Series B "BBB-" (S&P) SEE 'RATINGS" herein

Transcription

1 NEW ISSUE Book Entry Only RATING: Series A "A-" Series B "BBB-" (S&P) SEE 'RATINGS" herein In the opinion of Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and certifications, and compliance with certain covenants intended to assure compliance with the applicable provisions of the Internal Revenue Code of 1986 as amended (the "Code"), and the regulations thereunder, interest on the Bonds will be excluded from the gross income of the holders thereof for federal income tax purposes, except as described under "TAX MATTERS" herein. Interest on the Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed upon individuals and corporations. Bond Counsel also is of the opinion that interest on the Bonds is exempt from all state and local taxes in the State of Louisiana. See "TAX MATTERS" for additional information. Dated: August 1, 2009 $43,500,000 Multifamily Housing Revenue Bonds (GMF-Louisiana Chateau Projects) Series 2009A LOUISIANA HOUSING FINANCE AGENCY $49,000,000 MULTIFAMILY HOUSING REVENUE BONDS (GMF-LOUISIANA CHATEAU PROJECTS) CONSISTING OF $5,500,000 Multifamily Housing Revenue Bonds (GMF-Louisiana Chateau Projects) Subordinate Series 2009B Due: As shown on inside front cover The Louisiana Housing Finance Agency (the "Issuer") is issuing its $49,000,000 Multifamily Housing Revenue Bonds (GMF-Louisiana Chateau Projects) consisting of $43,500,000 Series 2009A (the "Series A Bonds") and $5,500,000 Subordinate Series 2009B (the "Series B Bonds" and, together with the Series A Bonds, the "Bonds"). The principal of and premium, if any, and interest on the Bonds are payable at the designated trust office of The Bank of New York Mellon Trust Company, N.A., as Trustee (the "Trustee"), in Indianapolis, Indiana. Interest on the Bonds is payable on March 1 and September 1 of each year, commencing March 1, The Bonds are being issued only as fully registered bonds in the denominations of $5,000 each and integral multiples thereof and will be issued in book-entry form only under a global book-entry system operated by The Depository Trust Company, New York, New York ("DTC"), and purchasers will not be entitled to receive certificates representing their Bonds for so long as the global book-entry system is in effect. See "THE BONDS-Book Entry-Only System." Principal of and interest on the Bonds will be paid by the Trustee directly to DTC, as the registered owner thereof. Any purchaser as a beneficial owner of a Bond must maintain an account with a broker or dealer who is, or acts through, a DTC Participant to receive payment of the principal of and interest on such Bond. The Bonds are subject to redemption prior to maturity as more fully described herein. The Bonds are being issued pursuant to and secured by a Trust Indenture dated as of August 1, 2009 (the "Indenture") between the Issuer and the Trustee. The proceeds of the Bonds will be loaned to GMF-Louisiana Chateau, LLC, a Tennessee limited liability company (the "Borrower") to finance a portion of the cost of the acquisition, renovation and equipping of seven separate and discrete residential facilities containing, collectively, 1,105 residential rental units and related support facilities located in Lake Charles and Lafayette, Louisiana (each a "Project" and collectively, the "Projects"), fund debt service reserve funds for each Series of Bonds and pay certain costs of issuance of the Bonds. The Bonds are secured solely and exclusively by the Trust Estate. Neither the Bonds nor any such obligation or agreement of the Issuer shall constitute an obligation, either general or special, of the State, any municipality or any other political subdivision of the State or constitute or give rise to any pecuniary liability of the State, any municipality or any other political subdivision of the State; nor shall the Issuer have the power to pledge the general credit or taxing power of the State, any municipality or any other political subdivision of the State. Neither the members of the Board of Commissioners of the Issuer nor any person executing the Bonds shall be personally liable on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. INVESTMENT IN THE BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK AND EACH PROSPECTIVE INVESTOR SHOULD CONSIDER ITS FINANCIAL CONDITION AND THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE BONDS. SEE "RISK FACTORS AND INVESTMENT CONSIDERATIONS" HEREIN. THE SERIES B BONDS ARE SUBORDINATE TO THE SERIES A BONDS. SEE "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS RELATIONSHIP BETWEEN SERIES." The Bonds are payable solely from and are secured by a pledge and assignment of the Trust Estate (as defined in the Indenture), including (i) Project Revenues (as defined in the Indenture) including Loan Payments made by the Borrower pursuant to the Loan Agreement dated as of August 1, 2009, between the Issuer and the Borrower (the "Loan Agreement" or the "Agreement"), (ii) the Loan Agreement (other than the rights to indemnification, amounts payable to the Issuer under the Loan Agreement and rights to receive notice), the Notes, the Mortgage and the Regulatory Agreement (each as defined in the Indenture), (iii) all moneys and securities from time to time held by the Trustee under the terms of the Indenture (except with respect to moneys in the Rebate Fund), and (iv) any and all other real and personal property from time to time thereafter by delivery or by writing of any kind, conveyed, mortgaged, pledged, assigned or transferred as and for additional security for the Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" herein. The Bonds are offered when, as, and if issued by the Issuer, subject to prior sale, withdrawal or modification of the offer without notice and subject to the approval of legality by Foley & Judell, L.L.P., New Orleans, Louisiana, Bond Counsel. Certain legal matters will be passed upon for the Issuer by its in-house counsel, or by Bond Counsel; for the Borrower by its counsel, Glankler Brown, PLLC, Memphis, Tennessee and its Louisiana counsel, Crawford Lewis, P.L.L.C., Baton Rouge, Louisiana; and for the Underwriter by Peck, Shaffer & Williams LLP, Cincinnati, Ohio. It is expected that delivery of the Bonds will be made against payment therefor through the facilities of DTC on or about August 26, This cover page contains limited information for reference only. It is not a summary of the issue. The entire Official Statement, including the Appendices, must be read to make an informed investment decision. Date: August 25, 2009

