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which the Borrower and its partners have not pledged any of their respective assets. No person should
purchase any Bonds without carefully reviewing the following information, which summarizes some, but
not all factors that should be carefully considered before such purchase.
General
Payment of the Bond Debt Service Charges, and the Borrower’s obligations with respect to the
Bond Debt Service Charges, will be secured by and payable from Bond proceeds held in the Project Fund
and moneys deposited into the Collateral Fund and the Bond Fund, including the Interest Account and the
Remarketing Proceeds Account held in the Bond Fund, and interest earnings thereon. Although the
Borrower will execute the Promissory Note to evidence its obligation to repay the Loan, it is not expected
that any revenues from the Project or other amounts, except moneys in the Special Funds, and the interest
earnings thereon, will be available to satisfy that obligation. The Indenture requires the Trustee to verify,
before any disbursement of funds from the Project Fund, that the sum of the funds on deposit in the Project
Fund and the Collateral Fund after such disbursement will be at least equal to the then outstanding principal
amount of the Bonds. Funds on deposit in the Project Fund, the Collateral Fund, the Interest Account of the
Bond Fund, and the interest earnings thereon, have been calculated to be sufficient to pay the debt service
on the Bonds.
Limited Security for Bonds
The Bonds are not secured by the FHA Insured Mortgage Loan, any GNMA Security, the Project
or any mortgage on the Project. Investors should look exclusively to amounts on deposit in the Special
Funds under the Indenture and investment earnings on each as the source of payment of debt service on the
Bonds.
Early Redemption of the Bonds
Any person who purchases a Bond should consider the fact that the Bonds are subject to redemption
prior to the Initial Mandatory Tender Date. See “THE BONDS – Optional Redemption” herein.
Issuer Limited Liability
The Bonds will not be insured or guaranteed by any governmental entity or by the Issuer or any
member or program participant of the foregoing. The Holders of the Bonds will have no recourse to the
Issuer in the event of an Event of Default on the Bonds. The Trust Estate (as such term is defined in the
Indenture) for the Bonds will be the only source of payment on the Bonds.
THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY
FROM THE PLEDGED REVENUES (AS DEFINED IN THE INDENTURE) AND FROM OTHER
MONEY PLEDGED UNDER THE INDENTURE. NEITHER THE FAITH AND CREDIT OF THE
COMMONWEALTH NOR THE FAITH AND CREDIT OF ANY POLITICAL SUBDIVISION
THEREOF (INCLUDING THE ISSUER AND THE CITY) ARE PLEDGED TO THE PAYMENT
OF THE PRINCIPAL OF OR THE INTEREST OR PREMIUM, IF ANY, ON THE BONDS. THE
ISSUANCE OF THE BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY
OBLIGATE THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF
(INCLUDING THE ISSUER AND THE CITY) TO LEVY ANY TAXES WHATEVER THEREFOR
OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT EXCEPT FROM THE FUNDS
PLEDGED THEREFOR. THE ISSUER HAS NO TAXING POWER.
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