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Repurchase Option Policy

All Grasse Road sales will be subject to a Repurchase Option allowing the College an option to repurchase the property in the future. The manner in which the Repurchase Option would operate in some commonly occurring situations is outlined below, with "Owner" referring to the person who owns the property subject to the Option. This is just an outline, however, and reference should be made to the Repurchase Option itself, a copy of which is available through the Dartmouth College Real Estate Office.

Option

Dartmouth shall have the option to repurchase the property upon any one of the following events ("Triggering Events"):

1. When the Owner wishes to sell the property;
2. One year after the Owner leaves full-time College employment (other than as a result of retirement) or dies;
3. The date the property has been rented to third parties for more than 1 year (other than a lease of the Premises for two years or less while the Owner is on an approved leave from Dartmouth);
4. The date the property ceases to be used as the Owner's principal residence.

Notice to Dartmouth

The Owner is required to give Dartmouth written notice of a Triggering Event within a specified time ("Triggering Notice") and may also be required to give an earlier "informational" notice.

Appraisal

Promptly following the Triggering Notice, the Owner and Dartmouth shall agree upon an appraiser to determine the property's fair market value.

Exercise by Dartmouth

Dartmouth shall have a right to repurchase the property by giving notice to the Owner ("Exercise Notice"). Exercise Notice generally must be given within 60 days of the date the Owner and Dartmouth agree on an appraiser.

Closing

Closing shall take place within 6 months of the date of Exercise Notice, but Dartmouth is entitled to set an earlier date on 30 days' prior notice.

Option Price

The purchase price to be paid by Dartmouth upon the exercise of its option in most cases shall be the lesser of #1 or #2 below, less 5% to cover transaction costs:

1. The fair market value on the date Triggering Notice is given; or
2. A capped price equal to the sum of:
   1. The greater of a) the Owner's original purchase price adjusted by the change in the Consumer Price Index (CPI-U Northeast Region) from the date 6 months prior to purchase until the date 18 months prior to Triggering Notice, or b) the Owner's original purchase price; and
   2. Owner's other costs for improvements recognized by the IRS for the purpose of increasing the tax basis in the property, up to a maximum of:
      1. $2,500 each year for the first 5 years of ownership (pro-rated for partial years)
      2. $3,000 for each year of the sixth though tenth years of ownership (pro-rated for partial years)
      3. $4,000 for each of the eleventh through fifteenth year of ownership (pro- rated for partial years)
      4. $5,000 for each subsequent to the fifteenth year of ownership (pro-rated for partial years); and
   3. Owner's other costs for maintenance and repairs, such as interior and exterior painting, flooring refinishing and oil burner maintenance, but shall exclude costs associated with cleaning, yard maintenance, snow plowing and personal property repair, up to a maximum of:
      1. $1,000 each year for the first 5 years of ownership (pro-rated for partial years)
      2. $1,200 each year of the sixth through tenth years of ownership (pro-rated for partial years)
      3. $1,600 each year of the eleventh through fifteenth years of ownership (pro-rated for partial years)
      4. $2,000 for each year subsequent to the fifteenth year of ownership (pro-rated for partial years).

Marketing

Once Dartmouth receives Triggering notice, it shall have the right to market the property to prospective buyers. Dartmouth's marketing may include advertising and mailings, and Dartmouth shall be provided with reasonable access in order to show the property to prospective purchasers through individual showings and open houses. Dartmouth's access for such showings shall be comparable to that typically given to a broker under a listing agreement.

Non-Exercise by Dartmouth

Dartmouth's option to purchase shall terminate if Exercise Notice is not given within the applicable 60-day period, unless Triggering Notice is being given due to the Owner leaving College employment. In the event Triggering Notice is being given solely due to the Owner leaving College employment, Dartmouth shall have additional options to purchase i) upon the occurrence of any Triggering Event as listed above, and ii) as follows:

Every third anniversary of the April 15 first occurring after Triggering Event (b) above shall be considered to be a new Triggering Notice, and Dartmouth shall continue to have an option to purchase by giving Exercise Notice within 60 days of each such Triggering Notice (e.g. if the Owner leaves College employment on June 1, 2001, Triggering Event (b) shall occur on June 1, 2002, and new Triggering Notice shall be considered to have been received on April 15, 2005, April 15, 2008 and every three years thereafter until an alternative Triggering Event occurs which gives rise to a final Triggering Notice).