Exhibit
10.2
AGREEMENT
OF PURCHASE AND SALE
THIS
AGREEMENT (“Agreement”)
dated
as of September 14th,
2006,
is by and between HEADLANDS
REALTY CORPORATION,
a
Maryland corporation (“Seller”),
and
FORWARD
AIR, INC.,
a
Tennessee corporation (“Buyer”).
ARTICLE
I
PURCHASE
AND SALE OF PROPERTY
Section
1.1 Agreement
of Purchase and Sale. Subject
to Seller acquiring the Property (as defined below), Seller
hereby
agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from
Seller, subject to the terms and conditions set forth herein, the following:
(a) that
certain real property located in the City of Forest Park, County of Clayton,
State of Georgia, and being more particularly described in Exhibit A
attached
hereto (the “Real
Property”);
(b) all
of
Seller’s right title and interest in and to all rights, privileges and easements
appurtenant to the Real Property, including, without limitation, all minerals,
oil, gas and other hydrocarbon substances on and under the Real Property, as
well as all development rights, air rights, water, water rights, riparian rights
and water stock relating to the Real Property and any rights-of-way or other
appurtenances used in connection with the beneficial use and enjoyment of the
Real Property and all of Seller’s right, title and interest in and to all roads
and alleys adjoining or servicing the Real Property (collectively, the
“Appurtenances”);
(c) all
of
Seller’s right, title and interest in and to the Improvements (as defined below)
and fixtures to be constructed on the Real Property pursuant to Section 2.2
below, including, without limitation, an approximately 142,000 square foot
cross
dock shipping and distribution center building containing approximately 12,000
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 Seller
pursuant to Section 2.2 below; and
(d) any
intangible personal property now or hereafter owned by Seller and used in the
ownership, use or operation of the Real Property, including, without limitation,
Seller’s rights and interests in any utility contracts (excluding any utility
deposits made by Seller) or other agreements or rights relating to the
ownership, use and operation of the 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) Seller 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
“Intangible
Property”).
All
of
the items referred to in subparagraphs (a) through (d) above are collectively
referred to as the “Property.”
Section
1.2 Purchase
Price.
(a) The
purchase price of the Property is Fourteen Million Seven Hundred Seventy Six
Thousand Two Hundred Fifteen Dollars ($14,776,215) (the “Purchase
Price”).
(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 One Million Four Hundred
Seventy-Seven Thousand Six Hundred Twenty-One Dollars ($1,477,621.00) (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 Seller
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 THE SELLER’S 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 SELLER HAVE RENDERED SPECIFIC PERFORMANCE IMPOSSIBLE
TO ACHIEVE, BUYER MAY SEEK TO RECOVER ITS ACTUAL DAMAGES DUE TO SELLER’S DEFAULT
HEREUNDER. THE PARTIES HAVE AGREED THAT SELLER’S 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 SELLER 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 SELLER AS THE SOLE AND EXCLUSIVE
REMEDY AVAILABLE TO SELLER 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 1.2(b)(ii) IS NOT INTENDED TO LIMIT
SELLER’S OR BUYER'S RIGHTS UNDER SECTIONS
7.1, 9.3 AND 9.12 OF
THIS AGREEMENT.
INITIALS:
SELLER DS
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 Seller under the terms
of
this Agreement) shall be paid to Seller 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 Pro Forma attached hereto as Schedule
1
(the
“Pro
Forma”),
including, without limitation, the title exceptions set forth in the Pro Forma,
and a copy of a current survey of the Property (the “Survey”),
and
Buyer hereby approves of the matters set forth on the Pro Forma and Survey,
with
the exceptions noted on the Pro Forma and Survey in Schedule
1,
subject
to the obligation of Seller to cure, correct or eliminate certain items as
noted
on Schedule
1
(the
“Title
Items”).
