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Due diligence period

Clause Library
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Pursuant to the terms set forth in the Agreement, the Buyer will conduct due diligence on the Property from September 6, 2019 through September 25, 2019 (the “Due Diligence Period”), at Buyer’s sole cost and expense. Buyer has the right to terminate its obligations under the Agreement (without further liability except as described in the Agreement) on or before the end of the Due Diligence Period. During the Due Diligence Period, the Buyer and the Company will negotiate the Lease in good faith. If, on or before the end of the Due Diligence Period, the Company and Buyer have not approved a final form of Lease, then, upon expiration of the Due Diligence Period, the Agreement and both the Company’s and Buyer’s obligations thereunder will, without further action by the parties, automatically terminate without further liability.

Buyer has deposited $500,000 as a deposit (the “Initial Deposit”) with an escrow agent. If Buyer does not elect to terminate the Agreement during the Due Diligence Period, Buyer shall deposit an additional $500,000 (together with the Initial Deposit, the “Deposit”) with the escrow agent two (2) business days after the last day of the Due Diligence Period. The Deposit is non-refundable, except in the event of termination by Buyer during the Due Diligence Period.

“(d) Notwithstanding anything herein to the contrary, at any time prior to the date that is fifteen (15) days prior to the expiration of the Due Diligence Period, Seller may exclude up to five (5) of the properties identified on Exhibit A from the transaction contemplated herein (“Seller’s Excluded Properties”) by providing written notice to Buyer (“Seller’s Excluded Properties Notice”). Seller’s Excluded Properties Notice must contain a description of the properties to be excluded from Exhibit A. Upon Buyer’s receipt of Seller’s Excluded Properties Notice, Exhibit A will be deemed modified to exclude Seller’s Excluded Properties and the Purchase Price will be reduced by the Assigned Home Value of each of the Seller’s Excluded Properties. After Buyer’s receipt of Seller’s Excluded Properties Notice, Seller’s Excluded Properties will no longer be subject to this Agreement. For the avoidance of doubt, the terms of this Agreement shall remain in effect for the properties that are not Seller’s Excluded Properties.”

“Funding. Buyer shall use commercially reasonable efforts to raise the equity capital necessary to purchase the Property from Seller prior to the expiration of the Due Diligence Period (the “Necessary Equity Capital”). If Buyer raises the Necessary Equity Capital prior to the expiration of the Due Diligence Period, and this Agreement remains in full force and effect and Seller shall not be in default of its obligations hereunder, Buyer shall consummate the transaction contemplated herein, subject to the satisfaction of all conditions precedent in favor of Buyer hereunder, prior to consummating any other transaction for the purchase of real property to which Buyer is a party; provided, however, nothing set forth in this section shall restrict Buyer’s right to terminate this Agreement during the Due Diligence Period as set forth in Section 7 of this Agreement. ”

Due Diligence Period: Subject to the provisions of Section 7 below and the “Acceleration of the Due Diligence Period and Closing Date” provision in the Basis Terms, the due diligence period with regard to the First Closing Properties shall commence on the Effective Date and end on the First Closing Date (the “First Due Diligence Period”), the due diligence period with regard to Second Closing Properties shall commence on the Effective Date and end on the Second Closing Date (the “Second Due Diligence Period”). For purposes of this Agreement, any references to the defined term “Due Diligence Period” shall mean the conducting of any examination, inspection and investigation of either (i) the First Closing Properties during the First Due Diligence Period, or (ii) the Second Closing Properties during the Second Due Diligence Period, as the case may be.”

“Acceleration of the Due Diligence Period and Closing Date: Upon five (5) business days’ written notice from Buyer to Seller, Buyer may elect to purchase from Seller any or all of the properties listed on Exhibit A, according to a mutually agreed upon random methodology for determining the order of properties to purchase first, (excluding those properties listed on Schedule II) by delivering written notice (the “Property Notice”) of its election to accelerate the Due Diligence Period and Closing Date on those properties listed in the Property Notice (the “Accelerated Closing” and the date specified in the Property Notice shall be the “Accelerated Closing Date”). For the avoidance of doubt, the terms of the Agreement shall remain in effect for those properties not included in the Property Notice.”

