Exhibit
10.2
AGREEMENT
OF PURCHASE AND SALE
THIS
AGREEMENT (“Agreement”)
dated
as of July 10,
2006,
is by and among AMB
PROPERTY II, L.P.,
a
Delaware limited partnership (“AMB”),
HEADLANDS
REALTY CORPORATION,
a
Maryland corporation (“Headlands”)
(AMB
and Headlands are hereinafter collectively referred to as, “Sellers”),
and
FORWARD
AIR, INC.,
a
Tennessee corporation (“Buyer”).
ARTICLE
I
PURCHASE
AND SALE OF PROPERTY
Section
1.1 AMB
Sale.
AMB
hereby
agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from
AMB, subject to the terms and conditions set forth herein, the following:
(a) that
certain real property located in the City of Des Plaines, County of Cook, State
of Illinois, and being more particularly described in Exhibit A-1
attached
hereto (the “AMB
Real Property”);
(b) all
of
AMB’s right title and interest in and to all rights, privileges and easements
appurtenant to the AMB Real Property, including, without limitation, all
minerals, oil, gas and other hydrocarbon substances on and under the AMB Real
Property, as well as all development rights, air rights, water, water rights,
riparian rights and water stock relating to the AMB Real Property and any
rights-of-way or other appurtenances used in connection with the beneficial
use
and enjoyment of the AMB Real Property and all of AMB’s right, title and
interest in and to all roads and alleys adjoining or servicing the AMB Real
Property (collectively, the “AMB
Appurtenances”);
(c) all
of
AMB’s right, title and interest in and to all Improvements (as defined below) to
be constructed on the Real Property (as herein defined) pursuant to Section
2.2
below; and
(d) any
intangible personal property now or hereafter owned by AMB and used in the
ownership, use or operation of the AMB Real Property, including, without
limitation, AMB’s rights and interests in any utility contracts (excluding any
utility deposits made by AMB) or other agreements or rights relating to the
ownership, use and operation of the AMB Real Property (except that, (i) to
the
extent that any such contracts or other agreements are part of portfolio
agreements, they shall not be assignable, and (ii) AMB hereby retains all rights
to any and all copyrights, trademarks, logos, graphics and other rights with
respect to the name “AMB”, including the name “AMB”), and any construction
warranties relating to the Improvements (collectively, the “AMB
Intangible Property”).
Section
1.2 Headlands
Sale.
Headlands hereby
agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from
Headlands, subject to the terms and conditions set forth herein, the following:
(a) that
certain real property located in the City of Des Plaines, County of Cook, State
of Illinois, and being more particularly described in Exhibit A-2
attached
hereto (the “Headlands
Real Property”
and
together with the AMB Real Property, the “Real
Property”);
(b) all
of
Headlands’ right title and interest in and to all rights, privileges and
easements appurtenant to the Headlands Real Property, including, without
limitation, all minerals, oil, gas and other hydrocarbon substances on and
under
the Headlands Real Property, as well as all development rights, air rights,
water, water rights, riparian rights and water stock relating to the Headlands
Real Property and any rights-of-way or other appurtenances used in connection
with the beneficial use and enjoyment of the Headlands Real Property and all
of
Headlands’ right, title and interest in and to all roads and alleys adjoining or
servicing the Headlands Real Property (collectively, the “Headlands
Appurtenances”
and
together with the AMB Appurtenances, the “Appurtenances”);
(c) all
of
Headlands’ right, title and interest in and to the Improvements and fixtures to
be constructed on the Real Property pursuant to Section 2.2 below, including,
without limitation, an approximately 125,540 square foot cross dock shipping
and
distribution center building containing approximately 10,800 square feet of
two
(2) story office space (the “Building”),
and
all apparatus, equipment and appliances used in connection with the operation
or
occupancy of the Real Property, such as heating and air conditioning systems
and
facilities used to provide any utility, refrigeration, ventilation, garbage
disposal, snow removal equipment, or other services on the Real Property, if
any, which have been installed or constructed on the Real Property by AMB
pursuant to Section 2.2 below;
(d) the
personal property owned by Headlands, if any, located on the Real Property
and
used exclusively in the operation or maintenance of the Improvements, as
described on Schedule 1
attached
hereto (the “Headlands
Personal Property”);
and
(e) any
intangible personal property now or hereafter owned by Headlands and used in
the
ownership, use or operation of the Improvements, the Headlands Real Property
and
Headlands Personal Property, including, without limitation, Headlands’ rights
and interests in any utility contracts (excluding any utility deposits made
by
Headlands) or other agreements or rights relating to the ownership, use and
operation of the Improvements or the Headlands Real Property (except that,
Headlands hereby retains all rights to any and all copyrights, trademarks,
logos, graphics and other rights with respect to the name “AMB”, including the
name “AMB”), and, on a non-exclusive basis, any construction warranties relating
to the Improvements (collectively, the “Headlands
Intangible Property”
and
together with the AMB Intangible Property, the “Intangible
Property”).
All
of
the items referred to in Sections 1.1 and 1.2 above are collectively referred
to
as the “Property.”
Section
1.3 Purchase
Price.
(a) The
purchase price of the Property is Twenty-Two Million One Hundred Five Thousand
Thirty-Six Dollars ($22,105,036) (the “Purchase
Price”).
The
allocation of the Purchase Price between AMB and Headlands shall be determined
by Sellers in their sole and absolute discretion.
(b) The
Purchase Price shall be paid as follows:
(i) Within
three (3) days after full execution of this Agreement, Buyer shall deposit
in
escrow with Chicago Title Company at 388 Market Street, San Francisco, CA 94111,
Attn.: Michelle Viguie (the “Title
Company”)
an all
cash payment, or wire transfer, in the amount of Three Million Three Hundred
Fifteen Thousand Seven Hundred Fifty-Five Dollars ($3,315,755)(the “Deposit”).
Except as otherwise provided in this Agreement, the Deposit shall not be
refundable to Buyer. The Deposit shall be held in an interest bearing account
and all interest thereon shall be deemed a part of the Deposit. At the Closing,
as defined in Section 1.2(b)(iii) below, the Deposit shall be paid to Sellers
and credited against the Purchase Price.
(ii) IF
THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO THE FAILURE OF ANY CONDITION
PRECEDENT AND THE BUYER IS NOT THEN IN DEFAULT, THEN THE TITLE COMPANY SHALL
RETURN THE DEPOSIT TO BUYER. IF
THE SALE OF THE PROPERTY IS NOT CONSUMMATED SOLELY DUE TO EITHER OF THE SELLERS’
DEFAULT HEREUNDER, THEN, AS BUYER’S SOLE AND EXCLUSIVE REMEDIES, BUYER MAY
EITHER: (1) TERMINATE THIS AGREEMENT AND RECEIVE A REFUND OF THE DEPOSIT,
IN WHICH EVENT NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS
HEREUNDER (EXCEPT AS PROVIDED IN SECTIONS
7.1, 9.3 AND 9.12
BELOW), OR (2) ENFORCE SPECIFIC PERFORMANCE OF THIS AGREEMENT; PROVIDED,
HOWEVER, IF THE ACTIONS OF SELLERS HAVE RENDERED SPECIFIC PERFORMANCE IMPOSSIBLE
TO ACHIEVE, BUYER MAY SEEK TO RECOVER ITS ACTUAL DAMAGES DUE TO SELLERS’ DEFAULT
HEREUNDER. THE PARTIES HAVE AGREED THAT SELLERS’ ACTUAL DAMAGES IN THE EVENT OF
A FAILURE TO CONSUMMATE THE SALE DUE TO BUYER’S DEFAULT WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLERS WOULD INCUR IN THE EVENT OF BUYER’S DEFAULT. IN THE EVENT BUYER
FAILS, WITHOUT LEGAL EXCUSE, TO COMPLETE THE PURCHASE OF THE PROPERTY, THE
DEPOSIT MADE BY BUYER SHALL BE FORFEITED TO SELLERS AS THE SOLE AND EXCLUSIVE
REMEDY AVAILABLE TO SELLERS FOR SUCH FAILURE. BY
PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY
OF
THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY
COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES
OF
THIS LIQUIDATED DAMAGES PROVISION. THIS SECTION 1.3(b)(ii) IS NOT INTENDED
TO
LIMIT SELLERS’ OR BUYER'S RIGHTS UNDER SECTIONS
7.1, 9.3 AND 9.12 OF
THIS AGREEMENT.
INITIALS:
SELLERS JEM
BUYER
MJJ
(iii)
The
balance of the Purchase Price (plus the construction costs of the Improvements
attributable to any Change Orders (as defined below) requested by Buyer pursuant
to Section 2.2 below that has not already been paid to Sellers under the terms
of this Agreement) shall be paid to Sellers in immediately available funds
via
wire transfer at the consummation of the purchase and sale contemplated
hereunder (the “Closing”).
ARTICLE
II
TITLE
REVIEW; CONDITIONS
Section
2.1 Limited
Title Review.
(a) Buyer
hereby acknowledges its receipt of the Title Commitment attached hereto as
Schedule
5
(the
“Title
Commitment”),
including, without limitation, the title exceptions set forth in the Title
Commitment, and a copy of a current survey of the Property (the “Survey”).
Buyer
shall have until 5:00 p.m. central time on July 12, 2006 to approve by written
notice to Seller of the matters set forth on the Title Commitment and the
Survey. If Buyer fails to deliver to Seller such written approval notice by
such
date and time, then Buyer shall be deemed to have elected to terminate this
Agreement and the Deposit shall be returned to Buyer and neither party shall
have any further liability to the other except for indemnities that expressly
survive a termination of this Agreement. At any time during the course of
construction of the Improvements (hereinafter defined) Buyer may request that
the Title Company update the Title Commitment and Buyer may obtain updates
of
the Survey, in order to verify that there have been no new title exceptions
affecting the Property other than those approved by Buyer in the Title
Commitment and Survey which it was initially provided or as otherwise permitted
under this Agreement.
(b) Subject
to the provisions of Section 2.1(c) below, Buyer may, at or prior to Closing,
notify Sellers in writing of any objections to title first raised by the Title
Company or first disclosed in any updates to the Title Commitment or the Survey
obtained by the Buyer between (a) the Effective Date, and (b) the Closing,
and
which: (1) are not the result of Buyer’s acts, (2) do not constitute exceptions
which are disclosed in the Title Commitment or the Survey or any prior updates
and (3) have a material adverse effect on the use or operation of the Property
as a distribution facility. Buyer shall advise Sellers of its additional title
objections by written notice within three (3) business days of learning of
any
such additional title matters. Sellers shall have until the earlier of (x)
two
(2) business days after receipt of Buyer’s objections, or (y) the Closing Date,
to give Buyer notice that (i) Sellers will remove such objectionable
exceptions; or (ii) Sellers elect not to cause such exceptions to be
removed. If Sellers give Buyer notice under clause (ii), Buyer may elect
within two (2) business days after receipt of Sellers’ notice to (i) waive its
objections to title exceptions that Sellers have not agreed to remove and
proceed with the purchase without offset or credit against the Purchase Price,
or (ii) terminate this Agreement. If Sellers fail to give Buyer notice within
(x) two (2) business days after receipt of Buyer’s objections, or (y) the
Closing Date, whichever is earlier, then Sellers shall be deemed to have elected
to give Buyer notice under clause (ii). If Sellers give Buyer notice under
clause (ii), and Buyer fails to give Sellers notice of its election within
two (2) business days after receipt of Sellers’ notice, then Buyer shall be
deemed to have elected to terminate this Agreement, the Deposit shall be
returned to Buyer and if the matter objected to by Buyer was the result of
Seller’s voluntary act occurring after the Effective Date and was not otherwise
permitted under this Agreement, Sellers shall pay to Buyer its actual
out-of-pocket expenses incurred in connection with this transaction in an amount
up to One Hundred Thousand Dollars ($100,000) in the aggregate, and neither
party shall have any further rights or obligations hereunder except as provided
in Sections 7.1, 9.3 and 9.12 below. If Sellers shall give notice pursuant
to clause (i) and shall fail to remove any such objectionable exceptions, then
Buyer may elect to terminate this Agreement, the Deposit shall be returned
to
Buyer, Sellers shall pay to Buyer for its actual out-of-pocket expenses incurred
in connection with this transaction in an amount up to One Hundred Thousand
Dollars ($100,000) in the aggregate, and neither party shall have any further
rights or obligations hereunder except as provided in Sections 7.1, 9.3 and
9.12
below. If Sellers elect to attempt to cure any such additional title objections,
the date for Closing shall be automatically extended until Sellers complete
the
cure, but in no event shall the extension exceed thirty (30) days after the
date
for Closing set forth in Section 8.2 hereof unless a further extension is
approved in writing by Buyer.
