$40,350,000. Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016

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1 NEW ISSUE BOOK ENTRY ONLY Rating: Moody s: MIG 1 (See RATING herein) The delivery of the Bonds (as defined below) is subject to the opinion of Bond Counsel to the Issuer to the effect that, assuming compliance with certain covenants and based on certain representations, interest on the Series 2016 Bonds is excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date hereof, subject to the matters described under TAX MATTERS herein, including the alternative minimum tax on corporations. See TAX MATTERS herein. $40,350,000 Development Authority of Peach County Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 Dated: Date of Issue Due: October 1, 2018 The Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 (the Series 2016 Bonds or the Bonds ) are being issued by the Development Authority of Peach County (the Issuer ) pursuant to a Trust Indenture dated as of October 1, 2016 (the Indenture ) between the Issuer and U.S. Bank National Association, as Trustee (the Trustee ) for the Bonds. The proceeds of the Bonds are being loaned to USG Real Estate Foundation IV, LLC (the Borrower ) pursuant to a Loan Agreement dated as of October 1, 2016 (the Loan Agreement ) between the Issuer and the Borrower, to (a) provide funds to finance the cost of the purchase and acquisition from Fort Valley State University Foundation Property LLC (the Seller ) of the facilities and equipment of an existing approximately 951 bed student housing facility known as Wildcat Commons, Buildings 1-5, including an approximately 8900 square foot student clubhouse and related amenities, facilities and improvements (collectively, the Series 2016 Project ) located on the campus of Fort Valley State University (the University ), a unit of the University System of Georgia (the University System ); (b) fund interest on the Bonds; and (c) pay all or a portion of the costs associated with the issuance of the Bonds. The real property on which the Series 2016 Project is located is leased to the Borrower pursuant to a Ground Lease dated as of October 28, 2016 between the Board of Regents of the University System of Georgia (the Board ), as lessor, and the Borrower, as lessee, as it may be amended or supplemented from time to time (the Ground Lease ). The Borrower will rent the Series 2016 Project to the Board on an annually renewable basis for use by the University pursuant to a Rental Agreement between the Borrower and the Board dated as of October 1, 2016 (the Rental Agreement ). As described herein, pursuant to a Rental Agreement, between the Borrower and the Board, the Borrower is renting the Series 2016 Project to the Board on an annually renewable basis for use by the University. Neither the University nor the Board shall have any obligation with respect to the Bonds or the financing or refinancing of the Series 2016 Project. The Board has no legal or moral obligation to rent the Series 2016 Project in a manner supportive of the creditworthiness of the Bonds. The Bonds will be issued in fully registered form, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the Bonds. Individual purchases of beneficial ownership interests in the Bonds will be made in book entry form only, and individual purchasers will not receive physical delivery of bond certificates. Payments of the principal of, and interest on, the Bonds will be made by the Trustee, to Cede & Co., as nominee for DTC, for disbursement to DTC participants and subsequent disbursement to the beneficial owners of the Bonds. It is anticipated that the Bonds will be retired with proceeds of a loan (the USDA Loan ) anticipated to be made to the Borrower by the United States Department of Agriculture Rural Development ( USDA ). FAILURE BY THE BORROWER TO OBTAIN THE USDA LOAN MAY RESULT IN THE INABILITY OF THE ISSUER TO PAY THE BONDS ON THEIR MATURITY DATE. The Bonds are issuable as fully registered Bonds without coupons in denominations of $100,000 and integral multiples of $5,000 in excess thereof. The Bonds will bear interest from their date of issue, payable semiannually on each April 1 and October 1, commencing April 1, The Bonds are limited obligations of the Issuer, payable only from the Trust Estate described herein. THE BONDS, TOGETHER WITH ALL PRINCIPAL AND INTEREST THEREON, AND PREMIUM, IF ANY, WITH RESPECT THERETO ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER SECURED BY THE INDENTURE, AND SHALL BE PAYABLE SOLELY FROM THE REVENUES AND INCOME DERIVED FROM THE LOAN AGREEMENT AND THE SECURITY (AS DEFINED IN THE INDENTURE), AND FROM CERTAIN FUNDS AND ACCOUNTS PLEDGED TO THE TRUSTEE UNDER THE INDENTURE AND DESCRIBED THEREIN. THE BONDS SHALL NEVER CONSTITUTE AN INDEBTEDNESS OF THE STATE OF GEORGIA, THE ISSUER OR ANY OTHER POLITICAL SUBDIVISION, AGENCY, OR INSTRUMENTALITY OF THE STATE OF GEORGIA WITHIN THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION, NOR ARE THEY A CHARGE AGAINST THE PROPERTY, A PLEDGE OF THE FAITH AND CREDIT, GENERAL CREDIT OR TAXING POWER, IF ANY, OF THE STATE OF GEORGIA, THE ISSUER OR ANY OTHER POLITICAL SUBDIVISION, AGENCY, OR INSTRUMENTALITY OF THE STATE OF GEORGIA, NOR SHALL ANY OF THE FOREGOING BE SUBJECT TO ANY PECUNIARY LIABILITY THEREON. UNDER THE TERMS OF THE INDENTURE, THE ISSUER MAY ISSUE ADDITIONAL BONDS WHICH MAY BE SECURED ON A PARITY WITH THE BONDS. The Bonds are subject to prior optional redemption and extraordinary redemption as described herein. See THE BONDS herein. SEE CERTAIN BONDHOLDERS RISKS HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE BONDS. EACH PROSPECTIVE INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE BONDS. This cover page is for quick reference only. It is not a summary of this Official Statement. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Bonds are offered when, as, and if issued by the Issuer and received by the Underwriter and are subject to prior sale and the approval of legality by Butler Snow LLP, Atlanta, Georgia, Bond Counsel, and to certain other conditions. Certain legal matters will be passed on for the Borrower by Stover Legal Group, LLC, Atlanta, Georgia, and for the Underwriter by Kutak Rock LLP, Omaha, Nebraska. Delivery of the Bonds through the facilities of DTC in New York, New York is expected on or about October 28, Dated: September 29, 2016

2 MATURITY SCHEDULE Principal Amount Maturity Date SERIES 2016 BONDS Interest Rate Yield Price CUSIP 1 $40,350,000 October 1, % 1.200% 100% AY4 1 CUSIP is a registered trademark of the American Bankers Association (ABA). CUSIP data contained herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitution for the CUSIP. Neither the Issuer, the Borrower nor the Underwriter take any responsibility for the accuracy of CUSIP numbers herein, which are included solely for the convenience of owners of the Bonds.

3 No dealer, broker, salesman, or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations should 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 by any sale of the Bonds by any person in any state in which it is unlawful for such person to make such offer, solicitation, or sale. This Official Statement contains statements that are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, among others, statements concerning expectations, beliefs, opinions, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements in this Official Statement are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. The information set forth herein has been obtained from representatives of the Issuer, the Borrower, USDA, the University, the Board, public documents, records and other sources that are deemed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Underwriter. All of the information concerning the Board and the University contained in this Official Statement has been obtained by the Borrower from the Board and the University and publicly available sources, and neither the Board nor the University has any obligation to the owners of the Bonds to update such information. The information herein is subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Borrower since the date hereof. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The Issuer has provided only that information in this Official Statement that is contained under the heading THE ISSUER and, as to the Issuer, under the heading LITIGATION The Issuer. The Issuer has not furnished or verified any other information or statements contained in this Official Statement and is not responsible for the sufficiency, completeness, or accuracy of such other information or statements. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

4 TABLE OF CONTENTS Page INTRODUCTORY STATEMENT... 1 ESTIMATED SOURCES AND USES OF FUNDS... 4 THE BONDS... 4 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS THE ISSUER THE SERIES 2016 PROJECT THE GROUND LEASE THE RENTAL AGREEMENT THE BORROWER NO RECOURSE AGAINST THE BORROWER S MEMBER AND OFFICERS THE UNIVERSITY UNIVERSITY NOT LIABLE FOR BONDS APPRAISAL CERTAIN BONDHOLDERS RISKS LITIGATION TAX MATTERS UNDERWRITING RATING LEGAL MATTERS RELATIONSHIP OF PARTIES CONTINUING DISCLOSURE MISCELLANEOUS APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS FORM OF BOND COUNSEL OPINION FORM OF CONTINUING DISCLOSURE AGREEMENT USDA LOAN COMMITMENT FORM OF GROUND LEASE FORM OF RENTAL AGREEMENT

5 OFFICIAL STATEMENT $40,350,000 Development Authority of Peach County Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 INTRODUCTORY STATEMENT This Official Statement, including the cover page and the Appendices hereto, is provided to furnish certain information in connection with the sale by the Development Authority of Peach County (the Issuer ) of its Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 (the Series 2016 Bonds or the Bonds ) to be issued by the Issuer pursuant to a Trust Indenture dated as of October 1, 2016 (the Indenture ) between the Issuer and U.S. Bank National Association, as trustee (the Trustee ) for the Bonds. Definitions of certain terms used in this Official Statement are set forth in Appendix A hereto. The proceeds of the Bonds are being loaned to USG Real Estate Foundation IV, LLC (the Borrower ) pursuant to a Loan Agreement dated as of October 1, 2016 (the Loan Agreement ) between the Issuer and the Borrower, to provide funds to (a) finance the cost of the purchase and acquisition from Fort Valley State University Foundation Property LLC (the Seller ) of facilities and equipment of an existing approximately 951 bed student housing facility known as Wildcat Commons, Buildings 1-5, including an approximately 8900 square foot student clubhouse and related amenities, facilities and improvements (collectively, the Series 2016 Project ) located on the campus of Fort Valley State University (the University ), a unit of the University System of Georgia (the University System ); (b) fund interest on the Bonds; and (c) pay all or a portion of the costs associated with the issuance of the Bonds. The Borrower will be obligated pursuant to the Loan Agreement to pay to the Issuer such payments as will always be sufficient to pay when due the principal of, premium, if any, and interest on the Bonds. In order to evidence the loan of the proceeds of the Series 2016 Bonds to the Borrower, the Borrower will deliver a promissory note to the Issuer (the Borrower Note ) equal to the principal amount of the Series 2016 Bonds. The Borrower Note will be assigned to the Trustee as security for the Bonds. Under the Loan Agreement, it is the obligation of the Borrower to keep the Series 2016 Project insured, and to pay all taxes, assessments, and other charges levied or assessed against or with respect to the Series 2016 Project. It should be noted, however, that the Board of Regents of the University System of Georgia (the Board ) undertakes the responsibility of payment of all insurance coverages, taxes and assessments pursuant to the hereinafter described Rental Agreement. See THE RENTAL AGREEMENT herein. The Issuer has no responsibility for the operation, maintenance, condition or insuring of the Series 2016 Project. The real property on which the Series 2016 Project is located (the Property ) is leased to the Borrower pursuant to a Ground Lease dated as of October 28, 2016 between the Board, on behalf of and acting as the University, as lessor, and the Borrower, as lessee (as it may be amended or supplemented from time to time the Ground Lease ). The form of the Ground Lease is attached hereto as Appendix E.

6 The Borrower will rent the Series 2016 Project to the Board on an annually renewable basis for use by the University pursuant to a Rental Agreement between the Borrower and the Board dated as of October 1, 2016 (the Rental Agreement ). The form of the Rental Agreement is attached hereto as Appendix F. In the event the Board does not renew the Rental Agreement for any year, it is unlikely that the Borrower would be able to fulfill its payment obligations under the Loan Agreement. To secure the Borrower s obligations to the Issuer under the Loan Agreement and the Borrower Note, the Borrower will, subject to Permitted Encumbrances, (i) grant to the Trustee a deed of trust on the Borrower s interest in the Series 2016 Project and the land leased to the Borrower and assign and pledge to the Trustee the Borrower s interest in the General Revenues from the Series 2016 Project and any improvements thereto or expansions thereof pursuant to a Leasehold Deed To Secure Debt, Assignment of Rents and Leases and Security Agreement (the Leasehold Deed of Trust ) dated as of October 1, 2016 by the Borrower for the benefit of the Trustee, (ii) grant to the Trustee a first priority security interest in the accounts, documents, chattel paper, instruments and general intangibles held by the Borrower arising in any manner from the Borrower s ownership or operation of the Series 2016 Project and any improvements thereto or expansions thereof, in the inventory, if any, located thereat or thereon and in the Equipment pursuant to the Leasehold Deed of Trust, and (iii) collaterally assign to the Trustee, inter alia, its rights under the Rental Agreement pursuant to a Borrower Collective Collateral Assignment Agreement dated as of October 1, 2016 (the Borrower Collateral Assignment ) by the Borrower in favor of the Trustee. The Borrower anticipates that the Bonds will be redeemed prior to maturity or paid at maturity from the proceeds of a direct loan (the USDA Loan ) from the Department of Agriculture, acting through the United States Department of Agriculture Rural Development ( USDA ). The USDA has provided a commitment to provide financing for the Series 2016 Project pursuant to a letter of conditions dated July 20, 2016 (the Letter of Conditions ) and a take-out letter dated September 28, 2016 (the Take-Out Letter ). The Take-Out Letter and the Letter of Conditions are collectively referred to herein as the USDA Loan Commitment. The USDA Loan Commitment is attached hereto as Appendix D. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS USDA Loan herein. The Bonds mature on October 1, 2018 (the Maturity Date ). The Borrower will covenant in the Loan Agreement to use its best efforts to obtain a loan from the USDA, or another source of funds, in an amount sufficient to pay the Bonds in full at or prior to maturity. The USDA has obligated funds to make the USDA Loan to the Borrower and has committed to making the USDA Loan in an amount not to exceed $41,245,000 pursuant to the USDA Loan Commitment upon compliance by the Borrower with the provisions contained in the Letter of Conditions. USDA is not unconditionally bound to fund the USDA Loan. The failure by the Borrower to satisfy the requirements of the Letter of Conditions could result in a decision by USDA not to fund the USDA Loan. If USDA does not fund the USDA Loan, the Borrower would have to seek financing from other sources in order to retire the Bonds on or before the Maturity Date. There is no assurance the Borrower could secure financing from other sources, and such failure to secure financing from other sources could result in the nonpayment of the Bonds on the Maturity Date. The Indenture permits the issuance of additional Bonds if necessary with respect to the Series 2016 Project on a parity with the Bonds (the Additional Bonds ). See SECURITY AND SOURCES OF PAYMENTS FOR THE BONDS Additional Bonds herein. Because the Additional Bonds, if issued, will be on a parity with the Bonds, the holders of the Additional Bonds will be entitled to an equal and ratable claim to the Trust Estate and will be further secured by the Leasehold Deed of Trust. This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Issuer, the Borrower, the Series 2016 Project, the University, the Indenture, the Bonds, the Loan Agreement, the Borrower Note, the Ground Lease, the Leasehold Deed of Trust, the Rental 2

7 Agreement, the Continuing Disclosure Agreement and the USDA Loan Commitment. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture, the Loan Agreement, the Ground Lease, the Leasehold Deed of Trust, the Rental Agreement, the Continuing Disclosure Agreement and the USDA Loan Commitment (collectively, the Bond Documents ) are qualified in their entirety by reference to such documents, and references herein to the Bonds are qualified in their entirety to the forms thereof included in the Indenture, and references herein to the Borrower Note are qualified in their entirety to the forms thereof included in the Loan Agreement. The Bonds, together with all principal and interest thereon, and premium, if any, with respect thereto are special, limited obligations of the Issuer secured by the Indenture, and will be payable solely from the revenues and income derived from the Loan Agreement and the Security (as defined in the Indenture), and from certain funds and accounts pledged to the Trustee under the Indenture and described therein. The Bonds shall never constitute an indebtedness of the State of Georgia (the State ), the Issuer, or any other political subdivision, agency, or instrumentality of the State, within the meaning of any constitutional provision or statutory limitation, nor are they a charge against the property, a pledge of the faith and credit, general credit or taxing power, if any, of the State, the Issuer, or any other political subdivision, agency, or instrumentality of the State, nor shall any of the foregoing be subject to any pecuniary liability thereon. Under the terms of the Indenture, the Issuer may issue Additional Bonds which may be secured on a parity with the Bonds. SEE CERTAIN BONDHOLDERS RISKS HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE BONDS. EACH PROSPECTIVE INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE BONDS. Summaries of certain documents and definitions of certain terms relating to the Bonds are attached hereto as Appendix A. The proposed form of opinion of Bond Counsel is attached hereto as Appendix B. The form of Continuing Disclosure Agreement is attached hereto as Appendix C. The USDA Loan Commitment is attached hereto as Appendix D. The form of the Ground Lease is attached hereto as Appendix E. The form of the Rental Agreement is attached hereto as Appendix F. THE BONDS ARE NOT OBLIGATIONS, DIRECT OR CONTINGENT, OF THE USDA AND THE INCLUSION OF INFORMATION CONCERNING USDA IN THIS OFFICIAL STATEMENT SHOULD NOT BE CONSTRUED TO MEAN THAT USDA IS LIABLE OR IN ANY WAY RESPONSIBLE FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS OR THE OBLIGATIONS OF THE ISSUER OR THE BORROWER. 3