2 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES SERIES A BONDS Maturity Date Principal Amount Interest Rate Price CUSIP September 1, 2017 $ 3,000, % % 54626XAW8 September 1, 2020 $4,055, % 98.00% 54626XAX6 September 1, 2029 $11,530, % 98.00% 54626XAY4 September 1, 2039 $24,915, % 97.00% 54626XAZ1 SERIES B BONDS Maturity Date Principal Amount Interest Rate Price CUSIP September 1, 2039 $5,500, % 98.00% 54626XBA5 (Accrued interest to be added)

3 No person has been authorized to give any information or to make any representation not contained in this Official Statement and, if given or made, such information or representations must not be relied upon as having been authorized by the Issuer, the Borrower or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which such offer, solicitation or sale is not authorized, or in which it is unlawful to make such offer, solicitation or sale. The information set forth herein under the heading "THE ISSUER" has been obtained from the Issuer, and all other information contained in this Official Statement has been obtained from the Borrower and other sources that are believed to be reliable, but it is not guaranteed as to its accuracy or completeness. Nothing contained in this Official Statement is, or shall be relied on as, a promise or representation by the Issuer or the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Borrower since the date hereof. No registration statement relating to the Bonds has been filed with the Securities and Exchange Commission (the "Commission") or with any state securities agency. The Bonds have not been approved or disapproved by the Commission or any state securities agency, nor has the Commission or any state securities agency passed upon the accuracy or adequacy of this Official Statement. Any representation to the contrary is unlawful. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME, AND IF DISCONTINUED, MAY BE RECOMMENCED AT ANY TIME.

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5 TABLE OF CONTENTS INTRODUCTORY STATEMENT...1 THE BONDS...4 General Description...4 Transfer and Exchange of the Bonds...4 Book-Entry-Only System...4 Revision of Book-Entry-Only System...6 Mandatory Redemption of Bonds...6 Optional Redemption of Bonds...7 Mandatory Sinking Fund Redemption...7 Selection of Bonds to be Redeemed...9 Notice of Redemption...10 Payment of Redemption Price...10 No Partial Redemption After Default...10 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS...10 Limited Obligations of Issuer...10 Repayment of Loan...11 The Mortgage...11 Operation of the Projects...11 Rate Covenant...11 Debt Service Reserve Funds...12 Operating Reserve Fund...12 Insurance and Tax Escrow Fund...13 Repair and Replacement Fund...13 Surplus Fund...13 Relationship Between Series...14 Incurrence of Additional Indebtedness; Issuance of Additional Bonds...14 No Credit Enhancement Facility...14 Other Covenants of the Borrower...14 THE ISSUER...15 THE BORROWER AND THE PROJECTS...17 The Borrower...17 The Sole Member...18 The Projects...19 Limitation on Obligations of the Borrower...22 The Manager...23 The Asset Manager...23 Prior Operating History...23 Occupancy...24 Pro Forma Financial Projection...24 Real Estate Taxes...24 Environmental Assessments...24 Physical Needs Assessment...25 Project Regulation...26 Insurance...26 APPRAISALS...26 ESTIMATED SOURCES AND USES OF FUNDS...28 FORWARD-LOOKING STATEMENTS...28 RISK FACTORS AND INVESTMENT CONSIDERATIONS...28 Limited Obligations of Issuer...29 Limited Repayment Obligations of Borrower; Security for Repayment...29 The Borrower and Related Parties; Conflicts of Interest...29 Future Project Revenues and Expenses...30 Page i

6 Risks of Real Estate Investment...30 Project Risks...31 Incurrence of Additional Indebtedness...32 Appraisals...32 Financial Projections...32 Limitation on Acceleration of the Bonds...32 Risk of Early Redemption...33 Risk of Loss Upon Redemption...33 Specific Tax Covenants of Borrower and Rental Restrictions...33 Taxation of the Bonds...33 Federal Income Tax Matters; 501(c)(3) Status of Borrower...34 Possible Consequence of Tax Compliance Audit...34 Debt Service Reserve Funds...34 Bankruptcy of the Borrower...34 Enforceability of Remedies; Prior Claims...35 Secondary Market and Prices...35 Credit Ratings...35 Environmental Conditions...36 Insurance; Uninsured Losses...36 Other Possible Risk Factors...36 Summary...36 LITIGATION...36 Issuer...36 Borrower...37 APPROVAL OF LEGAL MATTERS...37 TAX MATTERS...37 RATINGS...39 UNDERWRITING...39 CONTINUING DISCLOSURE...39 MISCELLANEOUS...40 Signature Page... S-1 APPENDIX A DEFINITIONS OF CERTAIN TERMS...A-1 APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS...B-1 APPENDIX C FORM OF BOND COUNSEL OPINION...C-1 APPENDIX D PRO FORMA FINANCIAL PROJECTIONS...D-1 APPENDIX E HISTORICAL FINANCIAL STATEMENT... E-1 ii

