4. Request

Valencia seeks authorization to issue up to $30 million of Debt Instruments through the issuance and sale of Debt Instruments in more than one financing. The precise amount and timing of each financing, the market to be used and method by which it will be effected, price and interest rate (which may be fixed, adjustable, or variable), and other material provisions of the Debt Instruments issued in each financing will be determined by Valencia with due regard for its financial condition and requirements and then prevailing and anticipated market conditions, including competing demands for funds, existing at the time of each financing. Debt Instruments would consist of senior secured notes, debentures and notes, medium-term notes, and loans.

4.1. Senior Secured Notes

Secured Notes will be secured by a lien on the real and personal property of Valencia similar in terms to the Indenture filed with the Commission on July 25, 1994.

4.2. Debentures and Promissory Note

Debentures or promissory notes may be placed privately and may have fixed or floating rates of interest. Such debentures or promissory notes would be issued in accordance with an indenture, purchase agreement, or other document that would set forth the aggregate principal amount, maturity, default, and other material provisions of such debentures or promissory notes and would be secured by assets of Valencia.

4.3. Medium-Term Notes

Medium-term notes may be offered on a continuous or periodic basis. Maturities generally would range from 9 months to 15 years. They may be sold in private offerings, with fixed or floating rates, in senior or subordinated form and may be secured by assets of Valencia. Medium-term notes can be tailored to an investor's specific maturity needs so as to achieve the lowest cost of funds.

4.4. Loans

Valencia may, from time to time borrow directly from banks, insurance companies, or other sources. Valencia intends to confine its borrowing of this nature to situations designed to result in lower overall cost of funds and/or more advantageous terms and conditions than currently would be available through the issuance of other types of Debt Instruments.