8 ESTIMATED SOURCES AND USES OF FUNDS The schedule below contains the estimated sources and uses of funds resulting from the sale of the Bonds (exclusive of accrued interest and investment earnings): Sources of Funds Series 2016 Bonds Par Amount $40,350, Transfer from Prior Issue Funds 4,135, Total Sources of Funds $44,485, Uses of Funds Series 2016 Project Acquisition $42,757, Deposit to Capitalized Interest Account 1 932, Costs of Issuance 2 795, Total Uses of Funds $44,485, This amount will be used to pay interest on the Bonds to October 1, Includes Underwriter s Discount. THE BONDS General Description The Bonds will bear interest at the rates shown on the inside of the cover page of this Official Statement payable on April 1, 2017, and semiannually thereafter on April 1 and October 1 of each year (the Interest Payment Dates ) until paid, in an amount equal to the interest accrued from the most recent Interest Payment Date to which interest has been paid or provided for, or, if no interest has been paid, from the date of issuance of the Bonds, or unless, as shown by the records of the Trustee, interest on the Bonds is in default, in which event it will bear interest from the date to which interest has been paid in full at the Interest Rate specified on the inside front cover of this Official Statement. Interest on the Bonds will be computed on the basis of a 360-day year comprised of twelve 30-day months. The Bonds will be issued as fully registered Bonds without coupons in the denominations of $100,000 and integral multiples of $5,000 in excess thereof ( Authorized Denominations ). Payment of the Bonds The principal of, premium, if any, and interest on the Bonds are payable in any currency of the United States of America that at the time of payment is legal tender for the payment of public and private debts, and such principal and premium, if any, is payable when due at the Operations Office of the Trustee upon presentation and surrender thereof. Payment of the interest on any Bond is required to be made to the person appearing on the Bond Register as the registered owner thereof at the close of business on the Regular Record Date and is required to be paid: 4

9 (i) by check or draft mailed to such Bondholder on the Interest Payment Date at such Bondholder s address as it appears on the Bond Register; or (ii) in the case of an interest payment to any owner of $1,000,000 in aggregate principal amount of Bonds of a series, at such Bondholder s option and upon agreement of the Bondholder to pay wire transfer charges, by wire transfer to such Bondholder upon written notice from such Bondholder containing the wire transfer address to which such Bondholder wishes to have such wire directed, which written notice is filed with the Trustee prior to close of business on such Regular Record Date. Notwithstanding the foregoing, while the Bonds are held in the book-entry-only system described in the following section, all principal, premium, if any, and interest will be paid by DTC (as hereinafter defined) or its nominee by wire transfer. Book-Entry-Only System THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC S BOOK-ENTRY SYSTEM HAS BEEN OBTAINED FROM DTC. NONE OF THE ISSUER, THE BORROWER, THE UNIVERSITY, THE BOARD OR THE UNDERWRITER TAKE ANY RESPONSIBILITY FOR THE ACCURACY THEREOF. The Indenture directs the Issuer, the Trustee, the Borrower and certain other persons to deem and treat the person in whose name any Bond is registered in accordance with the Indenture on the registration books maintained pursuant to the Indenture as the owner thereof for all purposes. Notwithstanding the above, so long as the Bonds are held under a book-entry system, transfers and exchanges of beneficial ownership of the Bonds will be effected on the books of The Depository Trust Company ( DTC ), New York, New York or its successor as securities depository for the Bonds, pursuant to its rules and procedures. DTC 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 certificate will be issued for each series of the Bonds, in the aggregate principal amount of such series, and will be deposited with DTC. DTC, the world s largest 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 is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, 5

10 banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). S&P Global Ratings has assigned a rating of AA+ to DTC. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of 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 the 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 the 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 the 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 the 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 shall be sent to DTC. If less than all of the Bonds 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 the Bonds 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 the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 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 the Trustee, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to 6

11 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 (nor its nominee), the Trustee, the Borrower or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest 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 transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. So long as Cede & Co., or any successor thereto, is the registered owner of the Bonds, as DTC s partnership nominee, references herein to the Bondholders or owners or registered owners of the Bonds shall mean DTC and shall not mean the Beneficial Owners of the Bonds. During such period, the Trustee and the Issuer will recognize DTC or its partnership nominee as the owner of all of the Bonds for all purposes, including the payment of the principal of, premium, if any, and interest on the Bonds, as well as the giving of notices and voting. THE ISSUER, THE BORROWER AND THE TRUSTEE WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY PARTICIPANT OR ANY BENEFICIAL OWNER OF THE BONDS WITH RESPECT TO: (a) THE BONDS; (b) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT; (c) THE PAYMENT OF ANY AMOUNT DUE TO ANY PARTICIPANT OR BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS; (d) THE DELIVERY BY DTC TO ANY DIRECT PARTICIPANT, OR BY ANY PARTICIPANT TO ANY BENEFICIAL OWNER OF ANY NOTICE WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE BONDS TO BE GIVEN TO BOND OWNERS; (e) THE SELECTION OF BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (f) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER. Limited Obligations of the Issuer THE BONDS, TOGETHER WITH INTEREST THEREON, SHALL BE SPECIAL, LIMITED AND NOT GENERAL OBLIGATIONS OF THE ISSUER GIVING RISE TO NO PECUNIARY LIABILITY OF THE ISSUER, SHALL BE PAYABLE SOLELY FROM THE SECURITY, INCLUDING THE REVENUES AND RECEIPTS DERIVED FROM OR IN CONNECTION WITH THE SERIES 2016 PROJECT, INCLUDING ALL MONEY RECEIVED UNDER THE LOAN AGREEMENT, WHICH IS REQUIRED TO BE SET APART AND TRANSFERRED TO THE BOND FUND AND THE REDEMPTION FUND, WHICH REVENUES AND RECEIPTS (EXCEPT FOR THE RESERVED RIGHTS) ARE SPECIFICALLY PLEDGED AND ASSIGNED TO THE TRUSTEE FOR THE EQUAL AND RATABLE PAYMENT OF THE BONDS AND ANY ADDITIONAL BONDS THAT MAY BE ISSUED PURSUANT TO THE INDENTURE AND SHALL BE USED FOR NO OTHER PURPOSE THAN TO PAY THE DEBT SERVICE PAYMENTS ON THE BONDS AND ANY ADDITIONAL BONDS THAT MAY BE ISSUED PURSUANT TO THE INDENTURE, EXCEPT AS MAY BE OTHERWISE EXPRESSLY AUTHORIZED IN THE INDENTURE. NO AGREEMENTS OR PROVISIONS CONTAINED IN THE INDENTURE AND NO AGREEMENT, COVENANT OR 7

12 UNDERTAKING BY THE ISSUER CONTAINED IN ANY DOCUMENT EXECUTED BY THE ISSUER IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF THE BONDS SHALL GIVE RISE TO ANY PECUNIARY LIABILITY OF THE ISSUER OR A CHARGE AGAINST ITS GENERAL CREDIT, OR SHALL OBLIGATE THE ISSUER FINANCIALLY IN ANY WAY, EXCEPT WITH RESPECT TO THE FUNDS AVAILABLE UNDER THE INDENTURE AND THEIR APPLICATION AS PROVIDED IN THE INDENTURE. NO FAILURE OF THE ISSUER TO COMPLY WITH ANY TERM, COVENANT OR AGREEMENT IN THE INDENTURE OR IN ANY DOCUMENT EXECUTED BY THE ISSUER IN CONNECTION WITH THE INDENTURE, THE LOAN AGREEMENT OR THE BONDS, SHALL SUBJECT THE ISSUER TO LIABILITY FOR ANY CLAIM FOR DAMAGES, COSTS OR OTHER FINANCIAL OR PECUNIARY CHARGE EXCEPT TO THE EXTENT THAT THE SAME CAN BE PAID OR RECOVERED FROM THE FUNDS AVAILABLE UNDER THE INDENTURE. NOTHING IN THE INDENTURE SHALL PRECLUDE A PROPER PARTY IN INTEREST FROM SEEKING AND OBTAINING, TO THE EXTENT PERMITTED BY LAW, SPECIFIC PERFORMANCE AGAINST THE ISSUER FOR ANY FAILURE TO COMPLY WITH ANY TERM, CONDITION, COVENANT OR AGREEMENT IN THE INDENTURE; PROVIDED, THAT NO COSTS, EXPENSES OR OTHER MONETARY RELIEF SHALL BE RECOVERABLE FROM THE ISSUER EXCEPT AS MAY BE PAYABLE FROM THE FUNDS AVAILABLE THEREUNDER. THE BONDS AND THE OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST THEREON, ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER, SECURED AS PROVIDED IN THE INDENTURE AND PAYABLE SOLELY OUT OF THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE SECURITY AND AS OTHERWISE PROVIDED IN THE INDENTURE AND THE LOAN AGREEMENT. THE BONDS SHALL NEVER CONSTITUTE AN INDEBTEDNESS OF THE STATE, THE ISSUER, OR ANY OTHER POLITICAL SUBDIVISION, AGENCY, OR INSTRUMENTALITY OF THE STATE WITHIN THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION, NOR ARE THEY A CHARGE AGAINST THE PROPERTY, A PLEDGE OF THE FAITH AND CREDIT, GENERAL CREDIT OR TAXING POWER, IF ANY, OF THE STATE, THE ISSUER, OR ANY OTHER POLITICAL SUBDIVISION, AGENCY, OR INSTRUMENTALITY OF THE STATE, NOR SHALL ANY OF THE FOREGOING BE SUBJECT TO ANY PECUNIARY LIABILITY THEREON. UNDER THE TERMS OF THE INDENTURE, THE ISSUER MAY ISSUE ADDITIONAL BONDS WHICH MAY BE SECURED ON A PARITY WITH THE BONDS. NO RECOURSE UNDER OR UPON ANY OBLIGATION, COVENANT, OR AGREEMENT CONTAINED IN THE INDENTURE OR IN THE BONDS OR FOR ANY CLAIM BASED THEREON OR UNDER ANY JUDGMENT OBTAINED AGAINST THE ISSUER OR THE TRUSTEE, OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR OTHERWISE OR BY ANY LEGAL OR EQUITABLE PROCEEDING BY VIRTUE OF ANY CONSTITUTION, RULE OF LAW OR EQUITY, OR STATUTE OR OTHERWISE OR UNDER ANY OTHER CIRCUMSTANCES, UNDER OR INDEPENDENT HEREOF, MAY BE HAD AGAINST ANY INCORPORATOR, MEMBER OR OFFICER AS SUCH, PAST, PRESENT OR FUTURE OF THE ISSUER OR THE TRUSTEE, OR ANY INCORPORATOR, MEMBER OR OFFICER OF ANY SUCCESSOR CORPORATION, AS SUCH, EITHER DIRECTLY OR THROUGH THE ISSUER OR THE TRUSTEE OR ANY SUCCESSOR CORPORATION OR OTHERWISE, FOR THE PAYMENT FOR OR TO THE ISSUER OR ANY RECEIVER THEREOF, OR FOR OR TO THE TRUSTEE AS TRUSTEE FOR THE BONDHOLDERS OR OTHERWISE, OR ANY SUM THAT MAY BE DUE AND UNPAID BY THE ISSUER UPON THE BONDS. ANY AND ALL PERSONAL LIABILITY OF EVERY NATURE WHETHER AT COMMON LAW OR IN EQUITY, OR BY STATUTE OR BY CONSTITUTION OR OTHERWISE, OF ANY SUCH INCORPORATOR, MEMBER OR, OFFICER, AS SUCH, TO RESPOND BY REASON OF ANY ACT OR OMISSION ON HIS OR HER PART OR OTHERWISE, 8

13 FOR THE PAYMENT FOR OR TO THE ISSUER OR ANY RECEIVER THEREOF, OR FOR OR TO THE TRUSTEE AS TRUSTEE FOR THE BONDHOLDERS OR OTHERWISE, OF ANY SUM THAT MAY REMAIN DUE AND UNPAID UPON THE BONDS, IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A CONDITION OF AND IN CONSIDERATION FOR THE EXECUTION AND THE ISSUANCE OF THE BONDS. Redemption Optional Redemption. The Bonds shall be subject to redemption in Authorized Denominations prior to maturity upon the written request of the Borrower on and after April 1, 2018, in whole or in part on any date at a Redemption Price equal to 100% of the principal amount of the Bonds to be redeemed, plus interest accrued to the redemption date. In the event the Bonds are redeemed with moneys other than the proceeds of the USDA Loan, such moneys shall constitute Available Moneys. Extraordinary Optional Redemption. The Bonds will also be subject to redemption from Available Moneys upon the written request of the Borrower, in full, if: (i) the Series 2016 Project has been destroyed or damaged to such an extent that in the opinion of the Borrower and the University expressed in a certificate filed with the Trustee (A) it cannot reasonably be restored prior to the maturity of the Bonds to the condition thereof immediately preceding such destruction or damage, or (B) the Borrower will be prevented from carrying on its normal operations for a period extending beyond the maturity date of the Bonds, or (C) the cost of restoration or replacement would exceed the Net Proceeds of insurance payable in respect of such destruction or damage; or (ii) title to, or the temporary use of, a substantial portion of the Series 2016 Project has been taken under the exercise of the power of eminent domain by any governmental authority or person, firm, or corporation acting under governmental authority to such an extent that in the opinion of the Borrower and the University expressed in a certificate filed with the Trustee (A) it cannot be reasonably restored or replaced prior to the maturity date of the Bonds to substantially the condition thereof immediately preceding such taking, or (B) the Borrower will be prevented from carrying on its normal operations for a period extending beyond the maturity date of the Bonds, or (C) the cost of restoration or replacement would exceed the total amount of compensation for such taking. The Bonds will also be subject to redemption from Available Moneys in authorized denominations upon the written request of the Borrower, in part, in the event of partial condemnation or destruction of, or partial damage to, the Series 2016 Project from the Net Proceeds received by the Borrower as a result of such taking, destruction or damage to the extent such Net Proceeds are not used for the restoration of the Series 2016 Project or for the acquisition of substitute property suitable for the Borrower s operations at the Series 2016 Project as such operations were conducted prior to such taking, damage, or destruction if the Borrower furnishes to Trustee and the Issuer a certificate of the Borrower and the University stating (i) that the property forming a part of the Series 2016 Project that was taken, damaged, or destroyed is not essential to the Borrower s use or occupancy of the Series 2016 Project at substantially the same revenue-producing level prior to such taking, destruction, or damage, or (ii) that the Series 2016 Project has been restored to a condition substantially equivalent to its condition prior to the taking, damage, or destruction, or (iii) that the Borrower has acquired improvements that are substantially equivalent to the property forming part of the Series 2016 Project that was taken, destroyed, or damaged. If the Bonds are called for redemption upon the occurrence of any of the events described in the two immediately preceding paragraphs, the Bonds may be redeemed on any date for which the requisite 9

