The Addendum for Sale of Other Property by Buyer (TREC No. 10-6) is dated 12-05-11 and replaces TREC No. 10-5. TREC's landing page describes its purpose directly: "This Addendum is used if the Buyers will be unable to buy the new property unless their existing property is sold and closed."
Paragraph A — the contingency
The contract becomes contingent on the buyer receiving proceeds from the sale of a specific property (address filled in) by a specific date (the Contingency). If the Contingency isn't satisfied or waived by that date, the contract terminates automatically and earnest money is refunded to the buyer. The form itself flags the obvious trap: "NOTICE: The date inserted in this Paragraph should be no later than the Closing Date specified in Paragraph 9 of the contract."
Paragraph B — the seller's kick-out right
If the seller accepts a written offer to sell the property to someone else (a backup offer), the seller must notify the buyer of two things at once: (1) that the seller accepted the other offer, and (2) that the seller now requires the buyer to waive the Contingency. The buyer then has a negotiated number of days after that notice to waive — or the contract terminates automatically and earnest money is refunded to the buyer.
Paragraph C — how the buyer waives
Waiver only happens two ways at once: the buyer notifies the seller of the waiver, and deposits an additional dollar amount with the escrow agent as additional earnest money. Both are required — notice alone doesn't waive the Contingency.
Paragraph D — what happens if the buyer waives and then can't close
If the buyer waives the Contingency and then fails to close and fund solely because their other property's sale didn't come through, the buyer is in default, and the seller can pursue the remedies under Paragraph 15 of the contract — the same default remedies (specific performance, or terminate and keep earnest money) as any other buyer default.