PURCHASE AND SALE AGREEMENT

 

PURCHASE AND SALE AGREEMENT

 

by

 

and

 

between

 

OAKVIEW PLAZA NORTH, LLC, a Nebraska limited liability company, and FRANK R.

KREJCI and VERA JANE KREJCI, husband and wife, and

GEORGE W. VENTEICHER and SUSAN J. VENTEICHER,

husband and wife

 

"Seller"

 

and

 

LIGHTSTONE VALUE PLUS REIT, LP,

a New Jersey limited partnership

 

"Purchaser"

 

Dated as of

September 20, 2006

 

 

PURCHASE AND SALE AGREEMENT

 

INDEX

 

 

SIGNATURE PAGE

 

EXHIBITS

 

 

 

PURCHASE AND SALE AGREEMENT

 

1.   IDENTIFICATION OF PARTIES

 

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of September 20, 2006, between OAKVIEW PLAZA NORTH, LLC, a Nebraska limited liability company, FRANK R. KREJCI and VERA JANE KREJCI, husband and wife, and GEORGE W. VENTEICHER and SUSAN J. VENTEICHER, husband and wife (the "Seller") and LIGHTSTONE VALUE PLUS REIT, LP, a New Jersey limited partnership ("Purchaser").

 

RECITALS :

 

A.   Seller owns that certain real property located in Omaha, Nebraska (the “State”), consisting of approximately 21.63 acres of land, commonly known as Oakview Plaza North and a portion of Oakview Plaza South more particularly described on Exhibit A attached hereto and incorporated herein by this reference (the "Land"), together with the retail buildings located thereon, containing approximately 177,303 square feet of leasable space, and all other improvements located thereon (the "Improvements").

 

B.   Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all of Seller's right, title and interest in and to the Property (hereinafter defined) for the price and on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

2.   DESCRIPTION OF THE PROPERTY

 

Seller hereby agrees to sell and convey to Purchaser and Purchaser hereby agrees to purchase from Seller all of Seller's right, title and interest in and to the following:

 

(a)   The Land, together with the Improvements;

 

(b)   All of Seller's interest as lessor in all leases covering the Land and the Improvements (said leases, together with any and all amendments, modifications or supplements thereto, are hereinafter referred to collectively as the "Leases" and are identified in the Rent Roll (hereinafter defined) attached hereto as Exhibit B );

 

(c)   All rights, privileges, easements and appurtenances appertaining to the Land and the Improvements including, without limitation, all easements, rights-of-way and other appurtenances used or connected with the beneficial use or enjoyment of the Land and the Improvements. The Land, the Improvements, and all such rights, privileges, easements and appurtenances (including, without limitation, Seller's interest as lessor under the Leases) are sometimes hereinafter collectively referred to as the "Real Property";

 

(d)   All personal property, equipment, supplies and fixtures (collectively, the "Personal Property") owned by Seller and used in the operation of the Real Property including, without limitation, all property described in Exhibit C attached hereto; and

 

(e)   All intangible property used in connection with the foregoing including, without limitation, all trademarks, trade names (including, without limitation, all rights of Seller to the use of the name Oakview Plaza North and South), and the contract rights, licenses (to the extent transferable), permits (to the extent transferable) and warranties (to the extent transferable), more particularly described in Exhibit D ) attached hereto (the "Intangible Personal Property"). The Real Property, the Personal Property and the Intangible Personal Property are sometimes hereinafter collectively referred to as the "Property".

 

 

3.   THE PURCHASE PRICE

 

The purchase price for the Property is Thirty Three Million Two Hundred Fifty Thousand and No/100 Dollars ($33,250,000.00) (the "Purchase Price") and shall be paid to Seller by Purchaser paying the Purchase Price by wire transfer of immediately available funds at or prior to the Closing, net of all prorations and adjustments as provided herein.