14 notice of redemption can be given within 180 days of such event at a Redemption Price equal to 100% of the principal amount thereof plus interest accrued to the redemption date. Other Redemptions at Par. The Bonds will also be subject to redemption from Available Moneys in Authorized Denominations prior to maturity in whole or in part at any time and as expeditiously as reasonably possible upon the deposit of money in the Redemption Fund required by the Loan Agreement as set forth below in a principal amount equal to such deposit and at a Redemption Price equal to one hundred percent (100%) of such principal amount thereof plus interest accrued thereon to the redemption date: (i) any Net Proceeds of title insurance on the Series 2016 Project paid to the Trustee to the extent such net proceeds are not used to acquire or construct replacement or substitute property; or (ii) any Net Proceeds of insurance received by the Borrower as a result of destruction of or damage to the Series 2016 Project to the extent such net proceeds are not used to restore the Series 2016 Project and/or to acquire or construct replacement or substitute property; or (iii) any Net Proceeds received by the Borrower as a result of the taking of the Series 2016 Project or any part thereof under the exercise of the power of eminent domain to the extent such net proceeds are not used to restore the Series 2016 Project and/or to acquire or construct replacement or substitute property. In all instances where the Trustee is directed by the terms of the Indenture to redeem Bonds from money deposited into the Redemption Fund, the Trustee is required to redeem the maximum principal amount of Bonds that may be redeemed in accordance with the provisions of the preceding paragraph, and any excess money will remain in the Redemption Fund. Selection of Bonds To Be Redeemed. If less than all of the Bonds are to be called for redemption, the Trustee, except as otherwise provided in the Indenture, is required to select by lot the Bonds of such series or maturity to be redeemed in Authorized Denominations. The Trustee has no liability for the selection of Bonds for redemption. If a Bond of any series is in an amount greater than an Authorized Denomination, a portion of such Bond may be redeemed, but such Bond may be redeemed in part only in an Authorized Denomination and only if the unredeemed portion thereof is an Authorized Denomination. So long as the Bonds are maintained under a book-entry system with DTC or any other securities depository in accordance with the Indenture: (i) if fewer than all of the Bonds are called for redemption, DTC, or such other securities depository, and not the Trustee, will select the particular accounts from which such Bonds or portions thereof will be redeemed in accordance with DTC s or such other securities depository s standard procedures for redemption of obligations such as the Bonds; and (ii) if part, but not all, of any Bond shall be called for redemption, the owner of such Bond may elect not to surrender such Bond in exchange for a new Bond in accordance with the provisions of the Indenture and Bond, and in such event will be required to make a notation indicating the principal amount of such redemption and the date thereof on the payment grid attached to such Bond. For all purposes, the principal amount of each Bond outstanding at any time will be equal to the lesser of the principal sum shown on the face thereof and such principal sum reduced by the principal amount of any partial redemption of such Bond following which the owner thereof has elected not to surrender such Bond in accordance with the provisions of the Indenture and such Bond. The failure of the owner of a Bond to note the principal amount of any partial redemption on the payment grid attached thereto, or any inaccuracy therein, will not affect the payment 10

15 obligation of the Issuer under such Bond or the Indenture. THEREFORE, IT CANNOT BE DETERMINED FROM THE FACE OF A BOND WHETHER A PART OF THE PRINCIPAL THEREOF HAS BEEN PAID. Notice of Redemption; Cessation of Interest. If any of the Bonds are called for redemption, notice thereof identifying the Bonds or portions thereof to be redeemed is required to be given by the Trustee by mailing a copy of the redemption notice by first class mail (postage prepaid) not less than 20 days nor more than 60 days prior to the date fixed for redemption to the Owner of each Bond to be redeemed at the address shown on the Bond Register the close of business on the day preceding the date of the mailing; provided, however, that failure to give such notice by mailing to any Owner of Bonds or any defect therein will not affect the validity of any proceedings for the redemption of any other Bonds with respect to which no such failure or defect occurred. Each notice is required to specify the CUSIP numbers of the Bonds being called, the number of the Bonds being called, if less than all of the Bonds are being called, the redemption date, the Redemption Price, and the place or places where amounts due upon such redemption will be payable. Such notice will further state that payment of the applicable Redemption Price will be made upon presentation and surrender of the Bonds to be redeemed and that on the redemption date, the Redemption Price will become due and payable upon each Bond to be redeemed and that interest thereon will cease to accrue on and after such date, provided collected funds for the redemption of the Bonds to be redeemed are on deposit with the Trustee at the place of, and the time for, payment at that time. Any notice mailed as provided in the Indenture will be conclusively presumed to have been duly given, whether or not the Owner of such Bonds actually receives such notice. Any notice of redemption shall state that the redemption to be effected is conditioned upon the receipt by the Trustee on or prior to the redemption date of sufficient and legally available funds to pay the Redemption Price of the Bonds to be redeemed and that if such funds are not so received or are not so legally available such notice will be of no force or effect and such Bonds will not be required to be redeemed and shall further state that notice shall be rescinded on or prior to the redemption date if the amounts deposited with the Trustee are subject to the automatic stay provisions of the Bankruptcy Code. In addition, any notice of redemption may be rescinded by written notice given by the Issuer to the Trustee no later than 5 business days prior to the date specified for redemption. If sufficient funds to pay the Redemption Price of such Bonds are not received by the Trustee on or prior to the redemption date, if the amounts deposited with the Trustee are subject to the automatic stay provisions of the Bankruptcy Code, or if the notice of redemption is rescinded by the Issuer as provided above, the redemption will not be made and the Trustee is required to give notice, in the manner in which the notice of redemption was required to have been given, that such funds were not so received, the amounts deposited with the Trustee are subject to the automatic stay provisions of the Bankruptcy Code or the notice of redemption was rescinded by the Issuer, as the case may be, and that the redemption is to be or was cancelled. Except as provided in the Indenture, on the date fixed for redemption, notice of redemption having been given as described above, the Bonds or portions thereof called for redemption will be due and payable on the date fixed for redemption at the Redemption Price provided for in the Indenture. On such date, if money or defeasance obligations, or a combination of both sufficient to pay the Redemption Price of the Bonds or portions thereof to be redeemed are held by the Trustee in trust for the Owners of Bonds or portions thereof to be redeemed, interest on the Bonds or portions thereof called for redemption will cease to accrue; such Bonds or portions thereof will cease to be entitled to any benefits or security under the Indenture or to be deemed outstanding; and the Owners of such Bonds or portions thereof will have no rights in respect thereof except to receive payment of the Redemption Price thereof. 11

16 Transfers of Bonds Any Bond may be transferred or exchanged on the Bond Register upon surrender thereof at the Operations Office of the Trustee by the Owner in person or by his, her or its attorney-in-fact or legal representative duly authorized in writing together with a written instrument of transfer in form and with guarantee of signature satisfactory to the Trustee. Upon any such registration of transfer, the Issuer is required to execute and the Trustee is required to authenticate and deliver in the name of the transferee a new fully registered Bond or Bonds of like tenor, in authorized denominations and of the same series and in the same aggregate principal amount. The Trustee is not required to transfer or exchange any Bond (i) after the notice calling such Bond, or portion thereof, for redemption has been given; or (ii) during the period beginning at the opening of business on the fifteenth day (whether or not a Business Day) immediately preceding either any Interest Payment Date or any date of selection of Bonds to be redeemed and ending at the close of business on the Interest Payment Date or day on which the applicable notice of redemption is given. The Trustee may require the payment by the Owner requesting the transfer of any governmental tax, fee or charge required to be paid with respect to such exchange or transfer. General SECURITY AND SOURCES OF PAYMENT FOR THE BONDS It is anticipated that the proceeds of a USDA Loan to be made to the Borrower by USDA will be used to refund the Bonds and provide permanent financing for the Series 2016 Project. The interest on the Bonds will be paid from the Capitalized Interest Account which will be funded at closing in an amount sufficient to pay the interest through the maturity date of the Bonds. As more fully described below, the Bonds are payable solely from the Trust Estate. USDA Loan The Borrower will covenant in the Loan Agreement to cause the proceeds of the USDA Loan, if and when received, to be applied to pay the Bonds on or prior to the Maturity Date. Based upon the USDA Loan Commitment, the Borrower expects that USDA will approve and disburse the proceeds of the USDA Loan prior to or on the Maturity Date. The disbursement of the proceeds of the USDA Loan by USDA is conditioned upon the Borrower meeting certain conditions and requirements in the USDA Loan Commitment. The failure by USDA to approve and disburse the proceeds of the USDA Loan could result in a default on the Bonds if the Borrower (a) does not secure alternate permanent financing or interim financing, and/or (b) does not generate sufficient pledged revenues of the Borrower to pay the principal of, interest and premium, if any, on the Bonds. See CERTAIN BONDHOLDERS RISKS Failure To Redeem the Bonds; USDA Loan Commitment herein. Even after the issuance of the USDA Loan Commitment, USDA is not unconditionally bound to make the USDA Loan. There is no assurance that USDA will make the USDA Loan. See USDA LOAN COMMITMENT in Appendix D attached hereto for a copy of the USDA Loan Commitment. Leasehold Deed of Trust and Borrower Collateral Assignment As security for the obligations of the Borrower to the Issuer under the Loan Agreement and the Borrower Note, the Borrower will execute and deliver to the Trustee, subject to the Permitted Encumbrances, (i) the Leasehold Deed of Trust pursuant to which the Borrower will grant to the Trustee 12

17 (A) a first deed of trust lien on its interest in the Series 2016 Project and the Property and assign and pledge to the Trustee the Borrower s interest in the General Revenues from the Series 2016 Project and any improvements thereto or expansions thereof, and (B) a first priority security interest in the accounts, documents, chattel paper, instruments, and general intangibles held by the Borrower arising in any manner from the Borrower s ownership or operation of the Series 2016 Project and any improvements thereto or expansions thereof, in the inventory, if any, located at the Series 2016 Project, and the equipment, machinery, furnishings, and other personal property included in the Series 2016 Project, and (ii) the Borrower Collateral Assignment pursuant to which the Borrower will conditionally assign to the Trustee its rights under the Rental Agreement. See THE RENTAL AGREEMENT herein. The lien created by the Leasehold Deed of Trust is subject to the rights of the Board under the Ground Lease as the fee simple owner of the Property. The Leasehold Deed of Trust does not constitute a lien on the Ground Lessor s fee simple interest in the Property. Because of certain risks associated with pledging and granting a security interest in collateral of this nature, potential investors should not rely upon such collateral as providing any significant security for the Bonds. See CERTAIN BONDHOLDERS RISKS Risks Associated with Ground Lease herein. Pledge and Assignment of Trust Estate Pursuant to the Indenture, and in order to secure the payment of the Debt Service Payments according to their tenor and effect and to secure the performance and observance by the Issuer of the covenants expressed in the Indenture and in the Bonds, the Issuer will pledge and assign to the Trustee the following (the Trust Estate ): (i) all the right, title, and interest of the Issuer in and to (a) the Loan Agreement (except for Reserved Rights) and any amendment thereto, including without limitation the right to receive the proceeds of the USDA Loan, and any loan, financing, or similar agreement between the Issuer and the Borrower relating to Additional Bonds and (b) the Borrower Note, and all extensions, amendments, supplements, modifications and renewals of the terms thereof, if any, and all amounts encumbered thereby, including, but without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive, and make receipt for payments and other sums of money payable, receivable, or to be held thereunder, to bring any actions and proceedings thereunder or for the enforcement thereof, and to do any and all other things that the Issuer is or may become entitled to do under the foregoing; (ii) all the right, title, and interest of the Issuer in and to all cash proceeds and receipts arising out of or in connection with the sale of the Bonds and all of the right, title and interest of the Issuer in and to the General Revenues, including money held by the Trustee in the funds created under the Indenture (other than the Rebate Fund), including the Revenue Fund, the Bond Fund, the Redemption Fund, the Issuance Cost Fund, the Acquisition Fund, the Insurance Fund, the Condemnation Fund, the Replacement Reserve Fund and the Surplus Fund created thereunder, or held by the Trustee as special trust funds derived from insurance proceeds, condemnation awards, payments on contractors performance or payment bonds or other surety bonds, or any other source; (iii) all the right, title, and interest of the Issuer in and to all money and securities and interest earnings thereon from time to time delivered to and held by the Trustee under the terms of the Indenture (except money on deposit in the Rebate Fund), and all other rights of every name and nature and any and all other property from time to time by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred as and for additional security under the Indenture by the Issuer or by anyone on its behalf or with its written consent to the Trustee; and 13

18 (iv) all other property of every name and nature from time to time by delivery or by writing mortgaged, pledged, delivered or hypothecated as and for additional security under the Indenture by the Issuer or by anyone on its behalf or with its written consent in favor of the Trustee. Because of certain risks associated with pledging and assigning collateral of the nature described above, potential investors should not rely solely upon such collateral as providing security for the Bonds. As defined in the Indenture, General Revenues means (a) the sum of (i) the gross rents, fees and receipts and operating and non-operating revenues derived by the Borrower from the ownership or operation of the Series 2016 Project, including, without limitation, payments pursuant to the Rental Agreement, business or rental interruption insurance proceeds and proceeds of condemnation, sale or other disposition of the Series 2016 Project or any part thereof received by or on behalf of the Borrower; and (ii) Unrestricted Contributions, all as determined in accordance with GAAP, but excluding, in any event, (b) the sum of (i) earnings on amounts that are irrevocably deposited in escrow to pay the principal of or interest on indebtedness of the Borrower related to the Series 2016 Project; (ii) deposits received from residents of the Series 2016 Project and held by the Borrower until such time, if any, as the Borrower shall be permitted to apply such deposits to the payment of rent or to the repair and maintenance of the Series 2016 Project in accordance with the terms of a residency agreement, at which time such deposits shall constitute General Revenues; and (iii) revenues derived by the University from rental or commercial activities conducted within any portion of the Series 2016 Project while the Rental Agreement is in effect (the payments made by the Board to the Borrower pursuant to the Rental Agreement, however, shall be deemed General Revenues). Revenue Fund The Borrower has agreed to deposit with the Trustee all General Revenues to the Revenue Fund promptly upon receipt. The amounts so transferred and deposited into the Revenue Fund maintained by the Trustee shall be disbursed by the Trustee on each date as described below in the following order: (a) there shall be transferred to the Bond Fund: (i) on or before the twentieth day of each March and September, a sum equal to the amount payable on the immediately succeeding Interest Payment Date as interest on the Bonds, or such lesser amount that, together with amounts already on deposit in the Series 2016 CI Subaccount with respect to the Series 2016 Bonds, of the Capitalized Interest Account of the Bond Fund and available therefor, will be sufficient to pay interest on each series of the Bonds to become due on the immediately succeeding Interest Payment Date as provided in the Indenture, it being anticipated the interest on the Bonds will be paid from the 2016 CI Subaccount, with respect to the Series 2016 Bonds; (ii) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of interest on such Additional Bonds; (iii) on or before September 20, 2018, a sum equal to the principal due on October 1, 2018, it being anticipated that the principal of the Bonds will be paid with proceeds of the USDA Loan; 14

19 (iv) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of the principal of such Additional Bonds (whether at maturity or under any mandatory sinking fund or other similar redemption requirements of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds); and (v) on the Business Day prior to any date on which any Additional Bonds are to be redeemed pursuant to any mandatory redemption provisions of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds (other than mandatory sinking fund or other similar redemption pursuant to such supplemental indenture or indentures), an amount equal to the Redemption Price of such Additional Bonds to be redeemed (taking into account amounts then on deposit in the Bond Fund and the Redemption Fund to be used for the payment of such Additional Bonds to be redeemed). (b) there is required to be paid to the Trustee: (i) to the extent not previously paid, on an annual basis, the annual fee of the Trustee for the Ordinary Services of the Trustee payable each year plus the Ordinary Expenses of the Trustee incurred under the Indenture and under the other Bond Documents, as and when the same become due, (ii) except as provided in (i) above, the reasonable fees and charges of any paying agents on the Bonds for acting as paying agents as provided in the Indenture, payable as and when the same become due, (iii) the reasonable fees and charges of the Trustee for the Extraordinary Services of the Trustee rendered by it and the Extraordinary Expenses of the Trustee incurred by it under the Indenture and under the other Bond Documents, as and when the same become due; provided, that the Borrower may, without creating an Event of Default under the Indenture, contest in good faith the reasonableness of any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any such fees, charges, or expenses; (c) there is required to be paid to the Issuer (as certified in writing to the Trustee by the Issuer) on October 1 (or the immediately succeeding Business Day if such day is not a Business Day), an amount sufficient to reimburse the Issuer for all unpaid fees and expenses, if any, reasonably incurred by the Issuer under the Loan Agreement in connection with the Series 2016 Project, including, but not limited to, the reasonable fees and expenses of counsel for the Issuer and Bond Counsel, if any; (d) [Reserved]; (e) there is required to be paid to the Trustee for deposit to the Rebate Fund on the dates that the Borrower provides any calculation of the Rebate Amount to the Trustee in accordance with the Indenture, the amounts determined by the Borrower to be equal to the excess, if any, of the Rebate Amount so calculated over the amount then in the Rebate Fund; (f) there is required to be transferred to the Replacement Reserve Fund, any and all amounts paid to the Borrower under the Rental Agreement as reserve for replacements and to the 15