At
any time during the course of construction of the Improvements (hereinafter
defined) Buyer may request that the Title Company update the Pro Forma in the
form of a title commitment (“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 Pro Forma 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 Seller in writing of any objections to title first raised by the Title
Company or first disclosed in any updates to the Pro Forma in 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 Pro Forma 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
Seller of its additional title objections by written notice within three (3)
business days of learning of any such additional title matters. Seller 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) Seller will remove such objectionable exceptions; or (ii) Seller
elects not to cause such exceptions to be removed. If Seller gives Buyer notice
under clause (ii), Buyer may elect within two (2) business days after
receipt of Seller’s notice to (i) waive its objections to title exceptions that
Seller has not agreed to remove and proceed with the purchase without offset
or
credit against the Purchase Price, or (ii) terminate this Agreement. If Seller
fails 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
Seller shall be deemed to have elected to give Buyer notice under
clause (ii). If Seller gives Buyer notice under clause (ii), and Buyer
fails to give Seller notice of its election within two (2) business days after
receipt of Seller’s 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,
Seller shall pay to Buyer its actual out-of-pocket expenses incurred in
connection with this transaction in an amount up to Two Hundred Fifty Thousand
Dollars ($250,000) 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 Seller shall give notice pursuant to clause (i) and
shall fail to remove any such objectionable exceptions, or if Seller shall
fail
to cure or eliminate any Title Items, then Buyer may elect to terminate this
Agreement, the Deposit shall be returned to Buyer, Seller shall pay to Buyer
for
its actual out-of-pocket expenses incurred in connection with this transaction
in an amount up to Two Hundred Fifty Thousand Dollars ($250,000) 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 Seller
elects to attempt to cure any such additional title objections, the date for
Closing shall be automatically extended until Seller completes 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 Seller
determines may have a material adverse effect on Buyer’s use or operation of the
Property as a distribution facility, Seller 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”).
Seller 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 Seller 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 Seller
shall be entitled to use the Purchase Price proceeds to satisfy any such liens
(provided that Seller 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 Seller
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) Seller
has caused to be prepared, at Seller’s sole cost and expense, and Buyer has
approved (i) that certain Base Building and Tenant Improvement Specifications
dated April 21, 2006 ("Specifications")
and
attached hereto as Exhibit
B-1,
(ii)
that certain Site Plan prepared by Centre Point Engineering and dated June
14,
2006 and attached hereto as Exhibit
B-2 (“Site
Plan”),
(iii)
those certain preliminary elevation drawings prepared by Realacorp America
and
dated August 11, 2006 and attached hereto as Exhibit
B-3
(“Elevation
Plans”),
and
(iv) the preliminary floor plan prepared by Realacorp America and dated August
11, 2006 attached hereto as Exhibit
B-4
(the
“Floor
Plan”)
(items
(i) and (iv) 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 Seller 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) Seller
has prepared, and Buyer has approved, plans and specifications which have been
submitted to the City of Forest Park (“City”)
in
connection with the issuance of the building permit for the construction of
the
Building Shell, which such submitted plans and specifications are shown in
Exhibit
B-5
(the
“Submitted
Building Shell Plans”).
If
the City requires any material or substantial modifications to the Submitted
Building Shell Plans, Seller 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 Specifications (and, in the event of a conflict
between the Final Building Shell Plans and the Specifications, the
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
Seller in writing and shall be at Buyer's sole cost and expense and subject
to
Seller'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 Seller 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 Seller’s 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 Seller’s 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 Seller’s 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 Seller, Buyer and the Title Company, and shall provide that
such
Change Order Deposit shall be paid to Seller 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-eight (28) days after the Effective Date, Seller 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 Seller 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, Seller 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 Seller 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) Seller
shall cause the Building Shell to be constructed at Seller’s 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. Seller 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-6
(“Construction
Schedule”),
subject only to Buyer Delays (hereinafter defined) and Unavoidable Delays
(hereinafter defined) and in all events, on or before July 1, 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 Two Thousand Five Hundred Dollars ($2,500) 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 Two Hundred Fifty Thousand Dollars ($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 $2,500 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. Seller 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. Seller 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, Seller 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. Seller 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 Realacorp and constructed by a general
contractor selected by Seller, 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 Seller within three
(3) business days after its receipt of notice of the general contractor selected
by Seller, then Buyer shall be deemed to have approved such general contractor.
