FOURTH QUARTER,
WHICH SHALL BE DELIVERED WITH THE ANNUAL FINANCIAL STATEMENTS), A SCHEDULE OF
TENANT SECURITY DEPOSITS SHOWING ANY ACTIVITY IN THE SECURITY DEPOSIT ACCOUNT,
IF ANY, FOR SUCH QUARTER, TOGETHER WITH A CERTIFICATION OF MANAGER AS TO THE
BALANCE IN SUCH SECURITY DEPOSIT ACCOUNT, IF ANY, AND THAT SUCH TENANT SECURITY
DEPOSITS ARE BEING HELD IN ACCORDANCE WITH ALL LEGAL REQUIREMENTS.
(H)
BORROWER WILL FURNISH LENDER ANNUALLY, WITHIN NINETY (90) DAYS
AFTER THE END OF EACH FISCAL YEAR, WITH A REPORT SETTING FORTH (I) THE NET
OPERATING INCOME FOR SUCH FISCAL YEAR, (II) THE AVERAGE OCCUPANCY RATE OF THE
PROJECTS DURING SUCH FISCAL YEAR, (III) THE CAPITAL REPAIRS, REPLACEMENTS AND
IMPROVEMENTS PERFORMED AT THE PROJECTS DURING SUCH FISCAL YEAR AND THE AGGREGATE
RECURRING REPLACEMENT EXPENDITURES MADE IN CONNECTION THEREWITH, AND (IV) THE
BALANCE CONTAINED IN EACH OF THE ESCROW ACCOUNTS AS OF THE END OF SUCH FISCAL
YEAR (WHICH BALANCE LENDER SHALL PROVIDE UPON BORROWER'S WRITTEN REQUEST
THEREFOR).
(I)
UNLESS BORROWER IS A DISREGARDED ENTITY FOR TAX PURPOSES AND NOT
REQUIRED TO FILE ANY TAX RETURNS, BORROWER SHALL FURNISH TO LENDER ANNUALLY,
WITHIN THIRTY (30) DAYS OF FILING ITS RESPECTIVE TAX RETURN, A COPY OF SUCH TAX
RETURN.
(J)
BORROWER SHALL SUBMIT TO LENDER FOR LENDER'S WRITTEN APPROVAL AN
ANNUAL BUDGET, WITH RESPECT TO EACH FISCAL YEAR DURING THE TERM OF THE LOAN, NOT
LATER THAN JANUARY 31 OF SUCH FISCAL YEAR, IN FORM REASONABLY SATISFACTORY TO
LENDER SETTING FORTH IN REASONABLE DETAIL BUDGETED MONTHLY OPERATING INCOME AND
MONTHLY OPERATING CAPITAL AND OTHER EXPENSES (INCLUDING, WITHOUT LIMITATION,
EXPECTED CAPITAL EXPENDITURES AND RELETTING EXPENDITURES) FOR THE PROJECTS.
BORROWER HAS DELIVERED TO LENDER A TRUE, CORRECT AND COMPLETE COPY OF THE ANNUAL
BUDGET FOR 2006. EACH ANNUAL BUDGET SHALL CONTAIN, AMONG OTHER THINGS,
LIMITATIONS ON MANAGEMENT FEES, THIRD PARTY SERVICE FEES, AND OTHER EXPENSES AS
BORROWER MAY REASONABLY DETERMINE. LENDER SHALL HAVE THE RIGHT TO APPROVE SUCH
ANNUAL BUDGET WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, AND IN THE
EVENT THAT LENDER OBJECTS TO THE PROPOSED ANNUAL BUDGET SUBMITTED BY BORROWER,
LENDER SHALL ADVISE BORROWER OF SUCH OBJECTIONS WITHIN FIFTEEN (15) DAYS
46
AFTER RECEIPT THEREOF (AND DELIVER TO BORROWER A REASONABLY DETAILED DESCRIPTION
OF SUCH OBJECTIONS) AND BORROWER SHALL, WITHIN FIVE (5) BUSINESS DAYS AFTER
RECEIPT OF NOTICE OF ANY SUCH OBJECTIONS, REVISE SUCH ANNUAL BUDGET AND RESUBMIT
THE SAME TO LENDER. LENDER SHALL ADVISE BORROWER OF ANY OBJECTIONS TO SUCH
REVISED ANNUAL BUDGET WITHIN TEN (10) DAYS AFTER RECEIPT THEREOF (AND DELIVER TO
BORROWER A REASONABLY DETAILED DESCRIPTION OF SUCH OBJECTIONS) AND BORROWER
SHALL REVISE THE SAME IN ACCORDANCE WITH THE PROCESS DESCRIBED HEREIN UNTIL
LENDER APPROVES AN ANNUAL BUDGET; PROVIDED, HOWEVER, THAT IF LENDER SHALL NOT
ADVISE BORROWER OF ITS OBJECTIONS TO ANY PROPOSED ANNUAL BUDGET WITHIN THE
APPLICABLE TIME PERIOD SET FORTH IN THIS SECTION, THEN SUCH PROPOSED ANNUAL
BUDGET SHALL BE DEEMED APPROVED BY LENDER. UNTIL SUCH TIME THAT LENDER APPROVES
A PROPOSED ANNUAL BUDGET, THE MOST RECENTLY APPROVED ANNUAL BUDGET SHALL APPLY;
PROVIDED THAT,