forth.
E.
Acquirer
desires to acquire the Membership Interest from
Contributor, 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:
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 LCC's operating
agreement (the "LLC Operating
Agreement")).
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) a
value of the Membership Interest providing
the Contributor with a twenty percent
(20%) IRR (as defined in Meadows IV
Investors' operating agreement (the "Meadows
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IV Investors Operating Agreement")), based
on a minimum of a six month
investment holding period for Seller's
Capital Contribution (as defined in
Meadows IV Investors Operating Agreement),
(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 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 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
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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 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.
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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 incorporated,
validly existing, and in good standing as a
corporation under the laws of the
District of Columbia. 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 board of directors or
shareholders 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 bylaws,
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.
(d) Good Title.
(A) Contributor has good title to the Membership
Interest on the dat