“Closing and Closing Date: Subject to the “Acceleration of the Due Diligence Period and Closing Date” provision in the Basic Terms, Buyer and Seller shall close on the properties described on Schedule II attached hereto and incorporated herein by reference, and to the extent that the same are not excluded by Buyer during the First Due Diligence Period as permitted under the terms of this Agreement (collectively, the “First Closing Properties”) on October 15th, 2015 (the “First Closing” and October 15th, 2015 shall be the “First Closing Date”) and all remaining properties not referenced on Schedule II and not excluded by Buyer during the Second Due Diligence Period as permitted under the terms of this Agreement (collectively, the “Second Closing Properties”) shall close on December 31, 2015 (the “Second Closing” and December 31, 2015 shall be the “Second Closing Date”). If the first closing does not occur on October 15th, then the second closing automatically terminates. For purposes of this Agreement, any references to the defined term “Closing” shall mean the completion of the transactions contemplated by this Agreement that are scheduled to occur at the First Closing or Second Closing, as the case may be, and any references to the defined term “Closing Date” shall mean the First Closing Date or the Second Closing Date, as the case may be. ”

“Acceleration of the Due Diligence Period and Closing Date: Upon five (5) business days’ written notice from Buyer to Seller, Buyer may elect to purchase from Seller any or all of the properties listed on Exhibit A attached hereto by delivering written notice (the “Property Notice”) of its election to accelerate the Due Diligence Period and Closing Date on those properties listed in the Property Notice (the “Accelerated Closing” and the date specified in the Property Notice shall be the “Accelerated Closing Date”). For the avoidance of doubt, the terms of the Agreement shall remain in effect for those properties not included in the Property Notice.”

“Closing and Closing Date: Buyer and Seller shall close on the properties described on Schedule II attached hereto and incorporated herein by reference, and to the extent that the same are not excluded by Buyer during the First Due Diligence Period as permitted under the terms of this Agreement (collectively, the “First Closing Properties”) on September 30, 2015 (the “First Closing” and September 30, 2015 shall be the “First Closing Date”) and all remaining properties not referenced on Schedule II and not excluded by Buyer during the Second Due Diligence Period as permitted under the terms of this Agreement (collectively, the “Second Closing Properties”) shall close on October 31, 2015 (the “Second Closing” and October 31, 2015 shall be the “Second Closing Date”). For purposes of this Agreement, any references to the defined term “Closing” shall mean the completion of the transactions contemplated by this Agreement that are scheduled to occur at the First Closing or Second Closing, as the case may be, and any references to the defined term “Closing Date” shall mean the First Closing Date or the Second Closing Date, as the case may be. ”

Due Diligence Period: Subject to the provisions of Section 7 below, the due diligence period with regard to the First Closing Properties shall commence on the Effective Date and end on the First Closing Date (the “First Due Diligence Period”) and the due diligence period with regard to Second Closing Properties shall commence on the Effective Date and end on the Second Closing Date (the “Second Due Diligence Period”). For purposes of this Agreement, any references to the defined term “Due Diligence Period” shall mean the conducting of any examination, inspection and investigation of either (i) the First Closing Properties during the First Due Diligence Period, or (ii) the Second Closing Properties during the Second Due Diligence Period, as the case may be.”

“(a) Buyer shall have until the expiration of the applicable Due Diligence Period to examine, inspect, and investigate the Property and, in Buyer’s sole judgment and discretion, to determine whether Buyer desires to purchase the First Closing Properties or the Second Closing Properties, as the case may be. If Seller fails to provide all Property Information to Buyer within 30 days of the Effective Date, Buyer may terminate this Agreement. Notwithstanding anything stated in this Agreement to the contrary, Buyer’s consummation of the First Closing shall not serve as a waiver of Buyer’s inspection and termination rights during the Second Due Diligence Period with regard to the Second Closing Properties, and Buyer hereby expressly reserves it rights to inspect the Second Closing Properties Property and determine whether Buyer desires to purchase the Second Closing Property, in Buyer’s sole judgment and discretion, pursuant to the terms and conditions of this Agreement. For the avoidance of doubt, once the First Closing has been consummated by the parties, any termination rights under the Agreement in favor of Buyer or Seller (including, without limitation, those in Sections 6(e), 7(b), 7(d), 11(b), 12(b), 18(b)(1) and 21(1)) shall only be applicable with regard to the rights and obligations of the Buyer with respect to consummating the Second Closing pursuant to the terms and conditions of the Agreement.”