7 OFFICIAL STATEMENT relating to the original issuance of LOUISIANA HOUSING FINANCE AGENCY $49,000,000 MULTIFAMILY HOUSING REVENUE BONDS (GMF-LOUISIANA CHATEAU PROJECTS) CONSISTING OF $43,500,000 Multifamily Housing Revenue Bonds (GMF-Louisiana Chateau Projects) Series 2009A $5,500,000 Multifamily Housing Revenue Bonds (GMF-Louisiana Chateau Projects) Subordinate Series 2009B INTRODUCTORY STATEMENT This Official Statement, including the cover page and the Appendices hereto, is provided to furnish information in connection with the original issuance by the Louisiana Housing Finance Agency (the "Issuer") of its $49,000,000 Multifamily Housing Revenue Bonds (GMF-Louisiana Chateau Projects) consisting of $43,500,000 Series 2009A (the "Series A Bonds") and $5,500,000 Subordinate Series 2009B (the "Series B Bonds" and, together with the Series A Bonds, the "Bonds"). The Series B Bonds are subordinate to the Series A Bonds. The Issuer is also issuing contemporaneously with the Bonds its $8,500,000 Multifamily Housing Revenue Bonds (GMF- Louisiana Chateau Projects), Junior Subordinate Series 2009C (the "Series C Bonds") which are subordinate to the Bonds and are not being underwritten by the Underwriter and are not offered by this Official Statement. The Bonds are to be issued pursuant to the provisions of Chapter 3-A of Title 40 of the Louisiana Revised Statutes of 1950, as amended and all future acts supplemental thereto or amendatory thereof (the "Act"), and a Trust Indenture dated as of August 1, 2009 (the "Indenture"), between the Issuer and The Bank of New York Mellon Trust Company, N.A., Indianapolis, Indiana, as Trustee (the "Trustee"). This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and Appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of Bonds to potential investors is made only by means of the entire Official Statement. For the definitions of certain other terms used in this Official Statement and not otherwise defined herein, see APPENDIX A "DEFINITIONS OF CERTAIN TERMS" hereto. The Bonds will be issued in the amounts, will be dated, will bear interest at the respective rates, will be payable on the dates and will mature on the respective dates set forth on the inside cover page of this Official Statement. The Bonds are subject to redemption as described herein under the caption "THE BONDS Mandatory Redemption of Bonds; Optional Redemption of Bonds; and Mandatory Sinking Fund Redemption." For a more complete description of the Bonds, see "THE BONDS" herein. The Bonds and the Series C Bonds are being issued by the Issuer to finance a loan (the "Loan") to GMF- Louisiana Chateau, LLC (the "Borrower"), a Tennessee limited liability company, whose sole member is GMF- Preservation of Affordability Corp. (the "Sole Member"), a Tennessee nonprofit corporation which has been determined to be exempt from income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The Loan will be made pursuant to a Loan Agreement dated as of August 1, 2009 (the

