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e. Notice of Abandonment. If the City fails to deliver a Notice of Exercise or Consent to Transfer within the above -stated time periods, then the Option shall terminate and have no further force and effect. Thereafter, upon request by Owner, the City shall cause to be filed for recordation in the Office of the Recorder of Alameda County, a notice of abandonment, which shall declare that the provisions of the Option are no longer applicable to the Property. If the City fails to record a notice of abandonment, the sole remedy of Owner shall be to obtain a judicial order instructing prompt recordation of such a notice. f. Liquidated Damages. In the event the City chooses not to exercise its Option and no qualified Owner is found willing and able to purchase the Property, the City shall retain or recover from Owner the surplus, if any, as its property without any deduction, offset or recoupment whatsoever. If the Owner should sell the Property at market rate to an Owner who shall receive title free and clear of the provisions of this Agreement, then the damages suffered by the City by reason thereof would be uncertain. Such damages would involve the replacement costs for another affordable unit, and the expenses of continuing the ownership and control of the Property by the City; postponement of tax revenues therefrom to the community; and the failure of the City to effect its purposes and objectives within a reasonable time, resulting in additional immeasurable damage and loss to the City and the community. It is impractical and extremely difficult to fix the amount of such damages to the City, but the Parties are of the opinion, upon the basis of all information available to them, that such damages would exceed the amount of any projected surplus as the total of all liquidated damages and not as a penalty. In the event that this section should be held to be void for any reason by a court of law, the City shall be entitled to seek the full extent of damages otherwise provided by law. The Owner and the City specifically acknowledge this liquidated damages provision by their signatures here: City: - U�, 'r, Chris City nager by Jeff Kay, Asst. City Manager Fl— RF I1[4yW�[� mai I` 7. Right to Reinstatement. If the Option Event is the recordation of a notice of default, then the City shall be deemed to be Owner's successor in interest under California Civil Code Section 2924c (or successor section) solely for purposes of reinstatement of any mortgage on the Property that has led to the recordation of the notice of default. As Owner's deemed successor in interest, the City shall be entitled to pay all amounts of principal, interest, taxes, assessments, homeowners' association fees, insurance premiums, advances, costs, attorneys' fees and expenses required to cure the default. If the City exercises the Option, then any and all amounts paid by the City pursuant to this Section shall be treated as Adjustments to the Base Resale Price for the Property, as defined in Section 12, below. 8. Inspection of Property. After receiving a Notice of Intent to transfer or delivering a Notice of Exercise, the City shall be entitled to inspect the Property one or more times prior to the close of escrow to determine the amount of any Adjustments to the Base Resale Price. Before inspecting the Property, the City shall give Owner not less than forty-eight (48) hours written notice of the date, time and expected duration of the inspection. The inspection shall be conducted between the hours of 9:00 a.m. and 5:00 p.m., Monday through Friday, excluding court holidays, unless the parties mutually agree in writing to another date and time. Owner shall make the Property available for inspection on the date and at the time specified in the City's request for inspection. 9. Escrow. Promptly after delivering a Notice of Exercise, the City shall open an escrow account for its purchase of the Property. Close of escrow shall take place on such date which is the later to occur of the following, (a) sixty (60) days after a Notice of Exercise has been delivered, or (b) ten (10) days after Owner has performed all acts and executed all documents required for close of escrow. Prior to the close of escrow, the City shall deposit the Adjusted Resale Price as defined in Section 12 below and all escrow fees and closing costs to be paid by City. Closing costs and title insurance shall be paid pursuant to the custom and practice in the County of Alameda at the time of the opening of escrow, or as may otherwise be provided by mutual agreement. Owner agrees to perform all acts and execute all documents reasonably necessary to effectuate the close of escrow and transfer of the Property to the City. 10. Proceeds of Escrow: Removal of Exceptions to Title. Prior to close of escrow, Owner shall cause the removal of all exceptions to title to the Property that were recorded after the date of this Agreement. All amounts required to be deposited into escrow by the City shall be applied first to the payment of any and all liens and encumbrances recorded against the Property in order of lien priority, and thereafter to the payment of escrow fees and closing costs. Any amounts remaining after the amounts deposited 783016-1