20 appropriate fund or funds other than the Surplus Fund any and all additional amounts required to be deposited into such fund or funds by any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds on the date(s) specified therein; (g) [Reserved]; and Bond Fund (h) on the 5th day of each April and October (or the immediately succeeding Business Day if the 5th day of a month is not a Business Day) any amounts remaining therein on the last Business Day of each month is required to be transferred to the Surplus Fund. The Indenture establishes a trust fund of the Issuer with the Trustee to be designated the Bond Fund. The amounts described under the caption Revenue Fund above, all Basic Loan Payments received by the Trustee from the Borrower pursuant to the Loan Agreement, and certain other money received by the Trustee under the Loan Agreement are required to be deposited into the Bond Fund. Except as otherwise provided, money in the Bond Fund (with the exception of the Defeasance Account) is required to be used to pay Debt Service Payments on the Bonds. Upon an Event of Default, the Trustee may use money in the Bond Fund other than proceeds of the USDA Loan and money in the 2016 CI Subaccount to pay the fees and expenses of the Trustee prior to making payments to the Bondholders. If there are insufficient funds in the Bond Fund and the Redemption Fund available to pay Debt Service Payments for a series of Bonds then due, the Trustee is required to transfer to the Bond Fund, or to send written notice to the Borrower to transfer to the Trustee for deposit to the Bond Fund, an amount equal to the insufficiency from the following Funds in the following order of priority: first, the related Account of the Redemption Fund, second, the Surplus Fund, and third, the Replacement Reserve Fund. For additional information regarding the Bond Fund, see Appendix A SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS The Indenture Bond Fund. Redemption Fund The Indenture establishes a trust fund of the Issuer with the Trustee to be designated the Redemption Fund. Money in the Redemption Fund may be used only to pay the principal of Bonds or that portion of the Redemption Price of Bonds corresponding to principal as specified in the Indenture. For additional information regarding the Redemption Fund, see Appendix A SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS The Indenture Redemption Fund. Acquisition Fund The Indenture establishes a trust fund of the Issuer with the Trustee to be designated the Acquisition Fund. Money in the Acquisition Fund will be transferred at the direction of the Borrower to fund the acquisition of the Series 2016 Project from the Seller. All proceeds of the Bonds and investment earnings thereon remaining in the Acquisition Fund on the date six months after the issuance of the Bonds, less amounts retained or set aside to meet costs not then due and payable or that are being contested, are required to be used for other capital expenditures related to the Series 2016 Project that are approved by the University with the consent of the Borrower; provided, however, that a Favorable Opinion of Bond Counsel with respect to such expenditure has been obtained. If there are no such additional capital expenditures, such excess amounts are required to be transferred (i) to the 2016 Payment Subaccount of the Bond Fund and used for the payment of principal of the Bonds provided the Borrower delivers to the Trustee a Favorable Opinion of Bond Counsel; or (ii) if 16

21 the Borrower fails to deliver such an opinion, to the Redemption Fund by the Trustee and used to redeem Bonds on the earliest possible date for which notice may be given in accordance with the Indenture. Upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Acquisition Fund are required to be applied to the Debt Service Payment or redemption price of the Bonds. For additional information regarding the Acquisition Fund, see Appendix A SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS The Indenture Acquisition Fund. Replacement Reserve Fund The Indenture establishes a trust fund of the Issuer with the Trustee to be designated the Replacement Reserve Fund. There will be deposited into the Replacement Reserve Fund amounts paid by the Board for deposit pursuant the Rental Agreement. Amounts on deposit in the Replacement Reserve Fund may be issued from time to time at the direction of the Borrower, and earnings with respect thereto shall be retained in the Replacement Reserve Fund. Funds in the Replacement Reserve Fund will, so long as the Rental Agreement remains in effect and the Board is not in default thereunder, be applied to the maintenance and improvement of the Series 2016 Project in accordance with the terms of the Rental Agreement. The Trustee will disburse funds in the Replacement Reserve Fund to or at the written direction of the Borrower to make repairs and replacements to the Series 2016 Project or, in accordance with the Rental Agreement, to reimburse the Board. Surplus Fund Money remaining in the Revenue Fund after the disbursements described in paragraphs (a) through (g) under the description of the Revenue Fund above are required to be transferred to the Surplus Fund. Money in the Surplus Fund may be used by the Trustee to pay expenses of, or to make capital expenditures or repairs and replacements in respect of, the Series 2016 Project or which relate to the funding of the USDA Loan, provided that such funds are required to be disbursed upon written direction executed by an Authorized Borrower Representative. Money in the Surplus Fund may also be used to pay Debt Service Payments and to fund any required payment to the Rebate Fund, and the Issuer authorizes and directs the Trustee to withdraw funds from the Surplus Fund to make such Debt Service Payments to the extent that there are insufficient funds in the Revenue Fund, the Bond Fund, and the Redemption Fund (in such order of priority) available therefor on such date. Amounts credited to or held in the Surplus Fund will be available on a monthly basis to make the monthly credits or deposits required from the Revenue Fund. Upon the defeasance or payment of Outstanding Bonds, amounts held in the Surplus Fund will be transferred to the Borrower and applied to (i) the funding of any required reserves relative to the USDA Loan and (ii) the payment of any costs associated with the defeasance or payment of the Bonds and the funding of the USDA Loan. Any amounts in the Surplus Fund may be released to or at the direction of the Borrower and treated by the Borrower as revenues of the Series 2016 Project. Title and Property Insurance A mortgagee s title insurance policy or a commitment therefor will be delivered in the amount of not less than the original principal amount of the Bonds to insure the Trustee s first priority deed of trust lien on the leasehold interest in the Series 2016 Project, subject only to Permitted Encumbrances and the 17

22 standard exclusions from the coverage of such policy. Under such title insurance policy, the Trustee is not permitted to recover more than the fair market value of any property which is lost as a result of a title defect. Non-Discriminatory Use The Borrower has covenanted to operate the Series 2016 Project as a revenue producing student housing facility on a non-discriminatory basis. Additional Bonds So long as no Event of Default exists under the Indenture (or so long as such Event of Default is cured upon the issuance of the Additional Bonds) and provided that written confirmation has been received by the Issuer from Moody s that the issuance of the subject Additional Bonds will not adversely affect the rating on the Bonds or on any other Additional Bonds then outstanding, Additional Bonds may be issued pursuant to the Indenture by the Issuer upon the written request of the Borrower to provide funds to pay the costs of improvements to or related to the Facility or the Property and the costs of the issuance and sale of the Additional Bonds and capitalized or funded interest for such period and such other costs reasonably related to the financing as are agreed upon by the Borrower and the Issuer. Such Additional Bonds are required to be issued on a parity with the Bonds and any Additional Bonds theretofore or thereafter issued, are required to be secured by the lien and security interests granted by the Leasehold Deed of Trust relating to the Series 2016 Project, equally and ratably with the Bonds, and are required to be payable from the Bond Fund and the Redemption Fund. Such Additional Bonds are required to be issued in such series and principal amounts, to be dated, to bear interest at such rate or rates, to be subject to redemption at such times and prices and to mature in such years as the supplemental indenture authorizing the issuance thereof will fix and determine and are required to be authenticated as provided in the Indenture. Except to provide funds to pay the costs of improvements to or related to the Facility or the Property, the Borrower may not incur any additional Indebtedness. The Borrower may not incur any additional Indebtedness in the form of guarantees or derivatives in the form of credit default swaps or total-rate-of-return swaps or similar instruments. THE ISSUER The Issuer is a public body corporate and politic and was created pursuant to the laws of the State of Georgia, including the Act. The affairs of the Issuer are conducted by seven members who are appointed pursuant to the provisions of the Act. The Issuer is authorized to issue its revenue bonds and lend the proceeds of such revenue bonds for the purpose of developing trade, commerce, industry and employment opportunities. Information concerning the members of the Issuer is set forth below: 18

23 Name of Member Date of Expiration of Term David Cleveland, Chairman 09/30/2017 John Demons, Vice Chairman 09/30/2017 Freddy Greer, Secretary/Treasurer 09/30/2020 Kevin Bentley 09/30/2020 Ben McDaniel 09/30/2020 Albert O Bryant 09/30/2019 Bobby Vinson 09/30/2019 THE ISSUER S FINANCIAL CONDITION IS NOT MATERIAL TO AN INVESTMENT IN THE BONDS, AND, ACCORDINGLY, THE ISSUER S FINANCIAL INFORMATION IS NOT BEING PROVIDED. THE SERIES 2016 PROJECT The Series 2016 Project consists of an approximately 951-bed student housing facility known as Wildcat Commons, Building 1, Building 2, Building 3, Building 4, and Building 5, and an approximately 8900 square foot student clubhouse. The Series 2016 Project houses approximately 941 students and 10 housing coordinators in two bedroom, three bedroom and four bedroom units. The units are located in five 4-story buildings. The facilities include common spaces and related amenities. See THE UNIVERSITY Current University Housing Program herein for a description of all campus housing and occupancy rates. Series 2016 Project Unit Configurations Unit Type Number of Units Beds Per Unit Number of Beds Semester Rents 4 bed, 2 bath apartment $2,796 2 bed, 2 bath apartment $3,191 4 bed, 2 bath suite $2,469 4 bed, 2 bath semi-suite $2,305 3 bed, 1 bath semi-suite $2,139 Resident Managers $3,191 Total THE GROUND LEASE The following is a summary of certain provisions of the Ground Lease pursuant to which the real property underlying the Series 2016 Project has been leased to the Borrower by the Board. This summary is not a complete recital of the terms of the Ground Lease and reference is made to the Ground Lease in its entirety. During the initial offering period, potential purchasers of the Bonds can obtain a copy of the Ground Lease from the Underwriter at no cost and are encouraged to review the same before investing in the Bonds. Following the initial offering period, potential purchasers can examine such documents at the office of the Trustee. 19

24 General Lease Terms Pursuant to the Ground Lease, the Board has leased to the Borrower the site upon which the Series 2016 Project is located for a term of twenty-one years, ending June 30, 2037, unless terminated or extended in accordance with its terms. The Ground Lease may be extended, in limited circumstances, for an additional term up to five years. A copy of the Ground Lease is attached hereto as Appendix E. Limitations on Use The Ground Lease requires that the Series 2016 Project be used for educational and housing purposes. Rent Pursuant to the Ground Lease the Borrower shall pay to the Board annual rental payments of $10.00, and as additional rent, all costs and expenses which the Board incurs as a result of any default of the Borrower or failure on the part of the Borrower to comply with any provisions of the Ground Lease. Repairs; Damage or Destruction Pursuant to the Ground Lease, the Borrower is required to keep the premises and improvements in good order, including all necessary repairs and replacements, structural or otherwise, ordinary or extraordinary, including but not limited to the exterior and interior windows, doors, and entrances, signs, floor coverings, columns, and partitions, and lighting, heating, plumbing and sewage facilities, and air conditioning equipment. The Board is not required to make any repairs of any kind or nature during the term of the Ground Lease. If the Series 2016 Project is totally or partially destroyed, the Board will permit the Borrower to rebuild, or at the Borrower's option, the Borrower may terminate the Ground Lease. Utilities The Borrower shall be solely responsible for, and shall pay for all water, gas, light, power, sanitation, garbage, telephone and other utilities required for use of the Series 2016 Project. Insurance and Taxes The Borrower will maintain insurance coverage (including, but not limited to, workers compensation, employers liability, general liability, and property policies) as required by the Ground Lease. The insurance policies provided by the Borrower must be issued by a company authorized to conduct business in the State with a Best Policyholders Rating of A- or better and with a financial size rating of Class VIII or larger. Pursuant to the Ground Lease, the Borrower will pay any and all taxes, assessments, license fees, excises, imposts, fees and charges assessed, levied or imposed with respect to the Series 2016 Project, including, but not limited to, the building, fixtures, equipment and personal property located on the premises. 20

25 Leasehold Deeds of Trust The Borrower has the right to mortgage and/or otherwise encumber the premises and improvements to the extent of its leasehold interest only. The Borrower agrees to give any lender written notice of any default by the Borrower under the Ground Lease, and lender shall have a period of time after lender s receipt of notice of default (thirty days in the case of a default in the payment of any sum due under the Ground Lease and sixty days in the case of all other defaults; provided, however, that such periods shall be extended so long as reasonably necessary to enable a lender pursuing a cure or a foreclosure of its leasehold security deed with commercially reasonable diligence to complete such cure or foreclosure) in which to cure, or cause to be cured any such default before the Board may exercise any right or remedy under the Ground Lease or otherwise available to the Board. THE RENTAL AGREEMENT Under the terms of the Rental Agreement, the Board, as tenant, makes fixed rental payments for the use and occupancy of the Series 2016 Project, in periodic amounts that the Borrower estimates will be sufficient to enable the Borrower to pay debt service on the Bonds. In addition, the Board pays insurance and taxes for the Series 2016 Project, and maintenance and repair costs of the Series 2016 Project, to the extent insufficient funds are on deposit in the Replacement Reserve Fund. The Board s obligation to pay insurance for the Series 2016 Project, taxes and maintenance and repair costs of the Series 2016 Project is limited to the moneys budged by the University in each fiscal year for such purpose, which budget is subject to annual review and modification. The initial term of the Rental Agreement for the Series 2016 Project expires on June 30, The Board has the right to renew or extend the rental term of the Rental Agreement on a year-to-year basis for additional consecutive one-year renewal terms beyond its initial term to end no later than June 30, 2037; provided that notice of the Board s desire to exercise such option shall be given by the University to the Borrower at least sixty (60) days prior to the expiration date of the immediately preceding term. The Rental Agreement terminates annually, subject to renewal, at the sole option of the Board, and there can be no assurance that the Board will renew it. The Rental Agreement is a year-to-year use and occupancy contract that the Board has no legal or moral obligation to renew or keep in effect. If the Board elects not to renew the Rental Agreement and it expires by its terms at the end of its initial term or any subsequent 12 month term, the Board will have no further obligations under the Rental Agreement. If the Board elects not to renew the Rental Agreement, the Borrower may not be able to rent the Series 2016 Project to another tenant for an amount sufficient to enable the Borrower to make its payments due under the Loan Agreement. The likelihood that the Board of Regents will renew the Rental Agreement in part depends upon its continuing need for the Series 2016 Project and upon the availability of appropriations from the State of Georgia. See CERTAIN BONDHOLDERS RISKS Limitations on Board s Obligations Under Rental Agreement; Risk of Non-Renewal; Limited Sustainability. THE BOARD HAS NO LEGAL OR MORAL OBLIGATION WITH RESPECT TO THE BONDS OR TO CONTINUE TO RENT THE SERIES 2016 PROJECT IN A MANNER SUPPORTIVE OF THE CREDITWORTHINESS OF THE BONDS. The Board is not permitted to assign the Rental Agreement or sublet components of the Series 2016 Project without the Borrower s express written consent; provided, however, the Board may sublet components of the Series 2016 Project without first obtaining the consent of the Borrower for short-term (24 hours) educational or related purposes. Any assignment or subletting without the Borrower s consent 21

