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3.02. City Notes and Deed of Trust <br />Developer's obligation to repay the City Loan shall be <br />evidenced by a promissory note or notes in the form or forms set <br />forth in Attachment D, attached hereto and incorporated herein by <br />reference, and shall be subject to the terms and conditions therein <br />contained. Each City Note shall be secured by a deed of trust on <br />the Property in the form of a standard, short form deed of trust <br />issued by a trustee selected by the City, with City named as <br />beneficiary thereon. Developer shall duly execute each City Note <br />and its corresponding deed of trust and deliver the same to the <br />City or its designated agent as a condition of the City's <br />obligation to fund the City Loan. <br />The City agrees to undertake, in good faith, any determination <br />referenced in any City Note pertaining to possible deferrals of <br />installment payments on the said Note provided Developer provides <br />City with the information necessary to make such determinations and <br />access to Developer's books and records to verify such information. <br />3.03. Lien Priority <br />As a condition to city's obligation to fund the City Loan, <br />there shall be no liens upon the Property having priority over any <br />deed of trust securing any City Note, other than those specified in <br />Attachment E, attached hereto and incorporated herein, unless <br />otherwise consented to by the City Manager or delegee. <br />3.04. Funding of City Loan <br />The City Loan shall <br />into a construction escro <br />3.06. In addition to oth <br />funding of the City Loan <br />obtained all necessary <br />concurrent funding of the <br />3.05. Equity Dencsit <br />e <br />be made by depositing the loan proceeds <br />w account established pursuant to Section <br />r conditions set forth hereinabove, the <br />is conditional upon the Developer having <br />permits for the Project and upon the <br />Lender Loan. <br />If the loans to be made by the City and Lender are <br />insufficient to cover the entire estimated construction costs of <br />the Project, Developer shall deposit into the construction escrow <br />account provided for in Section 3.06 of this Agreement the amount <br />required to make up the deficit. <br />3.06. Construction Escrow Account <br />All loan proceeds and equity deposits shall be placed in a <br />non -interest bearing construction escrow account with United states <br />Page 5 of 10 Pages <br />EXHIBIT I <br />