(c) Notwithstanding
the foregoing, Buyer acknowledges that prior to and after the Effective Date,
with the prior written consent and approval of Buyer to any items which Sellers
determine may have a material adverse effect on Buyer’s use or operation of the
Property as a distribution facility, Sellers may impose certain easements,
assessments, conditions, covenants and restrictions, and other encumbrances
on
the Property with respect to the construction of the Improvements, the
development of adjoining parcels, the retention of certain rights and the
imposition of certain obligations with respect to common areas between the
Property and adjoining parcels (collectively, the “Development
Encumbrances”);
provided, however, Buyer hereby consents and approves of the Development
Encumbrances listed on Schedule
6
(“Pre-Approved
Development Encumbrances”)
and no
further consent or approval of Buyer shall be required in connection with such
Pre-Approved Development Encumbrances. Sellers shall provide Buyer with a copy
of any Development Encumbrances at least three (3) business days prior to
recording the same and, if such Development Encumbrances will have a material
adverse effect, as reasonably determined by Buyer, then Buyer shall have the
right to approve such Development Encumbrances prior to recordation. If Buyer’s
approval is required, Buyer shall not unreasonably withhold, condition or delay
its approval, and where Buyer does not provide notice of its approval or
objection to a proposed Development Encumbrance within three (3) business days
following notice of such proposed Development Encumbrance, it shall be deemed
to
have approved such Development Encumbrance. In addition, and notwithstanding
the
foregoing, the parties acknowledge that Sellers shall pay all costs and expenses
necessary to release any monetary lien secured by the Property prior to the
Closing, and no such liens or claims shall be Conditions of Title (hereinafter
defined) and Sellers shall be entitled to use the Purchase Price proceeds to
satisfy any such liens (provided that Sellers shall be entitled to bond around
any such liens if permitted under applicable law). All sums necessary to
effectuate the release of any such monetary liens or claims may be paid by
Buyer
and offset against the Purchase Price. Notwithstanding the foregoing, as long
as
the Development Encumbrances do not have a material adverse effect on Buyer’s
use or operation of the Property as a distribution facility, Buyer shall not
object to any Development Encumbrances (and shall not have any right to do
so),
and Sellers shall have no obligation to cure any such Development Encumbrances.
As used herein, “material adverse effect” shall be defined as any item which
would unreasonably restrict normal and customary operations of a third-party
prudent operator of the Property who would be in the same business as that
of
the Buyer.
Section
2.2 Improvements
Work.
(a) Headlands
has caused to be prepared, at Headlands’ sole cost and expense, and Buyer has
approved (i) that certain Base Building Specifications dated June 16, 2006
(“Base
Building Specifications”)
and
attached hereto as Exhibit
B-1,
(ii)
that certain Tenant Improvement Specifications dated June 16, 2006
("Tenant
Improvement Specifications")
and
attached hereto as Exhibit
B-2,
(the
Base Building Specifications together with the Tenant Improvement
Specifications, collectively, the “Specifications”)
and
(iii) the preliminary floor plan attached hereto as Exhibit
B-3
(the
“Floor
Plan”)
(items
(ii) and (iii) as they pertain to the tenant improvements to be constructed
in
the interior of the Building, being herein collectively referred to as the
“Preliminary
Tenant Improvement Plans”).
The
improvements to be constructed by Headlands pursuant to the Submitted Building
Shell Plans (as defined in subparagraph (b) below) (herein, the “Building
Shell”)
and
pursuant to the Preliminary Tenant Improvement Plans (herein, the “Tenant
Improvements”),
are
herein collectively referred to as the "Improvements."
(b) Sellers
have prepared, and Buyer has approved, plans and specifications which have
been
submitted to the City of Des Plaines (“City”)
in
connection with the issuance of the building permit for the construction of
the
Building Shell, which such submitted plans and specifications are as shown
in
Exhibit
B-4
(the
“Submitted
Building Shell Plans”).
If
the City requires any material or substantial modifications to the Submitted
Building Shell Plans, Sellers shall provide written notice of such modifications
to Buyer for its review, and with respect to any material modifications, for
its
consent and approval, which consent and approval shall not be unreasonably
withheld or delayed. If Buyer does not approve any material modifications to
the
Submitted Building Shell Plans required by the City, Buyer may elect to
terminate this Agreement, in which event the Deposit shall be returned to Buyer,
and neither party shall have any further rights or obligations hereunder except
as provided in Section 7.1, 9.3 and 9.12 below; provided, however, to the extent
such modifications (i) are required as a result of Buyer Delays (as defined
in
Section 2.2(i) below) or (ii) are consistent with the Specifications, Buyer
shall have no right to approve of such modifications or to terminate this
Agreement. If Buyer fails to approve or disapprove any such material
modifications within three (3) business days after its receipt thereof, then
Buyer shall be deemed to have approved such material modifications. Upon review
and approval of the Submitted Building Shell Plans, together with any
amendments, by the City (as modified to incorporate any modifications to the
Submitted Building Shell Plans which are required by the City), the Submitted
Building Shell Plans shall be deemed the “Final
Building Shell Plans.”
For
avoidance of doubt, the Building shall be built in accordance with the Final
Building Shell Plans and the Base Building Specifications (and, in the event
of
a conflict between the Final Building Shell Plans and the Base Building
Specifications, the Base Building Specifications shall
control).
(c) Any
changes to the Final Building Shell Plans requested by Buyer (herein referred
to
as a "Change
Order")
shall
be submitted only by Larry Teel, Mike Bauer, Chris Ruble or Matt Jewell to
Headlands in writing and shall be at Buyer's sole cost and expense and subject
to Headland's written approval, which approval shall not be unreasonably
withheld, conditioned or delayed. Any Change Order that increases the office
square footage, increases the amount of Building equipment, or increases the
scope of construction as specifically detailed in the Final Building Shell
Plans, shall result in specific costs which shall be paid by Buyer to Headlands
at Closing or the earlier termination of this Agreement (other than as a result
of Seller’s default). Buyer may by Change Order replace the materials called for
in the Final Building Shell Plans with comparable materials, or with materials
of a higher grade, but Buyer shall have no right to change the materials to
materials which, in Headlands' reasonable opinion, are of an inferior grade
or
quality to those called for in the Final Building Shell Plans. Notwithstanding
anything to the contrary contained herein, at Sellers request, Buyer shall
deposit ten percent (10%) of the cost of each Change Order up to the first
Four
Hundred Thousand Dollars ($400,000) of all such Change Orders and fifty percent
(50%) of the cost of all Change Orders after the first Four Hundred Thousand
Dollars ($400,000) of all such Change Orders, in escrow with the Title Company
(the “Change
Order Deposit”)
within
fifteen (15) days after Headlands’ request therefor and as a condition to
implementation of the applicable Change Order(s). Any such Change Order Deposit
made as required hereunder shall be subject to escrow instructions reasonably
satisfactory to Sellers, Buyer and the Title Company, and shall provide that
such Change Order Deposit shall be paid to Headlands at Closing (and shall
not
be credited against the Purchase Price), or returned to Buyer if Buyer is
entitled to a return of the Deposit hereunder.
(d) Within
twenty-one (21) days after the Effective Date, Sellers shall prepare or cause
to
be prepared plans and specifications sufficient to cause a building permit
to be
issued for the construction of the Tenant Improvements along with a construction
budget for such work, which plans and specifications shall be consistent and
compatible with the Preliminary Tenant Improvement Plans (the “Submitted
Tenant Improvement Plans”).
Buyer
shall have ten (10) business days after Headlands has delivered (or caused
the
delivery of) such Submitted Tenant Improvement Plans to Buyer to approve the
Submitted Tenant Improvement Plans. If Buyer fails to approve or request changes
to the Submitted Tenant Improvement Plans within ten (10) business days after
its receipt thereof, then Buyer shall be deemed to have approved the Submitted
Tenant Improvement Plans and the same shall thereupon be the “Final
Tenant Improvement Plans.”
If
Buyer timely requests any changes ("Buyer
Requested Change")
to the
Submitted Tenant Improvement Plans, Headlands shall make those changes which
are
reasonably requested by Buyer and shall within ten (10) business days of its
receipt of such request submit the revised portion of the Submitted Tenant
Improvement Plans to Buyer. Buyer may not thereafter disapprove the revised
portions of the Submitted Tenant Improvement Plans unless Headlands has
unreasonably failed to incorporate reasonable comments of Buyer and, subject
to
the foregoing, the Submitted Tenant Improvement Plans, as modified by said
acceptable revisions, shall be deemed to be Final Tenant Improvement Plans
upon
the submission of said acceptable revisions to Buyer. This process shall be
repeated until such time as all Buyer Requested Changes have been appropriately
incorporated into the Submitted Tenant Improvement Plans. Buyer shall at all
times in its review of the Submitted Tenant Improvement Plans, and of any
revisions thereto, act reasonably and in good faith. The Final Tenant
Improvement Plans and the Final Building Shell Plans, are collectively referred
to herein as the “Final
Plans.”
(e) Headlands
shall cause the Building Shell to be constructed at Sellers’ sole cost and
expense (except as otherwise provided in this Agreement), in a good and
workmanlike manner, in substantial and material compliance with the Final
Building Shell Plans, and in compliance with all applicable building codes
and
regulations of the City. Sellers shall complete the Building Shell in a timely
manner in substantial accordance with the construction schedule for the Building
Shell attached hereto as Exhibit
B-5
(“Construction
Schedule”),
subject only to Buyer Delays (hereinafter defined) and Unavoidable Delays
(hereinafter defined) and in all events, on or before January 31, 2007 (the
“Outside Completion Date”). For each day elapsing between the Outside Completion
Date (as such date may be extended pursuant to the provisions of Section 6.2)
and the Substantial Completion of the Improvements, the Buyer shall receive
a
credit against the Purchase Price in an amount of Four Thousand Dollars ($4,000)
per day, with the understanding, however, that there shall be no such credit
to
the Purchase Price for delays in Substantial Completion due to Buyer Delays or
Unavoidable Delays. Any credit against the Purchase Price received by Buyer
pursuant to the foregoing sentence shall in no event exceed Two Hundred Fifty
Thousand Dollars ($250,000). At such time as Buyer’s credit pursuant to this
Section 2.2(e) would exceed $250,000 (but for the foregoing limitation), then
Buyer may elect to terminate this Agreement upon written notice to Seller in
which event this Agreement shall terminate and the Deposit shall be returned
to
Buyer (and neither party shall have any further liability to the other) unless
Seller agrees within ten (10) days after receipt of such termination notice
to
allow the $4,000 per day credit to continue above $250,000 until Substantial
Completion is actually achieved. Buyer shall have no obligation for construction
costs attributable to the Building Shell except for any Change Orders. Headlands
shall cause the Tenant Improvements to be constructed in a good and workmanlike
manner, in substantial accordance with the Final Tenant Improvement Plans,
and
in accordance with all applicable building codes and requirements of the City.
