OR ANY
UPDATE TO EITHER OF THE FOREGOING, ("TITLE EVIDENCE") DISCLOSES UNPERMITTED
CLAIMS, LIENS, EXCEPTIONS OR CONDITIONS (THE "DEFECTS"), SAID DEFECTS SHALL BE
CURED AND REMOVED BY SELLER FROM THE TITLE EVIDENCE PRIOR TO CLOSING IN
ACCORDANCE WITH THIS SECTION 5.3.
5.3.1.
MANDATORY CURE ITEMS.
ON OR PRIOR TO CLOSING, SELLER SHALL BE
UNCONDITIONALLY OBLIGATED TO CURE OR REMOVE THE FOLLOWING DEFECTS (THE
"LIQUIDATED DEFECTS"), WHETHER DESCRIBED IN THE TITLE COMMITMENT, OR FIRST
ARISING OR FIRST DISCLOSED BY THE TITLE COMPANY (OR OTHERWISE) TO BUYER AFTER
THE DATE OF THE TITLE COMMITMENT, AND WHETHER OR NOT RAISED IN A TITLE OBJECTION
NOTICE (DEFINED BELOW):
(A) LIENS SECURING A MORTGAGE, DEED OF TRUST OR TRUST
DEED) EVIDENCING AN INDEBTEDNESS OF SELLER; (B) JUDGMENT LIENS AGAINST ANY OR
ALL OF SELLER OR ITS SHAREHOLDERS AND THE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
OR DULY AUTHORIZED MANAGING AGENT OF ANY OR ALL OF SELLER OR ITS SHAREHOLDERS
(COLLECTIVELY "SELLER PARTIES"); (C) TAX LIENS; (D) BROKER'S LIENS BASED ON THE
WRITTEN AGREEMENT OF SELLER OR ANY SELLER PARTIES; AND (E) ANY MECHANICS LIENS
THAT ARE BASED UPON A WRITTEN
AGREEMENT BETWEEN EITHER (X) THE CLAIMANT (A
"CONTRACT CLAIMANT") AND ANY OR ALL OF SELLER AND THE SELLER PARTIES, OR (Y) THE
CONTRACT CLAIMANT AND ANY OTHER CONTRACTOR, SUPPLIER OR MATERIALMAN WITH WHICH
ANY OR ALL OF SELLER AND THE SELLER PARTIES HAS A WRITTEN AGREEMENT.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, IF, PRIOR TO CLOSING,
SELLER FAILS TO SO CURE OR REMOVE (OR INSURE OVER, IN A FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO BUYER) ALL LIQUIDATED DEFECTS, THEN BUYER MAY EITHER
(1)
6
TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO SELLER, IN WHICH EVENT THE
PROVISIONS OF SECTION 21.8 GOVERNING A PERMITTED TERMINATION BY BUYER SHALL
APPLY; OR (2) PROCEED TO CLOSE WITH TITLE TO THE PROPERTY AS IT THEN IS, WITH
THE RIGHT TO DEDUCT FROM THE PURCHASE PRICE A SUM EQUAL TO THE AGGREGATE AMOUNT
NECESSARY TO CURE OR REMOVE (BY ENDORSEMENT OR OTHERWISE, AS REASONABLY
DETERMINED BY BUYER, ACTING IN GOOD FAITH) THE LIQUIDATED DEFECTS IN AN AMOUNT
NOT TO EXCEED THE SUM OF $500,000.
5.3.2.
OTHER DEFECTS.
ON OR BEFORE THE DATE THAT IS FIVE (5) DAYS PRIOR TO
THE REVIEW PERIOD EXPIRATION DATE, BUYER MAY DELIVER ONE OR MORE NOTICES (EACH A
"TITLE OBJECTION NOTICE") TO SELLER SPECIFYING ANY LIEN, CLAIM, ENCUMBRANCE,
RESTRICTION, COVENANT, CONDITION, EXCEPTION TO TITLE OR OTHER MATTER DISCLOSED
BY THE TITLE EVIDENCE, THAT IS NOT A LIQUIDATED DEFECT ("OTHER DEFECTS") THAT IS
EVIDENCED BY THE TITLE EVIDENCE AND THAT RENDERS TITLE UNACCEPTABLE TO BUYER.
MOREOVER, BUYER MAY DELIVER A TITLE OBJECTION NOTICE WITH RESPECT TO ANY OTHER
DEFECT THAT FIRST ARISES, OR IS FIRST DISCLOSED TO BUYER, SUBSEQUENT TO THE
DELIVERY OF THE APPLICABLE ITEM OF TITLE EVIDENCE TO BUYER, AND THAT RENDERS
TITLE UNACCEPTABLE BASED UPON COMMERCIALLY REASONABLE STANDARDS, PROVIDED THAT
BUYER DELIVERS SUCH TITLE OBJECTION NOTICE TO SELLER WITHIN FIVE (5) DAYS AFTER
BUYER OBTAINS ACTUAL KNOWLEDGE OF SUCH OTHER DEFECT.
SELLER