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residential real property in Northern California is customarily required by a commercial lender to pay. 7.1.7 Loan to Value Ratio. The loan to value ratio cannot exceed 70%. 7.1.8 Employee's Contribution. Employee will contribute a reasonable sum to the purchase of his primary residence. Employee's contribution may include his own resources as well as money borrowed from a lending institution. Employee shall determine what pementage of the loan by City shall be the Loan Amount and what shall be the attributable to City's Equity Share. 7.1.9 Employee's Equity Share. The sum of the Loan Amount and Employee's contribution shall be referred to as Employee's Equity Share. 7.1.10 The Home Exceeds Employee's Equity Share. If the purchase price of the primary residence chosen by Employee exceeds Employee's Equity Share, as described in Paragraph 7.1.9 above, City shall pay the reminder of the purchase price. However, the maximum of the remainder of the purchase price that City shall attribute to the purchase price shall not exceed Four Hundred Thousand Dollars ($400,000) less the Loan Amount. 7.1.11 City's Equity Share. The amount that City contributes to the purchase of the primary residence, as described in Paragraph 7.1.10 above, shall be referred to as City's Equity Share. 7.2 Ownership Provisions. Employee and City shall own the real property as undivided proportional interests attributable to each based on their respective equity share. Employee and his spouse have the right to transfer their ownership interest to a living revocable trust wherein Employee and his spouse are the sole trustees of the living revocable trust and they are the sole beneficiaries of the trust during their respective lifetimes. 7.2.1 Example of Proportional Ownership. Should Employee contribute $400,000 to the purchase of a primary residence and the Loan Amount from City is $200,000, Employee pumhases a home for $800,000, Employee's ownership interest would be 75% ($600,000/$800,000) and City's ownership interest would be 25%. The grant deed to the residence would reflect that Employee (and his spouse, if the property were held as community property with right of survivorship or joint tenancy) owns an undivided 75% interest and City owns an undivided 25% interest. 7.3 Execution of Documents. Employee and City shall cooperate in the preparation and execution of all documents necessary to ensure that the documents reflect the Agreement and this Amendment. F:Atty/Ag r/Amend3.Yamamoto 040403 3