Headlands shall pay the first Six Hundred Thousand Dollars ($600,000) of the
construction costs attributable to the Tenant Improvements (collectively, the
“Tenant
Improvements Construction Costs”)
and
Buyer shall be responsible for the balance of the Tenant Improvements
Construction Cost; provided, however, prior to commencement of the Tenant
Improvements, Headlands shall provide to Buyer a cost estimate providing the
maximum cost of the Tenant Improvements (the “Maximum
Tenant Improvement Cost Estimate”)
for
its prior written approval. Headlands shall be responsible for any costs of
the
Tenant Improvements in excess of the Maximum Tenant Improvement Cost Estimate,
unless such increase(s) are due to (i) Change Orders required by the Buyer
or
documented due to Buyer Delay or (ii) Unavoidable Delays (as defined herein).
The Improvements shall be designed by Harris Architects and constructed by
a
general contractor selected by Headlands, subject to the prior written approval
of Buyer, which approval shall not be unreasonably withheld, conditioned or
delayed. If Buyer fails to approve the general contractor selected by Headlands
within three (3) business days after its receipt of notice of the general
contractor selected by Headlands, then Buyer shall be deemed to have approved
such general contractor. If required by Buyer, Headlands shall submit the
Improvements, or applicable portions thereof, for competitive bidding. Headlands
shall cause the Improvements to be constructed substantially in accordance
with
the Final Plans and in accordance with the terms and conditions of this
Agreement. Headlands shall make no changes to the Final Plans without Buyer's
prior written consent, with the exception of immaterial details which will
not
affect Buyer's use and occupancy of the Building and the other Improvements.
In
the event Headlands should make any modifications to the Final Plans without
Buyer’s prior written consent in accordance with the preceding sentence,
Headlands shall promptly advise Buyer of the changes which were made. Headlands
shall have the Final Plans sealed by the Architect, obtain all required building
permits, certificates and licenses necessary to occupy the Building (other
than
business licenses attributable to Buyer’s business to be operated in the
Building) and thereafter, in accordance with all applicable law and insurance
requirements, cause the construction of the Improvements to be carried out
in a
diligent and good workmanlike manner, subject to any Buyer Delays. Sellers
shall
pay and discharge all liens applicable to the construction of the Improvements,
at their sole cost and expense, and payment of all such liens or lien claims
shall be a condition to Buyer’s obligation to purchase the Property, and Buyer
hereby acknowledges that Seller may use the Purchase Price proceeds to satisfy
such liens and claims (provided that Sellers shall be entitled to bond around
any such liens if permitted under applicable law). As used herein, “Unavoidable
Delays” shall mean an act of God, fire, earthquake, flood, explosion, war,
insurrection, riot, mob violence, sabotage, inability to procure labor,
equipment, facilities, materials or supplies, strikes, walk-outs, action of
labor unions, condemnation, laws, litigation involving a party, inability to
obtain governmental permits or approvals, unusually inclement weather, and
other
matters not within the control of the party in question.
(f) “Substantial
Completion”
of
the
Improvements shall occur upon (i) the completion of the Improvements in
substantial compliance with the Final Plans (as determined by the architect
of
record), subject only to Punch List Items (as defined below), and (ii) the
issuance by the appropriate governmental authority of a temporary certificate
of
occupancy (or its equivalent) for the Improvements (provided, that if at Closing
any work remains to be performed in order for a permanent certificate of
occupancy to be issued, then with respect to any such work that is the
responsibility of Seller under this Agreement (and not with respect to any
work
that is the responsibility of Buyer), an amount equal to 150% of the cost of
such work (as reasonably estimated by the contractor(s) performing such work)
shall be held back in escrow by the Title Company from the sale proceeds
pursuant to mutually acceptable reasonable escrow instructions which shall
provide that such funds shall be released to Seller upon completion of such
work).
(g) No
later
than the date which is thirty (30) days prior to the estimated date of
Substantial Completion, Headlands shall give Buyer written notice that Headlands
estimates Substantial Completion will occur thirty (30) days thereafter. At
any
time after receipt of such notice, but subject to the provisions of Section
9.3
hereof, Buyer may commence construction and installation of Buyer's equipment
and fixtures within the Building. Headlands and Buyer shall cause their
respective workmen to work in cooperation with each other.
(h) On
or
prior to the date of Substantial Completion, a representative of Headlands
and a
representative of Buyer together shall inspect the Improvements and, within
fifteen (15) days thereafter, generate a punchlist of defective or uncompleted
items relating to the completion of construction of the Improvements (the
"Punch
List Items"),
which
Punch List Items shall indicate the estimation by the parties of the cost of
each item. At the Closing, Sellers shall escrow with the Title Company an amount
equal to one hundred twenty-five percent (125%) of the estimated cost to
complete the Punch List Items (the “Punch
List Escrow”),
subject to escrow instructions reasonably satisfactory to the Sellers, the
Buyer
and the Title Company, which shall provide that Headlands shall, within a
reasonable time, but not later than sixty (60) days after the Closing Date,
complete such incomplete work and remedy such defective work as are set forth
on
the Punch List Items, and if Headlands fails to timely complete the Punch List
Items, the parties shall agree upon the reasonable cost to complete any
remaining Punch List Items, and such amount shall be delivered out of the Punch
List Escrow to the Buyer, with the balance of the Punch List Escrow to be
delivered to the Sellers, and Sellers shall have no further obligations with
respect to the Punch List Items.
(i) For
the
purposes of this Agreement, “Buyer
Delays”
shall
mean any actual delay in the date of Substantial Completion of the Improvements
due to Buyer’s required action or inaction, including, without limitation: (A)
any written Change Order which was requested by Buyer and causes a delay in
the
Substantial Completion of the Improvements, (B) any grant of Buyer’s request to
delay construction for consideration of potential or actual alterations to
the
construction of the Improvements, (C) Buyer’s failure to supply in a timely
fashion information requested by Headlands necessary for the timely construction
of the Improvements, and (D) any request for non-standard building components
(contrary to the Final Plans), which results in an actual delay in the
Substantial Completion of the Improvements. For each day of documented Buyer
Delay, the Purchase Price shall be increased by an amount equal to Four Thousand
Dollars ($4,000.00) per day, with the understanding, however, that there shall
be no adjustment to the Purchase Price if there are delays in Substantial
Completion for causes other than Buyer Delays, including, without limitation,
delays due to inclement weather, unavailability of services or materials (except
where due to Buyer Delays), or delays due to failure to receive timely approvals
from any applicable governmental authorities (except where due to Buyer Delays).
ARTICLE
III
BUYER’S
EXAMINATION
Section
3.1 Buyer’s
Independent Investigation.
(a) Buyer
acknowledges and agrees that it has been given a full opportunity to inspect
and
investigate each and every aspect of the Property (as it exists as of the
Effective Date), either independently or through agents of Buyer’s choosing,
including, without limitation:
(i)
all
the
items described on Schedule 2
hereto
(the “Due
Diligence Documentation”).
Buyer
hereby acknowledges receipt of the Due Diligence Documentation.
(ii) all
matters relating to title, together with all governmental and other legal
requirements such as taxes, assessments, zoning, use permit requirements and
building codes,
(iii) the
physical condition of the Property. Such examination of the physical condition
of the Property shall include an examination for the presence or absence of
hazardous or toxic materials, substances or wastes (collectively, “Hazardous
Materials”),
which
shall be performed or arranged by Buyer at Buyer’s sole expense,
(iv) any
easements and/or access rights affecting the Property,
(v)
the
service contracts and other contracts or agreements of significance to the
Property (hereinafter collectively referred to as “Contracts”),
and
(vi) all
other
matters of material significance affecting the Property.
(b) BUYER
SPECIFICALLY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 2.2 ABOVE AND IN SECTION 5.1 BELOW, SELLERS ARE SELLING AND BUYER IS
PURCHASING THE PROPERTY ON AN “AS IS WITH ALL FAULTS” BASIS AND THAT BUYER IS
NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS
OR IMPLIED, FROM SELLERS, THEIR AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING
THE PROPERTY, INCLUDING, WITHOUT LIMITATION: (i) the quality, nature,
adequacy and physical condition of the Property, (ii) the quality, nature,
adequacy, and physical condition of soils, geology and any groundwater,
(iii) the existence, quality, nature, adequacy and physical condition of
utilities serving the Property, (iv) the development potential of the
Property, and the Property’s use, habitability, merchantability, or fitness,
suitability, value or adequacy of the Property for any particular purpose,
(v) the zoning or other legal status of the Property or any other public or
private restrictions on use of the Property, (vi) the compliance of the
Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any governmental
or quasi-governmental entity or of any other person or entity, (vii) the
presence of Hazardous Materials on, under or about the Property or the adjoining
or neighboring property, (viii) the condition of title to the Property,
(ix) the Contracts (x) the economics of the operation of the Property
and (xi) the type, quality or nature of any use or business conducted on any
neighboring property.
Section
3.2 Release.
(a) Without
limiting the above, except with respect to a breach by Sellers of any of the
representations and warranties contained in Section 5.1 hereof or Sellers’
fraud, or a breach by Sellers of their duties and obligations in Section 2.2.
hereof, Buyer on behalf of itself and its successors and assigns waives its
right to recover from, and forever releases and discharges, Sellers, Sellers’
affiliates, Sellers’ investment manager, the partners, trustees, shareholders,
directors, officers, employees and agents of each of them, and their respective
heirs, successors, personal representatives and assigns, from any and all
demands, claims, legal or administrative proceedings, losses, liabilities,
damages, penalties, fines, liens, judgments, costs or expenses whatsoever
(including, without limitation, attorneys’ fees and costs), whether direct or
indirect, known or unknown, foreseen or unforeseen, that may arise on account
of
or in any way be connected with the physical condition of the Property or any
law or regulation applicable thereto, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended (42 U.S.C. Section 9601 et seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901
et seq.), the Clean Water Act (33 U.S.C. Section 1251
et seq.), the Safe Drinking Water Act (42 U.S.C. Section 300f
et seq.), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.), and the Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.).
(b) The
provisions of this Section 3.2 shall survive the Closing.
ARTICLE
IV
TITLE
Section
4.1 Conditions
of Title.
(a) At
the
Closing, AMB shall convey title to the AMB Real Property to Buyer by good and
sufficient special warranty deed in the form of Exhibit C
attached
hereto (the “AMB
Deed”):
At
the Closing, Headlands shall convey title to the Headlands Real Property and
the
Improvements to Buyer by good and sufficient special warranty deed in the form
of Exhibit C
attached
hereto (the “Headlands
Deed”).
(b) At
the
Closing, Sellers shall transfer title to the Personal Property by a bill of
sale
in the form attached hereto as Exhibit D
(the
“Bill
of Sale”).
Section
4.2 Evidence
of Title.
Delivery of title in accordance with the foregoing shall be evidenced by the
willingness of the Title Company to issue, at Closing, its standard American
Land Title Association Form B Owner’s Policy of Title Insurance (the
“Title
Policy”)
in the
amount of the Purchase Price showing title to the Real Property and the
Appurtenances vested in Buyer, subject to no exceptions other than the
following:
(i) Non-delinquent
liens for local real estate taxes and assessments;
(ii) Any
permitted Development Encumbrances pursuant to 2.1(c) above;
and
(iii) Any
exceptions disclosed by the Title Commitment or which have been approved or
waived pursuant to Section 2.1(b) above, and any exceptions to title which
would
be disclosed by an inspection and/or survey of the Property.