26 will be void, and, at the option of the Borrower, on 30 days notice to the Board, will operate to terminate the Rental Agreement. If the Series 2016 Project is wholly or partially damaged or destroyed, by any cause whatever, as to be rendered unfit for occupancy by the Board, and thereafter the Series 2016 Project is not repaired by the Borrower, at its expense, with reasonable promptness and dispatch, the Board shall nonetheless continue its scheduled payment of rent without abatement. At the cost and expense of the Board, during the term of the Rental Agreement, the Borrower is obligated to provide insurance coverage for the Series 2016 Project obtained from an insurance company licensed to transact business in the State for the applicable line of insurance and which has a Best Policyholders Rating of A- or better and a financial rating size of Class VIII or larger as required by the Rental Agreement. See Appendix F for the form of the Rental Agreement. THE BORROWER The Borrower was organized on August 7, 2015 as a Georgia limited liability company. The sole member of the Borrower is the University System of Georgia Foundation, Inc. (the Sole Member ). The Borrower will be treated as a disregarded entity for federal income tax purposes. The Borrower has only a limited operating history that consists of the renting of the Series 2016 Project to the Board. The Borrower has no net worth. See CERTAIN BONDHOLDERS RISKS Limited Resources of the Borrower herein. The Sole Member The Sole Member is a Georgia nonprofit corporation, which was incorporated on August 10, 1995 and has obtained a determination letter from the Internal Revenue Service recognizing it as an exempt organization under Section 501(c)(3) of the Code. The Sole Member is organized and shall be operated exclusively for charitable, religious, educational and scientific purposes within the meaning of Section 501(c)(3) of the Code, for the benefit of the University System of Georgia and such related purposes. The primary activity of the Sole Member is to promote and support the activities and objectives of the University System of Georgia. The Sole Member is managed by a Board of Trustees comprised of not less than 5 or more than 20 Trustees. THE SOLE MEMBER HAS NO OBLIGATION TO PAY DEBT SERVICE ON THE BONDS. NO RECOURSE AGAINST THE BORROWER S MEMBER AND OFFICERS No recourse under or upon any obligation, covenant, or agreement contained in the Loan Agreement, in any of the Bond Documents, or in any other documents delivered in connection with the issuance of the Bonds, or for any claim based thereon, or under any judgment obtained against the Borrower, or by the enforcement of any assessment or penalty or otherwise or by any legal or equitable proceeding by virtue of any constitution, rule of law or equity, or statute or otherwise or under any other circumstances, under or independent hereof, will be had against any incorporator, director, member, or officer, as such, past, present, or future of the Borrower or the Sole Member, or any incorporator, director, member, or officer of any successor entity, as such, either directly or through the Borrower or any successor entity, or otherwise, for the payment for or to the Borrower or any receiver thereof, of any sum that may be due and unpaid by the Borrower under the Loan Agreement, any of the Bond Documents, or any other documents delivered in connection with the issuance of the Bonds. 22

27 THE UNIVERSITY The following information concerning Fort Valley State University (the University ) is presented as it may be relevant to a complete understanding of the Series 2016 Project, the current enrollment at the University and available on-campus housing for University students. However, the University has no obligation with respect to the payment of debt service on the Bonds. The Bonds are payable solely from the Trust Estate. Overview The Fort Valley High and Industrial School, chartered in 1895, and the State Teachers and Agricultural College of Forsyth, founded in 1902, were consolidated in 1939 to form Fort Valley State College. Fort Valley State College became Fort Valley State University in June The University is one of Georgia s three public historically black colleges and universities. The University is Georgia s only 1890 land-grant school. The campus is located on 1,365 acres in Peach County in middle Georgia. The main campus incorporates 80 acres, and the remaining space is used for agricultural research and is available for future expansion. The University is a fully-accredited, comprehensive, four-year institution committed to providing strong academic programs, online courses and extracurricular activities to students. The University has the only certified veterinary technology program in the State. A unique partnership with Zoo Atlanta provides future veterinarians hands-on experience in caring for exotic animals. Fort Valley State s Cooperative Developmental Energy Program ( CDEP ) teams with major oil and energy companies across the nation to launch the careers of minorities and women in the industry. CDEP, the only program of its kind in the nation, offers dual degrees in math, engineering, chemistry, biology, health physics and geoscience. The campus dual-enrollment program, University Today Scholars, helps high school students earn college credit while working toward their diploma. The University offers bachelor s degrees in more than 50 majors education, business administration and agriculture are particularly popular as well as master s degrees in education and counseling. An education specialist degree also is available. In an effort to accommodate graduate and non-traditional students, external degree program courses are also offered at off-campus sites in Macon, Warner Robins, Cochran and Dublin, Georgia. During fall 2015, over 2,600 students were enrolled at the University. Approximately, ninety-six percent of that student population was African-American. The University s students represent 136 of Georgia s 159 counties, more than 25 states and about 7 international countries. The average age is 23 for undergraduates and 34 for graduate students. Approximately one-third of students live on campus, and 85 percent attend college full-time. Students are strongly encouraged to participate in co-curricular organizations, academic clubs, honor societies, and drama and music groups. These organizations are open to all students or students majoring in specific disciplines and afford many opportunities to expand academic, social, and personal growth. There are approximately 70 different student organizations at the University. Enrollment The following table sets forth the University s fall semester headcount and FTE enrollment during the past five fall semesters: 23

28 Total Enrollment Enrollment (Fall 2011-Fall 2015) % Change Total Enrollment FTE Enrollment (1) % Change FTE Enrollment , , ,568 (8.4) 3,378 (9.2) ,180 (10.9) 2,986 (11.6) ,594 (18.4) 2,389 (20.0) , , (1) Beginning in 2012, the University implemented higher test scores for admission. This action was taken to develop an academically stronger base of students in an effort to enhance the University s graduation and retention rates. As a result, the University experienced an enrollment decline. Admissions The following table shows the number of freshmen applications received and freshman students accepted and enrolled in the University for the last five fall semesters: Freshman Admission Statistics (Fall 2011-Fall 2015) Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Applications 5,967 6,553 3,493 2,799 4,963 Acceptances 2,457 2,073 1, ,010 Acceptance Rate 41% 32% 30% 27% 20% Number Enrolled Matriculation Rate 19% 33% 49% 30% 43% The following table sets forth the average freshman SAT score and average freshman GPA for the past five fall semesters: Freshman Academic Achievement (Fall 2011-Fall 2015) Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Average Freshman SAT Average Freshman GPA

29 Graduation Rate The following table sets forth the number of degrees awarded for the past five years: Degrees Awarded (Fiscal Years ) Undergraduate Tuition and Fees Graduate The following table sets forth the tuition for students taking 15 credit hours and mandatory fees for the past five fall semesters: HOPE Scholarship Average Cost of Undergraduate Tuition and Fees Per Semester (Fall 2012-Fall 2016) Fall 2012 Fall 2013 Fall 2014 Fall 2015 Fall 2016 In-State $2,256 $2,312 $2,370 $2,429 $2,429 Out-of -State $8,208 $8,413 $8,623 $8,839 $8,839 Fees $784 $832 $854 $854 $854 The State offers the HOPE Scholarship which is available to any Georgia resident who graduates from an accredited high school located in Georgia with a B average and maintains a B average in college. For the academic year, 71 University first-time freshman students received HOPE Scholarships, which is approximately 35% of first-time freshman students eligible for eligible for such scholarships. Current University Housing Program There are several on-campus housing options available to University students. The University s on-campus housing facilities are operated and managed by the University Housing Office. Wildcat Commons. Wildcat Commons was opened in two phases, the first in Fall 2007 and the second in Fall Wildcat Commons consists of seven buildings. Two buildings contain two- and three-bedroom apartments. The other five buildings consist of a mix of two-, three- and four-bedroom suites and semi-suites. All buildings include cable television, high-speed internet service, laundry facilities, a computer lab and a recreation/gaming center. Each room contains a bed, mattress, desk, desk chair, dresser, and closet/wardrobe for each person. The Series 2016 Project consists of Wildcat Commons Building 1, Wildcat Commons Building 2, Wildcat Commons Building 3, Wildcat Commons Building 4 and Wildcat Commons Building 5. See THE SERIES 2016 PROJECT herein. 25

30 Hall Existing On-Campus Housing and Room Charges Housing Type Occupancy Number of Beds Rent (per semester) Wildcat Commons Apartment 4 bed, 2 bath 256 $2,880 Buildings bed, 2 bath 124 $3,287 Wildcat Commons Suite 4 bed, 2 bath 800 $2,543 Buildings 3-7 Semi-Suite 4 bed, 2 bath 120 $2,374 3 bed, 1 bath 15 $2,203 Occupancy; Residency Requirements In Fall 2015, all of the traditional residence halls at the University were taken offline. Historic occupancy levels for the traditional residence halls are set forth below. Traditional Housing Occupancy 2011 (1) 2012 (2) 2013 (3) 2014 (4) 2015 (5) Total Beds Beds Occupied Occupancy Rate 68.1% 36.7% 15.6% 53.7% 0 (1) In Fall 2011, Watson Hall was taken offline, reducing availability in the Traditional Housing from 996 to 854. (2) In Fall 2012, all of the Traditional Housing was taken offline, except Josie Hall, Moore Hall, and Ohio Hall with 422 beds. (3) In Fall 2013, all of the Traditional Housing was taken offline, except Josie Hall and Ohio Hall with 262 beds. (4) In Fall 2014, all of the Traditional Housing was taken offline, except Ohio Hall with 54 beds. (5) In Fall 2015, all of the Traditional Housing was taken offline. Historic occupancy levels for Wildcat Commons are set forth below. Wildcat Commons Occupancy (1) Total Beds 1,315 1,315 1,315 1,315 1,315 1,311 1,311 Beds Occupied 1,281 1,216 1,242 1, ,108 Occupancy Rate 97.4% 92.4% 94.4% 87.9% 61.3% 74.5% 84.5% (1) Fall 2016 figures are preliminary. 26

31 Residency Requirement. All full-time students, under the age of 21, who have earned fewer than 60 hours of academic credit must live on-campus and subscribe to an applicable dining requirement. Exceptions to the University s residency requirement are available for students that: (i) reside at the legal permanent address of their parents/guardians and live within Peach, Houston, Bibb, Macon, Crawford, or Taylor counties, (ii) are married, (iii) are single parents, or (iv) have other special circumstances. The residency requirement is subject to change at the sole discretion of the Board. UNIVERSITY NOT LIABLE FOR BONDS NEITHER THE UNIVERSITY NOR THE BOARD SHALL HAVE ANY LIABILITY, EXPRESS OR IMPLIED, FOR THE PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS, NOR SHALL THE UNIVERSITY OR THE BOARD BE RESPONSIBLE OR LIABLE, EXPRESSLY OR IMPLIEDLY, FOR ANY OTHER OBLIGATIONS OF ANY PARTY OTHER THAN THE UNIVERSITY, UNDER ANY OF THE BOND DOCUMENTS, OR UNDER ANY OTHER DOCUMENTS DELIVERED IN CONNECTION WITH THE ISSUANCE OF THE BONDS OR FOR THE SERIES 2016 PROJECT. APPRAISAL An appraisal report dated as of May 5, 2016 was prepared for the sole benefit of the USDA which determined the market value as-is of the Series 2016 Project to be $42,400,000. None of the Issuer, the Underwriter, the Trustee or the Borrower makes any representation as to the market value of the Series 2016 Project as set forth in the appraisal report. Prospective purchasers should make his, her, or its own decision in regard to an investment in the Bonds. General CERTAIN BONDHOLDERS RISKS EACH INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE BONDS. Each prospective investor should carefully examine this Official Statement and his or her own financial condition (including the diversification of his or her investment portfolio) in order to make a judgment as to whether the Bonds are an appropriate investment. The Borrower has identified and summarized below certain Bondholders Risks that could adversely affect the operation of the Series 2016 Project and/or the Bonds which should be considered by prospective investors. The following discussion is not intended to be exhaustive, but includes certain major factors which should be considered along with other factors set forth elsewhere in this Official Statement, including the Appendices hereto. If the Borrower defaults in its obligations under the Loan Agreement or the other Bond Documents, a Default may occur under the Bond Documents. Upon a Default (as defined in the Indenture), the Bonds may be paid before maturity or applicable redemption dates and a forfeiture of purchase premiums, if any, may result. The Borrower s ability to generate revenues and its overall financial condition may be adversely affected by a wide variety of future events and conditions including (i) a decline in the enrollment of the University, (ii) increased competition from other schools, (iii) loss of accreditation of the University s programs, (iv) failure of the University to meet applicable federal guidelines or some other event which results in students of the University being ineligible for federal financial aid, and (v) cost overruns in connection other capital improvements. 27

32 Failure To Redeem the Bonds; USDA Loan Commitment The Bonds will mature on October 1, 2018, and it is the Borrower s intent that the Bonds will be paid from the proceeds of the USDA Loan. USDA has obligated funds to the Borrower in an amount not to exceed $41,245,000 and, prior to the pricing of the Bonds, will have committed to funding the USDA Loan upon satisfaction by the Borrower of the terms and conditions contained in the USDA Loan Commitment, including acquisition of the Series 2016 Project in accordance with USDA requirements. See USDA LOAN COMMITMENT in Appendix D hereto for a copy of the USDA Loan Commitment. However, even after the issuance of the USDA Loan Commitment and the issuance of the Bonds, USDA is not unconditionally bound to approve and disburse the proceeds of the USDA Loan. The breach by the Borrower of its covenants under the Letter of Conditions could result in a decision by USDA not to fund the USDA Loan. The Bonds are secured by amounts payable therefor by the Borrower under the Loan Agreement, the Trust Estate, certain funds and accounts established in the Indenture and pledged to the payment thereof, the Leasehold Deed of Trust and Borrower Collateral Assignment. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS herein for a further discussion of the security for the Bonds. If (a) USDA determines that it will not disburse the USDA Loan because all of the conditions for the approval and disbursement of the USDA Loan have not been met on or before the Maturity Date, or (b) the Borrower does not secure other interim or permanent financing for the Series 2016 Project, the Borrower will likely not have sufficient revenues to pay the principal of and interest on the Bonds at maturity. There is no certainty that the Borrower would be able to obtain other financing or generate sufficient revenues to pay the principal of, premium, if any, and interest on the Bonds on or before the Maturity Date, if ever. The Borrower s ability to generate revenues and its overall financial condition may be adversely affected by a wide variety of future events and conditions including (i) a decline in the enrollment of the University; (ii) increased competition from other schools; (iii) loss of accreditation of the University s programs; (iv) failure of the University to meet applicable federal guidelines or some other event which results in students of the University being ineligible for federal financial aid; and (v) cost overruns in connection with other capital improvements. If the Borrower does not secure permanent financing through USDA or another source to pay the Bonds at maturity, the pledged revenues of the Borrower generated by the Series 2016 Project may not be sufficient to pay in full the outstanding principal of, premium, if any and interest on the Bonds when due. Failure by the Borrower to pay the principal of and interest on the Bonds when due would result in a Default under the Indenture and the Loan Agreement. Limited Obligations of the Issuer The Bonds constitute special, limited obligations of the Issuer and have three potential sources of payment. The sources of payment are as follows: (a) Payments Received by the Trustee From the Borrower Pursuant to the Terms of the Indenture and the Loan Agreement. The Issuer has no obligation to pay the Bonds except from the Trust Estate, including Loan Payments derived from the Loan Agreement. The Bonds and the obligation to pay principal, premium, if any, and interest thereon, are special, limited obligations of the Issuer, secured as provided in the Indenture and payable solely out of the 28

33 payments made pursuant to the Loan Agreement and the Security and as otherwise provided in the Indenture and the Loan Agreement. Neither the faith and credit nor the taxing power of the Board, the University, the State or any political subdivision thereof is pledged to the payment of the Bonds. The State is not liable on the Bonds and the Bonds are not a debt of the State. The Issuer has no taxing power. No owner of the Bonds has the right to compel any exercise of the taxing power, if any, of the Issuer, the State or any political subdivision thereof to pay the principal of, premium, if any, or interest on the Bonds. Neither the members of the Issuer nor any person executing the Bonds is liable personally on the Bonds by reason of the issuance thereof. Under the Loan Agreement, the Borrower will be required to make Loan Payments (the interest in which the Trustee has received by assignment from the Issuer) to the Trustee in amounts sufficient to enable the Trustee to pay the principal of, premium, if any, and interest on the Bonds. The Loan Payments are anticipated, however, to be derived solely from the operation of the Series 2016 Project. Furthermore, the Borrower s ability to meet its obligations under the Loan Agreement will depend upon achieving and maintaining certain occupancy levels at the Series 2016 Project throughout the term of the Bonds. No assurance can be made that the Borrower will generate sufficient revenues from the Series 2016 Project to pay maturing principal of, premium, if any, and interest on the Bonds after payment of operating expenses of the Series 2016 Project. (b) Revenues Received From Operation of the Series 2016 Project by a Receiver Upon a Default Under the Indenture. It has been the experience of lenders in recent years that attempts to have a receiver appointed to take charge of properties with respect to which loans have been made are frequently met with defensive measures such as the initiation of protracted litigation and the initiation of bankruptcy proceedings. Such defensive measures can prevent the appointment of a receiver or greatly increase the expense and time involved in having a receiver appointed. See CERTAIN BONDHOLDERS RISKS Enforceability of Remedies herein. Accordingly, prospects for uninterrupted payment of principal and interest on the Bonds in accordance with their terms are largely dependent upon Loan Payments from the Borrower described in the preceding paragraph, which is wholly dependent upon the success of the Borrower in the operation of the Series 2016 Project. (c) Proceeds Realized From the Sale or Lease of the Issuer s and the Borrower s Interest in the Series 2016 Project to a Third Party by the Trustee at or Following Foreclosure by the Trustee of the Leasehold Deed of Trust and Proceeds Realized From the Liquidation of Other Security for the Bonds. Debtors frequently employ defensive measures, such as protracted litigation and bankruptcy proceedings, in response to lenders efforts to foreclose on real property or otherwise to realize upon collateral to satisfy indebtedness which is in default. Such defensive measures can prevent, or greatly increase the expense and time involved in achieving, such foreclosure or other realization. In addition, the Trustee could experience difficulty in selling or leasing the real and personal property portion of the Series 2016 Project upon foreclosure due to the special purpose nature of a Series 2016 Project, and the proceeds of such sale will likely not be sufficient to pay fully the owners of the Bonds. See CERTAIN BONDHOLDERS RISKS Liquidation of Security May Not Be Sufficient in the Event of a Default herein. Accordingly, prospects for uninterrupted payment of principal and interest on the Bonds in accordance with their terms are largely dependent upon the Loan Payments described in paragraph (a) above, which is wholly dependent upon the success of the Series 2016 Project. Even if the Series 2016 Project is operating in an efficient manner, other factors could affect the Borrower s ability to make Loan Payments under the Loan Agreement. 29

