WHETHER SELLER IS WILLING TO REMOVE ANY SUCH ITEM WHICH BUYER HAS DISAPPROVED.
IF SELLER DOES NOT GIVE BUYER WRITTEN NOTICE WITHIN THE PRESCRIBED PERIOD OF
TIME, SELLER SHALL BE DEEMED TO HAVE ELECTED NOT TO REMOVE ANY SUCH ITEM WHICH
BUYER HAS DISAPPROVED. IF THERE ARE EXCEPTIONS WHICH BUYER HAS DISAPPROVED AND
WHICH SELLER IS NOT WILLING TO REMOVE AT SELLER'S EXPENSE, BUYER SHALL HAVE
UNTIL THE END OF THE DUE DILIGENCE PERIOD (OR SUCH FIVE (5) DAY PERIOD FOR
SELLER'S RESPONSE, WHICHEVER IS LATER) TO NOTIFY SELLER IN WRITING OF BUYER'S
ELECTION TO EITHER (A) WAIVE ITS DISAPPROVAL AND APPROVE SUCH EXCEPTIONS, OR
(B) TERMINATE THIS AGREEMENT AND RECEIVE A REFUND OF THE DEPOSIT. IF BUYER
ELECTS TO WAIVE ITS DISAPPROVAL AND APPROVE ANY SUCH EXCEPTIONS BY PROVIDING A
NOTICE OF APPROVAL (AS DEFINED IN SECTION 5.2.1 BELOW), SUCH EXCEPTIONS THEN
SHALL BE DEEMED TO BECOME PERMITTED EXCEPTIONS AT THE CLOSING. NOTWITHSTANDING
THE ABOVE, TITLE TO THE PROPERTY SHALL BE
6
FREE OF "MONETARY ENCUMBRANCES" AT THE CLOSE OF ESCROW EXCEPT FOR THE LIEN OF AD
VALOREM REAL PROPERTY TAXES AND GENERAL AND SPECIAL ASSESSMENTS NOT YET DUE AND
PAYABLE. SELLER SHALL SATISFY OR CAUSE TO BE SATISFIED PRIOR TO THE CLOSE OF
ESCROW OR AT THE CLOSE OF ESCROW FROM THE PURCHASE PRICE ALL MONETARY
ENCUMBRANCES EXCEPT FOR PRORATED AD VALOREM REAL PROPERTY TAXES AND ASSESSMENTS.
AS USED IN THIS AGREEMENT, THE TERM "MONETARY ENCUMBRANCES" SHALL MEAN
ENCUMBRANCES OR DEFECTS TO TITLE WHICH, BY THEIR TERMS, REQUIRE THE PAYMENT OF
MONEY IN INSTALLMENTS OR AT A FIXED TIME, INCLUDING, BUT NOT LIMITED TO,
MORTGAGES, DEEDS OF TRUST, JUDGMENT LIENS AND MECHANIC'S OR MATERIALMENS' LIENS.
5.2
DUE DILIGENCE PERIOD.
5.2.1
AT ALL TIMES DURING THE PERIOD COMMENCING ON THE
EXECUTION DATE UNTIL 5:00 P.M. (PACIFIC TIME) ON THE DAY WHICH IS THIRTY (30)
DAYS AFTER THE EXECUTION DATE, OR THE NEXT BUSINESS DAY IF SUCH DATE FALLS ON A
WEEKEND OR HOLIDAY (THE "DUE DILIGENCE PERIOD"), BUYER, ITS AUTHORIZED AGENTS,
EMPLOYEES, CONSULTANTS AND REPRESENTATIVES ("BUYER'S AGENTS") SHALL HAVE THE
RIGHT TO ENTER THE PROPERTY AT REASONABLE TIMES AND AT REASONABLE INTERVALS TO
CONDUCT AND CARRY OUT ANY AND ALL NON INVASIVE INSPECTIONS, TESTS, AND STUDIES
AS BUYER DEEMS APPROPRIATE OR BUYER'S LENDER REQUIRES. BUYER SHALL NOT HAVE THE
RIGHT TO DO ANY INVASIVE TESTING OF THE PROPERTY OR THE IMPROVEMENTS LOCATED
THEREON WITHOUT THE PRIOR WRITTEN CONSENT OF SELLER, SUBJECT TO
SUBSECTION 5.2.2(G) BELOW. BUYER SHALL PROVIDE NOTICE TO SELLER OF ITS INTENT TO
ENTER THE PROPERTY AND PROVIDE SELLER THE RIGHT TO ACCOMPANY BUYER ON SUCH
ENTRY. BUYER SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AT ANY TIME PRIOR
TO THE EXPIRATION OF THE DUE DILIGENCE PERIOD AT BUYER'S SOLE AND ABSOLUTE
DISCRETION, FOR ANY REASON WHATSOEVER OR FOR NO REASON, BY DELIVERING TO SELLER
WRITTEN NOTICE OF BUYER'S ELECTION TO TERMINATE THIS AGREEMENT NO LATER THAN
5:00 P.M. (PACIFIC TIME) OF THE LAST DAY OF THE DUE DILIGENCE PERIOD (THE
"TERMINATION NOTICE"). BUYER'S FAILURE