Due diligence period clause samples

2.5.Termination During Due Diligence Period. If Buyer determines, in its sole and absolute discretion, before the expiration of the Due Diligence Period that the Interests and/or the Property is unacceptable for Buyer’s purposes, Buyer shall have the right to terminate this Agreement by giving to Seller written notice of termination before the expiration of the Due Diligence Period and the Earnest Money shall be immediately refunded to Buyer. In addition, upon such a termination, Buyer shall promptly return the Property Information to Seller, or certify to Seller that the Property Information has been destroyed. If Buyer does not give written notice of termination before the expiration of the Due Diligence Period, this Agreement shall continue in full force and effect, the Earnest Money shall become non-refundable to Buyer except as otherwise expressly provided herein, and Buyer shall have no further right to terminate this Agreement pursuant to this Paragraph 2.5.

2.Extension of Due Diligence Period. Pursuant to Section1.1 of the Purchase Agreement, the Due Diligence Period is set to expire on 5:00 p.m (Pacific Time) on January24, 2020. Notwithstanding the foregoing, the parties hereto agree to extend the Due Diligence Period until 5:00 p.m. (Pacific Time) on January30, 2020.

The Franklin Crossing Purchase Agreement provides that the Franklin Crossing Purchaser has a 21-day period from the effective date of the Franklin Crossing Purchase Agreement to conduct due diligence. Prior to the expiration of this due diligence period, the Franklin Crossing Purchaser has the right, in its sole and absolute discretion, to determine whether or not to proceed with the purchase of Franklin Crossing. The Franklin Crossing Purchaser may determine not to proceed with the purchase of Franklin Crossing for any reason or no reason whatsoever prior to the expiration of the 21-day due diligence period. In the event that the Franklin Crossing Purchaser determines not to proceed with the purchase of Franklin Crossing prior to the expiration of the 21-day due diligence period and terminates the Franklin Crossing Purchase Agreement, the initial deposit of $500,000 shall be returned to the Franklin Crossing Purchaser. In the event that the Franklin Crossing Purchaser does not terminate the Franklin Crossing Purchase Agreement by the end of the 21-day due diligence period, the Franklin Crossing Purchaser will provide an additional deposit of $500,000 to the title company to hold in escrow.

4.Due Diligence Period.Buyer shall have until 5:00 p.m. (EST) on the date which is sixty (60) days after the Effective Date (“Due Diligence Period”) in which to conduct its due diligence and all inquiries and investigations with respect to the Property as may be determined by Buyer in its sole discretion and at its sole cost and expense.If Buyer fails to provide written notice of its intent to terminate this Agreement prior to expiration of the Due Diligence Period, then notwithstanding anything to the contrary, the parties agree that this Agreement may thereafter only be cancelled by Buyer upon a default by Seller hereunder and Buyer shall be obligated to proceed to Closing (as defined herein), any and all contingencies to Closing shall be deemed to be waived by Buyer hereunder and the Deposits shall be non-refundable except in case of Seller’s default hereunder. During the Due Diligence Period, Buyer and its officers, employees, agents, advisors, accountants, attorneys and engineers shall have the right to enter upon the Property at reasonable times after written notice to Seller for purposes of inspection and examination of the Property (including environmental testing) and otherwise perform whatever tasks reasonably necessary or deemed appropriate by Buyer in its sole discretion. Buyer covenants and agrees that it will not materially disrupt or interfere with any tenants (including their use and/or enjoyment of the Property) or Seller’s operations of the Property during such inspections and investigations thereof.