If required by Buyer, Seller shall submit the Improvements, or applicable
portions thereof, for competitive bidding. Seller 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. Seller 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 Seller should make
any
modifications to the Final Plans without Buyer’s prior written consent in
accordance with the preceding sentence, Seller shall promptly advise Buyer
of
the changes which were made. Seller 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. Seller shall pay and discharge all liens applicable
to the construction of the Improvements, at its 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 Seller 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, unless the temporary
certificate of occupancy cannot be issued because Buyer has not completed work
for which it is responsible that is required for issuance of the temporary
certificate of occupancy, provided that (A) Seller has completed all work for
which it is responsible that is required for issuance of the temporary
certificate of occupancy as reasonably determined by the architect of record,
and (B) if at Closing any work remains to be performed in order for a permanent
certificate of occupancy (or its equivalent) 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, Seller shall give Buyer written notice that Seller
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. Seller 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 Seller 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, Seller 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 Seller, the Buyer
and the Title Company, which shall provide that Seller 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 Seller 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 Seller, and Seller 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 Seller 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 Two Thousand
Five Hundred Dollars ($2,500.00) 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, SELLER IS 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 SELLER, ITS 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 Seller of any of the
representations and warranties contained in Section 5.1 hereof or Seller’s
fraud, or a breach by Seller of its 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, Seller, Seller’s
affiliates, Seller’s investment manager, the partners, trustees, shareholders,
directors, officers, employees and agents of Seller, and its 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, Seller shall convey title to the Real Property to Buyer by good and
sufficient limited warranty deed in the form of Exhibit C
attached
hereto (the “Deed”).
(b) At
the
Closing, Seller shall transfer title to the Personal Property by a bill of
sale
in the form attached hereto as Exhibit D
(the
“Bill
of Sale”).
(c) At
the
Closing, Seller shall transfer title to the Intangible Property by an assignment
and assumption of Contracts, Warranties and Guaranties and other intangible
property in the form attached hereto as Exhibit E,
which
shall provide that Seller’s
construction warranties are assigned to Buyer on a non-exclusive basis in order
that Seller may reserve the right to pursue any claims which it may have against
the contractor pursuant to the construction warranties (the “Assignment
and Assumption of Contracts”).
Section
4.2 Evidence
of Title.
As a
condition to the Closing, 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 good, marketable and insurable fee simple
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 Pro Forma as updated 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, Seller, at its 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 Seller
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
SELLER’S
REPRESENTATIONS AND WARRANTIES
Section
5.1 Representations
and Warranties of Seller.
Seller
represents and warrants to Buyer that:
(a) Seller
is
a corporation, duly 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 Seller, (ii) is and at the
time of Closing will be legal, valid and binding obligations of Seller, and
(iii) does not and at the time of Closing will not violate any provision of
any
agreement or judicial order to which Seller is a party or to which Seller or
the
Property are subject. All documents executed by Seller 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 Seller, (ii) are or at the time of Closing will be
legal, valid and binding obligations of Seller, and (iii) do not and at the
time
of Closing will not violate any provision of any agreement or judicial order
to
which Seller is a party or to which Seller or the Property is subject.
(b) Seller
is
not a “foreign person” within the meaning of Section 1445(f)(3) of the
Federal Code.
(c) 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.
(d) Seller
has 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.
(e) Seller
has not received written notice from any applicable governmental authority
of
any pending or threatened special assessments or condemnation actions with
respect to the Property.
(f) Seller
has no actual knowledge, except as to matters disclosed in the Phase I
Environmental Assessment conducted by Contour Environmental, LLC, dated June
9,
2006, and has 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.
(g) Seller
has 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.
(h) Except
as
disclosed in Schedule 4
attached
hereto, there is no litigation filed against Seller that would adversely affect
the current use or operation of the Property or the ability of Seller to perform
their obligations under this Agreement.
Section
5.2 Certain
Limitations on Seller’s 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 Seller 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, Seller 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
Seller the entire thirty (30) day period within which to effect such cure)
and
if Seller cures 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
Seller cures 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, Seller 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 Two Hundred Fifty Thousand Dollars ($250,000) 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 Seller contained in this Agreement shall
survive the Closing, provided that Buyer must give Seller written notice of
any
claim it may have against Seller for a breach of any such representation or
warranty, or for breach of any covenants of Seller 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 Seller shall have
no
liability with respect thereto. Without limiting the foregoing, Buyer may not
bring any action against Seller for a breach of any representation, warranty
or
covenant of Seller contained in this Agreement or in any agreement delivered
by
Seller 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 Seller’s desire to curtail any frivolous lawsuits.
