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(c) It is hereby expressly stipulated and agreed that any Disposition of the Project by the
Borrower in violation of this Section 7 shall be null, void and without effect, and shall be ineffective to
relieve the Borrower of its obligations under this Regulatory Agreement and the Loan Agreement. The
Borrower shall include by incorporation by reference or verbatim the requirements and restrictions
contained in this Regulatory Agreement in any deed or other documents transferring any interest in the
Project to another person to the end that such transferee has notice of and is bound by such restrictions, and
shall obtain the express agreement from any transferee so to abide. In the event that the Issuer approves
the Disposition of the Project in accordance with this Section 7, and the transferee has agreed to perform
the obligations of the Borrower under the Loan Agreement and this Regulatory Agreement in accordance
with the terms and conditions of the Loan Agreement and this Regulatory Agreement, the Borrower shall
be released from its obligations hereunder automatically and without further action by the Issuer, and the
Issuer shall confirm such release by recordable written instrument, if requested to do so by the Borrower.
(d) Except as permitted in Section 7(a), so long as any portion of the Bonds remains
outstanding, there shall be no transfer by any party of more than a 50% ownership interest in the Borrower,
nor shall there be any other similarly significant change in the ownership interest, control or relative
distribution thereof, of the Borrower by any other method or means including, but not limited to, increased
capitalization, merger, corporate or other amendments, issuance of additional or new stock or classification
of stock, or otherwise, without the prior written consent of the Issuer, which consent shall not be
unreasonably withheld; provided, however, that this subsection 7(d) shall not apply to transfers of the
interests in the Borrower to the Investor Partner or its affiliate or of the interests of the Investor Partner in
the Borrower.
(e) Any Disposition will be subject to the Issuer, the Trustee, and if the closing of the Mortgage
Loan has occurred, the Mortgage Lender, receiving an opinion of Bond Counsel that the transaction
contemplated and as carried out will not adversely affect the exclusion of the interest on the Bonds of the
holders thereof from gross income for federal income tax purposes.
(f) The restrictions contained in the foregoing provisions of this Section 7 shall not be
applicable to any of the following exceptions, and the prior consent of the Issuer shall not be required as to
such exceptions: (i) any transfer pursuant to or in lieu of a foreclosure under the Mortgage or other similar
disposition of the Project, (ii) grants of utility related easements and utility and other service related leases
or easements, including without limitation, laundry service leases or television cable easements, over
portions of the Project, provided the same are granted in the ordinary course of business in connection with
the operation of the Project as contemplated by this Regulatory Agreement, (iii) leases of apartment units
to Low Income Tenants or other tenants in accordance with the requirements of this Regulatory Agreement,
(iv) any sale or conveyance to a condemning governmental authority as a direct result of a condemnation
or a governmental taking or a threat thereof, and (v) any change in allocations of preferred return capital,
depreciation or losses or any final adjustments in capital accounts (all of which may be freely transferred
or adjusted by Borrower pursuant to Borrower's Partnership Agreement).
8. Enforcement.
(a) The Issuer, the Borrower and the Trustee each covenant that it will not knowingly take or
permit any action that would adversely affect the exemption from federal income taxation of interest on the
Bonds. Moreover, each covenants to take any lawful action (including amendment of this Regulatory
Agreement as may be necessary, in the opinion of Bond Counsel) to comply fully with the requirements of
the Act and with all applicable rules, rulings, policies, procedures, regulations or other official statements
promulgated or proposed by the Department of the Treasury or the Internal Revenue Service from time to
time pertaining to obligations the interest on which is tax-exempt under Section 142(d) of the Code and
affecting the Project.
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