All
of
the foregoing exceptions shall be referred to collectively as the “Conditions
of Title.”
Section
4.3 As-Built
Survey.
Within
at least three (3) business days prior to the Closing, Sellers, at their sole
cost and expense, shall provide to Buyer a current “as built” survey of the
Property (the “As-Built Survey”) which may be an update of the Survey provided
in accordance with Section 2.1(a) hereof. The As-Built Survey shall meet all
requirements of an ALTA/ACSM Land Title Survey which are necessary to obtain
an
extended coverage title insurance policy, and shall demonstrate that the
Improvements do not encroach upon or violate (unless the Title Company insures
against the forced removal of any such encroachments) with respect to: (i)
any
title exceptions, other than those approved by Buyer in the Title Commitment
and
Survey which it was initially provided pursuant to Section 2.1(a) hereof
(provided that Buyer shall not be deemed to have approved any violation that
was
not actually depicted on such initial Survey and which is depicted on the
As-Built Survey, such as a set-back violation where the set-back lines were
depicted on the initial Survey but a violation of the set-back lines was only
shown on the As-Built Survey) or as otherwise permitted under this Agreement,
or
(ii) the terms and conditions of any of the Development Encumbrances, other
than
those approved by Buyer pursuant to Section 2.1(c) hereof. The As-Built Survey
shall also be provided by Sellers to the Title Company, and if the legal
description of the Property as shown on the As-Built Survey varies from the
legal descriptions contained in the Title Commitment, the Title Commitment
shall
be updated to conform to the legal description of the Property contained on
the
As-Built Survey.
ARTICLE
V
SELLERS’
REPRESENTATIONS AND WARRANTIES
Section
5.1 Representations
and Warranties of Sellers.
Sellers
represent and warrants to Buyer that:
(a) AMB
is a
limited partnership, duly organized, validly existing and in good standing
under
the laws of the State of Delaware. Headlands is a corporation, due organized,
validly existing and in good standing under the laws of the State of Maryland.
This Agreement (i) is and at the time of Closing will be duly authorized,
executed and delivered by Sellers, (ii) is and at the time of Closing will
be
legal, valid and binding obligations of Sellers, and (iii) does not and at
the
time of Closing will not violate any provision of any agreement or judicial
order to which Sellers are a party or to which Sellers or the Property are
subject. All documents executed by Sellers which are to be delivered to Buyer
at
Closing (i) are or at the time of Closing will be duly authorized, executed
and
delivered by Sellers, (ii) are or at the time of Closing will be legal, valid
and binding obligations of Sellers, and (iii) do not and at the time of Closing
will not violate any provision of any agreement or judicial order to which
Sellers are a party or to which Sellers or the Property are subject.
(c) Neither
Seller is a “foreign person” within the meaning of Section 1445(f)(3) of
the Federal Code.
(d) The
list
of service contracts in Schedule 3
attached
hereto is a complete list of all of the service contracts affecting the Property
as of the date hereof.
(e) Sellers
have not received written notice from any applicable governmental authority
that
the Property is in violation of any laws, ordinances or regulations of any
applicable governmental authority having jurisdiction thereover or control
thereof.
(f) Sellers
have not received written notice from any applicable governmental authority
of
any pending or threatened special assessments or condemnation actions with
respect to the Property.
(g) Sellers
have received no written notice that the Property is in violation of any
federal, state, local or administrative agency ordinance, law, rule, regulation,
order or requirement relating to environmental conditions or Hazardous Material
(“Environmental
Laws”).
For
the purposes hereof, “Hazardous
Material”
shall
mean any substance, chemical, waste or other material which is listed, defined
or otherwise identified as “hazardous” or “toxic” under any federal, state,
local or administrative agency ordinance or law, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. §§ 9601 et seq.
and the
Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.,
or any
regulation, order, rule or requirement adopted thereunder, as well as any
formaldehyde, urea, polychlorinated biphenyls, petroleum, petroleum product
or
by-product, crude oil, natural gas, natural gas liquids, liquefied natural
gas,
or synthetic gas usable for fuel or mixture thereof, radon, asbestos, and
“source,” “special nuclear” and “by-product” material as defined in the Atomic
Energy Act of 1985, 42 U.S.C. §§ 3011 et seq.
(h) Sellers
have not been the subject of any filing of a petition under the Federal
Bankruptcy Law or any federal or state insolvency laws or laws for composition
of indebtedness or for the reorganization of debtors.
(i) Except
as
disclosed in Schedule 4
attached
hereto, there is no litigation filed against Sellers that would adversely affect
the current use or operation of the Property or the ability of Sellers to
perform their obligations under this Agreement.
Section
5.2 Certain
Limitations on Sellers’ Representations and Warranties. Notwithstanding
anything to the contrary contained in this Agreement, no claim for a breach
of a
representation or warranty by Buyer shall be actionable if the breach in
question results from or is based on a condition, state of facts or other matter
with respect to which Buyer has actual knowledge on or prior to the Closing
(such conditions, state of facts or other matters are herein referred to as
“Exception
Matters”).
If
Buyer obtains knowledge of any Exception Matters after the Effective Date and
prior to Closing and such Exception Matters would have a material adverse effect
on Buyer’s ability to use and operate its business at the Property as reasonably
contemplated by Buyer, Buyer may elect to either (i) proceed with the purchase
of the Property subject to such Exception Matters and without any adjustment
to
the Purchase Price, or (ii) upon written notice to Sellers specifying the nature
of the Exception Matters, Buyer may elect to terminate this Agreement and
receive a refund of the Deposit; provided, that if Buyer so elects to terminate
this Agreement, Sellers shall have the right, but not the obligation, to cure
such Exception Matters within the thirty (30) day period following delivery
of
such notice (and the Closing shall be delayed to the extent necessary to allow
Sellers the entire thirty (30) day period within which to effect such cure)
and
if Sellers cure such Exception Matters, then Buyer’s right to terminate this
Agreement as a result of such Exception Matters shall be null and void and
this
Agreement shall continue without termination (and, if the Closing Date is
extended, Closing shall occur on the date that is five (5) business days after
Sellers cure such Exception Matters). If Buyer fails to make the election in
(ii) within five (5) business days after obtaining knowledge of an Exception
Matter, then Buyer shall be deemed to have made the election under (i) above.
Upon a termination of this Agreement pursuant to this Section 5.2, the Deposit
shall be refunded to Buyer, Sellers shall pay to Buyer for its actual
out-of-pocket expenses incurred in connection with this transaction up to a
sum
in the amount of One Hundred Thousand Dollars ($100,000) in the aggregate,
and
neither party shall have any further rights or obligations hereunder except
as
provided in Sections 7.1, 9.3 and 9.12 below.
Section
5.3 Survival;
Limitation of Liability.
All
representations and warranties of Sellers contained in this Agreement shall
survive the Closing, provided that Buyer must give Sellers written notice of
any
claim it may have against Sellers for a breach of any such representation or
warranty, or for breach of any covenants of Sellers contained in this Agreement,
within one (1) year following of the Closing Date. Any claim which Buyer may
have at any time, whether known or unknown, which is not asserted within such
one (1) year period shall not be valid or effective, and Sellers shall have
no
liability with respect thereto. Without limiting the foregoing, Buyer may not
bring any action against Sellers for a breach of any representation, warranty
or
covenant of Sellers contained in this Agreement or in any agreement delivered
by
Sellers to Buyer at Closing unless and until the aggregate amount of all
liability and losses arising out of any such breach exceeds Fifty Thousand
Dollars ($50,000), it being Sellers’ desire to curtail any frivolous lawsuits.
In addition, in no event will Sellers’ liability for all such breaches exceed,
in the aggregate, Two Million Dollars ($2,000,000). The provisions of this
Section 5.3 shall survive the Closing.
ARTICLE
VI
CONDEMNATION
AND CASUALTY
Section
6.1 Condemnation.
Sellers
shall give Buyer notice of the commencement of condemnation proceedings
affecting any portion of the Property, or receipt by Sellers of any written
threat of condemnation from a governmental authority with the power to condemn.
In the event that either: (i) more than ten percent (10%) of the Property,
or
(ii) any portion of the Property that materially and adversely interferes with
the use of the Property by Buyer as a distribution facility, is condemned or
threatened in writing to be condemned prior to the Closing, then Buyer may,
at
its option to be exercised within ten (10) business days of Sellers’ notice
of the occurrence of the commencement of condemnation proceedings or receipt
of
a written threat of condemnation, either terminate this Agreement or agree
to
continue with this Agreement to consummate the purchase for the full Purchase
Price as required by the terms hereof. If Buyer elects to terminate this
Agreement or fails to give Sellers notice within such ten (10) business day
period that Buyer will proceed with the purchase, then this Agreement shall
terminate at the end of such ten (10) business day period, the Deposit shall
be
returned to Buyer and neither party shall have any further rights or obligations
hereunder except as provided in Sections 7.1, 9.3 and 9.12 below. If
(a) either: (i) ten percent (10%) or less of the Property is condemned
prior to the Closing, or (ii) such condemnation does not materially interfere
with Buyer’s operations of the Property as a distribution facility, or
(b) Buyer elects within the aforesaid ten (10) business day period to
proceed with the purchase, then this Agreement shall not terminate and upon
the
Closing, there shall be a credit against the Purchase Price due hereunder equal
to the amount of any condemnation awards collected by Sellers as a result of
any
such condemnation, or any payment received in lieu of condemnation (but in
no
event shall the amount of such credit exceed the Purchase Price). If the awards,
or any payment in lieu thereof, have not been collected as of the Closing,
then
such awards, or any payment in lieu thereof, shall be assigned to Buyer, and
Buyer shall not receive any credit against the Purchase Price with respect
to
such awards, or any payment in lieu thereof; provided, that if the amount of
awards, or any payment in lieu thereof, subsequently received by Buyer exceeds
the Purchase Price, then Buyer shall pay to Sellers any such excess within
ten
(10) days after Buyer’s receipt of such awards, or any payment in lieu thereof.
The provisions of this Section 6.1 shall survive the Closing.
Section
6.2 Casualty.
All risk
of loss with respect to the Property until Closing shall be borne by Sellers.
In
the event that any damage or destruction of the Property, or any part thereof,
by fire or other casualty occurs prior to the actual Closing, the Sellers shall
provide written notice of such casualty to Buyer within ten (10) business days
following the date of such casualty, which notice shall include an election
by
Sellers of whether they will repair or restore the casualty damage to the
Property, or elect to terminate this Agreement due to such casualty. If Sellers
elect to repair or restore the damage to the Property caused by such casualty,
Sellers shall repair and restore all such damage and complete the Improvements
in accordance with the requirements of Section 2.2 hereof, and the Outside
Completion Date shall be extended by the reasonable period necessary to repair
and restore the Improvements due to such casualty, but in no event beyond May
15, 2007 without the prior consent of Buyer to a further extension beyond May
15, 2007. If Sellers elect to terminate this Agreement due to such casualty,
the
Deposit shall be immediately refunded to the Buyer, and the parties shall have
no further duties or obligations under this Agreement. If Sellers elect to
repair or restore all damage to the Improvements due to such casualty, but
the
time necessary to repair or restore the Improvements will extend beyond May
15,
2007, the Buyer shall elect, within ten (10) business days after it has received
written notice from Sellers of the existence of such casualty, and the time
estimated by Sellers as being necessary for completion of the Improvements,
to
either: (i) terminate this Agreement, in which event the Deposit shall be
immediately refunded to Buyer and the parties shall have no further duties
or
obligations hereunder, or (ii) agree to the extension to the Outside Completion
Date proposed by Sellers. If the Buyer does not provide any written notice
to
Sellers within ten (10) business days following receipt of the written notice
from Sellers advising of the existence of the casualty, the election by Sellers
to proceed with repair and restoration of the Improvements and the time
estimated for completion, the Buyer shall be deemed to have elected the option
provided in subparagraph (ii) above.