“(a) Buyer shall have a period commencing on the Effective Date and ending at 6:00 PM Pacific Time on July 31, 2015 (the “Due Diligence Period”) to examine, inspect, and investigate the Property and, in Buyer’s sole judgment and discretion, to determine whether Buyer desires to purchase the Property. Buyer may, in its sole judgment and discretion, extend the Due Diligence Period up to thirty (30) days by providing written notice to Seller before the expiration of the Due Diligence Period.”

b. not deliver the EBI Report to Purchaser but to provide Purchaser with an opportunity to conduct, at Purchaser’s sole cost and expense, Purchaser’s own testing at the Hotel, the scope of which testing shall not exceed the limits of the testing provided for in the Scope of Work or as otherwise approved by Seller and which shall be conducted by a nationally recognized environmental consulting firm selected by Purchaser and reasonably acceptable to Seller (“Purchaser’s Consultant”) and subject to the requirements, limitations and obligations set forth in Section 1.3(b) of the Contract (but not including subclauses (v) and (vi) contained therein) (such testing, “Purchaser’s Testing”), in which case Purchaser shall elect in writing prior to the expiration of the Due Diligence Period to (i) not conduct Purchaser’s Testing and terminate the Contract in accordance with Section 1.3(f) of the Contract prior to the expiration of the Due Diligence Period, (ii) not conduct Purchaser’s Testing and proceed with the Closing in accordance with the Contract without any abatement of the Purchase Price or (iii) conduct Purchaser’s Testing prior to the expiration of the Due Diligence Period, in which case (y) Seller and Purchaser shall agree to amend the Contract solely to provide an extension of the Due Diligence Period, not to exceed seven (7) Business Days or as otherwise approved by Seller and (z) at Seller’s request, and only upon Seller’s request, Purchaser shall promptly provide Seller with a copy of any report prepared as a result of Purchaser’s Testing (“Purchaser’s Testing Report”); provided, that, if Seller elects the option referred to in this clause (b), but Purchaser fails to make a written election under this clause (b) prior to the expiration of the Due Diligence Period, then Purchaser shall be deemed to have elected the option referred to in subclause (i) of this clause (b); it being agreed that Purchaser shall not send to Seller or to any other Person the Purchaser’s Testing Report or any other information relating to Purchaser’s Testing unless otherwise specifically requested by Seller or as expressly permitted under Section 11.13 of the Contract; or

terminate the Contract prior to the expiration of the Due Diligence Period in accordance with Section 3 of this Amendment and Section 1.3(f) of the Contract, Purchaser shall not be entitled to terminate the Contract from and after the expiration of the Due Diligence Period on account of any (i) information contained in the EBI Report or discovered as a result of the EBI Testing or (ii) information contained in Purchaser’s Testing Report or discovered as a result of Purchaser’s Testing, if permitted pursuant to this Amendment, (c) Seller shall have no obligation to remediate, cure or otherwise address any conditions, matters, issues or violations discovered or suspected as a result of or in connection with the EBI Testing or, if permitted pursuant to this Amendment, Purchaser’s Testing, (d) at Closing, Purchaser shall take the Hotel “AS-IS” (including as it relates to the results of EBI’s Testing and, if permitted pursuant to this Amendment, Purchaser’s Testing) and subject to the terms of the Contract, including Sections 10.2 and 10.3 thereof, (e) Seller shall be released from any costs, loss, liability, damage, expenses, demand, action or cause of action or any kind arising from or relating to the EBI Testing, or if permitted pursuant to this Amendment, Purchaser’s Testing, in each case, pursuant to the release provision set forth in Section 10.4 of the Contract and (f) to the extent that Seller elects to deliver the EBI Report to Purchaser, and to the extent that Purchaser is permitted to conduct Purchaser’s Testing pursuant to this Amendment, the EBI Report, the Purchaser’s Testing Report and all information discovered as a result of the EBI Testing and Purchaser’s Testing shall be deemed to be Confidential Information and be kept confidential pursuant to the terms of Section 11.13 of the Contract.

c. not deliver the EBI Report to Purchaser and not provide Purchaser with any opportunity to conduct Purchaser’s Testing or any other testing at the Hotel, in which case Purchaser shall elect in writing prior to the expiration of the Due Diligence Period to either (i) terminate the Contract in accordance with Section 1.3(f) of the Contract prior to the expiration of the Due Diligence Period, or (ii) proceed with the Closing in accordance with the Contract without any abatement of the Purchase Price; provided, that, if Seller elects the option referred to in this clause (c), but Purchaser fails to make a written election under this clause (c) prior to the expiration of the Due Diligence Period, then Purchaser shall be deemed to have elected the option referred to in subclause (i) of this clause (c).

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