8 "Loan Agreement"), between the Issuer and the Borrower, and will be used to (i) finance a portion of the cost of the acquisition, renovation and equipping by the Borrower of seven separate and discrete residential rental facilities containing, collectively, 1,105 residential rental units and related support facilities located in Lake Charles and Lafayette, Louisiana (each a "Project" and collectively, the "Projects"), including the buildings, furniture, fixtures and equipment comprising such facilities and including the real property upon which such buildings and other items are located, (ii) pay a portion of the costs of issuance of the Bonds, and (iii) fund a Debt Service Reserve Fund for each series of Bonds. See the caption "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" and "ESTIMATED SOURCES AND USES OF FUNDS." The Borrower is obligated under the Loan Agreement to make payments (the "Loan Payments") in such amounts and at such times as will be sufficient to pay, when due, the principal of, premium, if any, and interest on the Bonds as well as certain other fees and expenses in connection with the Bonds. As evidence of its obligations to make the Loan Payments with respect to the Bonds the Borrower will execute and deliver to the Trustee a promissory note for each Series of Bonds (each a "Note" and collectively, the "Notes"). The Borrower's obligations under the Notes and the Loan Agreement will be secured by a Mortgage, Assignment of Rents and Security Agreements (the "Mortgage"), dated as of August 1, 2009, from the Borrower to the Trustee for the benefit of the registered owners of the Bonds, pursuant to which the Trustee shall have a first priority mortgage lien on, and security interest in, the Projects and on all of the revenues from the operation of the Projects (the "Project Revenues") including all rentals and fees payable with respect to the Projects, and other property, as provided in the Mortgage. The Mortgage also secures the SGP Note (as defined herein) and the Series C Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS The Mortgage" herein. The Bonds are secured by the Trust Estate created in the Indenture which includes all right, title and interest of the Issuer in and to (a) the Project Revenues, including Loan Payments, (b) the Loan Agreement (other than the rights to indemnification, amounts payable to the Issuer under the Loan Agreement and rights to receive notice), the Notes, the Mortgage and the Regulatory Agreement; (c) all moneys and securities from time to time held by the Trustee under the terms of the Indenture (except with respect to money in the Rebate Fund); and (d) any and all other real and personal property from time to time thereafter by delivery or by writing of any kind, conveyed, mortgaged, pledged, assigned or transferred as and for additional security for the Bonds by the Issuer or by anyone on its behalf or with its written consent to the Trustee, which is thereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms of the Indenture as additional security for the Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" herein. Concurrently with the issuance of the Bonds, the Borrower will enter into a management agreement (the "Management Agreement") with Mitchell Management Company, Mobile, Alabama (the "Manager"). The Borrower's obligations under the Loan Agreement, the Notes and the Mortgage are limited, nonrecourse obligations and the Borrower has no obligation to make payments of amounts due under the Loan Agreement except from Project Revenues. No other revenues or assets of the Borrower will be available for the payment of, or as security for, the Bonds. The right of the Issuer to collect and receive payments under the Loan Agreement has been assigned to the Trustee under the Indenture for the benefit of the Holders. No assets or other revenues of the Issuer are or will be available for the payment of, or as security for, the Bonds. The Bonds will be issued as "qualified 501(c)(3) bonds" as defined in Section 145 of the Code. Although the Borrower is not an organization described in Section 501(c)(3) of the Code, in the opinion of Glankler Brown, PLLC, counsel to the Borrower and the Sole Member, the Borrower will be disregarded as an entity separate from its owner, the Sole Member, for federal income tax purposes. Consequently, the Borrower will be treated as a part of the Sole Member, which is a 501(c)(3) entity, for federal income tax purposes. Additionally, in order for the Bonds to be treated as "qualified 501(c)(3) bonds," the Projects must meet certain occupancy restrictions set forth in Section 142(d) and Section 145(d) of the Code. Therefore, the Borrower's operation of each of the Projects will be subject to the terms and restrictions of a Regulatory Agreement, dated as of August 1, 2009 entered into among the Issuer, the Borrower and the Trustee (the "Regulatory Agreement") which, among other things, will require that for the Qualified Project Period (as defined in the Regulatory Agreement), at least 40% of the dwelling units in a Project be occupied by families of low or moderate income, defined as families 2

9 or individuals whose income does not exceed 60% (adjusted for family size) of the median gross income for the area in which such Project is located. Furthermore, the Borrower will be obligated to operate the Projects so as to maintain the Sole Member's status as an entity described in Section 501(c)(3) of the Code. The terms of the Regulatory Agreement will therefore require that at least 75% of the dwelling units in each of the Projects be occupied by families of moderate income (the "Moderate Income Tenants"), defined as families or individuals whose income does not exceed 80% of the median gross income for the Lake Charles and Lafayette MSAs, as applicable, as adjusted for family size. The Borrower has also adopted a policy of restricting rents of Moderate Income Tenants to rental rates which are determined to be affordable and the Borrower will limit rental rates (excluding tenant paid utilities) for those tenants to a level that does not exceed 30% of the area median gross income for the Lake Charles and Lafayette MSAs, as applicable, adjusted for family size. The Regulatory Agreement will have the effect of reducing the potential universe of tenants eligible to reside in the Projects. See "THE BORROWER AND THE PROJECTS Project Regulation" and "RISK FACTORS AND INVESTMENT CONSIDERATIONS Project Risks; Rental Housing Requirements" herein and APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS "THE REGULATORY AGREEMENT" herein. The Sole Member will have no liability on account of financial obligations of the Borrower under the Loan Agreement and the Notes or the other Bond Documents. The Sole Member will enter into certain other of the Loan Documents for the sole purpose of agreeing to comply with the tax covenants therein, but the Trustee's recourse against the Sole Member for any violation of these covenants will be limited to the Sole Member's interest in the Borrower. The Bonds are subject to mandatory, extraordinary and optional redemption respectively as described herein. See "THE BONDS" herein. AN INVESTMENT IN THE BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK, INCLUDING, AMONG OTHERS, RISKS ASSOCIATED WITH THE LIMITED SOURCE OF PAYMENT FOR THE BONDS AND VARIOUS REAL ESTATE AND OPERATING RISKS. PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE STATEMENTS AND INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT, INCLUDING THE MATERIAL UNDER THE CAPTION "RISK FACTORS AND INVESTMENT CONSIDERATIONS." THE BONDS ARE SECURED SOLELY AND EXCLUSIVELY BY THE TRUST ESTATE. NEITHER THE BONDS NOR ANY SUCH OBLIGATION OR AGREEMENT OF THE ISSUER SHALL CONSTITUTE AN OBLIGATION, EITHER GENERAL OR SPECIAL, OF THE STATE, ANY MUNICIPALITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OR CONSTITUTE OR GIVE RISE TO ANY PECUNIARY LIABILITY OF THE STATE, ANY MUNICIPALITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE; NOR SHALL THE ISSUER HAVE THE POWER TO PLEDGE THE GENERAL CREDIT OR TAXING POWER OF THE STATE, ANY MUNICIPALITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE. NEITHER THE MEMBERS OF THE BOARD OF COMMISSIONERS OF THE ISSUER NOR ANY PERSON EXECUTING THE BONDS SHALL BE PERSONALLY LIABLE ON THE BONDS OR BE SUBJECT TO ANY PERSONAL LIABILITY OR ACCOUNTABILITY BY REASON OF THE ISSUANCE THEREOF. This Official Statement and the Appendices attached hereto contain descriptions of, among other matters, the Bonds, the Borrower, the Projects, the Manager, the Indenture, the Loan Agreement, the Mortgage, the Management Agreement, the Regulatory Agreement and the Continuing Disclosure Agreement. Such descriptions and information do not purport to be comprehensive or definitive. Definitions of certain terms and words used in this Official Statement and not otherwise defined are set forth in the Indenture. All references herein to any agreements are qualified in their entirety by reference to such agreements and documents, and all references herein to the Bonds are qualified in their entirety by reference to the forms thereof included in the Indenture. Copies of such agreements and all other documents referenced herein are available to the recipient of this Official Statement during the initial offering period by contacting the Underwriter. 3