ARTICLE
VII
BROKERS
AND EXPENSES
Section
7.1 Brokers.
The
parties represent and warrant to each other that except for NAI Hiffman, whose
commissions shall be paid by Sellers upon Closing in accordance with the
provisions of a separate written agreement between Sellers and such brokers,
no
other broker or finder was instrumental in arranging or bringing about this
transaction and that there are no claims or rights for brokerage commissions
or
finder’s fees in connection with the transactions contemplated by this
Agreement. If any person brings a claim for a commission or finder’s fee based
upon any contact, dealings or communication with Buyer or Sellers, then the
party through whom such person makes his claim shall defend the other party
(the
“Indemnified
Party”)
from
such claim, and shall indemnify the Indemnified Party and hold the Indemnified
Party harmless from any and all costs, damages, claims, liabilities or expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by the Indemnified Party in defending against the claim. The provisions
of this Section 7.1 shall survive the Closing or, if the purchase and sale
is not consummated, any termination of this Agreement.
Section
7.2 Expenses.
Except
as provided in Section 2.1(b) and Section 5.2 above and in Section 8.4
below, each party hereto shall pay its own expenses incurred in connection
with
this Agreement and the transactions contemplated hereby.
ARTICLE
VIII
CLOSING
AND ESCROW
Section
8.1 Escrow
Instructions.
Upon
execution of this Agreement, the parties hereto shall deposit an executed
counterpart of this Agreement with the Title Company, and this instrument shall
serve as the instructions to the Title Company as the escrow holder for
consummation of the purchase and sale contemplated hereby. Sellers and Buyer
agree to execute such reasonable additional and supplementary escrow
instructions as may be appropriate to enable the Title Company to comply with
the terms of this Agreement; provided, however, that in the event of any
conflict between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.
Section
8.2 Closing.
The
Closing hereunder shall be held and delivery of all items to be made at the
Closing under the terms of this Agreement shall be made at the offices of the
Title Company on the earlier of: (i) the date which is five (5) business days
after the Substantial Completion of the Improvements, and (ii) the date which
is
five (5) days after Buyer occupies the Improvements for the purpose of
conducting business therein (which occupancy shall be permitted at the sole
discretion of Sellers), or if such date is not a business day then upon the
next
ensuing business day, before 1:00 p.m. local time (the “Closing
Date”).
Such
date and time may not be extended without the prior written approval of both
Sellers and Buyer.
Section 8.3 Deposit of
Documents.
(a) At
or
before the Closing, Sellers, as applicable, shall deposit into escrow the
following items:
(i)
the
duly
executed and acknowledged AMB Deed and the Headlands Deed, subject to the
Conditions of Title;
(ii) two
(2)
duly executed counterparts of the Bill of Sale;
(iii) two
(2)
duly executed counterparts of the Assignment and Assumption of Contracts;
(iv) an
affidavit pursuant to Section 1445(b)(2) of the United States Internal
Revenue Code of 1986, as amended (the “Federal
Code”)
in the
form attached hereto as Exhibit F,
and on
which Buyer is entitled to rely, that each Seller is not a “foreign person”
within the meaning of Section 1445(f)(3) of the Federal Code; and
(v) duly
executed Cook County and State of Illinois transfer tax declarations
(“Transfer
Tax Declarations”);
(vi) a
lease
termination agreement, in the form attached hereto as Exhibit
G,
terminating that certain lease agreement dated October 25, 2002, as amended
from
time to time, between Sub-OP Fund II, L.P., a Delaware limited partnership,
as
landlord, and Buyer, as tenant, for premises located at 351 Touhy, Des Plaines,
Illinois (“Lease
Termination Agreement”);
and
(vii)
as
soon
as possible, but in any event within thirty (30) days after the Substantial
Completion of the Improvements (either prior to or after the Closing Date,
as
applicable), at no cost to Buyer and only to the extent available, a set of
the
Final Plans, any applicable warranties, operating manuals, a full and completed
construction manual, and other printed materials provided to Seller by its
contractors or by manufacturers or installers of any element or system in the
Improvements including, to the extent included in the Final Plans, doors,
heating, ventilation and air conditioning systems, lighting systems, and
electrical systems.
(b) At
or
before Closing, Buyer shall deposit into escrow the following items:
(i)
funds
necessary to close this transaction;
(ii) two
(2)
duly executed counterparts of the Bill of Sale;
(iii) two
(2)
duly executed counterparts of the Assignment and Assumption of Contracts;
and
(iv) the
Lease
Termination Agreement.
(c) Buyer
and
Sellers shall each deposit such other instruments as are reasonably required
by
the Title Company or otherwise required to close the escrow and consummate
the
purchase and sale of the Property in accordance with the terms hereof. Buyer
and
Sellers hereby designate Title Company as the “Reporting Person” for the
transaction pursuant to Section 6045(e) of the Federal Code and the
regulations promulgated thereunder.
Section
8.4 Prorations
(a) With
respect to the Property, Sellers shall be entitled to all income produced from
the operation of the Property which is allocable to the period prior to Closing
and shall be responsible for all expenses allocable to that period; and Buyer
shall be entitled to all income and responsible for all expenses allocable
to
the period beginning at 12:01 A.M. on the day Closing occurs. At the Closing,
all items of income and expense with respect to the Property listed below shall
be prorated in accordance with the foregoing principles and the rules for the
specific items set forth hereafter:
(i) Sellers
shall arrange for a billing under all those Service Contracts for which fees
are
based on usage and with utility companies for a billing for utilities, to
include all utilities or service used up to the day Closing occurs, and Sellers
shall pay the resultant bills. In the event any of the Service Contracts set
forth in Schedule 3
extend
over periods beyond the Closing the same shall be prorated on a per diem basis.
Notwithstanding the foregoing, Sellers shall receive the benefit of any future
credits or refunds from any utility company in connection with the installation
of such utility services.
(ii) All
ad
valorem real estate and personal property taxes with respect to the Real
Property and the Improvements shall be prorated as of the Closing Date on an
accrual basis. Accordingly, (i) Sellers shall be responsible for the payment
of
all such taxes for the tax year immediately preceding the calendar year in
which
the Closing occurs (i.e., tax year 2005 if the Closing occurs in 2006), which
taxes are payable in the calendar year in which the Closing occurs (i.e., 2006),
and (ii) Sellers and Buyer shall be responsible for their respective prorated
share of all such taxes for the tax year in which the Closing occurs (i.e.,
2006), which taxes are payable during the succeeding calendar year (i.e., 2007).
At Closing, Buyer shall receive a credit for the Sellers’ share of such taxes.
In the event that as of the date Closing occurs the actual tax bills for the
tax
year or years in question are not available and the amount of tax to be prorated
as aforesaid cannot be ascertained, then a good faith estimate of the amount
of
such taxes made by the Title Company shall be used; and after the Closing occurs
and when the actual amount of taxes of the year or years in question shall
be
determinable, such taxes will be re-prorated between the parties to reflect
the
actual amount to such taxes. With respect to any assessments which can be paid
in installments, Sellers shall only be responsible for installments which are
payable on or before the Closing Date. Sellers shall receive credit for any
previously paid or prepaid taxes attributable to periods from and after the
date
of Closing.
(iii) Gas,
water, electricity, heat, fuel, sewer and other utilities charges the
governmental licenses, permits and inspection fees relating to the Property,
shall be prorated on a per diem basis.
(b) The
Title
Company shall determine the aforesaid prorations and deliver such prorations
to
Sellers and Buyer on or before the date that is three (3) business days before
the Closing Date; provided that (i) if any of the aforesaid prorations cannot
be
calculated accurately as of the date that is three (3) business days prior
to
the Closing Date or, (ii) if any of the aforesaid prorations were calculated
inaccurately, then the same shall be recalculated by the parties as soon as
reasonably practicable after the Closing Date and either party owing the other
party a sum of money based on such subsequent proration(s) shall promptly pay
said sum to the other party, pursuant to the terms of this Section 8.4.
(c) Sellers
shall deliver to Buyer the Survey referenced in Section 2.1(a). Buyer shall
pay
for the cost to update, recertify or otherwise revise such Survey, the cost
of
any endorsements to the Title Policy and any local transfer taxes applicable
to
the sale, and Sellers shall pay the premium for the Title Policy and the cost
of
any related title examination charges. Sellers shall pay any state and county
transfer taxes applicable to the sale. Sellers and Buyer shall each pay fifty
percent (50%) of any escrow fees and expenses. Sellers and Buyer shall pay
their
respective attorneys’ fees. Any recording charges or other closing costs
applicable to the sale shall be prorated between Buyer and Sellers in accordance
with customary practice for Cook County, Illinois.
(d) The
provisions of this Section 8.4 shall survive the Closing.
ARTICLE
X
MISCELLANEOUS
Section
9.1 Notices.
Any
notices required or permitted to be given hereunder shall be given in writing
and shall be delivered (a) in person, (b) by certified mail, postage
prepaid, return receipt requested, (c) by a commercial overnight courier
that guarantees next day delivery and provides a receipt, or (d) by
telefacsimile or telecopy, and such notices shall be addressed as follows:
| |
To
Buyer:
|
|
Forward
Air, Inc.
|
| |
|
|
430
Airport Road
|
| |
|
|
Greenville,
Tennessee 37745
|
| |
|
|
Phone
No.: (423) 636-7008
|
| |
|
|
Fax
No.: (423) 636-7274
|
| |
|
|
Att’n:
Legal Department
|
| |
|
|
|
| |
With
a copy to:
|
|
Clements,
Allen, Woods & Margolis, P.C.
|
| |
|
|
15303
Dallas Parkway, Suite 1050
|
| |
|
|
Addison,
Texas 75001
|
| |
|
|
Phone
No.: (972) 991-2600
|
| |
|
|
Fax
No.: (972) 991-2601
|
| |
|
|
Att’n:
Robert M. Allen, Esq.
|
| |
|
|
|
| |
To
Sellers:
|
|
c/o
AMB Property II, L.P.
|
| |
|
|
One
O’Hare Centre
|
| |
|
|
6250
North River Road, Suite 1100
|
| |
|
|
Rosemont,
Illinois, 60018
|
| |
|
|
Phone
No.: (847) 292-9760
|
| |
|
|
Fax
No.: (847) 440-9040
|
| |
|
|
Att’n:
Mr. James E. McGill
|
| |
With
a copy to:
|
|
c/o
AMB Property II, L.P.
|
| |
|
|
Pier
One, Bay One
|
| |
|
|
San
Francisco, CA 94111
|
| |
|
|
Phone
No.: (415) 733-9521
|
| |
|
|
Fax
No.: (415) 477-2121
|
| |
|
|
Att’n:
Mr. Drew Singer
|
| |
|
|
|
| |
With
a copy to:
|
|
Morrison
& Foerster LLP
|
| |
|
|
755
Page Mill Road
|
| |
|
|
Palo
Alto, CA 94304
|
| |
|
|
Phone
No.: (650) 813-5613
|
| |
|
|
Fax
No.: (650) 494-0792
|
| |
|
|
Att’n:
Philip J. Levine, Esq.
|
or
to
such other address as either party may from time to time specify in writing
to
the other party. Any notice shall be deemed delivered when actually delivered,
if such delivery is in person, upon deposit with the U.S. Postal Service, if
such delivery is by certified mail, upon deposit with the overnight courier
service, if such delivery is by an overnight courier service, and upon
transmission, if such delivery is by telefacsimile or telecopy.
