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upon the ability of the Borrower to either refinance the Project at that time or to remarket the <br /> Series 2001 Tax-Exempt Bonds at a price equal to par. The ability of the Borrower to obtain <br /> refinancing of the Project, or to remarket the Series 2001 Tax-Exempt Bonds, could be <br /> adversely affected based on a number of factors that can not be known at this time,including <br /> but not limited to: adverse regulatory changes affecting Project operations, regulatory <br /> changes disallowing tax exempt financing of the Project, adverse market conditions, a <br /> change in Project revenues or expenses, and other factors that cannot be known with <br /> certainty at this time. <br /> If such refinancing is not possible,or the remarketing of the Series 2001 Tax-Exempt <br /> Bonds does not result in proceeds equal to the par amount of the Series 2001 Tax-Exempt <br /> Bonds, and the Borrower does not have sufficient other funds for repayment of the Series <br /> 2001 Tax-Exempt Bonds, a default will occur on the Series 2001 Tax-Exempt Bonds, in <br /> which case the Trustee has the right to accelerate payment of the Series 2001 Tax-Exempt <br /> Bonds and exercise its rights and remedies under the Indenture,the Loan Agreement and the <br /> Mortgages, including foreclosing the Mortgages. <br /> Dependence on Project Revenues <br /> The payment of principal of,premium,if any,and interest on the Series 2001 Bonds <br /> is intended to be made solely from payments of the Borrower under the Loan Agreement. <br /> The obligations of the Borrower under the Loan Agreement are nonrecourse and are payable <br /> only from the Collateral. (See "The Loan Agreement - Loan Payments" in Appendix A to <br /> this Official Statement.) Upon the occurrence of an Event of Default, recourse will be <br /> available only against the assets of the Borrower subject to the Mortgage and the Subordinate <br /> Mortgage(i.e.the Project). The ground lessor's interest in the Ground Lease will not be <br /> subordinate to the Mortgage or the Subordinate Mortgage. <br /> The Borrower has no significant assets other than the Project and the revenues <br /> derived therefrom. If the Project does not generate sufficient revenues from its operations, <br /> it is unlikely the Borrower will have other resources to make payments under the Loan <br /> Agreement necessary to pay in full all principal of, premium, if any, and interest on the <br /> Series 2001 Bonds when due. The ability of the Borrower to make Loan Repayments will <br /> therefore depend on the ability of the Borrower to maintain sufficient tenant occupancy in <br /> the Project and to charge and collect sufficient rents and other charges. <br /> The adequacy of future revenues of the Project to provide for all Project operating <br /> requirements, including payment of debt service,will be subject to various future events or <br /> conditions which cannot be accurately predicted, and which may be beyond the control of <br /> the Borrower,including,but not limited to,the risks of inadequate occupancy;increased real <br /> estate taxes; increased operating, maintenance or repair costs; and an inability to maintain <br /> or raise rental rates or other charges because of (i) inadequate incomes of tenants or <br /> prospective tenants, (ii) insufficient tenant demand, (iii) new or existing competition from <br /> other assisted living and senior housing facilities, including owner-occupied housing, (iv) <br /> decline in the attractiveness of the Project's amenities or location, (v) inferior management <br />