10 THE BONDS The Bonds are available in book-entry only form. See "BOOK-ENTRY-ONLY SYSTEM" below. So long as Cede & Co., as nominee of The Depository Trust Company ("DTC"), is the registered owner of the Bonds, references herein to the Bondholders or holders or Holders or registered owners of the Bonds means Cede & Co. and not the beneficial owners of the Bonds. General Description The Bonds are issuable as fully registered bonds without coupons in denominations of $5,000 each and integral multiples thereof. The Bonds will be dated August 1, The Bonds will bear interest at the rates, and will mature on the dates and in the amounts, all as set forth on the cover page of this Official Statement. Interest on the Bonds will be payable semiannually on each March 1 and September 1 of each year (the "Interest Payment Dates") commencing March 1, 2010, and be payable as to principal on the dates and in the amounts as set forth in the Indenture. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date preceding the date of its registration, unless it is registered as of an Interest Payment Date for which interest has been paid or after a Record Date in respect thereof, in which case it will bear interest from the next succeeding Interest Payment Date succeeding the fifteenth day (whether or not a Business Day) of the calendar month preceding the applicable Interest Payment Date (the "Record Date"), or unless no interest has been paid on such Bond, in which case from the Closing Date; provided, however, if at the time of registration of any Bond the interest thereon is in default, as shown by the records of the Trustee, such Bond shall bear interest from the date to which interest has been paid in full. Transfer and Exchange of the Bonds So long as the Bonds are in book-entry only form, Cede & Co., as nominee of DTC, will be the sole registered owner of the Bonds. Transfers of beneficial interests in the Bonds will be made as described below under "--Book-Entry-Only System." Book-Entry-Only System The following has been provided by DTC for use herein. While the information is believed to be reliable, none of the Issuer, the Trustee, the Borrower or the Underwriter, subject to the standard of review found on the inside cover hereof, nor any of their respective counsel, members, officers or employees, make any representations as to the accuracy or sufficiency of such information. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond will be issued for each issue of the Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non U.S securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of 4

11 DTC and Sole Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries (DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices will be sent to DTC. If less than all of the securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to securities unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or Agent, on each payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend 5

12 payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book entry only transfers through DTC (or a successor securities depository); in that event, Bond certificates will be printed and delivered to DTC. The information under this heading concerning DTC and DTC's book entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. NEITHER THE ISSUER NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES, WITH RESPECT TO THE PAYMENTS TO OR THE PROVIDING OF NOTICE TO THE DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE BONDS. THE ISSUER AND THE TRUSTEE CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC, DIRECT PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS PAID TO DTC OR ITS NOMINEE, AS THE REGISTERED OWNER, OR ANY NOTICES TO THE BENEFICIAL OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN A MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. Revision of Book-Entry-Only System In the event that either: (i) the Issuer receives notice from DTC to the effect that DTC is unable or unwilling to discharge its responsibilities as a clearing agency for the Bonds or (ii) the Issuer elects to discontinue its use of DTC as a clearing agency for the Bonds, then the Issuer and the Trustee will do or perform or cause to be done or performed all acts or things, not adverse to the rights of the holders of the Bonds, as are necessary or appropriate to discontinue use of DTC as a clearing agency for the Bonds and to transfer the ownership of each of the Bonds to such person or persons, including any other clearing agency, as the holder of such Bonds may direct in accordance with the Indenture. Any expense of such a discontinuation and transfer, including any expenses of printing new certificates to evidence the Bonds, will be paid by the Borrower. Mandatory Redemption of Bonds Bonds of each Series shall be called for redemption (1) in whole or in part in the event any of the Projects or any portion thereof is damaged or destroyed or taken in a condemnation proceeding and Net Proceeds resulting therefrom are to be applied to the payment of the Notes as provided in the Loan Agreement and the Borrower pursuant to the Loan Agreement has elected to use the Net Proceeds to redeem Bonds of such Series, (2) in whole in the event the Borrower exercises its option to terminate the Loan Agreement by reason of the happening of certain events that would render the Project unusable in the judgment of the Borrower or if the Borrower elects to prepay the Loan on or after September 1, 2019 or (3) in whole in the event the Borrower is required to prepay the Loan following a Default under the Loan Agreement. (See APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS "THE LOAN AGREEMENT." If called for redemption at any time pursuant to (1) through (3) above, the Bonds of a Series to be redeemed shall be subject to redemption by the Issuer prior to maturity, in whole at any time or (in the case of redemption pursuant to clause (1) above) in part on any Interest Payment Date (less than all of such Bonds to be selected in accordance with the provisions of the Indenture (as described under the caption "Selection of Bonds to be Redeemed" below)) at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date; such redemption date, and in the case of redemption pursuant to cause (3) above, to be the earliest practicable date, as determined by the Trustee, following acceleration of amounts due under the Loan. 6