The parties acknowledge and agree that Buyer has a major credit facility with Fifth Third Bank, as lender and as agent for other lenders (the “Lender”), and that Buyer may not be able to obtain all of the necessary approvals of the Lender (which may require additional due diligence work) for the consummation of the transactions set forth herein (collectively the “Lender Approvals”) within the initial sixty (60) day Due Diligence Period.As a result, the parties further agree that notwithstanding the foregoing provisions of this Section 4, in the event that Buyer, despite its exercise of due diligence and commercially reasonable efforts, is not able to obtain all of the Lender Approvals within the initial sixty (60) day Due Diligence Period, Buyer shall have the right to extend the Due Diligence Period for a period of thirty (30) days (the “Due Diligence Extension”) upon written notice to Seller prior to expiration of the initial sixty (60) day Due Diligence Period solely for the purpose of obtaining the Lender Approvals.In the event Buyer exercises the Due Diligence Extension, within three (3) business days following its exercise of the extension, Buyer shall deliver to Title Company, by wire transfer, an additional earnest money deposit of TWENTY THOUSAND AND NO/100 DOLLARS ($20,000.00) ("Extension Deposit"), which shall be applied to the Purchase Price at closing and shall be non-refundable to Buyer in the event closing does not occur for any reason other than a default by Seller.In the event that Buyer is not able to obtain all of the necessary Lender Approvals during the Due Diligence Extension, Buyer shall be entitled to terminate this Agreement upon written notice to Seller prior to expiration of the Due Diligence Extension, in which event the Initial Deposit and the Additional Deposit shall be returned to Buyer, the Extension Deposit shall be paid to Seller, and the parties hereto shall be relieved of all liabilities and obligations under this Agreement except to the extent expressly provided in this Agreement to the contrary.

The Purchase Agreement provides that the Purchaser has a 30-day period from the effective date of the Purchase Agreement to conduct due diligence with respect to the Property (the “Due Diligence Period”). Prior to the expiration of the Due Diligence Period, the Purchaser has the right, in the Purchaser’s sole and absolute discretion, to determine whether or not to proceed with the purchase of the Property. The Purchaser may determine not to proceed with the purchase of the Property for any reason or no reason whatsoever prior to the expiration of the Due Diligence Period. In the event that the Purchaser determines not to proceed with the purchase of the Property prior to the expiration of the Due Diligence Period, then the Purchase Agreement shall terminate and the Deposit shall be returned to the Purchaser.

6.1Sellers’ Delivery of Specified Documents. To the extent such items are in Sellers’ possession or control, Sellers shall provide or make available to Buyer, (a)within three (3)days after the Effective Date, in an electronic data room located at https://www.dropbox.com/home/Utah%203%20Disposition (the “Data Room”) the information and documents requested by Buyer as set forth on Schedule 6.1 attached hereto, and (b)such additional due diligence materials as Buyer shall reasonably request between the Effective Date and the expiration of the Due Diligence Period. In no event, however, shall Sellers be obligated to make available (or cause to be made available) any proprietary or confidential documents, including, without limitation, reports or studies that have been superseded by subsequent reports or studies, or any of the following confidential and proprietary materials (collectively, the “Excluded Materials”): (1)information contained in financial analyses or projections (including Sellers’ budgets, valuations, cost-basis information and capital account information); (2)material that is subject to attorney-client privilege or that is attorney work product; (3)appraisal reports or letters; (4)organizational, financial and other documents relating to Sellers as opposed to the Properties (other than any evidence of due authorization and organization required under this Agreement); (5)material that Sellers are legally required not to disclose other than by reason of legal requirements voluntarily assumed by Sellers after the Effective Date; or (6)the Excluded Contracts, other than the agreements listed on Schedule 1.9, copies of which agreements listed on Schedule 1.9 Sellers shall provide to Buyer to the extent Sellers are not prohibited from disclosing such agreements pursuant to a confidentiality agreement or other confidentiality obligation. Sellers shall have the continuing obligation during the pendency of this Agreement to add to the Data Room or otherwise provide Buyer with any document described in Schedule 6.1 and coming into the possession of any Seller after the initial delivery of such information.