34 Reimbursement Obligations of the Borrower Under the Rental Agreement, the Borrower is obligated to reimburse the Board for any payments for insurance coverage that extend beyond the final term of the Rental Agreement, whether such termination of the Rental Agreement is due to cancellation, nonrenewal or expiration. The Borrower is also required to reimburse the Board for any capital expenditures paid for or by the Board having a useful life beyond the final term of the Rental Agreement, whether termination of the Rental Agreement is due to cancellation, nonrenewal or expiration. In addition, the Board s obligation to pay all insurance coverages, taxes and maintenance and repairs of the Series 2016 Project is limited to the moneys budgeted by the University in the applicable fiscal year for such purposes, which budget is subject to annual review and modification. Such reimbursement obligations of the Borrower and required payments above the budget cap described above shall be paid from the Surplus Fund to the extent available moneys are on deposit therein. See SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS The Indenture Surplus Fund in Appendix A. Limited Resources of the Borrower The Borrower has no substantial revenues or assets other than the Series 2016 Project and the Bonds are secured only by the Series 2016 Project. Therefore, timely payment of principal of, premium, if any, and interest on the Bonds will be dependent upon the Borrower s ability to generate revenues from the Series 2016 Project sufficient to pay its operating expenses and loan payments under the Loan Agreement. If the Borrower does not secure permanent financing through USDA or another source to pay the Bonds at maturity, the pledged revenues of the Borrower generated by the Series 2016 Project will likely not be sufficient to pay in full the outstanding principal of, premium, if any, and interest on the Bonds when due. If, after payment of operating expenses, net revenues are insufficient to pay the debt service on the Bonds, the Borrower will not have money or assets other than the Series 2016 Project from which to make the payments required under the Loan Agreement. Limitations on Board s Obligations Under Rental Agreement; Risk of Non-Renewal; Limited Sustainability The Board has the option to renew the Rental Agreement on a year-to-year basis through at least the final maturity of the Bonds. The Borrower believes that the Series 2016 Project will aid the University in fulfilling its educational mission and that it is likely that the Board will renew the Rental Agreement for successive renewal terms throughout the term of the Bonds; however, renewal during any of these successive renewal terms is at the sole option and discretion of the Board. There can be no assurance that the State and the Board will deem it in their best interests to continue to occupy and utilize the Series 2016 Project for the entire term of the Bonds. There can also be no assurance that the Board will continue to renew the Rental Agreement for each renewal term throughout the term of the Bonds. The likelihood that the Rental Agreement will be renewed will depend upon, among other things, the continuing need of the Board for the Series 2016 Project, the appropriation of funds by the General Assembly of the State of Georgia to the Board in sufficient amounts to enable the Board to pay the rents due under the Rental Agreement and the Board not substituting more desirable rental space for the Series 2016 Project. The Rental Agreement and the obligations thereunder do not and will not constitute a pledge, liability or a charge upon the funds of the State or the Board and do not and will not constitute a debt or general obligation of the State or the Board. Neither the faith, credit nor taxing power of the State or the Board is or will be pledged to the payment of principal of or interest due with respect to the Bonds. 30

35 THE BOARD HAS NO LEGAL OR MORAL OBLIGATION WITH RESPECT TO THE BONDS OR TO CONTINUE TO RENT THE SERIES 2016 PROJECT IN A MANNER SUPPORTIVE OF THE CREDITWORTHINESS OF THE SERIES 2016 BONDS OR THE FINANCING OF THE PROJECT. If the Rental Agreement is not renewed by the Board and, as a result, the Borrower (which has no assets other than its interest in the Series 2016 Project) fails to continue to make the payments required by the Loan Agreement from other sources, the Trustee s sole remedy will be to recover and liquidate, relet or sell the Series 2016 Project as provided in the Leasehold Deed of Trust. In the event of such nonrenewal, the Board s obligation to pay rent will continue until the expiration of the annual term then in effect but not thereafter. The Borrower will then be entitled to relet or sell the Series 2016 Project; however, the Series 2016 Project constitutes a special purpose facility and may have limited suitability for other purposes and tenants. No assurance can be given that the Borrower could relet or sell the Series 2016 Project for an amount sufficient to pay debt service on the Bonds or that any amount realized upon a liquidation of the Series 2016 Project will be sufficient to provide for the payment of the Bonds on a timely basis. State Budgetary Constraints The State is required by law to operate under an annual balanced budget, in which expenditures may not exceed revenues collected by the State and any surplus revenues accrued by the State, known as Revenue Shortfall Reserve. Should the State s revenues and other sources of funds available to pay expenditures decline, it may be necessary for the General Assembly in the future to reduce appropriations to the Board, which in turn may adversely affect the ability of the Board to renew the Rental Agreement. No Recourse Against Directors, Members or Officers No recourse under or upon any obligation, covenant, or agreement contained in the Loan Agreement, in any of the Bond Documents, or in any other documents delivered in connection with the issuance of the Bonds, or for any claim based thereon, or under any judgment obtained against the Borrower, or by the enforcement of any assessment or penalty or otherwise or by any legal or equitable proceeding by virtue of any constitution, rule of law or equity, or statute or otherwise or under any other circumstances, under or independent hereof, will be had against any incorporator, director, member, or officer, as such, past, present, or future of the Borrower or the Sole Member, or any incorporator, director, member, or officer of any successor entity, as such, either directly or through the Borrower or any successor entity, or otherwise, for the payment for or to the Borrower or any receiver thereof, of any sum that may be due and unpaid by the Borrower under the Loan Agreement, any of the Bond Documents, or any other documents delivered in connection with the issuance of the Bonds. No Recourse Against the Issuer, University or the Board None of the Issuer, the University or the Board will be liable for the payment of the principal of, premium, if any, or interest on the Bonds, nor shall any be responsible or liable for any other obligations of the Borrower or the obligations of any other party in connection with the Bonds. Upon the occurrence of an uncured event of default by the Board under the Rental Agreement, the Borrower may pursue remedies as are available at law or in equity. See Limitations on Board s Obligations Under Rental Agreement; Risk of Non-Renewal; Limited Sustainability above. 31

36 Liquidation of Security May Not Be Sufficient in the Event of a Default The Series 2016 Project is located on the campus of the University and may not be suitable for uses other than as a student housing facility. The number of entities that could be expected to purchase or lease the Borrower s interest in the Series 2016 Project is therefore limited, and thus the ability of the Trustee to realize funds from the sale or lease of such interest upon an event of default may be limited. Such value may be also limited by actual or alleged rights of residents. Any foreclosure proceeding may be subject to substantial delays. The ability of the Trustee to receive funds sufficient to pay the Bonds from any sale or foreclosure of the Borrower s interest in the Premises may be limited by a number of factors, including the limited operational use of the Series 2016 Project as a student housing facility. Risks Associated with Ground Lease The Borrower does not own fee title to the real property on which the Series 2016 Project is situated, and instead leases such property from the Board pursuant to the Ground Lease. A default under the Ground Lease could result in a termination thereof, effectively depriving the Trustee of any real property security for the Bonds. The Trustee is granted the right to cure defaults under the Ground Lease and the right to compel the Board to enter into a new Ground Lease (on substantially the same terms as the original) upon any termination thereof. No assurance can be given, however, that the Trustee would be willing or able to effect a cure of any such default or enter into any such replacement Ground Lease. In addition, the obligation to comply with the terms of the Ground Lease and to relinquish any claim to the Series 2016 Project on termination of the Ground Lease renders the Series 2016 Project less valuable to prospective purchasers upon foreclosure. Additional Bonds The Issuer may, upon request from the Borrower complying with the provisions of the Indenture, issue one or more series of Additional Bonds to finance costs of completing the Series 2016 Project. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Additional Bonds herein. Series of Additional Bonds will be equally and ratably secured under the Indenture with the Bonds and with all other series of Bonds, if any, issued under the Indenture, without performance, priority or distinction of any Bond over any other. The consent of the Bondholders is not required prior to the issuance of Additional Bonds. Insurance and Legal Proceedings The Board is not obligated to repair and replace the Series 2016 Project. The Borrower will carry property and general liability insurance to the extent that such insurance is available on commercially reasonable terms in amounts consistent with industry practices and in compliance with the requirements of the Ground Lease, the Rental Agreement and the Loan Agreement. There can be no assurance that any current or future claims will be covered by or not exceed applicable insurance coverage. A claim against the Borrower not covered by, or in excess of, the Borrower s insurance or not paid for by the Board as provided in the Rental Agreement could have a material adverse effect upon the Borrower. Validation of Bonds It is expected that a final judgment confirming and validating the Bonds and the security therefor will be entered prior to the issuance of the Bonds, and the receipt of such final judgment will be a condition precedent to the issuance of the Bonds. Under State law, the judgment of validation will be forever conclusive with respect to the validity of the Bonds and the security therefor against the Issuer 32

37 and the Borrower. The enforceability of the Ground Lease and the Rental Agreement against the Board will not be the subject of the judgment of validation or any legal opinions to be delivered in connection with the issuance of the Bonds. The Borrower s real property interests created by the Leasehold Deed of Trust will be insured pursuant to a leasehold mortgagee s title insurance policy delivered to the Trustee. Market for the Bonds The Bonds will not be listed on a securities exchange or inter-dealer quotation system. Although the Underwriter presently intends to make a market for the Bonds, the Underwriter is not obligated to purchase any of the Bonds in the future, and such market making may be discontinued at any time. There can be no assurance that there will be a secondary market for the Bonds, and the absence of such a market for the Bonds could result in investors not being able to resell their Bonds should they need or wish to do so. Ad Valorem Property Taxes The Borrower believes that the Series 2016 Project will be exempt from ad valorem property taxation. Although the Borrower believes that it has a sound basis to assert that the Series 2016 Project will be exempt from ad valorem property taxation, no assurance can be given that the Borrower will not have to pay ad valorem property taxes on its leasehold estate in the Series 2016 Project, which would reduce the Borrower s revenues available to make payments under the Loan Agreement. The Board has agreed to pay the ad valorem taxes under the Rental Agreement should any such taxes be assessed. Cleanup Costs and Liens Under Environmental Statutes The Borrower is not aware of any enforcement actions currently in process with respect to any releases of pollutants, contaminants or hazardous substances at the site of the Series 2016 Project. However, there can be no assurance that an enforcement action or actions will not be instituted under applicable statutes or regulations at a future date. If enforcement actions were initiated, the Borrower could be liable for the costs of removing or otherwise treating pollutants, contaminants, or hazardous substances located at the site of the Series 2016 Project. In addition, under applicable environmental statutes, in the event an enforcement action were initiated, a lien superior to the Trustee s lien on behalf of the Bondholders could attach to the Series 2016 Project, which would adversely affect the Trustee s ability to realize value upon foreclosure of the Leasehold Deed of Trust. Furthermore, in determining whether to exercise any foreclosure rights with respect to the Series 2016 Project under the Indenture, the Trustee and the Bondholders would need to take into account the potential liability of any tenant of the Series 2016 Project, including a tenant by foreclosure, for clean-up costs with respect to such pollutants, contaminants, and hazardous substances. While the Borrower is not aware of any material environmental issues associated with the Series 2016 Project, the Borrower has not performed a Phase I environmental site assessment and no assurance can be given as to whether such an assessment would have discovered environmental contamination at or adjacent to the site of the Series 2016 Project. Furthermore, the absence of a Phase I environmental site assessment will result in the unavailability to the Borrower of the innocent landowner defense to CERCLA liability relating to remediation of hazardous substances at the site of the Series 2016 Project. Enforceability of Remedies To secure the Borrower s obligations to the Issuer under the Loan Agreement and the Bonds, the Borrower has, subject to Permitted Encumbrances, (i) granted to the Trustee a first deed of trust lien on the Borrower s interest in the Premises and has assigned and pledged to the Trustee the Borrower s interest in the General Revenues from the Series 2016 Project and any improvements thereto or 33

38 expansions thereof pursuant to the Leasehold Deed of Trust, (ii) granted to the Trustee a first priority security interest in the accounts, documents, chattel paper, instruments and general intangibles held by the Borrower arising in any manner from the Borrower s ownership or operation of the Series 2016 Project and any improvements thereto or expansions thereof, in the inventory, if any, located thereat or thereon and in the Equipment pursuant to the Leasehold Deed of Trust, and (iii) conditionally assigned to the Trustee, inter alia, its rights under the Rental Agreement. Pursuant to the Indenture, the Issuer will assign, pledge and grant a security interest in all of its right, title and interest in the Loan Agreement (except for Reserved Rights, as hereinafter defined), the Bonds and certain funds and accounts held under the Indenture to the Trustee which, on behalf of the owners of the Bonds, will exercise all of the Issuer s rights with respect thereto (except for Reserved Rights). The practical realization of value upon any default will depend upon the exercise of various remedies specified by the Bond Documents. These and other remedies may, in many respects, require judicial actions, which are often subject to discretion and delay. Under existing law (including, particularly, federal bankruptcy law), the remedies specified by the Bond Documents may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in the Bond Documents. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by state and federal laws, rulings, and decisions affecting remedies, including judicial discretion in the application of the principles of equity, and by bankruptcy, reorganization, or other laws affecting the enforcement of creditors rights generally. Uncertainty of Investment Income The investment earnings of, and accumulations in, certain funds and accounts established by the Indenture have been estimated and are based on assumed earnings rates. While these assumptions are believed to be reasonable in view of the rates of return presently available, there is no assurance that similar interest rates will be available on such investments in the future, nor is there any assurance that the potential accumulations assumed will be realized. Consequences of Changes in the Sole Member s or Borrower s Tax Status The Sole Member has obtained a determination letter from the Internal Revenue Service stating that it will be treated as an exempt organization as described in Section 501(c)(3) of the Code and can reasonably be expected not to be classified as a private foundation. In order to maintain its exempt status and not to be considered a private foundation, the Sole Member is subject to a number of requirements affecting its operation. The possible modification or repeal of certain existing federal income tax laws, the change of Internal Revenue Service policies or positions, the change of the Sole Member s method of operations, purposes or character or other factors could result in loss by the Sole Member and the Borrower of their tax-exempt status. The Sole Member and the Borrower will covenant to remain eligible for such tax-exempt status and to avoid operating the Series 2016 Project as an unrelated trade or business (as determined by applying Section 512(a) of the Code). Failure of the Series 2016 Project to remain so qualified or of the Borrower so to operate the Series 2016 Project could affect the funds available to the Borrower for payments under the Loan Agreement by subjecting the Sole Member and the Borrower to federal income taxation and could result in the loss of the excludability of interest on the Bonds from gross income for purposes of federal income taxation. 34