13 No Series B Bonds may be redeemed pursuant to this section if any Series A Bonds remain Outstanding. Optional Redemption of Bonds The Bonds are subject to redemption by the Issuer, at the direction of the Borrower, on or after September 1, 2019, in whole or in part at any time, at a redemption price equal to the principal amount of Bonds to be redeemed plus accrued interest to the date of redemption. None of the Series B Bonds, or any portion thereof, may be optionally redeemed if any Series A Bonds will remain Outstanding after such redemption. Mandatory Sinking Fund Redemption The Series A Bonds are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest on March 1 and September 1 of each year and in the principal amounts shown below: BONDS MATURING SEPTEMBER 1, 2017 Redemption Date Principal Amount Redemption Date Principal Amount March 1, 2010 $100,000 March 1, 2014 $200,000 September 1, 2010 $105,000 September 1, 2014 $200,000 March 1, 2011 $130,000 March 1, 2015 $230,000 September 1, 2011 $135,000 September 1, 2015 $240,000 March 1, 2012 $145,000 March 1, 2016 $245,000 September 1, 2012 $150,000 September 1, 2016 $250,000 March 1, 2013 $170,000 March 1, 2017 $260,000 September 1, 2013 $175,000 September 1, 2017 $265,000 Final Maturity BONDS MATURING SEPTEMBER 1, 2020 Redemption Date Principal Amount Redemption Date Principal Amount March 1, 2010 $30,000 September 1, 2015 $100,000 September 1, 2010 $70,000 March 1, 2016 $110,000 March 1, 2011 $75,000 September 1, 2016 $115,000 September 1, 2011 $75,000 March 1, 2017 $115,000 March 1, 2012 $85,000 September 1, 2017 $120,000 September 1, 2012 $85,000 March 1, 2018 $395,000 March 1, 2013 $95,000 September 1, 2018 $410,000 September 1, 2013 $100,000 March 1, 2019 $420,000 March 1, 2014 $105,000 September 1, 2019 $435,000 September 1, 2014 $110,000 March 1, 2020 $445,000 March 1, 2015 $100,000 September 1, 2020 $460,000 Final Maturity 7

14 BONDS MATURING SEPTEMBER 1, 2029 Redemption Date Principal Amount Redemption Date Principal Amount March 1, 2021 $475,000 September 1, 2025 $640,000 September 1, 2021 $490,000 March 1, 2025 $665,000 March 1, 2022 $505,000 September 1, 2026 $685,000 September 1, 2022 $525,000 March 1, 2027 $710,000 March 1, 2023 $540,000 September 1, 2027 $735,000 September 1, 2023 $560,000 March 1, 2028 $760,000 March 1, 2024 $580,000 September 1, 2028 $785,000 September 1, 2024 $600,000 March 1, 2029 $815,000 March 1, 2025 $620,000 September 1, 2029 $840,000 Final Maturity BONDS MATURING SEPTEMBER 1, 2039 Redemption Date Principal Amount Redemption Date Principal Amount March 1, 2030 $870,000 March 1, 2035 $1,240,000 September 1, 2030 $900,000 September 1, 2035 $1,285,000 March 1, 2031 $935,000 March 1, 2036 $1,335,000 September 1, 2031 $970,000 September 1, 2036 $1,380,000 March 1, 2032 $1,005,000 March 1, 2037 $1,430,000 September 1, 2032 $1,040,000 September 1, 2037 $1,485,000 March 1, 2033 $1,075,000 March 1, 2038 $1,540,000 September 1, 2033 $1,115,000 September 1, 2038 $1,595,000 March 1, 2034 $1,155,000 March 1, 2039 $1,650,000 September 1, 2034 $1,200,000 September 1, 2039 $1,710,000 Final Maturity 8