3.4Purchaser’s Right to Waive or Terminate. During the Due Diligence Period, Purchaser will review the Acquired Assets and various aspects of Purchaser's potential acquisition of the Acquired Assets. Purchaser may accept the condition of the Acquired Assets and waive the time remaining in the Due Diligence Period by issuing to Seller a written notification of acceptance of the Acquired Assets prior to the expiration of the Due Diligence Period. In addition, the Parties agree that Purchaser, in Purchaser’s sole and unreviewable discretion, may terminate this Agreement for any reason by written notice received by Seller on or before 4:00 p.m., Hawaii time, on the last day of the Due Diligence Period. If the last day of the Due Diligence Period falls on a Saturday, Sunday or holiday, the Due Diligence Period shall end on the next following business day. If Purchaser exercises such right of termination, the Parties agree that the Parties shall have no further obligations to each other under this Agreement except with respect to the obligations set forth in Section 3.3 (Inspection; Inspection Indemnity) above.

3.5Non-Potable Water Delivery Agreement. A draft Agreement for Water Delivery (Non-Potable Water) is attached as Exhibit D. The Parties agree to act in good faith and diligently pursue completion of negotiations of a final form of non-potable water delivery agreement, in form and substance acceptable to the Parties for execution and delivery at Closing, at least five (5) business days prior to the end of the Due Diligence Period. If the Parties are unable to reach agreement on the Agreement for Water Delivery (Non-Potable Water), either Party may prior to the end of the Due Diligence Period terminate this Agreement.

4.5 Identification and Agreement for Purchaser’s Acquisition of New Office and Storage Area. Exhibit J (Purchaser’s Proposed Location for New Office and Storage Area) attached hereto and incorporated herein reflects the location acceptable to Purchaser for a new office and storage area within the Service Areas. The Parties shall diligently pursue to completion, negotiations for the lease or conveyance of the fee simple interest in a subdivided lot of the property identified in Exhibit J and proper zoning for construction and use as Purchaser’s office and storage area, in form and substance acceptable to the Parties for execution and delivery at Closing, at least five (5) business days prior to the end of the Due Diligence Period.. Seller agrees that Purchaser shall be permitted to occupy the current operator’s onsite office and storage area until such time as Purchaser has completed the acquisition and construction of the new office and storage area.

7.7Leases, Liens and Encumbrances; Real Property. Seller is not a party to any agreement for the lease of real property, and Seller owns all tangible personal property and other assets necessary to conduct the Business as now conducted not subject to any lien or encumbrance. Schedule 7.7 contains a correct legal description, street address (if any) and tax parcel identification number of all Real Property including tracts, parcels and subdivided lots and easements which Seller is using in the Business. Seller has good title to such Real Property. The Real Property may have the following encumbrances: (i) liens for taxes for the current tax year which are not yet due and payable; and (ii) those Encumbrances deemed acceptable to Purchaser during the Due Diligence Period. True and complete copies of (A) all deeds, existing title insurance policies and surveys of or pertaining to the Real Property, and (B) all instruments, agreements and other documents evidencing, creating or constituting any encumbrances on the Real Property have been delivered to Purchaser.

Notwithstanding our entry into this letter of intent, we considered the sale of the SCC Facilities to be subject to substantial uncertainty until shortly before the actual closing. Transactions of this nature are subject to substantial purchaser diligence and it is not unusual for a purchaser to walk away from a transaction or seek to renegotiate its terms during, or even after, the due diligence period. As described in more detail below, that was the case for the sale of the SCC Facilities. Throughout the sale process, our asset management team was in fluid discussions with the Purchaser about the facilities to be included in the transaction and the price. In addition, we had to deal with the uncertainty of the eventual bankruptcy process for Senior Care Centers and the need for regulatory approvals in connection with the proposed change in ownership of the SCC Facilities. During this process, we continued to believe that an alternative to selling the SCC Facilities was to lease the SCC Facilities to new operators, and that we could do so in a manner (as described in more detail below) that would result in the future undiscounted cash flows from these new leases exceeding the carrying value of the SCC Facilities as of the relevant measurement date.