In addition, in no event will Seller’s 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
Section
6.1 Condemnation.
Seller
shall give Buyer notice of the commencement of condemnation proceedings
affecting any portion of the Property, or receipt by Seller 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 Seller’s 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 Seller 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 Seller 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 Seller 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
Seller. 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 Seller
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 Seller of whether it will repair or restore the casualty damage to the
Property, or elect to terminate this Agreement due to such casualty. If Seller
elects to repair or restore the damage to the Property caused by such casualty,
Seller 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
October 15, 2007 without the prior consent of Buyer to a further extension
beyond October 15, 2007. If Seller elects 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
Seller elects 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 October 15, 2007, the Buyer shall elect, within ten (10) business
days after it has received written notice from Seller of the existence of such
casualty, and the time estimated by Seller 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 Seller. Notwithstanding the foregoing,
in no
event shall the Buyer be required to close this transaction at any time between
August 1, 2007 and November 1, 2007 (“Closing
Blackout Period”),
unless Buyer specifically consents to a Closing Date within such period. Where
there is Substantial Completion of the Improvements during the Closing Blackout
Period, the Closing Date shall be November 2, 2007. If the Buyer does not
provide any written notice to Seller within ten (10) business days following
receipt of the written notice from Seller advising of the existence of the
casualty, the election by Seller 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 Greg Herren of
Seefried Properties, whose commissions shall be paid by Seller upon Closing
in
accordance with the provisions of a separate written agreement between Seller
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
Seller, 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. Seller 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 (subject to the extension
provided in Section 6.2 hereof), 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 Seller), 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
Seller and Buyer.
Section
8.3 Deposit
of Documents.
(a) At
or
before the Closing, Seller shall deposit into escrow the following items:
(i) the
duly
executed and acknowledged 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)
two
(2)
duly executed counterparts of a lease termination agreement, in the form
attached hereto as Exhibit
G,
terminating that certain Commercial Lease Agreement dated December 20, 2002,
as
amended by that certain First Amendment to Lease on July 12, 2005, respectively,
between AMB Partners II, L.P., a Delaware limited partnership, as landlord,
and
Buyer, as tenant, for premises located at 700 Airport South Parkway, Clayton
County, Georgia and at 574 Airport South Parkway, Suite 100, Clayton County,
Georgia, (“Lease
Termination Agreement”);
(vi)
a
duly
executed and acknowledged Affidavit Regarding Commercial Real Estate Brokers
(Seller), substantially in the form attached hereto as Exhibit
H and
described in Section 7.1;
(vii)
a
duly
executed and acknowledged Affidavit of Seller’s Residence, substantially in the
form attached hereto as Exhibit
I;
(viii)
a
duly
executed and acknowledged Commercial Real Estate Broker’s Affidavit,
substantially in the form attached hereto as Exhibit
J;
and
(ix)
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;
(iv)
two
(2)
duly executed counterparts of the Lease Termination Agreement; and
(v)
a
duly
executed and acknowledged Affidavit Regarding Commercial Real Estate Brokers
(Buyer) substantially in the form attached hereto as Exhibit
K.
(c) Buyer
and
Seller 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
Seller 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, Seller 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) Seller
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 Seller
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, Seller shall receive the benefit of any future
credits or refunds from any utility company in connection with the installation
of such utility services.
(ii)
Real
estate taxes and assessments on the Property shall be prorated based upon the
period (i.e., calendar or other tax fiscal year) to which same are attributable,
regardless of whether or not any such taxes are then due and payable or are
a
lien. Seller shall pay at or prior to Closing (or Buyer shall receive credit
for) any unpaid taxes attributable to periods prior to the date of Closing
(whether or not then due and payable or a lien as aforesaid); provided, that
with respect to any assessments which can be paid in installments, Seller shall
only be required to pay installments which are payable on or before the Closing
Date. Seller shall receive credit for any previously paid or prepaid taxes
attributable to periods from and after the date of Closing. 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 rates, millages and assessed valuation of the
previous year, with known changes, 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.
(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
Seller 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) Seller
shall deliver to Buyer the Survey referenced in Section 2.1(a) and the As-Built
Survey referenced in Section 4.3. Seller shall pay all costs for such surveys
and shall pay the cost of any title examination charges exceeding Two Thousand
Dollars ($2,000). Buyer shall pay for the cost of any title examination charges
up to Two Thousand Dollars ($2,000) and the cost of any endorsements to the
Title Policy and any local transfer taxes applicable to the sale, and Seller
shall pay the premium for the Title Policy and any state and county transfer
taxes applicable to the sale. Seller and Buyer shall each pay fifty percent
(50%) of any escrow fees and expenses. Seller 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 Seller in accordance
with customary practice for Clayton County, Georgia.
(d) The
provisions of this Section 8.4 shall survive the Closing.
