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200109053 REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (this "Regulatory Agreement" or "Agreement') is made and entered into as of September 1, 2001 by and among the NEBRASKA INVESTMENT FINANCE AUTHORITY, a body politic and corporate, not a state agency but an independent instrumentality exercising essential public functions organized and existing under the laws of the State of Nebraska (the "Issuer "), and LASALLE BANK NATIONAL ASSOCIATION, a national banking association organized and existing under and by virtue of the laws of the United States of America, with its principal corporate trust office located in Chicago, Illinois, and duly authorized to accept and execute trusts of the type contemplated by the Indenture (as hereinafter defined), as trustee (together with its permitted successors and assigns, the "Trustee ") and PEDCOR INVESTMENTS- 1999 -XL, L.P., an Indiana limited partnership (together with its successors and assigns), as the owner of the property described in Exhibit A (the "Borrower "). RECITALS: 1. The Nebraska Investment Finance Authority Act, Neb. Rev. Stat. Sections 58 -201 et seq. (Reissue 1998), as amended (the "Act') provides for the creation of the Issuer for the purpose of alleviating a shortage of rental housing available at rents which persons and families of low and moderate income can afford, and a shortage of capital for investment in such housing. 2. Pursuant to the Act, the Issuer is authorized to carry out the public purposes described therein by issuing its revenue bonds to make loans to finance the acquisition and construction of qualified multifamily rental housing developments, and by entering into any agreements made in connection therewith. 3. To alleviate the creation of slums and blighted areas, prevent deterioration of the quality of living conditions within the State of Nebraska (the "State "), alleviate excessive and disproportionate expenditures of public funds for crime prevention and punishment, public health and safety, fire and accident prevention and other public services and facilities, and increase employment in the construction industry, which constitute valid public purposes for the issuance of revenue bonds under the Act, the Issuer has determined it to be in furtherance of its public purposes and the public purposes of the Act to issue its Variable Rate Demand Multifamily Housing Revenue Bonds (Riverbend Apartments Project) Series 2001A (the "Series 2001A Bonds ") and its Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Riverbend Apartments Project) Series 2001B (the "Series 2001B Bonds," collectively with the Series 2001A Bonds, the "Bonds ") to make a loan to the Borrower, to finance the acquisition, equipping and construction of the multifamily rental housing project of the Borrower located in Grand Island, Nebraska on the site more particularly described in Exhibit A (the "Project'). 4. In order for interest on the Series 2001A Bonds to be excluded from gross income for federal income tax purposes under the Code (as herein defined), and the income tax regulations (the "Regulations ") and rulings with respect to the Code, in order to provide availability to moderate - income tenants as required by the Act, and in order for certain tax credits to be available to the Borrower under the Code and the Regulations and rulings with respect thereto, the use and operation of the Project must be restricted in certain respects. 5. The Issuer and the Borrower have determined to enter into this Regulatory Agreement in order to set forth certain terms and conditions relating to the acquisition, construction, equipping and