2. Property Value Guarantee.
a. Initial Appraisal. The Property was appraised by __________________, a Qualified Appraiser (defined below), at Guarantor’s sole cost, (such appraisal being the “Initial Appraisal”) in the amount of $____________. A copy of the Initial Appraisal is attached hereto as Exhibit B. The resale value of the Property, as determined by the Initial Appraisal, shall be referred to herein as the “Base Value”.
b. Qualifying Sale. Guarantor shall pay to Property Owner, within sixty (60) days following the closing of the sale of the Property (the “Closing”), the difference between the sale price for the Property (the “Sale Price”) and the Base Value (such difference being the “Property Value Guarantee Payment”) in the event that: (i) the Closing occurs more than ten (10) business days after the commencement of construction on the Project (“Construction Commencement”), but in no event later than the seventh (7th) anniversary of the Construction Commencement (ii) the Property is sold to a bona fide purchaser for value in an arm’s length transaction (excluding any short sale or other sale in exchange for the extinguishment of debt), (iii) the sale price for the Property is less than the Base Value, and (iv) at the Closing, the Property is in substantially the same condition as it was during the Initial Appraisal, reasonable wear and tear excepted. For the avoidance of doubt, this Agreement shall not apply to any sale of less than the entire Property. Upon the sale of less than the entire Property, this Agreement shall become null and void and be of no further force and effect.
c. Pre-Closing Appraisal. In the event that a written offer to purchase the Property by a bona fide third party purchaser is more than ten percent (10%) less than the Base Value, Guarantor shall have the right, at its sole cost, to engage a Qualified Appraiser to appraise the Property before the Closing (the “Pre Closing Appraisal”). If the Pre Closing Appraisal shows that the offer to purchase the Property is less than the Base value, Guarantor shall pay to Property Owner the Adjusted Property Value Guarantee Payment, to be paid within sixty (60) days following the closing of the sale of the Property. The term “Adjusted Property Value Guarantee Payment shall mean the difference between the Pre Closing Appraisal Price and the Sale Price. Notwithstanding the foregoing, Guarantor shall use commercially reasonable efforts to have the Pre-Closing Appraisal conducted by the same appraiser who conducted the Initial Appraisal, provided that (i) such appraiser is still a Qualified Appraiser. To the extent that the Property Owner has made substantial improvements to the property after the Initial Appraisal, and if the Property Owner believes these substantial improvements have increased the property value then Property Owner may request a pre-closing appraisal to determine whether any adjustments to the Base Value are required, with respect to said improvements.
d. Reimbursement Expenses. There shall be a payment by Guarantor to the Property Owner a flat amount of $1,500 for the time and convenience and/or future expenses of Property Owner when the Agreement is entered into.