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for the benefit of creditors or to a trustee for creditors, or permit an
<br />adjudication in bankruptcy or the taking possession of the mortgaged
<br />property or any part thereof by a receiver or the seizure and sale of the
<br />mortgaged property or any part thereof under judicial process or pursuant
<br />to any power of sale, and fail to have such adverse actions set aside within
<br />forty -five (45) days.
<br />9. (a) Any management contract entered into by Owners or any of them
<br />involving the project shall contain a provision that, in the event of
<br />default hereunder, it shall be subject to termination without penalty
<br />upon written request by the Secretary. Upon such request Owners
<br />shall immediately arrange to terminate the contract within a period of
<br />not more than thirty (30) days and shall make arrangements
<br />satisfactory to the Secretary for continuing proper management of the
<br />project.
<br />(b) Payment for services, supplies, or materials shall not exceed the
<br />amount ordinarily paid for such services, supplies, or materials in the
<br />area where the services are rendered or the supplies or materials
<br />furnished.
<br />(c) The mortgaged property, equipment, buildings, plans, offices,
<br />apparatus, devices, books, contracts, records, documents, and other
<br />papers relating thereto shall at all times be maintained in reasonable
<br />condition for proper audit and subject to examination and inspection
<br />at any reasonable time by the Secretary or his duly authorized agents.
<br />Owners shall keep copies of all written contracts or other instruments
<br />which affect the mortgaged property, all or any of which may be
<br />,subject to inspection and examination by the Secretary or his duly
<br />authorized agents.
<br />(d) The books and accounts of the operations of the mortgaged property
<br />and of the project shall be kept in accordance with the requirements
<br />of the Secretary.
<br />(e) Within sixty (60) days following the end of each fiscal year the
<br />Secretary shall be furnished with a complete annual financial report
<br />based upon an examination of the books and records of mortgagor
<br />prepared in accordance with the requirements of the Secretary,
<br />prepared and certified to by an officer or responsible Owner and,
<br />when required by the Secretary, prepared and certified by a Certified
<br />Public Accountant, or other person acceptable to the Secretary.
<br />(f) At request of the Secretary, his agents, employees, or attorneys, the
<br />Owners shall furnish monthly occupancy reports and shall give
<br />specific answers to questions upon which information is desired from
<br />time to time relative to income, assets, liabilities, contracts, operation,
<br />and condition of the property and the status of the insured mortgage.
<br />(g) All rents and other receipts of the project shall be deposited in the
<br />name of the project in a financial institution, whose deposits are
<br />insured by an agency of the Federal Government. Such funds shall be
<br />withdrawn only in accordance with the provisions of this Agreement
<br />for expenses of the project or for distributions of surplus cash as
<br />permitted by paragraph 6(e) above. Any Owner receiving funds of
<br />the project other than by such distribution of surplus cash shall
<br />immediately deposit such funds in the project bank account and
<br />failing so to do in violation of this Agreement shall hold such funds
<br />in trust. Any Owner receiving property of the project in violation of
<br />this Agreement shall hold such funds in trust. At such time as the
<br />Owners shall have lost control and /or possession of the project, all
<br />funds held in trust shall be delivered to the mortgagee to the extent
<br />that the mortgage indebtedness has not been satisfied.
<br />Replaces FHA -2466 which may be used until supply exhausted
<br />201107532
<br />(h) If the mortgage is insured under Section 232:
<br />(1) The Owners or lessees shall at all times maintain in full force and
<br />effect from the state or other licensing authority such license as
<br />may be required to operate the project as a nursing home and
<br />shall not lease all or part of the project except on terms approved
<br />by the Secretary.
<br />(2) The Owners shall suitably equip the project for nursing home
<br />operations.
<br />(3) The Owners shall execute a Security Agreement and Financing
<br />Statement (or other form of chattel lien) upon all items of
<br />equipment, except as the Secretary may exempt, which are not
<br />incorporated as security for the insured mortgage. The Security
<br />Agreement and Financing Statement shall constitute a first lien
<br />upon such equipment and shall run in favor of the mortgagee as
<br />additional security for the insured mortgage.
<br />(i) If the mortgage is insured under Section 231, Owners or
<br />lessees shall at all times maintain in full force and effect
<br />from the state or other licensing authority such license as
<br />may be required to operate the project as housing for the
<br />elderly.
<br />10. Owners will comply with the provisions of any Federal, State, or local law
<br />prohibiting discrimination in housing on the grounds of race, color, religion
<br />or creed, sex, or national origin, including Title VIII of the Civil Rights Act
<br />of 1968 (Public Law 90 -284; 82 Stat. 73), as amended, Executive Order
<br />11063, and all requirements imposed by or pursuant to the regulations of
<br />the Department of Housing and Urban Development implementing these
<br />authorities (including 24 CFR Parts 100, 107 and 110, and Subparts I and
<br />M of Part 200).
<br />11. Upon a violation of any of the above provisions of this Agreement by
<br />Owners, the Secretary may give written notice thereof, to Owners, by
<br />registered or certified mail, addressed to the addresses stated in this
<br />Agreement, or such other addresses as may subsequently, upon appropriate
<br />written notice thereof to the Secretary, be designated by the Owners as their
<br />legal business address. If such violation is not corrected to the satisfaction
<br />of the Secretary within thirty (30) days after the date such notice is mailed
<br />or within such further time as the Secretary determines is necessary to
<br />correct the violation, without further notice the Secretary may declare a
<br />default under this Agreement effective on the date of such declaration of
<br />default and upon such default the Secretary may:
<br />(a) (i) If the Secretary holds the note - declare the whole of said
<br />indebtedness immediately due and payable and then proceed with
<br />the foreclosure of the mortgage;
<br />(ii) If said note is not held by the Secretary - notify the holder of the
<br />note of such default and request holder to declare a default under
<br />the note and mortgage, and holder after receiving such notice and
<br />request, but not otherwise, at its option, may declare the whole
<br />indebtedness due, and thereupon proceed with foreclosure of the
<br />mortgage, or assign the note and mortgage to the Secretary as
<br />,provided in the Regulations;
<br />(b) Collect all rents and charges in connection with the operation of the
<br />project and use such collections to pay the Owners' obligations under
<br />this Agreement and under the note and mortgage and the necessary
<br />expenses of preserving the property and operating the project.
<br />(c) Take possession of the project, bring any action necessary to enforce
<br />any rights of the Owners growing out of the project operation, and
<br />Page 3 of 8 Form HUD -92466 (11/2002)
<br />ref Handbook 4571.1
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