15 The Series B Bonds are subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof, together with accrued interest thereon to the date fixed for redemption, on March 1 and September 1 of each year and in the principal amounts shown below: BONDS MATURING SEPTEMBER 1, 2039 Redemption Date Principal Amount Redemption Date Principal Amount March 1, 2010 $20,000 March 1, 2025 $75,000 September 1, 2010 $25,000 September 1, 2025 $80,000 March 1, 2011 $25,000 March 1, 2026 $80,000 September 1, 2011 $25,000 September 1, 2026 $85,000 March 1, 2012 $25,000 March 1, 2027 $90,000 September 1, 2012 $30,000 September 1, 2027 $90,000 March 1, 2013 $30,000 March 1, 2028 $95,000 September 1, 2013 $30,000 September 1, 2028 $100,000 March 1, 2014 $30,000 March 1, 2029 $105,000 September 1, 2014 $35,000 September 1, 2029 $105,000 March 1, 2015 $35,000 March 1, 2030 $110,000 September 1, 2015 $35,000 September 1, 2030 $115,000 March 1, 2016 $35,000 March 1, 2031 $120,000 September 1, 2016 $40,000 September 1, 2031 $125,000 March 1, 2017 $40,000 March 1, 2032 $130,000 September 1, 2017 $40,000 September 1, 2032 $135,000 March 1, 2018 $45,000 March 1, 2033 $140,000 September 1, 2018 $45,000 September 1, 2033 $145,000 March 1, 2019 $45,000 March 1, 2034 $150,000 September 1, 2019 $50,000 September 1, 2034 $160,000 March 1, 2020 $50,000 March 1, 2035 $165,000 September 1, 2020 $55,000 September 1, 2035 $170,000 March 1, 2021 $55,000 March 1, 2036 $180,000 September 1, 2021 $55,000 September 1, 2036 $185,000 March 1, 2022 $60,000 March 1, 2037 $190,000 September 1, 2022 $60,000 September 1, 2037 $200,000 March 1, 2023 $65,000 March 1, 2038 $210,000 September 1, 2023 $65,000 September 1, 2038 $215,000 March 1, 2024 $70,000 March 1, 2039 $225,000 September 1, 2024 $70,000 September 1, 2039 $235,000 Final Maturity Selection of Bonds to be Redeemed Bonds may be redeemed only in Authorized Denominations. If less than all of the Bonds are being redeemed: (i) the principal amount of the Bonds to be redeemed shall be designated by the Borrower in writing to the Trustee and (ii) the particular Bonds of the Series or portions thereof to be redeemed shall be selected by the Paying Agent by lot or in such manner as the Paying Agent in its discretion may deem proper. If it is determined that less than all of the principal amount represented by any Bond is to be called for redemption, then, following notice of intention to redeem such principal amount, the Owner thereof shall surrender such Bond to the Paying Agent on or before the applicable redemption date for (a) payment on the redemption date to such Owner of the Bond or Bonds of such Series in the aggregate principal amount of the unredeemed balance of the principal amount of such Bond, which shall be an Authorized Denomination. A new Bond of such Series representing the unredeemed balance of such Bond shall be issued to the owner thereof, without charge therefor. If the Owner of any Bond or integral multiple of the Authorized Denomination selected for redemption shall fail to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on 9

16 the date fixed for redemption to the extent of the amount called for redemption (and to that extent only), and interest shall cease to accrue from the date fixed for redemption. Except for mandatory sinking fund redemptions as set forth above, no Series B Bonds may be redeemed if any Series A Bonds remain outstanding. Notice of Redemption (a) In the event any of the Bonds are called for redemption, the Paying Agent shall give notice, in the name of the Issuer, of the redemption of such Bonds, which notice shall (i) specify the Bonds to be redeemed, the redemption date, the redemption price and the place or places where amounts due upon such redemption will be payable (which shall be the Designated Office of the Paying Agent) and, if less than all of the Bonds are to be redeemed, the numbers of the Bonds, and the portions of the Bonds, to be so redeemed, (ii) state any condition to such redemption, including but not limited to a statement that redemption is conditional upon receipt by the Trustee of sufficient moneys to redeem the Bonds, including any such condition, the Bonds to be redeemed shall cease to bear interest. Such notice may set forth any additional information relating to such redemption. Such notice shall be given by Mail to the Owners of the Bonds to be redeemed, at least thirty (30) days but no more than sixty (60) days prior to the date fixed for redemption. If a notice of redemption shall be unconditional, or if the conditions of a conditional notice of redemption shall have been satisfied, then upon presentation and surrender of the Bonds so called for redemption at the place or places of payment, such Bonds shall be redeemed. (b) desirable. The Paying Agent may give any other or additional redemption notice as it deems necessary or (c) Any Bonds which have been duly selected for redemption and which are deemed to be paid in accordance with the Indenture shall cease to bear interest on the specified redemption date. Payment of Redemption Price For the redemption of any of the Bonds of a Series, the Issuer shall cause to be deposited in the Special Redemption Account of the applicable Bond Fund, whether out of Project Revenues or any other moneys constituting the Trust Estate, including Net Proceeds available for such purpose pursuant to the Loan Agreement, or otherwise, an amount sufficient to pay the principal of, premium, if any, and interest to become due on the date fixed for such redemption. The obligation of the Issuer to cause any such deposit to be made hereunder shall be reduced by the amount of moneys in such Special Redemption Account available for and used on such redemption date for payment of the principal of, premium, if any, and accrued interest on the Bonds to be redeemed. No Partial Redemption After Default Anything herein to the contrary notwithstanding, if there has occurred and is continuing certain specified Events of Default under the Indenture, there shall be no redemption of less than all of the Bonds Outstanding. See APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS "THE INDENTURE." Limited Obligations of Issuer SECURITY AND SOURCES OF PAYMENT FOR THE BONDS THE BONDS ARE SECURED SOLELY AND EXCLUSIVELY BY THE TRUST ESTATE. NEITHER THE BONDS NOR ANY SUCH OBLIGATION OR AGREEMENT OF THE ISSUER SHALL CONSTITUTE AN OBLIGATION, EITHER GENERAL OR SPECIAL, OF THE STATE, ANY MUNICIPALITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OR CONSTITUTE OR GIVE RISE TO ANY PECUNIARY LIABILITY OF THE STATE, ANY MUNICIPALITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE; NOR SHALL THE ISSUER HAVE THE POWER TO PLEDGE THE GENERAL CREDIT OR TAXING POWER OF THE STATE, ANY MUNICIPALITY OR ANY OTHER POLITICAL SUBDIVISION OF THE 10

