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DRAFT <br /> (i) An amount equal to the difference between the fair inarket <br /> value of the Affordable Unit at the time of the initial purchase and the Affordable Sales Price <br /> (the"Initial Subsidy"),plus <br /> (ii) An amount equal to the product of(1)the appreciation of <br /> the Affordable Unit, as measured.by the increase in the+fair market value of the Affordable Unit <br /> at the time of the sale to the Homebuyer and the resale of the Affordable Unit, and(2)the <br /> percentage that the Initial Subsidy represented of the fair market value of the Affordable Unit <br /> when it was purchased by the Homebuyer(the"Proportionate Share of Appreciation"). <br /> (f) Payment of the City Equity Share is subject to the following: (1) <br /> payment to satisfy a first lien from a primary leader, as approved by City at the time of the initial <br /> sale,or subsequent approval in the event of a refinance event,and(2)an amount equal to the down <br /> payment and the cost of improvements paid by the Homebuyer. Following payment of the City <br /> Equity Share, the Homebuyer shall.receive the remainder of any closing proceeds, less any costs <br /> of closing, including any and all real estate broker commissions. <br /> 3.5.3 The fair market value of the initial sale and each subsequent sale during the <br /> Affordability Tern shall be determined as follows: <br /> (a) For the.initial sale,Developer:may propose to the City a fair market <br /> value based on a price per square foot that is based on, comparable sales of other units within the <br /> Project. <br /> (b) .Except as approved in writing by the City under sub-paragraph(a), <br /> prior to the sale of an Affordable Unit, a qualified appraiser shall conduct an appraisal of the <br /> Affordable Unit to determine fair market value without the restrictions of this Agreement. if the <br /> Developer or a prospective Homebuyer disputes the appraised value, then that party may pay for <br /> the costs of a second appraisal and, if there is still disagreement,the average of the two appraisals <br /> shall be used to determine the fair market value. <br /> (c) The fair market value of the Affordable Unit, as determined in <br /> accordance with the above, shall be provided to the City for approval or disapproval, which City <br /> shall provide within thirty(30) days of receipt of the proposed fair market value. If City does not <br /> provide a written response within such time period, then the proposed fair market value shall be <br /> deemed approved by the City. <br /> 3.5.4 When the City Equity Share becomes due,the proceeds from the sale of the <br /> Property shall first satisfy a First Lien,and the Homebuyer shall receive proceeds for the value of <br /> any improvements and any down payment actually paid, The City Equity Share shall be paid prior <br /> to disbursement of remaining sales proceeds to the Homebuyer. <br /> 4. OPERATION OF THE PROJECT BY DEVELOPER <br /> 4.1 Payment of Densily Bonus Setup.Fee, A Density Bonus Setup Fee in the amount <br /> of$34,707.75 will be charged to the Developer and must be paid prior to execution of this <br /> Agreement. <br /> 4w_J <br /> Page 12 <br /> 55394.00101143423340.1 <br />