from time to time, for all Reimbursable Costs or (ii) pay such Reimbursable Costs
directly to the applicable third parties.
Section 5.2 - Administrative Fee. Refer to Appendix B which is incorporated
herein.
Section 5.3 - Reimbursable Costs. Owner shall reimburse Operator for the costs
set forth in Appendix B (collectively, the "Reimbursable Costs"). Owner’s obligation
under this provision is subject to (1) Owner's express approval of the costs as part of an
Annual Budget or separately in writing, or (Gi) Operator incurring costs in accordance
with Section 3.8 (Emergency), 3.9 (Extraordinary Circumstances). Expenditures made
by Operator in excess of the Annual Budget that are required to comply with any Law
applicable to the Services or to the Project, shall be approved and reimbursed by Owner.
Subject to Owner's right to modify the provisions of this Section 5.3 from time to time
upon the reasonable request of the Lenders, Owner shall pay Reimbursable Costs as
follows:
(a) Operator shall not incur Reimbursable Costs unless they are incurred
in accordance with the applicable Annual Budget, or are permitted by Sections 3.8
(Emergency), 3.9 (Extraordinary Circumstances). If Operator becomes aware
that Reimbursable Costs exceed or will exceed the amount provided in the
applicable Annual Budget by 5% or more, Operator shall use all reasonable
efforts to notify Owner within ten (10) days and shall not, without Owner's
approval to amend the applicable Annual Budget or Owner’s authorization for
Operator to make such expenditure, perform any further Services that will cause
or increase a budget overrun, except as provided in 3.8 (Emergency), 3.9
(Extraordinary Circumstances). Jf Owner refuses to authorize expenditures in
excess of the Annual Budget, Operator shall be relieved of those duties or
obligations of this Agreement that cannot be performed without the expenditures
Owner refuses to approve.
(b) In all cases, Operator shall use reasonable commercial efforts to
mitigate any adverse effect from Owner's refusal to authorize expenditures in
excess of the Annual Budget. Owner’s reimbursement of any cost related to the
Services shall not be construed as Owner's approval or acceptance of the Services.
Section 5.4 - Adjustments and Conditions. Notwithstanding the payment of any
amount pursuant to the foregoing provisions, Owner shall remain entitled to conduct a
subsequent audit and review of all Reimbursable Costs incurred and paid by Owner and
of any supporting documentation for a period of three (3) years after the applicable
Contract Year. If such audit and review shows that any amount previously paid by
Owner to Operator did not constitute a Reimbursable Cost, Owner may (a) recover such
amount from Operator, plus interest at the Reference Rate, calculated from the date the
audit commenced, or (b) deduct such amount from any payment that thereafter may
become due to Operator.
Section 5.5 - Billing and Payment. Within 15 days following the end of each
month, Operator shall submit the receipts and disbursements showing Reimbursable
