05-13-2020 Council Packet - Laserfiche WebLink

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18 RISK FACTORS Limited Payment Sources THE SERIES 2020 BONDS ARE NOT GENERAL OR MORAL OBLIGATIONS OF THE ISSUER, THE HOST CITY, OR THE STATE, NOR IS THE TAXING POWER OF THE ISSUER OR THE STATE PLEDGED TO THE PAYMENT OF THE PRINCIPAL AMOUNT THEREOF OR THE INTEREST OR PREMIUM, IF ANY, THEREON. THE SERIES 2020 BONDS SHALL CONSTITUTE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER. THE SERIES 2020 BONDS SHALL NOT CONSTITUTE OR GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT, ASSETS, TAXING POWERS OR OTHER REVENUES OF THE ISSUER, THE HOST CITY, OR THE STATE. THE SERIES 2020 BONDS ARE NEITHER A DEBT NOR A LIABILITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OF THE ISSUER, THE HOST CITY, OR THE STATE. THE LOAN REPAYMENTS AND ADDITIONAL PAYMENTS TO BE MADE BY THE BORROWER UNDER THE LOAN AGREEMENT ARE SOLELY THE OBLIGATION OF THE BORROWER. THE LIMITED GUARANTOR IS NOT OBLIGATED TO MAKE ANY PAYMENTS UNDER THE LOAN AGREEMENT EXCEPT TO THE EXTENT OBLIGATED UNDER THE LIMITED GUARANTY IN THE EVENT THAT MONEY HELD BY THE TRUSTEE UNDER THE INDENTURE IS INSUFFICIENT TO PAY DEBT SERVICE ON THE SERIES 2020 BONDS. Dependence on Revenues of the Project The obligations of the Borrower under the Loan Agreement are those of the Borrower alone. Other than under the terms of the Limited Guaranty, the Limited Guarantor does not have any liability for such obligations. The Borrower is not expected to have any significant assets other than the Project. If the Project does not generate sufficient revenues, the Borrower will not have significant other resources pledged directly to make payments under the Loan Agreement necessary to pay in full the principal of, premium, if any, and interest due on the Series 2020 Bonds. The ability of the Borrower to make such payments will therefore depend on the ability of the Borrower to maintain sufficient unit occupancy in the Project and to charge and collect sufficient rates, fees and other charges. The future revenues of the Project will be subject to various events or conditions which cannot be predicted, and which may be beyond the control of the Borrower, including, but not limited to, the risks of inadequate occupancy; increased real estate taxes; increased operating, maintenance or repair costs; and an inability to maintain or raise unit rates or other charges because of (i) restrictions on the unit rates that can be charged to certain residents, (ii) insufficient resident demand, (iii) new or existing competition from other senior housing and healthcare facilities, (iv) a decline in the attractiveness of the Project, its amenities, or location, (v) changes to management or inferior management or maintenance, (vi) general or local economic conditions in the State, (vii) an inability to obtain or procure administrative or oversight services, and (viii) other factors which are not known to the Borrower at this time. No Subordination of Management Fees Any Management Fees payable by the Borrower to the Manager pursuant to the Management Agreement with respect to the Project will not be subordinated in right of payment to debt service on the Series 2020 Bonds.