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200 -unit apartment project and renting the dwelling units in the <br />Project to Elderly Households, as well as for other ancillary <br />purposes. The dwelling units are to be rented to Elderly Lower <br />Income Households and Elderly Very Low Income Households in the <br />percentages and at the rents specified in subsection 5(c) below <br />for the entire Term of the Lease; provided, however, that in <br />order to make the Project economically feasible, dwelling units <br />may be rented with the prior approval of Lessor to Elderly <br />Moderate Income Households or other Elderly Households, which are <br />not Lower or Very Low or Moderate Income Households. <br />(b) For the purpose of this Section 5, an <br />"economically feasible" project shall mean a Project which is <br />meeting its operating expenses (including expenses necessary to <br />maintain the Project in good and tenantable condition), <br />reasonable reserve requirements, taxes and debt service due on <br />the Mortgage Loans and is budgeting a quarterly distribution to <br />Lessee (the amount of which shall be included in the Annual <br />Operating Budget and shall be based on Lessee's time, costs and <br />materials spent on the Project). <br />(c) the Lessee shall rent the dwelling units and <br />establish rents for each dwelling unit as follows: <br />(i) initially, the tenant and monthly rent for <br />each dwelling unit shall be consistent with the parties' <br />statements set forth in Exhibit C attached hereto. The parties <br />acknowledge that the statements set forth in Exhibit C were made <br />to and relied upon by HUD in awarding the HDG Grant to the City. <br />(ii) if the Project is not economically feasible <br />at the rent levels in (i) above, then excluding the Lower Income <br />Units restricted by the HDG Documents and excluding the Very Low <br />Income Units restricted by the Regulatory Agreement, the dwelling <br />units may, with the prior approval of Lessor, be rented to <br />Elderly Moderate Income Households and other Elder Households <br />(which are not Lower, Very Low or Moderate Income) at rent levels <br />necessary to make the Project economically feasible. <br />C:GDLEASE.EHI -10- <br />