 

Within 48 hours of receipt by Madison Title, LLC (the “Escrow Agent”) of a fully executed copy of this Agreement, Purchaser shall deliver to the Escrow Agent, by wire transfer in the amount of $500,000 (the "Initial Deposit"), which Escrow Agent shall hold and disburse in accordance with the terms and provisions of this Agreement and the written escrow agreement attached hereto as Exhibit E (the “Escrow Agreement”). The date the Escrow Agent receives the Initial Deposit shall be the Effective Date. If Purchaser has not terminated this Agreement on or prior to the expiration of the Due Diligence Period (hereinafter defined), Purchaser shall deposit with Escrow Agent within one (1) business day after the expiration or waiver of the Due Diligence Period an additional amount of $250,000 (the “Additional Deposit” and together with the Initial Deposit collectively, the “Deposit”). For purposes of this Agreement, the term Deposit shall include interest earned thereon, if any. Escrow Agent shall pay the Deposit to Seller at Closing and the Deposit shall be applied as a credit to the Purchase Price and shall otherwise be held and disbursed in accordance with the terms of this Agreement and the Escrow Agreement. If either Purchaser or Seller is entitled under this Agreement to the payment of the Deposit, or any portion thereof, and requests Escrow Agent to make such payment (whether to itself or the other party), the other party agrees to provide notice to Escrow Agent authorizing such payment, unless such other party disagrees with such request in which event the provisions of the Escrow Agreement shall control.

 

 

4.   TITLE

 

(a)   As soon as possible following the execution of this Agreement, Seller shall order a title commitment on the Real Property (the "Commitment"), together with legible copies of all documents relating to the title exceptions referred to in the Commitment.

 

(b)   As soon as possible following the execution of this Agreement, Purchaser shall order, at its own expense, an updated survey of the Real Property sufficient to enable the title company to issue an ALTA owner's policy of title insurance (the "Survey"). The Survey shall be certified as true and correct by the surveyor for the benefit of Purchaser and title company.

 

By the end of the Due Diligence Period, Purchaser shall notify (the “Title Notice”) Seller of any title exceptions or survey matters which adversely affect Purchaser's use, or the marketability of title to, the Real Property ("Disapproved Matters"). All other title exceptions set forth in the Commitment shall constitute the "Permitted Encumbrances". As a condition to the Closing, Seller shall use its reasonable efforts to remove, or cause to be removed, all Disapproved Matters or, in the alternative, obtain title insurance in a form satisfactory to Purchaser insuring against the effect of such Disapproved Matters. Notwithstanding the foregoing, Seller shall be obligated to remove all monetary encumbrances. Within five (5) days of receipt of the Title Notice, Seller shall notify Purchaser in writing of any Disapproved Matters which Seller is unable to cause to be removed or satisfactorily insured against and Purchaser shall then, within five (5) days thereafter, elect, by giving written notice to Seller, (i) to terminate this Agreement and have the Deposit returned to it, or (ii) to waive its disapproval of such exceptions or survey matters (such exceptions or survey matters shall then be deemed to be "Permitted Encumbrances"). Failure by the Purchaser to give the Seller said notice shall constitute a waiver by Purchaser of its rights to terminate this Agreement for title or survey objections and an acceptance of the Disapproved Matters.

 

 

5.   REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Purchaser that the following matters are true and correct as of the execution of this Agreement and will also be true and correct as of the Closing:

 

(a)   OAKVIEW PLAZA NORTH, LLC, is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Nebraska. This Agreement has been, and all the documents executed by Seller which are to be delivered to Purchaser at the Closing will be, duly authorized, executed and delivered by Seller and will be legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms (except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally), will be sufficient to convey title (if they purport to do so), and will not violate any provisions of any agreement to which Seller is a party or to which the Property or Seller is subject. No consent, waiver or approval by any third party is required in connection with the execution and delivery by Seller of this Agreement or the performance by Seller of the obligations to be performed by Seller under this Agreement.

 

(b)   To the best of Seller's knowledge, there are no material physical, structural, or mechanical defects in the Improvements, including, without limitation, the plumbing, heating, air conditioning and electrical systems and, to the best of Seller's knowledge, all such items are in good operating condition and repair, reasonable wear and tear excepted.

 

(c)   To the best of Seller's knowledge, the use and operation of the Improvements and the Personal Property are in compliance with applicable building codes, environmental, zoning, subdivision, and land use laws, and other local, state and federal laws and regulations. Seller has received no notice from any governmental authority advising of a violation of any such laws or regulations.

 

(d)   (i) To the best of Seller’s knowledge, the plans and specifications, certificate(s) of occupancy, warranties, and all other contracts or documents required to be delivered to Purchaser pursuant to this Agreement, are true, correct and complete copies, (ii) the certificate(s) of occupancy and warranties are in full force and effect, and (iii) all contracts or documents required to be delivered to Purchaser pursuant to this Agreement are in full force and effect, without material default by any party and without any right of set-off except as disclosed in writing at the time of such delivery. Seller specifically affirms that the operating statements, income and expense reports are true, correct and complete copies.

