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� , A Development, or in the event that this statistical index is no longer published, any other appropriate index as determined by Habitat. In no case however shall the increase in the original Purchase Price exceed three per cent(3%)compounded annually, except as provided below for Qualifying Improvements as have been made to the Property by the owner, which amount shall be added to the original Purchase Price as set forth in subsection k, below. k. Qualifying Improvements. A "Qualifying Imp rovement' ' shall be any-capital improvement, as opposed to repairs and maintenance, installed by the owner, which satisfies all the criteria set forth below.The value of the Qualifying Improvements shall be limited to a total of ten percent (10%) of the original Purchase Price. The value of the Qualifying Improvements shall be the sum equal to the original cost of materials and labor prorated over the expected useful life of the improvements. It shall be the obligation of the owner to establish by sufficient evidence that any improvements are a Qualifying Improvement and the value thereof. Habitat shall have the right to determine the value of any Qualifying Improvement in its sole and absoiute discretion. Further, in establishing any value to a Qualifying Improvement,Habitat shall have the right to consider any damage to capital improvements in the Property and may offset the Eligible Sales Price by the reasonable cost of repair on such damage. In order to be deemed a Qualifying Improvement, each improvement must satisfy the following qualifying criteria: �The cost of the improvement must exceed ten percent (10%) of the original Purchase Price, �The improvements must have a remaining expected useful life of at least five (5) years beyond the completion of the proposed transfer, OThe owner shall present substantiating documentation showing the original cost of materials and the original cost of labor for the improvement, and the date of its installation. 1. Assi�nment of Excess Sales Proceeds. If the Property is sold or otherwise - Transferred by the Owner, or any other party, in violation of this Addendum for ° more than the amount permitted under this Addendum, any proceeds of such sale or Transfer in excess of the Eligible Sales Price shall be deemed assigned to Habitat. Habitat shall be entitled to bring legal action against any pa�ty who has derived any proceeds of sale in excess of the Eligible Sales Price, to recover any such proceeds of sale in excess of the Eligible Sales Price.There shall be established a lien on the title to the Property so that if such excess proceeds of sale ' are not paid to Habitat, upon its demand, then Habitat has the right to enforce said lien on the Property pursuant to California Civil Code §§2924 et seq. : � m. No Further Encumbrances. Along with Redwood City restrictions for affordable ! � ownership housing, the owner shall be allowed to encumber the Property with a single purchase money deed of trust,being the deed of trust in connection with the Habitat Loan. Encumbering the title to the Property with more than Redwood City restrictions for affordable ownership housing and the Habitat Loan,except for an Approved Junior Lien, as set forth in the Addendum to the Deed of Trust or Habitat Loan, if such is allowed, is prohibited, and shall constitute a default of this Addendum. Attachment No. 7 Page 4 of 5