On December5, 2018, we entered into a purchase and sale agreement to sell the SCC Facilities for an aggregate sales price of $385 million (the “Initial PSA”). The Initial PSA included a due diligence period that was initially set to expire on December14, 2018 and that was extended first to December28, 2018 and then ultimately to January17, 2019. At any time before the due diligence period expiration date, the Purchaser would be able to terminate the Initial PSA without penalty for any reason. In addition, the closing of the transaction was contingent upon our ability to negotiate a settlement agreement with Senior Care Centers pursuant to which Senior Care Centers would agree to cooperate with the sale and enter into operating transfer agreements (the “Transition Agreements”) with the Purchaser for the transfer of the operations of the SCC Facilities at closing. As a result of the filing of Senior Care Centers’ bankruptcy petition earlier in December, any such settlement agreement (together with the forms of the Transition Agreements) would require the approval of the bankruptcy court. Due to the Purchaser’s unrestricted termination right, as well as our experience to date in negotiating with this Purchaser (including the change in terms from the initial non-binding letter of intent) and concerns regarding our ability to obtain bankruptcy court approval in a timely manner, as of December31, 2018, we determined that there was significant uncertainty as to whether the sale would close. As of December31, 2018, we believed that if the sale did not close, we could lease the SCC Facilities to new operators. On January17, 2019, the Purchaser delivered written notice terminating the Initial PSA just prior to the expiration of the due diligence period. Notwithstanding the termination of the Initial PSA, we continued to discuss alternative sale terms with the Purchaser and on January27, 2019, we entered into an amended purchase and sale agreement with the Purchaser pursuant to which the Purchaser would acquire 28 of the 38 SCC Facilities for an aggregate sales price of $282.5 million (the “Amended PSA”).

If applicable, a second non-refundable down payment of $300,000.00 (the “Second Earnest Money Deposit”) will be remitted by Buyer after expiration of the Due Diligence Period. The Second Earnest Money Deposit shall be non-refundable but applied to the Purchase Price at Closing.

3. Due Diligence Period. Notwithstanding any provision of Section 7.l(a) of the Agreement to the contrary, the Due Diligence Period is hereby extended for fourteen (14) days following the AmendmentDate.

3.2 Due Diligence Period. Buyer shall have until 5:00 pm Eastern time on the day which is thirty (30) days after the Effective Date (the “Due Diligence Period”) to conduct such due diligence review of the Property, all of the items to be furnished by Seller to Buyer pursuant to Section3.3 below and all records and other materials related thereto as Buyer deems appropriate in its sole and absolute discretion.

(b)Pre-Closing “Gap” Title Defects.Whether or not Buyer shall have furnished to Seller any notice of Title Objections pursuant to the foregoing provisions of this Agreement, Buyer may notify Seller in writing of any objections to title first raised by the Title Company between (a) the end of the Due Diligence Period, and (b) the date of Closing so long as Buyer provides such written notice within three (3) business days of Buyer’s knowledge of such title matter, and in no event shall Buyer have the right to object to any title matters approved or caused by Buyer.With respect to any objections to title set forth in such notice, Seller shall have the same option to cure and Buyer shall have the same option to accept title subject to such matters or to terminate this Agreement as those which apply to any notice of objections made by Buyer before the end of the Due Diligence Period.If Seller elects to attempt to cure any such matters, the date for Closing shall be extended at Seller’s option by a reasonable additional time to effect such a cure, but in no event shall the extension exceed thirty (30) days after the date for Closing set forth herein.

