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(b) In lieu of such performance and payment bonds, Developer may or may <br />cause its General Contractor to provide Subguard Insurance in a form and amount acceptable to <br />the City. Alternatively, Development may provide evidence satisfactory to the City of the <br />Developer's ability to commence and complete construction of the Project in the form of an <br />irrevocable letter of credit, pledge of cash deposit, certificate of deposit, or other marketable <br />securities held by a broker or other financial institution, with signature authority of the City <br />required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable <br />to the City. Such evidence must be submitted in approvable form in sufficient time to allow the <br />City to review and approve the information within prior to the scheduled construction start date. <br /> <br />ARTICLE IV. <br /> <br />FINANCIAL ASSISTANCE – HOME LOAN <br />4.1 HOME Loan. Using funds from the Alameda County HOME Consortium <br />pursuant to the HOME Investment Partnership Act as established by the National Affordable <br />Housing Act of 1990 (42 USCA § 12471, et seq.), in the amount of Two Hundred Fifty-Six <br />Thousand Seven Hundred Sixty-One Dollars ($256,761), the City shall provide a loan (“HOME <br />Loan”) to Developer upon the terms and conditions and for the purposes set forth in this <br />Agreement. The HOME Loan shall be evidenced by a promissory note (the “HOME Note”) in <br />the principal amount of Two Hundred Fifty-Six Thousand Seven Hundred Sixty-One Dollars <br />($256,761), executed by Developer as Borrower substantially in the form attached hereto as <br />Exhibit H, and shall be secured by a Leasehold Deed of Trust (the “Leasehold Deed of Trust”) <br />executed by Developer as Trustor following Developer's acquisition of the Ground Leasehold <br />Interest. The Leasehold Deed of Trust shall be substantially in the form attached hereto as <br />Exhibit F and recorded against the Property subordinate only to such liens as City shall approve <br />in writing. The outstanding principal balance of the HOME Note will accrue three percent (3%) <br />simple annual interest commencing upon the date of disbursement. <br />Provided that Developer has complied with all conditions precedent to disbursement of <br />the HOME Loan set forth in Section 4.5, the proceeds of the HOME Loan (“HOME Loan <br />Proceeds”) shall be disbursed in accordance with Section 4.4 hereof. The Parties agree that City <br />shall disburse HOME Loan Proceeds only for the purposes set forth in Section 4.4. <br />4.2 Payment Dates; Maturity Date. Annual payments shall be due and payable on a <br />residual receipts basis in accordance with the formula set forth in the HOME Note. The entire <br />outstanding principal balance of the HOME Loan together with accrued interest and all other <br />sums due under the City Documents shall be payable in full on the fifty-fifth (55th) anniversary <br />of the date that City issues the final certificate of occupancy for the Project. <br />4.3 Security. As security for repayment of the HOME Note, Developer shall execute <br />the Leasehold Deed of Trust when Developer acquires the Ground Leasehold Interest. Pursuant <br />to the Leasehold Deed of Trust, the City shall be provided a lien against the leasehold interest in <br />the Property and the Improvements. The Leasehold Deed of Trust shall be recorded in the <br />Official Records on the date that Developer acquires the Property. The Leasehold Deed of Trust <br />144\259\1892880.4 <br />11