Agmt 2006 Mercy Housing California XXXIII (4)

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in (ii) below, who is a member ofthe Master Appraiser Institute and who has experience in the geographic area in which the Project is located, as reduced by customary costs of a sale, including customary sales commissions (anticipated to be approximately six percent (6%); provided, however, that if prior to exercise of the Option the Internal Revenue Service (the "Service") has issued a revenue ruling or provided a private letter ruling to Developer, Agency or City providing that property ofthe nature and use ofthe Project may be sold under the circumstances similar to those pertaining to the Option and Refusal Right at a lesser price, then the Option price shall be such lesser price. If the Agency desires that existing reserves be transferred to Agency in connection with the transfer of the Project, the purchase price under the Option shall increase by the fair market value of such reserves. Fair market value shall be calculated considering the nature of the reserves and any existing restrictions on the use or availability of such reserves. (ii) The fair market value of the Project shall be determined as follows. Developer and Agency shall select a mutually acceptable appraiser who shall determine the fair market value of the Project. In the event the parties are unable to agree upon an appraiser, Developer and Agency shall each select an appraiser. If the difference between the two appraisals is less than or equal to ten percent (10%) of the lower of the two appraisals, then fair market value shall be the average of the two appraisals. If the difference between the two appraisals is greater than ten percent (10%) of the lower of the two appraisals, then the two appraisers shall jointly select a third appraiser. The appraisals shall take into account the requirement that the Project remain dedicated for the use oflow-income households pursuant to any restrictions under any ground lease, loan agreements or regulatory agreements. If the third appraisal is less than either of the first two, then fair market value shall be the average ofthe two lowest appraisals. If the third appraisal is greater than the first two, then fair market value shall be the average of the two highest appraisals. If the third appraisal falls between the previous two appraisals, the fair market value shall be the value established by the third appraisal. Developer and Agency shall share the cost equally of any appraiser jointly selected or shall pay the costs of the appraiser they each select and shall share the cost equally of any third appraiser. Any appraiser selected pursuant to this section shall be an MAl appraiser with at least five years of experience and shall have had substantial experience appraising low- income housing tax credit projects. C. Refusal Right. Agency shall have a right of first refusal to purchase the Project for a period of24 months commencing upon the end of the I5-year low-income housing tax credit compliance period. This right shall be exercisable in accordance with the requirements of Internal Revenue Code Section 42(i)(7)(A) and any successor provision, together with any regulations promulgated pursuant thereto. If Agency does not exercise the Option or the Refusal Right, and Developer elects to resyndicate the Project, then Agency shall have an additional Refusal Right for a period of 24 months commencing upon the end of the tax credit compliance period applicable to such resyndication. D. Purchase Price Under Refusal Right. The purchase price for the Project pursuant to the Refusal Right shall be equal to the sum of (a) an amount sufficient to pay all debts secured by mortgages or deeds of trust on the Project, and (b) an amount sufficient to distribute to the Partners cash proceeds equal to the taxes projected to be imposed as a result of the sale pursuant to the Refusal Right. 803698-6 26