17 STATE. NEITHER THE MEMBERS OF THE BOARD OF COMMISSIONERS OF THE ISSUER NOR ANY PERSON EXECUTING THE BONDS SHALL BE PERSONALLY LIABLE ON THE BONDS OR BE SUBJECT TO ANY PERSONAL LIABILITY OR ACCOUNTABILITY BY REASON OF THE ISSUANCE THEREOF. Repayment of Loan The Loan Agreement and the Notes obligate the Borrower to cause to be paid to the Trustee from Project Revenues, Basic Loan Payments and Additional Loan Payments, which, together, shall be sufficient to pay the interest coming due on each Interest Payment Date with respect to the Bonds, plus the principal amount of the Bonds maturing or required to be redeemed as well as certain third-party fees and expenses that the Borrower is required to pay pursuant to the terms of the Loan Agreement. The Borrower's obligations to make Loan Payments with respect to the Bonds are limited obligations of the Borrower, and holders of the Bonds will have recourse only to the Projects and the Project Revenues to satisfy the obligations of the Borrower with respect to the Bonds. No other revenues or assets of the Borrower will be available for the payment of, or as security for, the Bonds. Pursuant to the Indenture, the Issuer will pledge and assign all its rights and interests (except certain reimbursement and indemnification rights of the Issuer and its rights to perform discretionary acts) and all amounts payable (other than certain fees and expenses due to the Issuer) under the Loan Agreement, the Notes and the Mortgage to the Trustee, in trust, to be held and applied pursuant to the provisions of the Indenture, for the benefit of the Holders. The Mortgage To secure the payment of the Loan Payments payable under the Loan Agreement and the Notes, the Borrower will grant to the Trustee under the Mortgage a first priority lien on and a security interest in each of the Projects (the "Mortgaged Property") and the right, title and interests of the Borrower in the Project Revenues, subject only to certain Permitted Encumbrances identified therein. The Mortgaged Property includes generally all the land, buildings, fixtures and equipment comprising each of the Projects, including the Project sites. See APPENDIX B SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS "THE MORTGAGE." Operation of the Projects Loan Payments to be made by the Borrower pursuant to the Loan Agreement will be derived solely from revenues generated by the operation of the Projects. In addition, the liability of the Borrower under the Loan Agreement is limited to the Borrower's interest in the Projects and the monies held in the Funds and Accounts held under the Indenture. NO REPRESENTATIONS OR ASSURANCES CAN BE MADE THAT REVENUES WILL BE REALIZED BY THE BORROWER IN AMOUNTS NECESSARY TO ENABLE THE BORROWER TO MAKE PAYMENTS PURSUANT TO THE LOAN AGREEMENT SUFFICIENT TO PAY THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS. WHILE THE INDENTURE CREATES A SECURITY INTEREST IN THE FUNDS HELD UNDER THE INDENTURE (OTHER THAN THE REBATE FUND ESTABLISHED THEREUNDER), AND THE MORTGAGE CREATES SECURITY INTERESTS IN THE PROJECT REVENUES, THE REVENUES OF THE PROJECTS ARE NOT SUBJECT TO ANY LOCKBOX OR OTHER ESCROW ARRANGEMENTS, EXCEPT THAT ALL PROJECT REVENUES ARE REQUIRED TO BE DEPOSITED WITH THE TRUSTEE, AND THE LOAN AGREEMENT AND THE MORTGAGE OTHERWISE PLACE NO RESTRICTIONS UPON THE EXPENDITURES OF SUCH REVENUES BY THE BORROWER. Rate Covenant The Borrower has agreed in the Loan Agreement to fix, charge and collect, or cause to be fixed, charged and collected, rents, fees and charges in connection with the operation and maintenance of the Projects, such that for 11