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such Imposition unpaid pending the outcome of such proceedings could not result in <br />conveyance of the Property in satisfaction of such Imposition or otherwise impair City's <br />interests under the Loan Documents; and, (c) Developer has furnished City with a bond or <br />other security reasonably satisfactory to City in an amount not less than 100% of the <br />applicable claim (including interest and penalties). <br />12.6. Evidence of Payment. Upon demand by City from time to time, Developer <br />shall deliver to City, within thirty (30) days following the due date of any Imposition, <br />evidence of payment reasonably satisfactory to City. <br />12.7. Books, Records and Annual Statement. Developer shall maintain <br />complete books of account and other records reflecting the construction and operation of <br />the Project in accordance with generally accepted accounting principles applied on a <br />consistent basis. During the Term of Agreement, the amount of the Residual Receipts shall <br />be determined on the basis of an annual audited financial statement (" Annual Statement"), <br />for the preceding year, beginning with the first year of operation of all or any part of the <br />Project, prepared at the Developer's expense by an independent certified public account <br />firm acceptable to the City. Such Annual Statement shall include an updated statement <br />based on the information provided in or required by Exhibit C. During the Term of <br />Agreement, the Developer shall submit the Annual Statement and any payment to the City <br />not later than one hundred twenty (120) days after closing of the Developer's previous <br />year's books. The first Annual Statement submitted by the Developer for the City/HOME- <br />ARP Loan shall include the period from the Completion of Construction to the close of <br />that year's books. The City shall review and approve such statement (such approval not to <br />be unreasonably withheld or delayed), or request revisions, within ninety (90) days after <br />receipt. In the event that Developer's calculation of Residual Receipts is found to be <br />incorrect as a result of a City review, and has underreported, Developer shall pay to the <br />City the full amount of additional amounts owed within thirty (30) days of notice of such <br />error. The terms of this subsection shall not be the exclusive method by which the City <br />may review Residual Receipts payments by the Developer. In the event the discovery <br />occurs at anytime subsequent to the ninety (90) day period for that year's books, Developer <br />shall pay to the City the full amount of such additional amounts owed within thirty (30) <br />days after the error is discovered. Notwithstanding the foregoing, no previous action or <br />inaction by the City shall prohibit the City from requesting repayment of any unpaid, owed <br />amounts of Residual Receipts at any time during the term of this Agreement or thereafter <br />within ten (10) years of when such unpaid Residual Receipts were due. The Developer <br />shall pay to the City the full amount of such additional amounts owed within thirty (30) <br />days of notice of such errors for periods prior to the previous year. <br />12.8. Project Operating Account. Developer shall establish an interest bearing <br />account to be known as the Operating Reserve Account. Upon the Conversion Date, <br />Developer shall deposit an amount into the Operating Reserve Account sufficient to pay at <br />least three (3) months of operating expenses and three (3) months of mandatory debt <br />service payments ("Target Balance"), or such greater amount as may be required by a <br />senior lender or the Tax Credit Investor. <br />35 <br />W ISEPIace Permanent Supportive Housing <br />City HOME -ARP Loan Agreement <br />