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(b) If the Borrower defaults in the performance of its obligations under this Regulatory
Agreement or breaches any covenant, agreement or warranty of the Borrower set forth in this Regulatory
Agreement, and if such default remains uncured for a period of 60 days after notice thereof shall have been
given by the Trustee or the Issuer to the Borrower and the Investor Partner (or for an extended period
approved in writing by Bond Counsel if such default stated in such notice can be corrected, but not within
such 60-day period, and if the Borrower commences such correction within such 60-day period, and
thereafter diligently pursues the same to completion within such extended period), then (i) the Borrower
agrees to pay the Issuer any rents or other amounts received by the Borrower for any units in the Project
which were in violation of this Regulatory Agreement during the period such violation continued, and (ii)
the Issuer or the Trustee may apply to any court, state or federal, for specific performance of this Regulatory
Agreement or an injunction against any violation of this Regulatory Agreement or any other remedies at
law or in equity or any such other actions as it may deem necessary or desirable so as to correct
noncompliance with this Regulatory Agreement. Any cure of any event of default hereunder made or
tendered by the Investor Partner shall be deemed to be a cure by the Borrower, and shall be accepted or
rejected by the Issuer and Trustee on the same basis as if made or tendered by the Borrower.
(c) Notwithstanding anything to the contrary stated in this Regulatory Agreement, the
Indenture or the Loan Agreement, the Issuer and the Trustee shall have the right to seek specific
performance of any of the covenants and requirements of this Regulatory Agreement concerning the
rehabilitation and operation of the Project. The Trustee and the Issuer shall have the right, either jointly or
severally, to enforce this Regulatory Agreement and require curing of defaults in such shorter periods than
specified above as Bond Counsel may determine necessary to maintain the tax-exempt status of interest on
the Bonds. The Trustee shall have the right in accordance with this Section 8, following written notice to
the Issuer, to exercise any or all of the Issuer's rights or remedies hereunder.
(d) The Issuer shall receive any reports submitted by the Borrower pursuant to this Regulatory
Agreement and shall monitor or cause to be monitored any such reports in accordance with the standards
set forth below. In performing their duties and obligations hereunder, the Issuer, the Trustee and their
respective counsel may rely upon statements and certificates of the Borrower and tenants and upon audits
of the books and records of the Borrower pertaining to occupancy of the Project.
(e) The Borrower and the Issuer each acknowledges that the primary purposes for requiring
compliance by the Borrower with the restrictions provided in this Regulatory Agreement are to comply
with the requirements of the Act and to preserve the federal income tax exemption of interest on the Bonds
to the Bondholders, and that the Trustee on behalf of the Bondholders who are declared to be third-party
beneficiaries of this Regulatory Agreement shall be entitled, for any breach of the provisions hereof, to all
remedies both at law and in equity in the event of any default hereunder.
(f) Notwithstanding the foregoing, enforcement of this Regulatory Agreement shall not serve
as a basis for acceleration of the Loan or result in any claim under such Loan, or claim against the Project,
the proceeds of the Loan, or against the rents or other income from the Project (other than Surplus Cash)
for payment hereunder.
9. Agreement Binding. This Regulatory Agreement and the covenants contained herein
shall run with the Real Property and, except as provided in Section 7 hereof (including each general partner
of the Borrower, each of whom the Borrower hereby represents to have authorized the Borrower to bind by
this Regulatory Agreement, and, to the extent controlled by the Borrower or any of the foregoing, each
person who is "related" to any of the foregoing within the meaning of Section 144(a)(3) of the Code), shall
bind the Borrower, its heirs, legal representatives, executors, administrators, successors in office or interest,
and assigns, and all subsequent owners of the Project or any interest therein, and the benefits shall inure to
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