Section
9.2 Entire
Agreement.
This
Agreement, together with the Exhibits attached hereto, contain all
representations, warranties and covenants made by Buyer and Sellers and
constitute the entire understanding between the parties hereto with respect
to
the subject matter hereof. Any prior correspondence, memoranda or agreements
are
replaced in total by this Agreement together with the Exhibits hereto.
Section
9.3 Entry
and Indemnity.
In
connection with any entry by Buyer, or its agents, employees or contractors
onto
the Property, Buyer shall give Sellers reasonable advance notice of such entry
and shall conduct such entry and any inspections in connection therewith so
as
to minimize, to the greatest extent possible, interference with Sellers’
business and otherwise in a manner reasonably acceptable to Sellers. Without
limiting the foregoing, prior to any entry to perform any on-site testing,
including any destructive or invasive testing, Buyer shall give Sellers notice
thereof, including the identity of the company or persons who will perform
such
testing and the proposed scope of the testing. In the event that Buyer proposed
to perform any destructive or invasive testing, Sellers shall approve or
disapprove, which such approval shall not be unreasonably withheld. If Buyer
or
its agents, employees or contractors take any sample from the Property in
connection with any such approved testing, at Sellers’ request, Buyer shall
provide to Sellers a portion of such sample being tested to allow Sellers,
if it
so chooses, to perform its own testing. Sellers or their representative may
be
present to observe any testing or other inspection performed on the Property.
Upon Sellers’ request, Buyer shall promptly deliver to Sellers copies of any
reports relating to any testing or other inspection of the Property performed
by
Buyer or its agents, employees or contractors. Buyer shall maintain, and shall
assure that its contractors maintain, public liability and property damage
insurance in amounts (public liability in a combined single limit of not less
than $2,000,000) and in form and substance adequate to insure against all
liability of Buyer and its agents, employees or contractors, arising out of
any
entry or inspections of the Property pursuant to the provisions hereof, and
Buyer shall provide Sellers with evidence of such insurance coverage upon
request by Sellers. Buyer shall indemnify and hold Sellers harmless from and
against any costs, damages, liabilities, losses, expenses, liens or claims
(including, without limitation, reasonable attorneys’ fees) arising out of or
relating to any entry on the Property by Buyer, its agents, employees or
contractors in the course of performing the inspections, testings or inquiries
provided for in this Agreement. The foregoing indemnity shall survive beyond
the
Closing, or, if the sale is not consummated, beyond the termination of this
Agreement.
Section
9.4 Time.
Time is
of the essence in the performance of each of the parties’ respective obligations
contained herein.
Section
9.5 1031
Exchange. The
parties acknowledge and agree that either party may elect to assign their
interest in this Agreement to an exchange facilitator by means of one or more
escrows for the purpose of completing an exchange of such Property in a
transaction which will qualify for treatment as a tax deferred exchange pursuant
to the provisions of Section 1031 of the Internal Revenue Code of 1986 and
applicable state revenue and taxation code sections (a “1031
Exchange”).
Each
party agrees to reasonably cooperate with any party so electing in implementing
any such assignment and 1031 Exchange, provided that such cooperation shall
not
entail any additional expense to the non-electing party, cause such party to
take title to any other property or cause such party exposure to any liability
or loss of rights or benefits contemplated by this Agreement, and the electing
party shall indemnify, defend and hold the non-electing party harmless from
any
liability, damage, loss, cost or other expense including, without limitation,
reasonable attorneys’ fees and costs, resulting or arising from the
implementation of any such assignment and 1031 Exchange. No such assignment
by
any party shall relieve such party from any of its obligations hereunder, nor
shall such party’s ability to consummate a tax deferred exchange be a condition
to the performance of such party’s obligations under this Agreement; provided,
however, that Sellers shall have the right, upon written notice to Buyer, to
extend the Closing for a period of up to two (2) months to accommodate any
such
exchange by Sellers.
Section
9.6 Attorneys’
Fees.
If
either party hereto fails to perform any of its obligations under this Agreement
or if any dispute arises between the parties hereto concerning the meaning
or
interpretation of any provision of this Agreement, then the defaulting party
or
the party not prevailing in such dispute, as the case may be, shall pay any
and
all costs and expenses incurred by the other party on account of such default
and/or in enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys’ fees and disbursements. Any
such attorneys’ fees and other expenses incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately
from
and in addition to any other amount included in such judgment, and such
attorneys’ fees obligation is intended to be severable from the other provisions
of this Agreement and to survive and not be merged into any such judgment.
Section
9.7 Jury
Trial Waiver. The
parties hereby agree to waive any right to trial by jury with respect to any
action or proceeding (i) brought by either party or any other party, relating
to
(A) this Agreement and/or any understandings or prior dealings between the
parties hereto, or (B) the Property or any part thereof, or (ii) to which
Sellers are a party. The parties hereby acknowledge and agree that this
Agreement constitutes a written consent to waiver of trial by jury pursuant
to
any applicable state statutes.
Section
9.8 No
Merger.
The
obligations contained herein shall not merge with the transfer of title to
the
Property but shall remain in effect until fulfilled.
Section
9.9 Assignment.
Buyer’s
rights and obligations hereunder shall not be assignable without the prior
written consent of Sellers, in their sole discretion.
In
no
event shall Buyer be released from any of its obligations or liabilities
hereunder if Sellers approves of any assignment of this Agreement. Subject
to
the foregoing, this Agreement shall inure to the benefit of and be binding
upon
the parties hereto and their respective successors and assigns.
Section
9.10 Counterparts
and Facsimile.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which taken together shall constitute one and
the
same instrument. The parties contemplate that they may be executing counterparts
of this Agreement transmitted by facsimile and agree and intend that a signature
by facsimile machine shall bind the party so signing with the same effect as
though the signature were an original signature.
Section
9.11 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Illinois.
Section
9.12 Confidentiality.
Buyer
and Sellers shall each maintain as confidential any and all material obtained
about the other and, in the case of Buyer, about the Property, and shall not
disclose such information to any third party except for disclosures required
by
court order or subpoena. In addition, neither party shall issue any press
release or other public announcement regarding this transaction without first
obtaining the other party’s written approval with respect to the release or
announcement and the content thereof. Notwithstanding the foregoing, Buyer
may
disclose any information regarding the economic terms of this transaction to
its
lenders, accountants, attorneys and other consultants and advisors, without
any
consent or approval of Sellers; provided, however, prior to receiving disclosed
information, such parties shall in writing acknowledge the confidential nature
of the material and agree to maintain as confidential all such material.
Notwithstanding anything to the contrary provided in this Agreement, after
the
Closing, Sellers and Buyer shall be permitted to make such disclosures regarding
the Property and the subject transaction as are similar or consistent with
Sellers’ and Buyer’s general public disclosure policy, including disclosures
made by Sellers or Buyer in their quarterly supplemental analyst disclosure
packages. This provision shall survive the Closing or any termination of this
Agreement.
Section
9.13 General
Rules of Construction.
The
parties acknowledge that this Agreement has been freely negotiated by both
parties, that each party has had the opportunity to review and revise this
Agreement, that each party has had the opportunity to consult with counsel
with
regard to this Agreement, and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party will not
be
employed in the interpretation of this Agreement or any amendments or exhibits
to this Agreement.
Section
9.14 Insurance.
Through
the Closing Date, Sellers shall maintain or cause to be maintained, at Sellers’
sole cost and expense the following insurance: (a) workman’s compensation
insurance for all persons carrying out any work required relating to the
Property, in accordance with and to the extent required by the requirements
of
applicable laws relative to workman’s compensation insurance, (b) comprehensive
or commercial and general liability insurance on an “occurrence” basis, and (c)
a standard “all risk” builders risk policy of insurance in an amount of not less
than the full replacement cost of the Improvements. All such insurance policies
shall be issued by insurance carriers licensed and approved to do business
in
the State of Illinois, and, upon Buyer’s written request, Sellers shall provide
Buyer with certificates evidencing such policies.
Section
9.15 Interpretation
of Agreement.
The
article, section and other headings of this Agreement are for convenience of
reference only and shall not be construed to affect the meaning of any provision
contained herein. Where the context so requires, the use of the singular shall
include the plural and vice versa and the use of the masculine shall include
the
feminine and the neuter. The term “person” shall include any individual,
partnership, joint venture, corporation, trust, unincorporated association,
any
other entity and any government or any department or agency thereof, whether
acting in an individual, fiduciary or other capacity.
Section
9.16 Authority
of Buyer.
Buyer
represents and warrants to Sellers that Buyer is a corporation, duly organized,
validly existing, and in good standing under the laws of the State of Tennessee.
Buyer further represents and warrants to Sellers that this Agreement and all
documents executed by Buyer which are to be delivered to Sellers at Closing
(a) are or at the time of Closing will be duly authorized, executed and
delivered by Buyer, (b) are or at the time of Closing will be legal, valid
and binding obligations of Buyer, and (c) do not and at the time of Closing
will not violate any provision of any agreement or judicial order to which
Buyer
is a party or to which Buyer is subject. The foregoing representation and
warranty and any and all other representations and warranties of Buyer contained
herein shall survive the Closing Date.
Section
9.17 Limited
Liability.
The
obligations of Sellers are intended to be binding only on the Sellers’ assets,
subject to the limits of Section 5.3, and the obligations of Sellers shall
not
be personally binding upon, nor shall any resort be had to, the private
properties of any of its trustees, officers, directors or shareholders, the
general partners, officers, directors or shareholders thereof, or any employees
or agents of Sellers.
Section
9.18 Amendments.
This
Agreement may be amended or modified only by a written instrument signed by
Buyer and Sellers.
Section
9.19 No
Recording.
Neither
this Agreement or any memorandum or short form thereof may be recorded by Buyer.
Section
9.20 Effective Date.
As used
herein, the term “Effective Date” shall mean the first date on which both
Sellers and Buyer shall have executed this Agreement.
Section
9.21 Restrictions
On Sale; Right of First Offer to Purchase the Property.
(a) For
a
period ending two (2) years after the Closing Date (the “Restriction
Period”),
Buyer
shall not engage in a sale, disposition or ground lease in excess of twenty-five
(25) years (inclusive of any extension option periods contained in such ground
lease) (a “Ground
Lease”),
of
the Real Property without the prior written consent of the Sellers, which may
be
withheld in Sellers’ sole and absolute discretion. Buyer’s restriction to sell
the Property under this Section 9.21(a) shall be evidenced in the AMB Deed
and
the Headlands Deed. The provisions of this Section 9.21(a) shall survive the
Closing for a period which ends upon the expiration of the Restriction Period.
The Buyer acknowledges that the Buyer’s agreement to this absolute restriction
on sale during the Restriction Period was a material inducement to Sellers
selling the Property to Buyer and Sellers would not have sold the Property
to
Buyer but for the inclusion of the restriction on sale contained in this Section
9.21.
(b) If,
during the period commencing immediately after the end of the Restriction Period
and continuing through and including the tenth (10th)
year
anniversary of the Closing Date, Buyer desires to sell all or any portion of
the
Property (it being understood that any such sale during the Restricted Period
shall be subject to the provisions of Section 9.21(a) above), Buyer shall
deliver a written offer notice to AMB, which offer notice shall set forth all
of
the material business terms of the proposed sale, including, without limitation,
the purchase price, the allocation of closing costs and prorations, the amount
of any deposit, the length of the due diligence period, the date on which
closing is to occur, and the terms of any lease back arrangement proposed by
Buyer (the “Offer
Notice”).