Section 4.3Title Insurance.At Closing, the Title Company shall issue to Buyer or be irrevocably committed to issue to Buyer an ALTA owner’s form title policy, in the amount of the Purchase Price, insuring that fee simple title to the Real Property is vested in Buyer, or such other person or entity designated by Buyer, subject only to the Permitted Exceptions, and otherwise in the form of a proforma owner’s title policy approved by Buyer during the Due Diligence Period, including such endorsements (or modifications) to the Title Policy as Buyer may require and included in such proforma owner’s title policy (the “Title Policy”), subject only to payment of the premium therefor and subject, further, to Buyer delivering to Title Company an ALTA survey of the Real Property and Improvements, a zoning report with respect to the Property and any other deliverables as may be reasonably required by the Title Company, each in form and substance reasonably required by Title Company to issue any Buyer requested endorsements set forth in Buyer’s objection letter delivered under Section 4.2(a).Buyer shall deliver a copy of its proforma owner’s title policy to Seller on or prior to the expiration of the Due Diligence Period.It shall constitute a condition precedent to Buyer’s obligation to purchase the Property that, at Closing, Title Company shall be irrevocably committed to issue to Buyer the Title Policy, subject only to the payment of the premium therefor.

(a)EXCEPT AS MAY BE SPECIFICALLY STATED IN THE CLOSING DOCUMENTS OR IN THE SURVIVING OBLIGATIONS OF THIS CONTRACT, BUYER IS PURCHASING THE PROPERTY AS IS, WHERE IS, AND WITH ALL FAULTS, AND BUYER RELEASES SELLER AND ALL SELLER AFFILIATES AND THEIR EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES, AND AGENTS FOR ANY COST, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION, OR CAUSE OF ACTION ARISING FROM OR RELATED TO ANY CONSTRUCTION OR DESIGN DEFECTS, ERRORS, OMISSIONS, OR OTHER CONDITIONS AFFECTING THE PROPERTY, KNOWN OR UNKNOWN. THIS RELEASE WILL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS EXPRESS TERMS AND PROVISIONS, INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO UNKNOWN CLAIMS, DAMAGES, AND CAUSES OF ACTION. THIS COVENANT RELEASING SELLER AND ALL SELLER AFFILIATES IS A COVENANT RUNNING WITH THE PROPERTY AND IS BINDING UPON BUYER, ITS SUCCESSORS AND ASSIGNS. BUYER SHALL PERFORM ALL INVESTIGATIONS OF THE PROPERTY IT DEEMS NECESSARY DURING THE DUE DILIGENCE PERIOD. SUBJECT TO SELLER'S REPRESENTATIONS AND WARRANTIES SPECIFIED IN SECTION 4.1, BUYER IS RELYING SOLELY ON BUYER'S INDEPENDENT ANALYSIS AND INVESTIGATION OF THE PROPERTY AND BUYER ASSUMES THE RISK THAT AN ADVERSE CONDITION OF THE PROPERTY MAY NOT HAVE BEEN REVEALED BY ITS OWN DUE DILIGENCE.

Manager that would create or cause any liability to Seller. In connection with the Closing, Seller shall pay, or cause its Hotel Manager to pay, all wages, salaries, any bonuses, employment taxes, withholding taxes, and any and all vacation days, sick days and personal days, if applicable, for the Hotel Employees, accruing prior to the Closing Date. Buyer shall be solely responsible for all wages, salaries, any bonuses, employment taxes, withholding taxes, and any and all vacation days, sick days and personal days, if applicable, for the Hotel Employees, accruing on or after the Closing Date. From and after the Closing, Buyer shall indemnify and save Seller harmless from and against any claim by any employee arising from Buyer’s actions and omissions as to any employees of Seller’s Hotel Manager. Seller agrees that it will not undertake any Prohibited Solicitation of Hotel Employees for a period of twelve (12) months after the Closing. “Prohibited Solicitation” shall mean, collectively: any active and direct contact with any current Hotel Employee through phone, email, offer of employment, encourage, or other means intended to induce recipient to engage in employment discussion at the detriment of the Buyer. Provided, however, that such Prohibited Solicitation shall not include any general advertising, such as third party online job banks, newspaper “help wanted” ads, radio commercials and career fairs; and provided further, that Seller shall have the right to offer employment to the general manager of the Hotel so long as Seller notifies Buyer of such intention prior to the expiration of the Due Diligence Period. This Section6.4.6 shall survive the Closing.

