Common use of Inspection Period and Option Exercise Clause in Contracts

Inspection Period and Option Exercise. (a) If the Optionee determines that it may wish to exercise the Option as to the Buildings, as to SCP III or as to the entire Property, as applicable (the “Option Property”), it shall first deliver a notice of interest to the Optionor pursuant to Section 7 below (the “Notice of Interest”). Such Notice of Interest shall be delivered no later than ninety (90) days prior to the Option Termination Date (the “Option Notice Deadline”). If such Notice of Interest is not received by the Option Notice Deadline, this Option Agreement will be null and void and neither party will have any further obligation to the other hereunder. If a Notice of Interest is timely delivered to Optionor, the Optionee shall be entitled, for the next following sixty (60) day period (the “Inspection Period”), to inspect the Option Property during normal business hours (i.e. Monday through Friday from 9:00 a.m. to 5:00 p.m. – federal holidays excepted) upon prior notice to Optionor of at least one (1) business day, to enter, or cause its agents or representatives to enter, upon the Option Property for the purpose of making surveys, tests, test borings, inspections, investigations and architectural, structural, economic, environmental and other studies of the Option Property and tenant interviews as the Optionee may deem desirable. The Optionee may also use the Inspection Period for obtaining title reports, surveys and/or zoning reports. The Optionor agrees that it shall reasonably cooperate with the Optionee in connection with any other information regarding the Option Property reasonably requested by the Optionee and will make available such information during the Inspection Period. The Optionee shall, at the Optionee’s sole cost and expense, promptly and fully restore any damage or destruction to the Option Property occurring as a result of any act or omission of the Optionee by reason of such tests, studies or investigations. The Optionee shall indemnify, defend and hold the Optionor harmless from and against all loss, cost, damage or claim (including reasonable attorneys’ fees and courts costs) arising out of or resulting from the Optionee’s exercise of the right and privilege granted to the Optionee to inspect the Option Property, and the indemnity contained in this paragraph shall survive the termination of this Option Agreement and termination of the SCP Purchase Agreement (defined below). (b) If, during the Inspection Period, the Optionee in its sole discretion determines that the Option Property condition or any circumstance related to the Option Property has changed adversely since the date of execution of this Option Agreement, or if for any or no reason whatsoever the Optionee is not satisfied with the results of its investigations, the Optionee shall have no right or recourse against the Optionor or the Option Property other than the right to elect not to exercise the Option. If the Optionee determines in its sole discretion that it shall exercise the Option, the Optionee shall provide notice of exercise to the Optionor pursuant to Section 7 below (the “Notice of Exercise”) no later than the last day of the Inspection Period (the “Exercise Deadline”). The date of such exercise shall be hereinafter referred to as the “Exercise Date.” On such Exercise Date, in addition to providing the Notice of Exercise, the Optionee shall deliver to the Optionor, in duplicate executed originals, a Purchase and Sale Agreement (the “SCP Purchase Agreement”) for the Option Property in substantially the form attached hereto as Exhibit B The Optionor shall execute and return the SCP Purchase Agreement to the Optionee no later than five (5) business days thereafter. Optionor’s failure to so execute the SCP Purchase Agreement shall not in any manner affect Optionee’s Option rights hereunder, provided that Optionee is not in default hereunder and Optionee’s execution and delivery of the SCP Purchase Agreement to Optionor was in accordance with the terms hereof in all material respects. Failure of the Optionee to deliver the Notice of Exercise by the Exercise Deadline and/or to include a signed SCP Purchase Agreement with the Notice of Exercise, as provided above, shall render this Option Agreement null and void, in which event neither party shall have any further obligation to the other hereunder. (c) The Optionee agrees that it will have no rights whatsoever with respect to the Property, its management or its operation except as expressly set forth hereunder or as expressly set forth in the SCP Purchase Agreement after its full execution and delivery in accordance herewith.