DEFAULT AND DAMAGES.
13.1
DEFAULT BY BUYER. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT, IN
THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE SOLELY TO A BUYER DEFAULT (ALL
OF THE CONDITIONS TO BUYER'S OBLIGATIONS TO CLOSE HAVING BEEN SATISFIED OR
WAIVED IN WRITING BY BUYER IN ITS SOLE AND ABSOLUTE DISCRETION), SELLER WILL
SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL NATURE OF THE
NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR EXTREMELY
DIFFICULT TO ASCERTAIN. IN ADDITION, BUYER WISHES TO HAVE A LIMITATION PLACED
UPON THE POTENTIAL LIABILITY OF BUYER TO SELLER IN THE EVENT THE CLOSE OF ESCROW
FAILS TO OCCUR DUE SOLELY TO A BUYER DEFAULT, AND WISHES TO INDUCE SELLER TO
WAIVE OTHER REMEDIES WHICH SELLER MAY HAVE IN THE EVENT OF A BUYER DEFAULT.
BUYER AND SELLER, AFTER DUE NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE
AMOUNT OF THE DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH
SELLER WILL SUSTAIN IN THE EVENT OF SUCH BUYER DEFAULT. BUYER AND SELLER HEREBY
AGREE THAT SELLER MAY, IN THE EVENT THE CLOSE OF ESCROW FAILS TO OCCUR SOLELY
DUE TO A BUYER DEFAULT AND PROVIDED SELLER IS NOT IN DEFAULT HEREUNDER, AS ITS
SOLE AND EXCLUSIVE REMEDY HEREUNDER, TERMINATE THIS AGREEMENT BY WRITTEN NOTICE
TO BUYER AND ESCROW HOLDER, CANCEL THE ESCROW AND RECEIVE THE DEPOSIT AS
LIQUIDATED DAMAGES AND ESCROW HOLDER SHALL IMMEDIATELY DELIVER THE DEPOSIT TO
SELLER. SUCH RETENTION OF THE DEPOSIT BY SELLER IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO SELLER AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE
OR PENALTY. OTHER THAN AS SET FORTH IN THIS SECTION 13.1, UNDER NO CIRCUMSTANCES
SHALL BUYER HAVE ANY LIABILITY FOR A BREACH OF ANY PROVISION OF THIS AGREEMENT
(OTHER THAN BUYER'S
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INDEMNIFICATION OBLIGATIONS HEREUNDER).
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NOTHING IN THIS SECTION 13.1 SHALL (A) PREVENT OR PRECLUDE ANY RECOVERY OF
ATTORNEYS' FEES OR OTHER COSTS INCURRED BY SELLER PURSUANT TO SECTION 15.5 OR
(B) IMPAIR OR LIMIT THE EFFECTIVENESS OR ENFORCEABILITY OF THE INDEMNIFICATION
OBLIGATIONS OF BUYER CONTAINED IN SECTION 4.3.1 AND SECTION 14 HEREOF. SELLER
AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS
SECTION 13.1 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS
TERMS.
Seller's Initials: /s/CS
Buyer's Initials: /s/ RJH
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13.2
Default by Seller. If Seller defaults in its obligations to sell and
convey the Property to Buyer pursuant to this Agreement, Buyer's sole and
exclusive remedy shall be to elect one of the following: (a) to terminate this
Agreement, in which event Buyer shall be entitled to the return by the Escrow
Holder to Buyer of the Deposit (together with all interest thereon), (b) waive
such default and proceed to Close of Escrow as set forth in this Agreement, or
(c) to bring a suit for specific performance provided that any suit for specific
performance must be brought as to