AMB
shall have fifteen (15) business days after receipt of the Offer Notice to
notify Buyer in writing of AMB’s election to purchase the Property under the
terms set forth in the Offer Notice. AMB’s failure to notify Buyer of its
election within such fifteen (15) business day period shall be deemed an
election by AMB not to purchase the Property. If AMB elects to purchase the
Property, then Buyer and AMB (or AMB’s designee) shall negotiate in good faith
the terms of a mutually acceptable form of purchase contract with respect to
the
Property containing the terms set forth in the Offer Notice and promptly enter
into such contract upon mutual approval thereof. Notwithstanding the foregoing,
if Buyer and AMB (or AMB’s designee) have not entered into such contract for
purchase of the Property within thirty (30) days following receipt of AMB’s
written election to purchase the Property, it will be deemed that AMB has
rejected the Offer Notice and elected not to purchase the Property. If AMB
elects not to purchase the Property, then Buyer shall be free to sell the
Property to a bona fide unrelated third party on terms not more favorable to
such third party than were set forth in the Offer Notice and for a price that
will result in Buyer receiving not less than the net amount of cash that Buyer
would have received if Buyer had sold the Property to AMB under the terms set
forth in the Offer Notice; provided, that if AMB elects not to purchase the
Property pursuant to an Offer Notice and Buyer subsequently desires to sell
all
or a portion of the Property on terms more favorable than those set forth in
the
original Offer Notice or on terms that would result in Buyer receiving less
than
the net amount of cash that Buyer would have received if Buyer had sold the
Property to AMB under the terms set forth in the original Offer Notice, then
Buyer shall deliver a new Offer Notice to AMB pursuant to this Section 9.21(b)
containing the terms of such proposed sale and AMB shall again have the right
to
accept such new offer prior to Buyer consummating the proposed sale with a
third
party. The right of first offer under this Section 9.21(b) shall be evidenced
in
the AMB Deed and the Headlands Deed. Buyer hereby agrees that Buyer shall not
try to circumvent or evade AMB’s right to purchase the Property pursuant to this
Section 9.21 by entering into a Ground Lease for the Property in lieu of selling
the Property. The provisions of this Section 9.21(b) and AMB’s right of first
offer to purchase the Property pursuant to the terms of this Section 9.21(b)
shall survive the Closing for a period of ten (10) years, after which AMB’s
right of first offer to purchase the Property shall expire and terminate and
be
of no further force and effect. Further, upon the termination of AMB’s right of
first offer and if requested by Buyer, AMB shall execute a release of such
right
of first offer in form suitable for recording in the Real Property Records
of
Cook County, Illinois.
Section
9.22 Deadlines
on Non-Business Days. In
the
event any deadline specified herein falls on a day which is not a regular
business day (including, without limitation, any day where the banks in San
Francisco, California or the offices of the Escrow Agent in San Francisco,
California, are closed), then the deadline shall be extended to the end of
the
next following regular business day.
Section
9.23 Default.
No
party shall be deemed to be in default under this Agreement unless such party
fails, for any reason other than the other party’s default hereunder or the
failure of a condition precedent to such party’s obligation to perform
hereunder, to meet, comply with or perform any covenant, agreement or obligation
on such party’s part required within the time limits and in the manner required
in this Agreement unless and until such party has received written notice from
the other party of such default and the party receiving such written notice
has
failed to cure such default within five (5) business days after the receipt
of
such notice if a monetary default or a failure to make a delivery of any of
the
documents described in Section 8.3, and within thirty (30) days after receipt
of
such notice if any other default, or if the default is non-monetary, and the
nature of the default is such that the same cannot reasonably be cured within
such thirty (30) day period, such party shall not be deemed to be in default
if
it diligently commences to cure the default within such thirty (30) day period
and thereafter diligently proceeds to rectify and cure the default as soon
as
possible.
The
parties hereto have executed this Agreement as of the respective dates written
below.
|
SELLERS:
|
AMB
PROPERTY II, L.P.,
|
| |
a
Delaware limited partnership
|
| |
|
|
|
|
| |
By:
|
Texas
AMB I, LLC,
|
| |
a
Delaware limited liability company its general partner
|
| |
|
|
|
|
| |
|
By:
|
AMB
Property Holding Corporation,
|
| |
|
a
Maryland corporation, its sole member
|
| |
|
|
|
|
| |
|
|
By:
|
/s/
James McGill
|
| |
|
|
Name:
|
James
McGill
|
| |
|
|
Its:
|
Sr.
V.P.
|
| |
|
|
|
|
| |
HEADLANDS
REALTY CORPORATION
|
| |
a
Maryland corporation
|
| |
|
|
|
|
| |
By:
|
/s/
James McGill
|
| |
Name:
|
James
McGill
|
| |
Its:
|
Sr.VP
|
|
Date:
7/10/06
|
|
|
|
|
| |
|
|
|
|
|
BUYER:
|
FORWARD
AIR, INC.,
a
Tennessee corporation
|
| |
|
|
|
|
| |
By:
|
/s/
Matthew J. Jewell
|
|
Date:
7/7/06
|
Name:
|
Matthew
J. Jewell
|
| |
Its:
|
SVP&
General Counsel
|
[Parties
must also initial Section 1.3(b)(ii)]
SCHEDULE
1
Personal
Property
None.
SCHEDULE
2
Due
Diligence Documentation
|
1.
|
Building
plans and specifications for the
Property;
|
|
2.
|
Geotechnical
testing information;
|
|
3.
|
A
Preliminary Title Report, with copies of recorded encumbrances, including
CC&R’s (within 15 days after the Effective Date);
and
|
|
4.
|
Copies
of any City Planning Permits in connection with the
Property.
|
SCHEDULE
3
List
of Service Contracts
None.
SCHEDULE
4
Exception
Matters
NONE
SCHEDULE
5
Title
Commitment
SCHEDULE
6
Pre-Approved
Development Encumbrances
1.
Plat
of Vacation to vacate an existing utility easement that runs along the eastern
border of the western parcel. This easement will have to be relocated along
the
eastern or western property line.
2.
Plat
of Subdivision consolidating the two parcels currently comprising the
Property.
3.
Utility Easements for electric, gas, water, sewer, and/or storm as long as
no
improvements are constructed on such easements in violation of the terms of
such
easements.
EXHIBIT
A-1
DESCRIPTION
OF AMB REAL PROPERTY
A
portion
of that certain real property situated in Cook County,
Illinois, described as follows:
THE
WEST
660.00 FEET OF THE EAST 700.0 FEET (EXCEPT THE NORTH 726 FEET THEREOF) AS
MEASURED ALONG THE NORTH AND EAST LINES, RESPECTIVELY, OF THE NORTHWEST ¼ OF THE
NORTHEAST ¼, EXCEPT THE EAST 60.00 FEET OF THE WEST 660.00 FEET OF THE EAST
700.00 FEET (EXCEPT THE NORTH 726.00 FEET THEREOF, AS MEASURED ALONG THE NORTH
AND EAST LINES, OF THE NORTHWEST ¼ OF THE NORTHEAST ¼ AFORESAID) AND EXCEPT THE
SOUTH 33.00 FEET OF THE LAND TAKEN FOR ROAD PURPOSES IN SECTION 25, TOWNSHIP
41
NORTH, RANGE 11 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY,
ILLINOIS.
EXHIBIT
A-2
DESCRIPTION
OF HEADLANDS REAL PROPERTY
A
portion
of that certain real property situated in Cook County, Illinois, described
as
follows:
LOT
1 IN
INTERCONTINENTAL INDUSTRIAL SUBDIVISION, BEING A SUBDIVISION OF PART OF THE
NORTHWEST ¼ OF THE NORTHEAST ¼ OF SECTION 25, TOWNSHIP 41 NORTH, RANGE 11, EAST
OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.
EXHIBITS
B-1 AND B-2
BASE
BUILDING AND TENANT IMPROVEMENT SPECIFICATIONS
AMB
Property Corporation
BASE
BUILDING & TENANT
IMPROVEMENT
SPECIFICATIONS
Forward
Air, Inc.
125,540
AMB
Des Plaines Logistics Center
250
Wille Road, Des Plaines, Illinois
June
16, 2006
EXHIBIT
B-4
SUBMITTED
BUILDING SHELL PLANS
EXHIBIT
B-5
CONSTRUCTION
SCHEDULE
EXHIBIT
C
DEED
|
THIS
DOCUMENT WAS PREPARED BY
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AND
AFTER RECORDING RETURN TO:
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)
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)
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)
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[This
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SPECIAL
WARRANTY DEED
THIS
SPECIAL WARRANTY DEED
(the
“Deed”),
is
made as of this _____ day of __________________, 2006, by ___________________,
a
________________ (the “Grantor”),
having an office at One O’Hare Centre, 6250 North River Road, Suite 1100,
Rosemont, Illinois 60018 to _______________,
a
______________ (the “Grantee”),
having an office at __________________.
WITNESSETH:
That
the
Grantor for and in consideration of the sum of TEN AND 00/100THS DOLLARS
($10.00) and other good and valuable consideration in hand paid by the Grantee,
the receipt and sufficiency of which is hereby acknowledged, by these presents
does
GRANT, REMISE, RELEASE, ALIEN, SELL AND CONVEY unto
the
Grantee and its successors and assigns FOREVER,
all of
the real estate, situated in the County of _________ and State of Illinois
described on Exhibit
A
attached
hereto and made a part hereof together with the building structures, fixtures
and other improvements affixed to or located on said real estate, together
with
all rights and appurtenances pertaining to such property, including any right,
title and interest of Grantor in and to adjacent streets, alleys or rights
of
way (the “Property”),
subject to those matters described on Exhibit
B
attached
hereto and made a part hereof (the “Permitted
Exceptions”).
TO
HAVE AND TO HOLD
the
Property, with the rights and appurtenances subject to the Permitted Exceptions,
unto the Grantee and its successors and assigns forever.
Grantor
does covenant, promise and agree, to and with the Grantee and its successors
and
assigns, that it has not done, or suffered to be done, anything whereby the
Property is, or may be, in any manner encumbered or charged, except as herein
recited, and that it WILL
WARRANT AND FOREVER DEFEND
the
Property against persons lawfully claiming, or to claim the same, by, through
or
under Grantor but not otherwise, except for claims arising under or by virtue
of
the Permitted Exceptions.
IN
WITNESS WHEREOF,
the
Grantor has caused its name to be signed to these presents on the day, month
and
year first set forth above.
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STATE
OF
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COUNTY
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I,
the
undersigned, a Notary Public in and for said County and State aforesaid,
DO
HEREBY CERTIFY, that _____________________________________ as _________________
of ______________, a _______________ (the “Company”), personally known to me to
be the same person whose name is subscribed to the foregoing instrument as
such
_____________, appeared before me this day in person and acknowledged he
signed
and delivered said instrument as his free and voluntary act, and as the free
and
voluntary act of said Company, for the uses and purposes therein set
forth.
GIVEN
UNDER my hand and Notarial Seal this _____ day of _____________,
2006.
Tax
bills
should be sent to:
EXHIBIT
A TO DEED
LEGAL
DESCRIPTION
[SIGNATURE
PAGE FOR SPECIAL WARRANTY DEED]
EXHIBIT
B TO DEED
EXHIBIT
D
BILL
OF SALE
For
good
and valuable consideration, the receipt of which is hereby
acknowledged, _______________ ,
a
___________________
(“Seller”), does hereby sell, transfer, and convey to _______________, a
________________ (“Buyer”), any and all personal property owned by Seller
and located on and used in connection with the operation of that certain real
property located in the City of _________________ ,
County
of _______________ ,
State
of _____________ ,
described on Exhibit
A
attached
hereto and made a part hereof, as such personal property is more particularly
described in the attached Schedule 1.
