opposed to Seller's breach or inaccuracy in any
representation of Seller as of the date of this Agreement pursuant to paragraph
8 below) as of the Close of Escrow, in which case Buyer shall have the option
either to (i) proceed with the Closing and the Deposit shall be applied to the
Purchase Price, or (ii) terminate this Agreement and the Deposit shall be
returned to Buyer. Consequently, except as set forth in the preceding sentence,
if Buyer terminates this Agreement pursuant to this paragraph 5.3 at any time
after Buyer's election to extend the Due Diligence Period, Title Company hereby
is instructed to promptly release the Deposit to Seller.
5.4 Satisfaction of Conditions. The occurrence of the Closing shall
constitute satisfaction of conditions set forth in paragraphs 5.1 and 5.2 not
otherwise specifically satisfied or waived by Buyer or Seller.
-9-
6. Remedies.
6.1 LIQUIDATED DAMAGES. IF ESCROW FAILS TO CLOSE DUE TO BUYER'S
DEFAULT UNDER THIS AGREEMENT, BUYER AND SELLER AGREE THAT BASED UPON THE
CIRCUMSTANCES NOW EXISTING, KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR
EXTREMELY DIFFICULT TO ESTABLISH SELLER'S DAMAGES CAUSED BY BUYER'S DEFAULT
UNDER THIS AGREEMENT. ACCORDINGLY, BUYER AND SELLER AGREE THAT IN THE EVENT
ESCROW FAILS TO CLOSE DUE TO BUYER'S DEFAULT UNDER THIS AGREEMENT, IT WOULD BE
REASONABLE AT SUCH TIME TO AWARD SELLER "LIQUIDATED DAMAGES" EQUAL TO THE AMOUNT
OF THE DEPOSIT PREVIOUSLY PAID BY BUYER. THEREFORE, IF ESCROW FAILS TO CLOSE DUE
TO BUYER'S DEFAULT UNDER THIS AGREEMENT, THIS AGREEMENT SHALL TERMINATE, ESCROW
HOLDER SHALL CANCEL THE ESCROW AND SELLER SHALL BE ENTITLED TO RETAIN THE
PORTION OF THE DEPOSIT PREVIOUSLY PAID BY BUYER AND RELEASED TO SELLER.
RETENTION OF THE NONREFUNDABLE DEPOSIT BY SELLER SHALL BE SELLER'S SOLE AND
EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT ESCROW FAILS TO CLOSE DUE TO A
BREACH BY BUYER, AND SELLER WAIVES ANY AND ALL RIGHT TO SEEK OTHER RIGHTS OR
REMEDIES AGAINST BUYER, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE. THE
PAYMENT AND RETENTION OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275
OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO
CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. IN ADDITION, BUYER SHALL PAY
ALL TITLE, SURVEY AND ESCROW CANCELLATION CHARGES. SELLER HEREBY WAIVES THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. NOTWITHSTANDING THE FOREGOING,
IN NO EVENT SHALL THIS SECTION 6.1 LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY
AGAINST THE OTHER PARTY DUE TO (A) THE OTHER PARTY'S OBLIGATION TO INDEMNIFY
SUCH PARTY IN ACCORDANCE WITH THIS AGREEMENT, OR (B) THIRD PARTY CLAIMS. BY
THEIR SEPARATELY EXECUTING THIS PARAGRAPH 6.1 BELOW, BUYER AND SELLER
ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING
LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED
THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT
WAS EXECUTED. UPON TERMINATION OF THIS AGREEMENT AS PROVIDED HEREIN, NEITHER
PARTY SHALL HAVE