 

(e)   The Rent Roll attached hereto as Exhibit B is true, correct and complete. As of the Closing, the Rent Roll delivered at the Closing will be true, correct and complete. The copies of the Leases delivered to Purchaser are true, correct and complete copies and are in full force and effect, without default by any party and without any right of setoff, except as expressly provided by the terms of such Leases or as disclosed to Purchaser in writing at the time of delivery. The copies of the Leases and other agreements with the tenants under the Leases (the "Tenants") delivered to Purchaser pursuant to this Agreement constitute the entire agreements with such Tenants relating to the Real Property, have not been amended, modified or supplemented, except for such amendments, modifications and supplements delivered to Purchaser, and there are no other leases or tenancy agreements affecting the Real Property.

 

 

(f)   There are no brokerage leasing fees or commissions or other compensation due with respect to the existing leases (“Leasing Commissions”) except as specified in Exhibit F attached hereto.

 

(g)   Exhibit G attached hereto is a true and complete schedule of all of the Contracts (as hereinafter defined in Section 7 ), true, complete and correct copies of which will have been delivered to Purchaser for Purchaser's approval within ten (10) days hereof. To the best of Seller's knowledge, the Contracts are in full force and effect, without default by any party and without any claims made for the right of setoff, except as expressly provided by the terms of such Contracts or as disclosed to Purchaser in writing at the time of such delivery. The Contracts constitute the entire agreements with such vendors relating to the Property, have not been amended, modified or supplemented, except for such amendments, modifications and supplements delivered to Purchaser, and there are no other agreements with any third parties (excluding, however, the Leases and Permitted Encumbrances) affecting the Property which will survive the Closing.

 

(h)   To the best of Seller's knowledge, and except as disclosed to Purchaser in writing, there are no condemnation, environmental, zoning or other land-use regulation proceedings, either instituted or threatened to be instituted, which would detrimentally affect the value of the Real Property or the use and operation of the Real Property for its intended purpose, and there are no assessments affecting the Real Property other than as set forth in the Commitment or as disclosed in Exhibit H attached hereto.

 

 

(i)   Seller has received no notice advising that (i) any utility required by law for the present use and operation of the Property has not been installed across public property or valid easements to the boundary lines of the Real Property, or is not connected pursuant to valid permits, or (ii) such facilities are inadequate to service the Property or are not in good operating condition.

 

(j)   To the best of Seller's knowledge, Seller has obtained all licenses, permits, easements, and rights-of-way, including proof of dedication, required from all governmental authorities having jurisdiction over the Real Property or from private parties for the present use and operation of the Real Property and to assure vehicular and pedestrian ingress to and egress from the Real Property at all access points currently being used.

 

(k)   At the Closing, there will be no outstanding contracts made by Seller for the construction or repair of any improvements to the Improvements which have not been fully paid for and Seller shall cause to be discharged all construction liens arising from any labor or materials furnished to the Improvements prior to the Closing.

 

(l)   To the best of Seller's knowledge, the Real Property is free from infestation by rodents, termites or other insects or animals.

 

(m)   Seller does not use, treat, store or dispose of, and, to the best of Seller's knowledge, Seller has not permitted anyone else to use, treat, store or dispose of, whether temporarily or permanently, any hazardous or toxic materials ("Hazardous Materials") at, on or beneath the Real Property in violation of any federal, state or local law, regulation or ordinance. Seller has no knowledge of the presence, use, treatment, storage, release or disposal of any Hazardous Materials at, on or beneath the Real Property which has created or might create any liability of owners or occupants of the Real Property under any federal, state or local law or regulation or which would require reporting to a governmental agency. Except as disclosed in writing to Purchaser, no asbestos or PCBs are contained in or stored on the Real Property. To the best of Seller's knowledge, there are no storage tanks located in, on or under the Real Property.

 

 

(n)   Seller has not received any notice from any insurance carrier or any of the Tenants of any defects or inadequacies in the Property, or in any portion thereof, which would adversely affect the insurability thereof or the cost of such insurance. Except as delivered to Purchaser, there are no pending insurance claims.

