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200109053 demand by the Issuer or the Trustee, pay all expenses and costs of the Issuer and the Trustee in determining whether or not the Borrower is in compliance with the terms of this Regulatory Agreement, provided, however that the payment of such expenses and costs shall be subordinate in all respects to any amounts due with respect to the Bonds. Upon determining that a violation of this Regulatory Agreement has occurred, the Issuer or the Trustee shall, by notice in writing (within 20 days of such determination) to the Credit Enhancer, inform the Credit Enhancer that such violation has occurred, the nature of the violation and that (1) the violation has been cured by the Borrower, (ii) the violation has not been cured by the Borrower, but the Borrower has agreed to cure the same within 30 days, or (iii) the Borrower has notified the Issuer and the Trustee that such violation is incurable. Neither the Issuer nor the Trustee shall be under any obligation to cure a violation under this Regulatory Agreement. The Issuer and the Trustee acknowledge that, notwithstanding the occurrence of any violation of this Regulatory Agreement, neither the Issuer nor the Trustee shall have any right to cause or direct acceleration of the Bonds or the Mortgage Loan, to enforce the Bonds or the Note or to foreclose on the Mortgage, and that no person other than the Credit Enhancer shall have the right to (a) declare the Bonds or the principal balance of the Note to be immediately due and payable or (b) commence foreclosure or other like action, without express written authorization from the Credit Enhancer; provided that this paragraph shall not be construed to limit the rights of the Issuer and the Trustee to pursue the remedies set forth in the first three paragraphs of this Section and for the Issuer to otherwise enforce its Reserve Rights. Section 17. The Trustee. The Trustee shall act as specifically provided herein and in the Indenture. The Trustee is entering into this Regulatory Agreement solely in its capacity as trustee under the Indenture, and the duties, powers, rights and liabilities of the Trustee in acting hereunder shall be subject to the provisions of the Indenture. The Trustee may at all times assume compliance with this Regulatory Agreement unless otherwise notified in writing by the Issuer, or unless it has actual knowledge of noncompliance. After the date on which no Bonds remain Outstanding, the Trustee shall no longer have any duties or responsibilities under this Regulatory Agreement and all references to the Trustee in this Regulatory Agreement shall be deemed references to the Issuer. Section 18. Recording and Filing. The Borrower shall cause this Regulatory Agreement, and all amendments and supplements hereto, to be recorded and filed in the real property records of the County and in such other places as the Issuer or the Trustee may reasonably request. The Borrower shall pay all fees and charges incurred in connection with any such recording. Section 19. Governing Law. This Regulatory Agreement shall be governed by the laws of the State. The Trustee's rights, duties and obligations hereunder are governed in their entirety by the terms and provisions of the Indenture. Section 20. Amendments. Except as set forth in Section 6, this Regulatory Agreement shall be amended only by a written instrument executed by the Issuer, the Trustee (so long as the Bonds are Outstanding) and the Borrower or their successors in title, and duly recorded in the real property records of the County, and only upon receipt by the Issuer of (i) an Opinion of Bond Counsel that such amendment will not adversely affect the Tax - exempt status of interest on the Series 2001A Bonds and is not contrary to the provisions of the Act and with, (ii) the written consent of the Trustee and (iii) the prior -24-