82-25 AUTHORIZING, APPROVING, RATIFYING AND CONFIRMING CERTAIN ADDITIONS AND CHANGES TO ECONOMIC DEVELOPMENT REVENUE BONDS (BRETTWOOD VILLAGE ASSOCIATES PROJECT)

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A � BONDHOLDERS' RISKS Potential purchasers of the Bonds should carefully consider the following risk factors prior to making a decision to purchase. Letter of Credit. To the extent that the Partnership is unable to meet its obligation under the Loan Agreement, the Mortgage and the Note, the Trustee may draw on the Letter of Credit. In Twist Cap Inc. v. Southeast Bank of Tampa ("Ttaist Cap"), 1 Bankruptcy Reptr. 284 (D. Fla. 1979) , a Bankruptcy Referee preliminarily enjoined payments to be made under a letter of credit secured by properties of a debtor where the debt to be repaid with amounts drawn under the letter of credit was not so secured. As the Trustee is secured under the Mortgage by a security interest in certain property of the Partnership at least to as great an extent as the Bank is secured by a security interest in the same property under the Credit Agreement, Chapman and Cutler, Bond Counsel, will render an opinion to the Underwriter (see Appendix F hereto) that, under the rationale of Twist Cap, payments under the Letter of Credit will not be enjoinable as a voidable preference under the United States Bankruptcy Code (Title 11 of the United States Code) , as amended. See "THE LETTER OF CREDIT" herein. In addition to the risk of delayed payments under the Letter of Credit, as discussed above, Bondholders may be faced with the risk of disgorgement of Bond payments in the event of the filing of a petition in bankruptcy by or against the Partnership or a general partner thereof within 91 days after the related payments on the Note are made. The Letter of Credit and the Indenture have been structured to minimize the Bondholders' risks of loss in such an event. See "THE LETTER OF CREDIT" herein. To the extent that the Letter of Credit may become unenforceable or other- wise unavailable to pay amounts due under the Bonds, Bondholders should consider the factors set forth below. Call in the Event of a Determination of Taxability. In the event of a Determination of Taxability the Trustee is directed under terms of the Inden- ture to redeem the Bonds at the earliest practicable date. The redemption price for each outstanding Bond in such event will be lOSX of the principal amount thereof, plus accrued interest to the date of redemption; provided, however, if such Determination of Taxability is due to the enactment of legis- lation which does not in the Opinion of Bond Counsel cause or result in the interest payable on the Bonds prior to such redemption date being included in the gross income of any Bondholder, then no premium shall be due or payable. It is possible that the redemption price of 105X will be insufficient to com- pensate bondholders fully for the loss of tax exemption. Enforceability of Remedies. The remedies available to the holders and owners of the Bonds upon an event of default under the Indenture are in many respects dependent upon judicial actions which are often subject to discretion or delay. Under existing law and judicial decisions, the remedies provided for under the Indenture may not be readily available or may be limited. The 17