39 Taxation of the Series 2016 Bonds An opinion of Bond Counsel has been obtained as described under TAX MATTERS herein. Such an opinion is not binding on the Internal Revenue Service. Application for a ruling from the Internal Revenue Service regarding the status of the interest on the Series 2016 Bonds has not been made. The opinion of Bond Counsel contains certain exceptions and is based on certain assumptions described herein under the heading TAX MATTERS. Failure by the Issuer, the Sole Member or the Borrower to comply with certain provisions of the Code and covenants contained in the Indenture, the Loan Agreement and the Tax Regulatory Agreement could result in interest on the Series 2016 Bonds becoming includible in gross income for federal tax purposes. The Issuer LITIGATION There is not now pending (as to which the Issuer has received service of process) or, to the actual knowledge of the Issuer threatened, any litigation against the Issuer restraining or enjoining the issuance or delivery of the Bonds or questioning or affecting the validity of the Bonds or the proceedings or authority under which the Bonds are to be issued. Neither the creation, organization or existence of the Issuer nor the title of any of the present members or other officers of the Issuer to their respective offices is being contested. There is no litigation against the Issuer pending (as to which the Issuer has received service of process) or, to the actual knowledge of the Issuer, threatened, which in any manner questions the right of the Issuer to enter into the Indenture, the Loan Agreement or the Bond Purchase Agreement or to secure the Bonds in the manner provided in the Indenture, the Resolution and the Act. The Borrower Other than the validation proceedings pending in the Superior Court of Peach County, Georgia, there is no action, suit or proceeding, at law or in equity before any court, public board or body pending or, to the knowledge of the Borrower, threatened (or any meritorious basis for such an action, suit, proceeding, inquiry or investigation) at the date of this Official Statement to restrain or enjoin the issuance, sale, execution or delivery of the Bonds or any proceedings of the Borrower taken with respect thereto, or wherein an unfavorable decision, ruling or finding (i) would adversely affect the transactions contemplated by this Official Statement or the validity or enforceability of the Bonds, the Indenture, the Loan Agreement or any other agreement or instrument which is used or contemplated for use in the consummation of the transactions contemplated by this Official Statement or (ii) would materially adversely affect the financial condition or operations of the Series 2016 Project. There is no litigation now pending or threatened against the Borrower, of which the Borrower has knowledge, which in any manner questions the right of the Borrower to enter into or perform its obligations under the Loan Agreement, the Ground Lease, the Rental Agreement, the Leasehold Deed of Trust or the Borrower Collateral Assignment. TAX MATTERS THE FOLLOWING DISCUSSION, WHICH WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE SALE OF THE BONDS, IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER, TO AVOID PENALTIES THAT MIGHT BE IMPOSED ON THE TAXPAYER IN CONNECTION WITH THE MATTERS DISCUSSED THEREIN. INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX IMPLICATIONS OF THE PURCHASE, OWNERSHIP OR DISPOSITION 35

40 OF THE BONDS UNDER APPLICABLE STATE OR LOCAL LAWS, OR ANY OTHER TAX CONSEQUENCE. Certain Federal Income Tax Considerations General. The following discussion is a summary of certain expected material federal income tax consequences of the purchase, ownership and disposition of the Bonds and is based on the Internal Revenue Code of 1986, as amended (the Code ), the regulations promulgated thereunder, published rulings and pronouncements of the Internal Revenue Service ( IRS ) and court decisions currently in effect. There can be no assurance that the IRS will not take a contrary view, and no ruling from the IRS, has been, or is expected to be, sought on the issues discussed herein. Any subsequent changes or interpretations may apply retroactively and could affect the opinion and summary of federal income tax consequences discussed herein. The following discussion is not a complete analysis or description of all potential U.S. federal tax considerations that may be relevant to, or of the actual tax effect that any of the matters described herein will have on, particular holders of the Bonds and does not address U.S. federal gift or estate tax or (as otherwise stated herein) the alternative minimum tax, state, local or other tax consequences. This summary does not address special classes of taxpayers (such as partnerships, or other pass-through entities treated as a partnerships for U.S. federal income tax purposes, S corporations, mutual funds, insurance companies, financial institutions, small business investment companies, regulated investment companies, real estate investment trusts, grantor trusts, former citizens of the U.S., broker-dealers, traders in securities and tax-exempt organizations, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who may be subject to or personal holding company provisions of the Code) that are subject to special treatment under U.S. federal income tax laws, taxpayers qualifying for the health insurance premium assistance credit, or persons that hold Bonds as a hedge against, or that are hedged against, currency risk or that are part of hedge, straddle, conversion or other integrated transaction, or persons whose functional currency is not the U.S. dollar. This summary is further limited to investors who will hold the Bonds as capital assets (generally, property held for investment) within the meaning of Section 1221 of the Code. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. As used herein, the term U.S. Holder means a beneficial owner of a Bond who or which is: (i) an individual citizen or resident of the United States, (ii) a corporation or partnership created or organized under the laws of the United States or any political subdivision thereof or therein, (iii) an estate, the income of which is subject to U.S. federal income tax regardless of the source; or (iv) a trust, if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b the trust validly elects to be treated as a U.S. person for U.S. federal income tax purposes. As used herein, the term Non-U.S. Holder means a beneficial owner of a Bond that is not a U.S. Holder. THIS SUMMARY IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY AND DOES NOT DISCUSS ALL ASPECTS OF THE U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER OF BONDS IN LIGHT OF THE HOLDER S PARTICULAR CIRCUMSTANCES AND INCOME TAX SITUATION. PROSPECTIVE HOLDERS OF THE BONDS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE BONDS BEFORE DETERMINING WHETHER TO PURCHASE BONDS. 36

41 THE FOLLOWING DISCUSSION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER, TO AVOID PENALTIES THAT MIGHT BE IMPOSED ON THE TAXPAYER IN CONNECTION WITH THE MATTERS DISCUSSED THEREIN. INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX IMPLICATIONS OF THE PURCHASE, OWNERSHIP OR DISPOSITION OF THE BONDS UNDER APPLICABLE STATE OR LOCAL LAWS, OR ANY OTHER TAX CONSEQUENCE. FOREIGN INVESTORS SHOULD ALSO CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES UNIQUE TO NON-U.S. HOLDERS. Information Reporting and Backup Withholding. Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Bonds will be sent to each registered holder and to the IRS. Payments of interest and principal may be subject to backup withholding under Section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner s social security number or other taxpayer identification number ( TIN ), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding tax. Any amounts so withheld would be allowed as a credit against the recipient s federal income tax. Special rules apply to partnerships, estates and trusts, and in certain circumstances, and in respect of Non-U.S. Holders, certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof. Series 2016 Bonds Opinion. On the date of initial delivery of the Bonds, Butler Snow LLP, Bond Counsel to the Issuer, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof ( Existing Law ), (1) for federal income tax purposes, interest on the Series 2016 Bonds will be excludable from the gross income of the holders thereof and (2) the Series 2016 Bonds will not be treated as specified private activity bonds the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Code. Except as stated above, Bond Counsel to the Issuer will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. See APPENDIX B FORM OF OPINION OF BOND COUNSEL. In rendering its opinion, Bond Counsel to the Issuer will rely upon (a) information furnished by the parties to the Loan Agreement and the Tax Regulatory Agreement, and particularly written representations of officers and agents of such parties with respect to certain material facts that are solely within their knowledge relating to the use of proceeds of the Bonds, and (b) the Issuer s federal tax certificate. Failure of the Issuer or the Borrower to comply with these representations or covenants could cause the interest on the Series 2016 Bonds to become includable in gross income retroactively to the date of issuance of the Series 2016 Bonds. The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Series 2016 Bonds in order for interest on the Series 2016 Bonds to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Series 2016 Bonds to be included in gross income retroactively to the date of issuance of the Series 2016 Bonds. The opinion of Bond Counsel to the Issuer is conditioned on compliance by the Issuer with such requirements, and Bond Counsel to the Issuer has not been retained to monitor compliance with these requirements subsequent to the issuance of the Series 2016 Bonds. 37

42 Bond Counsel s opinion regarding the Series 2016 Bonds represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel s opinion related to the Series 2016 Bonds is not a guarantee of a result. Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Series 2016 Bonds. A ruling was not sought from the IRS by the Issuer with respect to the Series 2016 Bonds or property financed with the proceeds of the Series 2016 Bonds. No assurances can be given as to whether or not the IRS will commence an audit of the Series 2016 Bonds, or as to whether the IRS would agree with the opinion of Bond Counsel. If an audit is commenced, under current procedures the IRS is likely to treat the Issuer as the taxpayer and the holders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. Federal Income Tax Accounting Treatment of Original Issue Discount The initial public offering price to be paid for one or more maturities of the Series 2016 Bonds may be less than the principal amount thereof or one or more periods for the payment of interest on the Bonds may not be equal to the accrual period or be in excess of one year (the Original Issue Discount Bonds ). In such event, the difference between (i) the stated redemption price at maturity of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The stated redemption price at maturity means the sum of all payments to be made on the Bonds less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year. Under existing law, any U.S. Holder who has purchased a Series 2016 Bond as an Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see Collateral Federal Income Tax Consequences set forth below. In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such U.S. Holder in excess of the basis of such Original Issue Discount Bond in the hands of such U.S. Holder (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income. Under Existing Law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each accrual period and ratably within each such accrual period) and the accrued amount is added to an initial owner s basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond. 38

43 All U.S. Holders of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds. Collateral Federal Income Tax Consequences Interest on the Series 2016 Bonds will be includable as an adjustment for adjusted current earnings to calculate the alternative minimum tax imposed on corporations by section 55 of the Code. Under section 6012 of the Code, U.S. Holders of tax-exempt obligations, such as the Series 2016 Bonds, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation. Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Series 2016 Bonds, if such obligation was acquired at a market discount and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to market discount bonds to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A market discount bond is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the revised issue price (i.e., the issue price plus accrued original issue discount). The accrued market discount is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. UNDERWRITING Raymond James & Associates, Inc. (the Underwriter ), has entered into a Bond Purchase Agreement with the Issuer and the Borrower, to purchase the Bonds at a purchase price of $39,946,500 (representing the principal amount of the Bonds less an underwriter s discount of $403,500). The total compensation to the Underwriter in connection with the Bonds is expected to be in the form of the discount. The obligation of the Underwriter to purchase the Bonds will be subject to various conditions contained in the Bond Purchase Agreement, including the issuance and receipt of the ratings described herein. The Underwriter and/or its affiliates may receive additional fees for providing services as an investment broker or bidding agent with respect to the investment of Bond proceeds. The Underwriter is purchasing the Bonds and intends to offer the Bonds to the purchasers thereof at the offering prices set forth on the cover page of this Official Statement, which offering price may subsequently be changed without any requirement of prior notice. The Underwriter has reserved the right to permit other securities dealers who are members of the National Association of Securities Dealers, Inc. to assist in selling the Bonds. The Underwriter may offer and sell Bonds to certain dealers at prices lower than the public offering price or otherwise allow concessions to such dealers who may re-allow concessions to other dealers. Any discounts and/or commissions that may be received by such dealers in connection with the sale of the Bonds will be deducted from the Underwriter s discount. The Underwriter and its affiliates together comprise a full service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial 39

44 advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriter and its affiliates may have, from time to time, performed and may in the future perform, various investment banking services for the Issuer for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities and financial instruments which may include bank loans and/or credit default swaps) for its own account and for the accounts of its customers and may at any time hold long and short positions in such securities and instruments. Such investment securities activities may involve securities and instruments of the Issuer. The Borrower has agreed to indemnify the Underwriter against certain civil liabilities, including certain liabilities under federal securities laws. Under existing statutes, regulations, and court decisions, the enforceability of such an agreement to indemnify is uncertain. RATING The Bonds have received a rating of MIG 1 by Moody s Investors Service, Inc. (the Rating Agency ). An explanation of the significance of such rating may be obtained from the Rating Agency. The Rating Agency was furnished with the information contained in a preliminary form of this Official Statement and other information. Generally, ratings agencies base their ratings on such materials and information, as well as their own investigation, studies and assumptions. The rating reflects only the view of the Rating Agency, and none of the Borrower, the Issuer, or the Underwriter makes any representation as to the appropriateness of the rating. It should be noted that there is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency, if in the judgment of such rating agency, circumstances warrant such action. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. LEGAL MATTERS Certain legal matters incident to the authorization, issuance and sale of the Bonds are subject to the approving legal opinion of Butler Snow LLP, Atlanta, Georgia, as Bond Counsel ( Bond Counsel ), who has been retained by, and acts as, Bond Counsel to the Issuer. Bond Counsel has not been retained or consulted on disclosure matters and has not undertaken to review or verify the accuracy, completeness or sufficiency of this Official Statement or other offering material relating to the Bonds and assumes no responsibility for the statements or information contained in or incorporated by reference in this Official Statement, except that in its capacity as Bond Counsel, Butler Snow LLP has, at the request of the Issuer, reviewed the information under the headings THE BONDS (other than under the subcaption Book-Entry-Only System ), SECURITY AND SOURCES OF PAYMENT FOR THE BONDS (other than under the subcaptions USDA Loan, Leasehold Deed of Trust and Borrower Collateral Assignment and Title and Property Insurance ), TAX MATTERS, and APPENDIX A SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS and has supplied a form of its proposed opinion in APPENDIX B hereto. This review was undertaken solely at the request and for the benefit of the Issuer and did not include any obligation to establish or confirm factual matters set forth herein. Certain legal matters will also be passed on for the Borrower by its counsel, Stover Legal Group, LLP, Atlanta, Georgia, and for the Underwriter by its counsel, Kutak Rock LLP, Omaha, Nebraska. 40

45 RELATIONSHIP OF PARTIES In the ordinary course of business, the Underwriter and certain of its affiliates may from time to time provide other investment banking services, commercial banking services or financial products to the University, the Issuer, the Borrower and the Sole Member. CONTINUING DISCLOSURE It has been determined that no financial or operating data concerning the Issuer is material to any decision to purchase, hold or sell the Bonds, and the Issuer will not provide any such information. The Borrower has undertaken all responsibilities for any continuing disclosure to Bondholders as described below, and the Issuer shall have no liability to Bondholders or any other person with respect to such disclosures. The Borrower will enter into a continuing disclosure agreement (the Disclosure Agreement ), a form of which is attached as Appendix C, with Digital Assurance Certification, LLC for the benefit of the holders and beneficial owners of the Bonds. Under the Disclosure Agreement, the Borrower will be obligated, while any Bonds remain outstanding, to provide timely notice of specified material events, to the Electronic Municipal Market Access ( EMMA ) system of the Municipal Securities Rulemaking Board. Information filed with EMMA may be obtained at The Borrower has not previously entered into a continuing disclosure undertaking pursuant to Rule 15c2-12. In the event of any failure of the Borrower to provide the required continuing disclosure, any Bondholder may bring an action seeking specific performance of the Borrower s obligations to provide continuing disclosure. No assurance can be given as to the outcome of any such proceeding. Failure by the Borrower to comply with the continuing disclosure obligations in the Disclosure Agreement will not be an Event of Default under the Leasehold Deed of Trust, the Loan Agreement, the Indenture or under any other Bond Document, and the sole and exclusive remedy for such failure shall be an action brought by or on behalf of the holders of the Bonds to compel specific performance of the Borrower s continuing disclosure obligations, as described above. MISCELLANEOUS Any statements herein involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. The foregoing references to and summaries or descriptions of provisions of the Bonds, the Loan Agreement, the Indenture, the Ground Lease, the Rental Agreement, the other Bond Documents, and all references to other materials not stated to be quoted in full are only brief outlines of some of the provisions thereof and do not purport to summarize or describe all of the provisions thereof. The information set forth in this Official Statement and in the Appendices hereto should not be construed as representing all of the conditions affecting the Issuer, the Borrower, the Underwriter or the Bonds. At closing of the issuance and sale of the Bonds, the Issuer and the Borrower will each deliver to the Underwriter a certificate that no litigation is pending or threatened against it which would have a material effect on the issuance of the Bonds or performance under the Bond Documents. In addition, the 41