 

(o)   Except as set forth in Exhibit H attached hereto, there are no pending or, to the best of Seller's knowledge, threatened legal proceedings or actions of any kind or character affecting the Property or Seller's interest therein. Except as delivered to Purchaser, there are no litigation documents relating to any of the matters set forth in Exhibit H .

 

(p)   Seller is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and Seller will furnish to Purchaser, prior to the Closing, an affidavit in the form attached hereto as Exhibit I (the “FIRPTA Affidavit”).

 

The representations and warranties made in this Agreement by Seller shall be continuing and shall be deemed remade by Seller as of the Closing with the same force and effect as if in fact made at that time. All representations and warranties made in this Agreement shall not merge into any instrument or conveyance delivered at the Closing but shall survive the Closing for a period of six (6) months.

 

 

6.   REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Seller that this Agreement has been, and all the documents to be delivered by Purchaser to Seller at the Closing will be, duly authorized, executed and delivered by Purchaser, are, and in the case of the documents to be delivered will be, legal and binding obligations of Purchaser, are, and in the case of the documents to be delivered will be, enforceable in accordance with their respective terms (except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally), and do not, and will not at the Closing, violate any provisions of any agreement to which Purchaser is a party.

 

7.   SELLER'S DELIVERIES

 

(a)   Seller has delivered, or will deliver to Purchaser no later than five (5) days after the Effective Date, the following documents:

 

Notwithstanding anything to the contrary contained in this Agreement, in the event that Seller, despite its good-faith efforts, shall be unable to fully perform its obligations to deliver all of the documents and information as required under this Section 7 , then Purchaser's sole remedy shall be the right to elect, by giving written notice to Seller, either (i) to terminate this Agreement and have the Deposit returned to it or (ii) to waive such failure to provide such documents and information and to consummate the transaction contemplated hereby with no adjustment in the Purchase Price. If Purchaser elects to terminate this Agreement, any money or documents shall be returned to the party depositing the same, and thereafter this Agreement shall become null and void with no further obligation on the part of either party.

 

At an appropriate time prior to the thirty (30) days after the Effective Date (the “Due Diligence Period”) and with prior reasonable notification to Seller, Purchaser, its agents and representatives shall be entitled: (i) to enter onto the Real Property during normal business hours to perform inspections and tests of the Real Property or the Personal Property, including all leased areas (subject to the rights of the Tenants) and structural and mechanical systems within the Improvements; (ii) to examine and copy any and all books and records maintained by Seller or its agents relating to receipts and expenditures pertaining to the Property since construction; (iii) subject to the terms of the Leases, to interview the Tenants during normal business hours; (iv) to examine for the presence or absence of hazardous or toxic materials, substances or wastes (collectively, “Hazardous Materials”); and (v) to review the documentation described in this subsection (a). Prior to entering upon the Land to make inspections, Purchaser shall provide and shall cause each third party making inspections to provide, to Seller liability insurance in the amount of $2,000,000. After making such tests and inspections, Purchaser agrees to promptly restore the Real Property and the Personal Property to their condition prior to such tests and inspections. Purchaser agrees to indemnify and hold harmless Seller from all loss, cost and expense (including reasonable attorneys’ fees) incurred, suffered by, or claimed against Seller by reason of any actual damage to the Real Property or the Personal Property or injury to persons caused by Purchaser and/or its agents, employees or contractors in exercising its rights under clauses (i) or (ii) above. The indemnification and hold harmless provisions of this Section 7 shall survive any termination of this Agreement. All such investigations and inspections shall be done in such a way as to minimize disruption of tenants’ business operations and interference with tenants generally.

 

 

In the event that all aspects of the Property are not acceptable to Purchaser in its sole discretion, Purchaser shall give written notice thereof to Seller and Escrow Agent prior to the expiration of the Due Diligence Period, the Initial Deposit shall be returned to Purchaser and this Agreement shall terminate and both Seller and Purchaser shall thereafter be relieved from any and all liability under this Agreement except for the Purchaser’s indemnification obligations under the preceding paragraph.

 

Failure of the Purchaser to give the Seller a letter objecting to any of the documentation described in subsection (a) of this Section 7 within the Due Diligence Period shall constitute a waiver by Purchaser of its right to terminate this Agreement because of the unacceptability of these items.