for one (1) year.As a condition to allowing Buyer, or its engineers, analysts, contractors, agents and consultants access to the Property, Buyer shall obtain and deliver to Seller a certificate of insurance or other evidence satisfactory to Seller that Buyer has in force adequate liability insurance in an amount not less than TWO MILLION DOLLARS ($2,000,000.00) naming Seller as additional insured, and a copy of such policy upon Seller’s request.In addition, Buyer shall, not later than the expiration of the Due Diligence Period, advise Seller in writing of the labor, service, supply and maintenance contracts which it elects to assume.Buyer’s obligation to purchase the GA/LA/NC/SC Property and the Limited Liability Company Interests pursuant to this Agreement is contingent upon Buyer being satisfied, in its sole and absolute discretion, with the results of its due diligence investigation on or before the expiration of the Due Diligence Period.Buyer shall have the right to terminate this Agreement, for any or no reason, prior to expiration of the Due Diligence Period by providing written notice of such termination to Seller, whereupon Buyer shall receive immediate return of its Deposit (less the Non-Refundable Portion which shall be paid to Seller) and neither Buyer nor Seller shall have any further rights or obligations hereunder except as may be otherwise expressly set forth herein.If, prior to expiration of the Due Diligence Period, Buyer does not furnish written notice to Seller as required in the immediately preceding sentence, Buyer will be deemed to have elected to proceed with the transaction contemplated hereby and Buyer’s right to terminate this Agreement under this Section 3.2 shall be waived.

7. Due Diligence Period.Notwithstanding any provision to the contrary in the Agreement, including Section 3.2 thereof, Buyer and Seller agree that (a) the Due Diligence Period shall be deemed to have expired upon execution of this Amendment and Buyer shall have no further right to terminate the Agreement pursuant to Section 3.2 and (b) the Deposit is nonrefundable to Buyer except as expressly set forth in the Agreement.

(j)minor variations of not more than one (1) foot in either north/south or east/west directions between the tax lot lines and the description of the Land set forth on Exhibit A attached hereto, provided, however, that, to the extent same existed prior to the Effective Date, any claimed title defect based on such variations must be raised, if at all, prior to the expiration of the Due Diligence Period. After the expiration of the Due Diligence Period, all variations between the tax lot lines and the description of the Land set forth on Exhibit A attached hereto, that pre-existed the Effective Date and were not raised by Purchaser in an Objection Notice, shall constitute Permitted Exceptions.

Subject to terms and conditions of this Agreement, the closing of the transaction contemplated by this Agreement (the “Closing or Closing Date”) shall take place on the earlier to occur of: thirty (30) days after the expiration of the Due Diligence Period. At Closing, Seller shall transfer and convey unencumbered legal title to the Interests to Purchaser, and the Land shall only be subject to the Permitted Exceptions and in accordance with the terms of this Agreement.

Section 1.4 Due Diligence Period. Upon execution and delivery of this Agreement and the delivery of the initial deposit required by section 1.3(b), Buyer shall have up to Ten (10) calendar days from the Effective Date to request and review any and all materials regarding the Company in the possession or control of Seller (the “Due Diligence Period”). Buyer may, at any time prior to the expiration of the Due Diligence Period, in its sole discretion terminate this Agreement by delivery of written notice (including email) to that effect to Seller. Should Buyer so terminate this Agreement, Seller will cause Seller's Attorney promptly return the initial deposit made by Buyer (net of bank or wire fees), Buyer shall return any materials regarding the Company to Seller, and this Agreement shall thereafter be of no force or effect.