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restrictions; and (c) all license fees, taxes and assessments imposed on City (other than City's income or franchise taxes) which are measured by or based upon (in whole or in part) the amount of the obligations secured by the Property. If permitted by law, Developer may pay any Imposition in installments (together with any accrued interest). 12.3.1 Right to Contest. Developer shall not be required to pay any Imposition so long as: (a) its validity is being actively contested in good faith and by appropriate proceedings; (b) Developer has demonstrated to City's reasonable satisfaction that leaving such Imposition unpaid pending the outcome of such proceedings could not result in conveyance of the Property in satisfaction of such Imposition or otherwise impair the City's interests under the Inclusionary Loan Documents; and, (c) Developer has furnished City with a bond or other security satisfactory in an amount not less than 100% of the applicable claim (including interest and penalties). 12.3.2 Evidence of Payment. Upon demand by City from time to time, Developer shall deliver to City, within thirty (30) days following the due date of any Imposition, evidence of payment reasonably satisfactory to City. 12.3.3 Books and Records. Developer shall maintain complete books of account and other records reflecting its operations (in connection with the Property), in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to City. 12.4 [RESERVED] 12.5 Proiect Operating Budget. Developer must promptly deposit all Gross Revenues (as defined in the Project Note) directly into a segregated depository account established exclusively for the Project ("Project Operating Account") pursuant to the agreement with the property management company. Withdrawals from the Project Operating Account may be made only in accordance with the provisions of this Agreement and the approved Project Budget, as it may be revised from time to time with prior City approval. Developer may make withdrawals from the Project Operating Account solely for the payment of Operating Expenses (as defined in the Project Note) and for payments of debt service and distributions as permitted by the Project Note. Withdrawals from the Project Operating Account for other purposes may be made only with the prior written approval of the City. Notwithstanding anything to the contrary contained herein, neither capital contributions from the Investor Limited Partner or proceeds from any loans made to the Developer (other than loans to address operating deficits pursuant to the terms of the Partnership Agreement) shall be deposited in the Project Operating Account. 12.6 Replacement Reserve Account. Developer must establish or cause to be established a segregated replacement reserve depository account ("Replacement Reserve Account") no later than the commencement of the permanent financing period for the Project. Developer must make monthly deposits from project income into the Replacement Reserve Account in accordance with Developer's Project Budget, and the requirements of the Senior Lender, as amended from time to time. Developer may withdraw funds from the Replacement Reserve Account solely to fund capital improvements for the Project and as otherwise is permitted under the Senior Loan Documents and including, but not limited 55A-40