 

 

Purchaser shall give Seller written notice of those Contracts Purchaser desires Seller to terminate prior to Closing and Seller shall arrange to terminate those Contracts designated by Purchaser as of the Closing.

 

(b)   PURCHASER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN SECTION 5 , SELLER IS SELLING AND PURCHASER IS PURCHASING THE PROPERTY ON AN “AS IS WITH ALL FAULTS” BASIS AND THAT PURCHASER 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, including, but not limited to, the structural elements, foundation, roof, appurtenances, access, landscaping, parking facilities and the electrical, mechanical, HVAC, plumbing, sewage, and utility systems, facilities and appliances, (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 quality of any labor and materials used in any improvements on the Real Property, (ix) the condition of title to the Property, (x) the Leases or Contracts, (xi) the economics of the operation of the Property and (xii) the accuracy of any third party reports delivered to the Purchaser.

 

 

(c)   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 obligations hereunder, or Seller’s fraud, Purchaser 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 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.).

 

(d)   The provisions of this Section 7 shall survive the Closing.

 

 

8.   CONDITIONS PRECEDENT TO CLOSING

 

The following shall be conditions precedent to Purchaser's obligation to consummate the purchase and sale transaction contemplated herein ("Purchaser's Conditions Precedent"):

 

(a)   (i)   Purchaser shall have received and approved, at or prior to the Closing, executed estoppel certificates substantially in the form provided by Purchaser’s lender from all of the Major Tenants (hereinafter defined) and from Tenants comprising 85% of the economic rent.

 

(ii)   Purchaser shall have received and approved, at or prior to the Closing, executed subordination, non-disturbance and attornment agreements (“SNDAs”) substantially in the form provided to Seller during the Due Diligence Period from tenants designated by the Purchaser’s lender.

 

(b)   Title shall have been approved by Purchaser under Section 4 with the title company standing ready to issue an owners policy of title insurance in the form customarily delivered in Nebraska insuring Purchaser's interest in the Land and Improvements, dated the day of the Closing, with liability in the amount of the Purchase Price, subject only to the Permitted Encumbrances, together with such endorsements as Purchaser reasonably may require (the "Title Policy").

 

(c)   Seller shall have executed and delivered to Purchaser a certificate (the “Certificate”) attached hereto as Exhibit J updating the representations and warranties of Seller through Closing, which Certificate Seller covenants to deliver unless new matters or knowledge of a defect arises, in which case Seller shall deliver a Certificate stating such matter. Purchaser may then (i) waive such matter and consummate the transaction contemplated hereby or (ii) terminate this Agreement, in which case neither party shall have any further obligations or liabilities hereunder and any money or documents shall be returned to the party depositing the same.

 

 

(d)   No Major Tenant shall be in default under its Lease, shall be involved as a debtor in a bankruptcy proceeding, shall have given notice that it is going dark or shall have gone dark, or shall have reduced its space or shall have given notice that it is reducing its space. Each of the following tenants is a Major Tenant: Dick’s Sporting Goods, Petsmart, Babies R Us, Famous Footwear, Beauty Brands and Old Navy.

 

(e)   There shall be no Hazardous Materials at the Property that were not present at the end of the Due Diligence Period.

 

In the event that any Purchaser’s Condition Precedent is not satisfied, Purchaser shall give written notice thereof to the Seller and Escrow Agent, the Deposit shall be returned to the Purchaser and this Agreement shall terminate and both Seller and Purchaser shall thereafter be relieved from any and all liability under this Agreement except for the indemnification and hold harmless provisions contained in Section 7.

 

9.   COVENANTS OF SELLER

 

Seller hereby covenants with Purchaser, as follows:

 

