WASHINGTON SANTA ANA HOUSING PARTNERS, L.P

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(a) Developer shall use good faith commercially reasonable efforts to obtain alternative sources of rental subsidies and shall provide the City with annual progress reports on efforts to obtain alternative sources of rental subsidies that would allow the rents to be reduced. Upon receipt of any alternative rental subsidies, Developer shall reduce the rents back to the original restrictions to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs, required replacement reserves and debt service of the Project as shown on the Operating Budget. (b) Developer shall provide tenants in the Restricted Units with notice of any rent increase pursuant to this Section 7.7, and shall notify the tenant that if they have received a tenant -based voucher from the Housing Authority they may use the tenant -based voucher for their Restricted Unit. (c) All rent increases for the Restricted Units are subject to City approval pursuant to the terms of this Section 7.7. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the City a schedule of any proposed increase in the rent. The City will disapprove a rent increase if it does not comply with the restrictions set forth in this Section 7.7. Notwithstanding the foregoing, rent increases for the PBV Restricted Units shall be subject to review and approval of the City. Developer shall give tenants of all Restricted Units written notice at least sixty (60) days prior to any rent increase. 7.8. Reserved. Section 8. RESERVED. Section 9. GENERAL PROVISIONS AND WARRANTIES 9.1. As a material inducement to City to enter into this Agreement, Developer represents and warrants as follows, which representations and warranties are made solely by Developer and not by or on behalf of any partner of Developer: Formation, Qualification and Compliance. Supportive Housing LLC, the managing general partner of Developer: (a) is a limited liability company, validly existing and in good standing under the laws of the State of California; (b) has all requisite authority to conduct its business and own and lease its properties; and, (c) is qualified and in good standing in every jurisdiction in which the nature of its business makes qualification necessary or where failure to qualify could have a material adverse effect on its financial condition or the performance of its obligations under the Loan Documents. Developer is in compliance with all laws applicable to its business and has obtained all approvals, licenses, exemptions and other authorizations from, and has accomplished all filings, registrations and qualifications with, any Governmental Authority that are necessary for the transaction of its business. 9.2. Execution and Performance of Loan Documents. (a) Developer has all requisite authority to execute and perform its 19 The Crossroads at Washington City NSP Loan Agreement