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��14��141
<br /> that particular �perator-certified staternents may be unreliab�e �for example, �ndi�ate a likely
<br /> proh�bited use �f fun.ds of the Project}, or axe presented in a manner that �s inconsistent w�th
<br /> Prograrn �b�igations, HUD may, on a case-by-case hasis, require audited financia� statements
<br /> from �perator. Such aud�ted fnancial statements shall be certifed by an independent pu�lic
<br /> accountant, at �perator's expense, and delivered ta HUD and Lender with�n ninety �9�} days
<br /> after HUD's n�ti�e to �perator requiring such statements.
<br /> r
<br /> ��} ��nsistent with Program �bligations, �perator sha�� obtain, or cause to be
<br /> obtained, contracts for g�ods, materials, supplies, and services �"�oods and S�r�vices"} at costs,
<br /> amounts, and terms that do not �xceed r�asonable and necessary levels and those customar��y
<br /> paid in the vicinity of the Land f�r ��vds and Services received. The purchase price of Goods
<br /> and Services shall be based on qua�ity, durabi�ity and scope of work. Reasonal�le �perating
<br /> Expens�s do not include amaunts paid far betterments as defined in the Project's jur�sdiction or
<br /> impravements un�ess determined by HUI3 to be prudent and appropriate. If the �perator is
<br /> acquiring �`roods and SerVices whose costs ex�eed five per�ent (5%} of the gross annual re�enue
<br /> af the Healthcare Fa�ility, �perator sha11 solicit written c�st estimates. �peratar shall keep
<br /> copies of all written �ost estimates and contracts or other instruments relating to the Proj ect, all
<br /> or any of which may be subj ect to inspect�on and exam�nati�n by HUD at the H�a�thcare FaCility
<br /> or nther mutually agreeab�e �ocatian.
<br /> ��} If a qua.rter�ylyear-to�date financial statement demanstrates negati�e
<br /> Healthcare Facility Working �apital as defined by HUD, or �f�perator fails to timely submit
<br /> su�h statement, then until a �urrent quarterly, year-to-�date financia� statement demonstrates
<br /> positive Healthcar� Facility �Vorking Capital or until otherwise authorized by HUD, no funds
<br /> derived frorn or �n conne�tion with the operation of the Healthcar� Facility may be
<br /> distributed, advanced, or otherwise used for any purpose �ther than, as appli�able, making
<br /> payments due pursuar�t to any Borrower-�perator Agreement andlor Master Lease ��f any�,
<br /> making payments required to be made under the Loan Documents, making payments pursuant to
<br /> any of the AR Financing Documents, a.nd making payments far �`roods and Ser�ices, provided
<br /> that paym�nts for �aads and Services shall be subj ect to the limitations set forth in subsection
<br /> �e} above.
<br /> �g} At request of HUD, �perator shall give specific answers, satisfactory ta
<br /> HUI3, to questians posed fr�rn t�me to tim� re�ating to income, assets, i1a�3111t1�5, C�ritraCtS,
<br /> operation, and condition of the Healthcare Faci�ity, and shal� provide to HUI] copies of a�1
<br /> books, contra�ts, re�ords, do�uments and other papers relating to the Healthcare Facility fram
<br /> tim�ta time as HUI] may request.
<br /> (h} �perator acl�nowledges that the financial information referenced above �s
<br /> necessary for HUD to review fr�m tim� to time, given the risk inherent in the �perati�n af the
<br /> Hea�thcare Faci��ty, and gi�en the necessity of the �p�ratar's f nan�ial and nperatianal stability
<br /> in order to �nsure timely payment of amounts due under the Loan I]ocuments (wh�ther directly
<br /> from �peratar where �perator is the Borr�wer, or �ndirectly fr�m amaunts due under any
<br /> Borrower-�perator Agreement where �perator is n�t Borrower}. At HUI]'s opti�n, HUD may
<br /> dire�t that an� financial or operationa� reports required by this Agreernent be submitted to
<br /> Lender andlor another third party, in addition to or�n lieu of submission to HUI].
<br /> Pre�ious versivns o�solete Page'!4 of'I S fvrm H U DW924��A-�RC F�Rev. D8113}
<br /> Replaces HUD-924��-NHL
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