(i)            HUD can terminate the Operator Lease (A) for any violation of the Operator Lease that is not cured within any applicable notice and cure period given in the Operator Lease, (B) for any violation of the Operator’s Regulatory Agreement, pursuant to its terms; (C) for any violation of Program Obligations or Healthcare Requirements (both as defined below) that is not cured within thirty (30) days of Lessee’s receipt of written notice of such violation; provided, however, that if such cure reasonably requires more than thirty (30) days to cure, HUD may not terminate the Operator Lease if Lessee commences such cure within such thirty (30) day period and thereafter diligently prosecutes such cure to completion, (D) if HUD, as a result of the occurrence of any of the events described in the foregoing items (A), (B), or (C) is required to advance funds for the operation of the Healthcare Facility,  or [(E) if the Lessor has an identity of interest with the Lessee, for any reason].  (Emphasis added) (10/22/15)

Section 7(c)(i)(E) of the Subordination [, Non-Disturbance and Attornment] Agreement of Operating Lease should not be stricken, regardless of whether an IOI relationship between the owner and operator exists at closing.  The use of brackets in this provision is a scrivener’s error.  The language in paragraph 7(c)(i)(E)  is necessary to address IOI relationships between the owner and operator that exist when the borrower/owner is in default on its HUD-insured loan but the affiliated operator is in compliance with the operator documents.  Thank you for bringing this error to our attention.  A corrected version of this document will be posted to Hudclips.  In the meantime, please delete the brackets manually.