ARTICLE
IX
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
Seller:
|
c/o
Headlands Realty Corporation
|
| |
60
State Street, Suite 1200
|
| |
Boston,
MA 02109
|
| |
Phone
No.: (617) 619-9308
|
| |
Fax
No.: (617) 619-9408
|
| |
Att’n:
Steven Kros
|
|
With
a copy to:
|
c/o
Headlands Realty Corporation
|
| |
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 Seller 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 Seller 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 Seller’s
business and otherwise in a manner reasonably acceptable to Seller. Without
limiting the foregoing, prior to any entry to perform any on-site testing,
including any destructive or invasive testing, Buyer shall give Seller 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, Seller 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 Seller’s request, Buyer shall
provide to Seller a portion of such sample being tested to allow Seller, if
it
so chooses, to perform its own testing. Seller or their representative may
be
present to observe any testing or other inspection performed on the Property.
Upon Seller’s request, Buyer shall promptly deliver to Seller 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 Seller with evidence of such insurance coverage upon request
by Seller. Buyer shall indemnify and hold Seller 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, excluding, however, any expenses or claims due to Seller’s gross
negligence or intentional misconduct. 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 Seller 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 Seller.
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 Seller
is 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 Seller, in its sole discretion.
In
no
event shall Buyer be released from any of its obligations or liabilities
hereunder if Seller 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 Georgia.
Section
9.12 Confidentiality.
Buyer
and Seller 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 Seller; 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, Seller and Buyer shall be permitted to make such disclosures regarding
the Property and the subject transaction as are similar or consistent with
Seller’s and Buyer’s general public disclosure policy, including disclosures
made by Seller 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, Seller shall maintain or cause to be maintained, at Seller’s
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 Georgia, and, upon Buyer’s written request, Seller 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 Seller 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 Seller that this Agreement and all
documents executed by Buyer which are to be delivered to Seller 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 Seller are intended to be binding only on the Seller’s assets,
subject to the limits of Section 5.3, and the obligations of Seller 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 Seller.
Section
9.18 Amendments.
This
Agreement may be amended or modified only by a written instrument signed by
Buyer and Seller.
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 Seller
and Buyer shall have executed this Agreement.
Section
9.21 Restrictions
On Sale; Right of First Notice Regarding Sale of 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 Seller, which may
be
withheld in Seller’s sole and absolute discretion. Buyer’s restriction to sell
the Property under this Section 9.21(a) shall be evidenced in the 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 Seller selling the Property
to
Buyer and Seller 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 notice to Seller, which 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”).
The
right of first notice under this Section 9.21(b) shall be evidenced in the
Deed.
Buyer hereby agrees that Buyer shall not try to circumvent or evade Seller’s
right of first notice 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 Seller’s right of first notice pursuant to the terms of this
Section 9.21(b) shall survive the Closing for a period of ten (10) years, after
which Seller’s right of first notice shall expire and terminate and be of no
further force and effect. Further, upon the termination of Seller’s right of
first notice and if requested by Buyer, Seller shall execute a release of such
right of first notice in form suitable for recording in the Real Property
Records of Clayton County, Georgia.
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.
Section
9.24 Seller’s
Acquisition of the Property.
Buyer
hereby acknowledges and agrees that as of the Effective Date Seller does not
own
the Property, and that Seller’s obligation to close hereunder is conditioned
upon Seller’s acquisition of the Property and that Seller shall not be in
default hereunder if Seller fails to acquire all or any portion of the Property
for any reason whatsoever.
The
parties hereto have executed this Agreement as of the respective dates written
below.
| |
SELLER:
|
|
HEADLANDS
REALTY CORPORATION,
|
| |
|
|
a
Maryland corporation
|
| |
|
|
|
|
|
|
|
By:
|
/s/
Drew Smith
|
| |
|
|
Name:
|
Drew
Smith
|
| |
|
|
Its:
|
Vice
President
|
| |
|
|
|
|
| Date: |
9/14/06
|
|
|
|
| |
|
|
|
|
| |
|
|
|
| |
BUYER:
|
|
FORWARD
AIR, INC.,
|
| |
|
|
a
Tennessee corporation
|
| |
|
|
|
| |
|
|
By:
|
/s/
Matthew J. Jewell
|
| Date: |
9/14/06
|
|
Name:
|
Matthew
J. Jewell
|
| |
|
|
Its:
|
SVP
& General Counsel
|
[Parties
must also initial Section 1.2(b)(ii)]
27