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TIMELY CONSTRUCTED AS REQUIRED ABOVE, THE CITY SHALL LOSE TRANSIENT OCCUPANCY TAXES AND THE PARTIES ACKNOWLEDGE THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLER IN THE EVENT OF THE FAILURE OF BUYER TO TIMELY COMPLETE THE HOTEL PROJECT. THEREFORE THE PARTIES HAVE AGREED THAT THE REASONABLE ESTIMATE OF SAID DAMAGES IF BUYER FAILS TO TIMELY COMPLETE THE HOTEL PROJECT SHALL BE AN AMOUNT EQUAL TO THE FOLLOWING: (1) A SIXTY PERCENT (60%) ROOM OCCUPANCY FOR A TWENTY (20) ROOM HOTEL; (II) MULTIPLIED AT A ROOM RATE EQUAL TO ONE HUNDRED FIFTEEN DOLLARS ($115) PER NIGHT; am MULTIPLIED BY A THREE (3) YEAR PERIOD (1,095 DAYS); (IV) MULTIPLIED BY A TRANSIENT OCCUPANCY TAX OF ELEVEN PERCENT (11.0%) ("LIQUIDATED DAMAGES"). BUYER'S PAYMENT OF LIQUIDATED DAMAGES SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY FOR BUYER'S DEFAULT. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE ME OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369. Initials: Signed in counterpart. Seller Buyer Seller agrees that following the Project Entitlement Date, Seller will use commercially diligent efforts to obtain a commitment for a construction loan for the Project and the required security for such construction loan is anticipated to include, without limitation, a completion guaranty executed by Seller and/or a completion bond for the Project in favor of the lender. For purposes of this Agreement, "Unavoidable Delay" shall mean shall mean and refer to any prevention, delay or stoppage caused by the occurrence of any of the following events: (a) rain, floods, earthquakes, fires, other casualties, or unexpected conditions; (b) acts of war; (c) acts of God; (d) insurrection, strikes, lockouts, walk -outs, riots, boycotts, or similar obstructive actions; (e) market wide shortages of labor, materials or supplies, (f) delays in the performance of other acts to be taken by governmental entities; or (g) in the case of Buyer's obligation to perform, any other cause beyond the reasonable control of Buyer, but excluding Buyer's financial inability to perform in favor of the Lender. For the purpose of this Agreement, an "Unavoidable Delay" includes, but is not limited to impacts of a public health crisis, pandemic, epidemic, actions, orders or shut -down of any kind of the government of the United States of America or of the State, County, or City where the Property is located, or any action or shut -down of their respective departments, agencies, subdivisions or officials or any civil or military authority, or any global or national financial market disruption as a result of any of the foregoing, or any other circumstance beyond the control of the parties that renders continued performance under this Agreement commercially impracticable. The Hotel Covenant shall also contain affordable housing restrictions that run with the land, as required by Government Code section 54233 of the Surplus Lands Act. 3.10.2 Project Entitlements Approvals. The Project Entitlements and the development of the Property must conform to all City, and other applicable governmental development, land use and architectural regulations and standards. Drawings, plans and specifications for the Project Entitlements shall be subject to the reasonable approval of the City -7-