BUYER
ACKNOWLEDGES THAT SELLER IS SELLING AND BUYER IS PURCHASING SUCH PERSONAL
PROPERTY ON AN “AS IS WITH ALL FAULTS” BASIS AND THAT BUYER IS NOT RELYING ON
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED,
FROM SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING SUCH PERSONAL
PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
This
Bill
of Sale may be executed in two or more counterparts, each of which shall be
deemed an original but all of which taken together shall constitute one and
the
same instrument.
Dated
this ____ day of __________, 2006.
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SELLER:
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BUYER:
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Schedule
1 to Bill of Sale
List
of Personal Property
None.
Exhibit
A
to Bill of Sale
Real
Property Description
EXHIBIT
E
ASSIGNMENT
AND ASSUMPTION OF CONTRACTS,
WARRANTIES
AND GUARANTIES
AND
OTHER INTANGIBLE PROPERTY
THIS
ASSIGNMENT AND ASSUMPTION (the “Assignment”) dated as of _____ _________, 2006,
is between ______________ ,
a ____________________
(“Assignor”), and ______________________, a ______________________
(“Assignee”).
A. Assignor
owns certain real property and certain improvements thereon located in the
City
of ,
County
of ,
State
of ,
and
more particularly described in attached Exhibit A
(the
“Property”).
B. Assignor
has entered into certain contracts that affect the Property, which contracts
are
described on Exhibit B
attached
hereto (the “Contracts”).
C. Assignor
and Assignee have entered into an Agreement of Purchase and Sale dated as of
____________, 2006 (the “Agreement”), pursuant to which Assignee agreed to
purchase the Property from Assignor and Assignor agreed to sell the Property
to
Assignee, on the terms and conditions contained therein.
D. Assignor
desires to assign to Assignee its interest in the Contracts and in certain
warranties, guaranties, and intangible personal property with respect to the
Property, and Assignee desires to accept the assignment thereof, on the terms
and conditions below.
ACCORDINGLY,
the parties hereby agree as follows:
1. As
of the
date on which the Property is conveyed to Assignee pursuant to the Agreement
(the “Conveyance Date”), Assignor hereby assigns without recourse or warranty of
enforceability all of its right, title and interest in and to the following:
(a) all
of
the Contracts approved by Assignee and listed on Exhibit B;
(b) any
warranties and guaranties (“Warranties and Guaranties”) made by or received from
any third party with respect to any improvements owned by Assignor on the
Property; and
(c) any
intangible property now owned by Assignor in connection with the Property
excluding claims by Assignor, if any, arising out of matters occurring before
the Conveyance Date.
2. Assignor
hereby agrees to indemnify Assignee against and hold Assignee harmless from
any
and all liabilities, losses, damages, claims, costs or expenses, including,
without limitation, reasonable attorneys’ fees and costs (collectively,
“Claims”), originating prior to the Conveyance Date and arising out of
Assignor’s obligations under the Contracts.
3. Concurrently
with the conveyance of Assignor’s interest in the Property to Assignee, Assignee
hereby assumes all of Assignor’s obligations under the Contracts and agrees to
indemnify Assignor against and hold Assignor harmless from any and all Claims
originating on or subsequent to the Conveyance Date and arising out of
Assignor’s obligations under the Contracts.
4. With
respect to the assignment of the Warranties and Guaranties to Assignee, such
assignment shall be on a non-exclusive basis in order that Assignor may reserve
the right to pursue any claims which it may have against the warrantor or
guarantor pursuant to the Warranties and Guaranties.
5. In
the
event of any dispute between Assignor and Assignee arising out of the
obligations of Assignor under this Assignment or concerning the meaning or
interpretation of any provision contained herein, the losing party shall pay
the
prevailing party’s costs and expenses of such dispute, including, without
limitation, reasonable attorneys’ fees and costs.
6. This
Assignment shall be binding on and inure to the benefit of the parties hereto
and their respective successors and assigns.
7. This
Assignment may be executed in any number of counterparts, each of which shall
be
deemed an original but all of which taken together shall constitute one and
the
same instrument.
8. The
obligations of Assignor are intended to be binding only on the property of
the
Assignor and shall not be personally binding upon, nor shall any resort be
had
to, the private properties of any of its trustees, officers, directors or
shareholders, its investment manager, the partners, officers, directors or
shareholders thereof, or any employees or agents of the Assignor or the
investment manager. The obligations of Assignor are subject to the limitations
on liability contained in Section 5.3 of the Agreement.
Assignor
and Assignee have executed this Assignment the day and year first above written.
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ASSIGNOR:,
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ASSIGNEE:
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Exhibit
A
to Assignment
and
Assumption of Contracts
Real
Property Description
Exhibit
B
to Assignment
and
Assumption of Contracts
List
of Approved Contracts
EXHIBIT
F
CERTIFICATE
OF TRANSFEROR OTHER
THAN
AN INDIVIDUAL
(FIRPTA
Affidavit)
Section 1445
of the Internal Revenue Code provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person. To inform
________________________, a _________________________ “Transferee”), the
transferee of certain real property located in the City of ________________ ,
County
of ______________ ,
State
of _______________ ,
that
withholding of tax is not required upon the disposition of such U.S. real
property interest by ____________________ ,
a ______________________
(“Transferor”), the undersigned hereby certifies the following on behalf of
Transferor:
1. Transferor
is not a foreign corporation, foreign partnership, foreign trust, or foreign
estate (as those terms are defined in the Internal Revenue Code and Income
Tax
Regulations);
2. Transferor’s
U.S. employer identification number is ______________ ;
and
3. Transferor’s
office address is c/o ______________________________ .
Transferor
understands that this certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
Under
penalty of perjury, I declare that I have examined this certificate and to
the
best of my knowledge and belief it is true, correct and complete, and I further
declare that I have authority to sign this document on behalf of Transferor.
Dated
as
of ______________, 2006.
NOTICE
TO
TRANSFEREE (BUYER): You are required by law to retain this Certificate until
the
end of the fifth tax year following the tax year in which the transfer takes
place and make the Certificate available to the Internal Revenue Service if
requested to do so during that period.
EXHIBIT
G
LEASE
TERMINATION AGREEMENT
THIS
LEASE TERMINATION AGREEMENT (the “Agreement”) is entered into as of the ______
day of ______, 2006, by and between SUB-OP FUND II, L.P., a Delaware limited
partnership (“Landlord”) and FORWARD AIR, INC., a Tennessee corporation
(“Tenant”).
W
I T N E S S E T H
WHEREAS,
Landlord and Tenant entered into that certain Commercial Lease Agreement dated
October 25, 2002 (the “Lease”), with respect to certain real property commonly
referred to as 351 West Touhy Avenue, Suites 100 and 150, Des Plaines, Illinois
as more fully described therein (the “Premises”).
WHEREAS,
Tenant is concurrently entering into an Agreement of Purchase and Sale
(“Purchase Agreement”), dated as of the date hereof, with AMB Property II, L.P.,
a Delaware limited partnership (“AMB”) and Headlands Realty Corporation, a
Maryland corporation (“Headlands”) (AMB and Headlands are hereinafter
collectively referred to as “Sellers”), which such Sellers are affiliates of
Landlord.
WHEREAS,
in connection with the terms and conditions of the Purchase Agreement, Tenant
desires to vacate and surrender the Premises to Landlord on the “Termination
Date” (as herein defined) notwithstanding that the term of the Lease does not
expire until February 29, 2008, and Landlord desires to accept such vacation
and
surrender.
NOW,
THEREFORE, in consideration of the above and the mutual covenants and conditions
contained herein, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
1. Defined
Terms and Recitals.
All
capitalized terms used herein but not otherwise defined herein shall have the
meanings set forth in the Lease. Tenant and Landlord hereby agree that the
recitals set forth hereinabove are true and correct and incorporated into this
Agreement.
2. Effective
Date of Termination.
The
Lease shall remain in full force and effect and shall govern the rights and
obligations of the parties with respect to the Premises through and including
closing date (the “Termination Date”) of the Purchase Agreement; provided,
however, that Landlord and Tenant shall each perform and observe all of the
undertakings, obligations and covenants to be performed or observed by Landlord
and Tenant, respectively, under the Lease, as same pertains to the Premises,
through and including the Termination Date, including, without limitation the
generality of the foregoing, the payment of all Base Rent, all monthly charges
and all other charges which accrued or apply to the period through and including
the Termination Date, any indemnity obligations of Tenant under the Lease,
which
accrue or apply to the period through and including the Termination Date. Upon
achievement of the Termination Date, Tenant shall vacate the Premises in the
condition required under the Lease and the Lease shall automatically terminate
and, except as specifically provided below, shall be of no further force and
effect.
3. Obligations
and Liabilities Surviving the Termination Date.
Notwithstanding the achievement of the Termination Date:
(a) Tenant
shall remain liable to Landlord for all outstanding amounts due Landlord and
other obligations of Tenant under the Lease accruing on or prior to the
Termination Date.
(b) All
indemnity obligations of Tenant under the Lease accruing on or prior to the
date
that Tenant vacates the Premises or arising out of Tenant’s occupancy of the
Premises, shall remain in full force and effect.
(c) Landlord
shall have the right to pursue all remedies at law and/or in equity resulting
from Tenant’s failure to comply with (i) any of its obligations under the Lease
that remain in effect after achievement of the Termination Date pursuant to
this
Paragraph 3 and (ii) any obligations imposed on Tenant under this Agreement,
including the obligation to vacate the Premises on or before the Termination
Date.
4. Contingency.
The
parties acknowledge and agree that this Agreement is contingent upon the closing
of the purchase by Tenant from Sellers and sale by Sellers to Tenant of that
certain property pursuant to the Purchase Agreement, and this Agreement shall
not take effect unless and until such contingency is satisfied.
5. Inspection.
The
parties acknowledge that Landlord and Tenant will undertake a joint inspection
of the Premises immediately prior to the Termination Date to determine whether
Tenant has complied with its obligations under the Lease. If Landlord determines
that Tenant has complied with its obligations under the Lease then there shall
be no deductions from the $43,057.90 Security Deposit being held by Landlord
under the Lease. If Landlord determines that repairs or restoration to the
Premises are necessary, then Landlord shall have the right to deduct from the
Security Deposit any reasonable amounts paid or incurred by Landlord for such
repair or restoration, as well as any damages sustained by Landlord resulting
from any delay in preparing the Premises for occupancy by a future tenant due
to
Tenant’s failure to comply with any of its obligations under the Lease. In the
event the cost to Landlord of performing such repairs or restoration exceeds
the
Security Deposit being held by Landlord, then Tenant shall reimburse Landlord
for such deficiency.
6. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Illinois.
7. Counterparts.
This
Agreement may be executed in two or more counterparts, which when taken together
shall constitute one and the same instrument. The parties contemplate that
they
may be executing counterparts of the Amendment transmitted by facsimile and
agree and intend that a signature by facsimile machine shall bind the party
so
signing with the same effect as though the signature were an original signature.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Lease as of the
day
and year first above written.
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LANDLORD:
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SUB-OP
FUND II, L.P.,
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a
Delaware limited partnership
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In
the presence of:
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By:
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AMB
Property II, L.P.
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a
Delaware limited partnership,
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its
general partner
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By:
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TEXAS
AMB I, LLC,
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a
Delaware limited liability company,
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its
general partner
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Name:
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AMB
Property Holding Corporation,
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a
Maryland corporation,
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its
managing member
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By:
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Name:
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Its:
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TENANT:
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FORWARD
AIR, INC.,
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a
Tennessee corporation
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In
the presence of:
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By:
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Name:
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Title:
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Name:
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4