(a)   Prior to the expiration of the Due Diligence Period, Seller shall neither execute any new Lease, nor terminate, renew, amend or modify any existing Lease without giving Purchaser written notice of the action being taken. After the expiration of the Due Diligence Period and prior to the Closing, Seller shall neither execute any new Lease, nor terminate, renew, amend or modify any existing Lease, without Purchaser's prior written consent, which consent shall be granted or withheld in Purchaser's good-faith, non-arbitrary business judgment. If Purchaser has not notified Seller within three (3) business days of receipt of a request for approval of its decision, Purchaser shall be deemed to have approved the matter. Subject to the foregoing, Seller shall diligently seek tenants for all space which is or will become vacant prior to the end of the month following the Closing. Prior to the Closing, Seller shall not accept from any Tenant payment of rent or other charges more than one month in advance or apply any security deposit to rent due from any Tenant, unless Seller shall first have obtained Purchaser's prior written consent. At the Closing, the security deposit provided for under each of the Leases shall be credited to Purchaser and no Tenant or any other party shall have any claim (other than for customary refund at the expiration of a Lease) to all or any part of any security deposit. Purchaser acknowledges that Seller is in the process of negotiating a letter of intent with The Avenue (the “Avenue Lease”) for 4,886 square feet at an initial base rent of $18.83 per square foot, triple net. Seller shall pay for all tenant improvements and leasing commissions associated with the Avenue Lease. The terms of the Avenue Lease shall be subject to Purchaser’s approval. Purchaser understands that Seller is negotiating a letter of intent with Ulta for 9,900 square feet (the “Ulta Lease”). Purchaser shall be responsible for all tenant improvements and leasing commissions associated with the Ulta Lease. The terms of the Ulta Lease shall be subject to Purchaser’s approval.

 

 

(b)   Prior to the expiration of the Due Diligence Period, Seller shall not enter into any Contract with respect to the Property without giving Purchaser written notice of its execution. After the expiration of the Due Diligence Period and prior to the Closing, Seller shall not enter into any Contract with respect to the Property which will survive the Closing or will otherwise affect the use, operation or enjoyment of the Property after the Closing, unless Seller first shall have obtained Purchaser's prior written consent. If Purchaser has not notified Seller within three (3) business days of receipt of a request for approval of its decision, Purchaser shall be deemed to have approved the matter.

 

 

(c)   The Existing Insurance Policies, or equivalent coverage, shall remain continuously in force through the day of the Closing.

 

(d)   At all times prior to the Closing, Seller shall (i) operate and manage the Property in the same manner it presently operates and manages the Property, (ii) maintain present services, (iii) maintain the Property in good repair and working order, reasonable wear and tear excepted, and not make any material alterations or changes to the Improvements, (iv) keep on hand sufficient materials, supplies, equipment and other personal property for the efficient operation and management of the Property in a first class manner, and (v) perform when due all of Seller's material obligations under the Leases, the instruments securing any mortgage lien on the Property, Contracts, Governmental Approvals and other agreements relating to the Property and otherwise in accordance with applicable laws, ordinances, rules and regulations affecting the Property. After full execution of this Contract and until the Closing, Seller shall maintain all existing personnel on the Property in their current employment positions at their current rates of compensation. In the event of the Closing of the purchase of the Property, Purchaser shall not retain the existing employees and management agents of Seller for the Property, and, accordingly, on the Closing, Seller shall (i) cause all employment and management agreements respecting the Property to be terminated, and deliver evidence of such termination to Purchaser, and (iii) remove all employees and management personnel from the Property. Except for the obligation of Seller to use its reasonable efforts to fully enforce the material obligations of Tenants under the Leases, nothing contained in this Section 9(d) shall be deemed or construed as imposing any obligations of such Tenants onto Seller. Seller shall take steps to terminate, as of the day of the Closing, those of the Contracts designated in writing by Purchaser (no less than ten (10) days prior to Closing) which may by their terms be so terminated. None of the Personal Property shall be removed from the Real Property, unless replaced by Personal Property of equal or greater utility and value unless such Personal Property has no value.

 

 

(e)   Seller shall pay in full, prior to the Closing, all bills and invoices for labor, goods, utility charges, material and services of any kind relating to the Property.

 

(f)   Seller agrees to pay all Leasing Commissions at or prior to Closing except for Leasing Commissions with respect to new Leases (excluding the Avenue Lease), lease renewals, or exercises of expansion options, entered into after the date of this Agreement which shall be Purchaser’s obligation if the Closing occurs, except that if the new tenant is in occupancy prior to Closing, the Leasing Commission shall be prorated over the term of the lease. Except as disclosed in Exhibit F , all alterations, installations, decorations, other tenant improvements work required to be performed and all tenant improvement allowances which lessor under the Leases is obligated to pay to Tenants (collectively, the “Tenant Improvements”) prior to the Closing under the Leases or other agreements affecting the Property, have been, or by the Closing will be, completed and are, or by the Closing will be, paid in full. At the Closing, Purchaser shall receive a credit against the Purchase Price for the aggregate amount of all alterations, installations, decorations and other tena