46 Borrower will represent to the Underwriter and the Issuer in the Bond Purchase Agreement that the information contained in this Official Statement relating to itself and the Series 2016 Project does not contain any misrepresentation of a material fact and does not omit to state any material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading. The Borrower has furnished the information contained in this Official Statement relating to itself and the Series 2016 Project. The Issuer has furnished only the information contained in this Official Statement relating to itself under the headings THE ISSUER and LITIGATION The Issuer. The University has furnished the information contained in this Official Statement relating to itself. The Underwriter has furnished the information contained in this Official Statement under the heading UNDERWRITING and has furnished the information with respect to the public offering prices of the Bonds contained on the cover page of this Official Statement. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the owners of the Bonds. The distribution of this Official Statement has been duly authorized by the Issuer and the Borrower. The Issuer has not assisted in the preparation of this Official Statement, except for the statements pertaining to the Issuer under the captions THE ISSUER and LITIGATION The Issuer herein and, except as aforesaid, the Issuer is not responsible for any statements made in this Official Statement. Except for the execution and delivery of documents required to effect the issuance of the Bonds, the Issuer has not otherwise assisted in the public offer, sale or distribution of the Bonds. Accordingly, except as aforesaid, the Issuer assumes no responsibility for the disclosures set forth in this Official Statement. [Remainder of Page Intentionally Left Blank] 42

47 USG REAL ESTATE FOUNDATION IV, LLC By: USGREF MANGER, LLC, its Manager By: /s/ Sachin Shailendra Sachin Shailendra, President [Signature Page to Official Statement]

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49 APPENDIX A SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS

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51 APPENDIX A SUMMARIES OF PRINCIPAL FINANCING DOCUMENTS The following summaries of certain of the Bond Documents do not purport to be comprehensive or definitive statements of the provisions of such Bond Documents and prospective purchasers of the Series 2016 Bonds are referred to the complete texts of such documents, copies of which are available upon request from the Underwriter prior to the issuance and delivery of the Series 2016 Bonds and from the Trustee after the issuance and delivery of the Series 2016 Bonds. DEFINITIONS Certain words and terms used in this Official Statement are defined herein. In addition to the words and terms defined elsewhere herein, the following words and terms are defined terms in the Official Statement COI Account means the Account within the Issuance Cost Fund by that name created in Section 5.05 of the Trust Indenture CI Subaccount means the Account of the Bond Fund by that name created in Section 5.03(b) of the Trust Indenture Defeasance Subaccount means the Account of the Bond Fund by that name created in Section 5.03(b) of the Trust Indenture Payment Subaccount means the Account of the Bond Fund by that name created in Section 5.03(b) of the Trust Indenture. Accountant means an independent certified public accountant or firm of independent certified public accountants (which may be the accountant or firm of accountants retained by the Borrower). Accounts means, collectively, all of the accounts and subaccounts within the Funds created pursuant of the Trust Indenture (each, an Account ). Act means The Development Authorities Law (O.C.G.A. Section , et seq.), as amended. Acquisition Fund means the Fund of that name created in Section 5.06 of the Trust Indenture. Additional Bonds means any additional parity Bonds, bonds or other obligations authorized to be issued by the Issuer pursuant to the terms and conditions of Section 2.11 of the Trust Indenture. Additional Borrower Notes means any promissory notes issued by the Borrower in connection with Additional Bonds. Additional Loan Payments means the Loan Payments payable by the Borrower to the Issuer pursuant to the Loan Agreement that are described in Section 5.02(b) of the Original Loan Agreement. Additions or Alterations means modifications, repairs, renewals, improvements, replacements, alterations, additions, enlargements or expansions in, on or to the Project, including any and all machinery, furnishings and equipment therefor. Affiliate means any Person (a) directly or indirectly controlling, controlled by or under common control with the Borrower; or (b) a majority of the members of the Directing Body (defined below) of which are members of the Directing Body of the Borrower. For purposes of this definition, control means with respect to: (i) a corporation having stock, the Bondholdership, directly or indirectly, of more than 50% of the securities (as defined in 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of A-1

52 contingencies, entitled to elect a majority of the directors of such corporation; (ii) a nonprofit corporation not having stock, having the power to elect or appoint, directly or indirectly, a majority of the members of the Directing Body of such corporation; or (iii) any other entity, the power to direct the management of such entity through the Bondholdership of at least a majority of its voting securities or the right to designate or elect at least a majority of the members of its Directing Body, by contract or otherwise. For the purposes of this definition, Directing Body means with respect to: (A) a corporation having stock, such corporation s board of directors and Bondholders, directly or indirectly, of more than 50% of the securities (as defined in 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the directors of such corporation (both of which groups shall be considered a Directing Body); (B) a nonprofit corporation not having stock, such corporation s members if the members have complete discretion to elect the corporation s directors, or the corporation s directors if the corporation s members do not have such discretion; or (C) any other entity, its governing body or board. For the purposes of this definition, all references to directors and members shall be deemed to include all entities performing the function of directors or members however denominated. Annual Period means the 12-month period commencing on July 1 of each calendar year and ending on June 30 of the immediately succeeding calendar year. Assignment of Agreements and Documents means, (a) with respect to the Series 2016 Bonds, the Borrower Collective Collateral Assignment Agreement, dated as of the Series 2016 Closing Date, by the Borrower in favor of the Trustee, as the same may be amended and/or supplemented from time to time as permitted hereby (including to provide for the issuance of Additional Bonds) and thereby, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Attorneys Fees means, with respect to any Person, the reasonable attorneys fees and expenses incurred by such Person in connection with: (a) the performance of its obligations, or the enforcement of its rights, under the Indenture, the Loan Agreement, or any other document, instrument or agreement pertaining to the Bonds or the transactions contemplated by the Indenture or the Loan Agreement; (b) the defense or prosecution of any pending or threatened proceeding brought under or in connection with the Indenture, the Loan Agreement, or any other document, instrument or agreement pertaining to the Bonds or the transactions contemplated by the Indenture or the Loan Agreement; (c) the negotiation or settlement of any claim or dispute arising under, or the interpretation or amendment of any provision of, or advice as to a Person s rights or obligations under, the Indenture, the Loan Agreement, or any other document, instrument or agreement pertaining to the Bonds or the transactions contemplated by the Indenture or the Loan Agreement; in each case, whether incurred at trial, in any administrative, arbitration or mediation proceeding, on appeal, or otherwise, including for all purposes any fees and expenses of (i) any outside counsel, including (in the case of the Issuer) Bond Counsel, and (ii) any in-house counsel. Audit Report means an unqualified audit report resulting from an audit conducted by an Accountant in conformity with generally accepted auditing standards prepared in accordance with GAAP. Authorized Borrower Representative means any person at the time designated to act on behalf of the Borrower by written certificate furnished to the Issuer and the Trustee, containing the title and specimen signature of such person and signed on behalf of the Borrower by its President and shall initially be the President of the Borrower. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. Authorized Denominations means, (a) with respect to the Series 2016 Bonds, denominations of $100,000 and integral multiples of $5,000 in excess of $100,000 (each, an Authorized Denomination ), and (b) with respect A-2

53 to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Authorized Issuer Representative means any person at the time designated to act on behalf of the Issuer by written certificate furnished to the Trustee, containing the title and specimen signature of such person and signed on behalf of the Issuer by its Chairman or Vice-Chairman. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. Available Moneys shall mean one of the following: (a) proceeds from the original issuance and sale of the Series 2016 Bonds and investment earnings thereon which were at all times since their receipt by the Trustee held in a separate and segregated account in which only proceeds and investment earnings thereon are held; (b) moneys on deposit with the Trustee in trust for the benefit of the holders of the Series 2016 Bonds for at least 123 days during which no Event of Bankruptcy with respect to the Borrower shall have occurred and investment earnings thereon which were at all times since their receipt by the Trustee held in a separate and segregated account in which only such moneys and investment earnings thereon are held; (c) proceeds on deposit with the Trustee from (1) the sale of the Series 2016 Bonds in question or (2) the sale of refunding bonds which proceeds of which were at all times since their receipt by the Trustee held in a separate and segregated account in which only such proceeds are held and which are accompanied by an opinion required by the following paragraph (d); and (d) moneys in which the written opinion of counsel experienced in bankruptcy law matters selected by the Borrower and not unacceptable to the Trustee, if used to pay principal, redemption premium, if any, or interest on such Series 2016 Bonds, will not constitute an avoidable preferential payment under Section 547 of the Bankruptcy Code recoverable from holders of such Series 2016 Bonds pursuant to Section 550 of the Bankruptcy Code. Bankruptcy Code means Title 11 of the United States Code, as amended, and any successor statute or statutes having substantially the same function. Basic Loan Payments means the Loan Payments payable by the Borrower to the Issuer pursuant to the Loan Agreement that are described under the subheading Basic Loan Payments in Section 5.02(a) of the Original Loan Agreement. Board means the Board of Regents of the University System of Georgia. Bond Counsel means the attorney or firm of attorneys nationally recognized as experienced in matters related to Tax-Exempt Bonds and reasonably acceptable to the Borrower. Bond Documents means, (a) with respect to the Series 2016 Bonds, collectively, the Indenture, the Series 2016 Bonds, the Loan Agreement, the Series 2016 Borrower Notes, the Tax Regulatory Agreement relating to the Series 2016 Bonds, the Leasehold Deed of Trust relating to the Series 2016 Project, the Assignment of Agreements and Documents relating to the Series 2016 Bonds, the Bond Purchase Agreement relating to the Series 2016 Bonds, the Ground Lease relating to the Series 2016 Project, the Rental Agreement relating to the Series 2016 Project, the Continuing Disclosure Agreement relating to the Series 2016 Bonds and the Financing Statements relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Bond Fund means the Fund of that name created in Section 5.03 of the Trust Indenture. Bond Law means the Revenue Bond Law (O.C.G.A. Section et seq., as amended.) Bond Payment Dates means, collectively, the Interest Payment Dates and all dates on which Debt Service Payments shall be payable on or in respect of any of the Bonds according to their terms and the terms of the Trust Indenture, including without limitation, scheduled mandatory sinking fund redemption dates, dates of acceleration of the Bonds pursuant to Section of the Trust Indenture, optional redemption dates, extraordinary optional redemption dates and stated maturity dates, so long as any Bonds shall be Outstanding (each, a Bond Payment Date ). A-3

54 Bond Purchase Agreement means, (a) with respect to the Series 2016 Bonds, the Bond Purchase Agreement dated September 29, 2016, among the Issuer, the Borrower and the Underwriter, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Bond Register means the books for the registration of the Bonds and for the registration of the transfer of the Bonds kept and maintained by the Trustee as Bond Registrar. Bond Resolution means, (a) with respect to the Series 2016 Bonds, the resolution or resolutions adopted by the Issuer authorizing the issuance and sale thereof, the security therefor, and the execution, delivery and performance of the applicable Issuer Documents, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Bond Year means, with respect to any series of Bonds, the 12-month period beginning and ending on the dates specified in the Tax Regulatory Agreement related to such series of Bonds. Bondholders or Bondholders means the Persons in whose names any of the Bonds are registered on the Bond Register. Bonds means the Series 2016 Bonds and all Additional Bonds. Borrower means USG Real Estate Foundation IV, LLC, a limited liability company, duly organized and validly existing under the laws of the State of Georgia and whose sole member is the Foundation, and its successors and assigns, to the extent permitted by Section 8.03 of the Original Loan Agreement. Borrower Collective Collateral Assignment Agreement means, (a) with respect to the Series 2016 Project, the Borrower Collective Collateral Assignment Agreement dated as of the Series 2016 Closing Date, by the Borrower in favor of the Trustee, as the same may be amended and/or supplemented from time to time as permitted hereby (including to provide for the issuance of Additional Bonds) and thereby, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project. Borrower Documents means, (a) with respect to the Series 2016 Bonds, the Loan Agreement, the Series 2016 Borrower Notes, the Tax Regulatory Agreement relating to the Series 2016 Bonds, the Leasehold Deed of Trust relating to the Series 2016 Project, the Security Agreement relating to the Series 2016 Bonds, the Borrower Collective Collateral Assignment Agreement relating to the Series 2016 Bonds, the Bond Purchase Agreement relating to the Series 2016 Bonds, the Ground Lease relating to the Series 2016 Project, the Rental Agreement, the Continuing Disclosure Agreement relating to the Series 2016 Bonds and the Financing Statement(s) relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Borrower s Manager means the person or persons then acting as manager of the Borrower and initially shall mean USGREF Manager, LLC, a limited liability company organized and validly existing under the laws of the state of Georgia. Borrower Notes means the Series 2016 Borrower Notes and any Additional Borrower Notes. Business Day means any day other than a Saturday or a Sunday on which (a) the Trustee is open for the purposes of commercial banking business, (b) the New York Stock Exchange is open for trading and (c) the Federal Reserve is open for business. Calculation Date means, with respect to any series of Bonds, the second Bond Year following the Closing Date for such series of Bonds and thereafter, the last day of each Bond Year and the date upon which such series of Bonds shall be Discharged. A-4

55 Capitalized Interest means amounts derived from the proceeds of Bonds and deposited in the Capitalized Interest Account of the Bond Fund to pay interest on Bonds and interest earned on such amounts to the extent that such interest earned is required to be applied to pay interest on Bonds. Capitalized Interest Account means the Account of the Bond Fund by that name created in Section 5.03(b) of the Trust Indenture. Closing Date means, (a) with respect to the Series 2016 Bonds, the Series 2016 Closing Date, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Code means the Internal Revenue Code of 1986, as amended. Reference herein to any specific provision of the Code shall be deemed to include a reference to any successor provision or provisions to such provision and to any Regulations issued or proposed under or with respect to such provision or under or with respect to any predecessor provision of the Internal Revenue Code of 1954, as amended, to the extent any of the foregoing is applicable to the Bonds. Condemnation Fund means the Fund of that name created in Section 5.09 of the Trust Indenture. Consistent Basis means, in reference to the application of GAAP, that the accounting principles observed in the period referred to are comparable in all material respects to those applied in the preceding period, except as to any changes consented to by the Trustee. Continuing Disclosure Agreement means, (a) with respect to the Series 2016 Bonds, the Continuing Disclosure Agreement of even date herewith among the Borrower and the Dissemination Agent, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Costs means, with respect to a Project, those costs and expenses in connection with the acquisition (including through lease), construction, furnishing and equipping thereof permitted by the Act to be paid or reimbursed from the proceeds of the Bonds including, but not limited to, the following: (a) (i) the cost of the preparation of Plans and Specifications (including any preliminary study or planning thereof or any aspect thereof); (ii) the cost of site preparation and the cost of acquisition and construction of the Project (including through lease) and all construction, acquisition and installation expenses required to provide utility services or other facilities and all real or personal properties deemed necessary in connection therewith (including development, architectural, engineering and supervisory services with respect to any of the foregoing); (iii) interest on the Bonds during the applicable Construction Period and for such additional period as the Borrower shall reasonably determine to be necessary for placing the Project in operation (but in no event more than two years); and (iv) any other costs and expenses relating to the acquisition (including through lease), construction and placing in service thereof, including start-up costs (which start-up costs may only be paid from the 2016 Marketing Account of the Acquisition Fund); (b) the purchase price of the Equipment in connection therewith, including all costs incident thereto, payment for labor, services, materials and supplies used or furnished in site improvement and in the construction thereof, including all costs incident thereto, payment for the cost of the construction, acquisition and installation of utility services or other facilities in connection therewith, payment for all real and personal property deemed necessary in connection therewith, payment of consulting and development fees in connection therewith, and payment for the miscellaneous expenses incidental to any of the foregoing items including the premium on any surety bond; (c) the fees or out-of-pocket expenses, if any, of those providing services with respect thereto, including, but not limited to, architectural, engineering, development and supervisory services; A-5

56 (d) any other costs and expenses relating to the Project that constitute costs or expenses for which the Issuer may expend Bond proceeds under the Act, other than Issuance Costs of the related Bonds, including, but not limited to, during the Construction Period, Rating Agency fees and expenses, Trustee fees and expenses and Issuer fees and expenses; and (e) reimbursement to the Borrower for any costs described above paid by it, whether before or after the execution of the Loan Agreement; provided, however, that reimbursement for any expenditures made prior to the execution of the Loan Agreement from the Acquisition Fund shall only be permitted for expenditures meeting the requirements of the Regulations, including but not limited to, of the Regulations. Debt Service Payment means, with respect to any series of Bonds on any Bond Payment Date: (a) the interest payable thereon on such Bond Payment Date; (b) the principal or Redemption Price, if any, payable in respect thereof on such Bond Payment Date; and (c) the Sinking Fund Requirement, if any, with respect to such Bond Payment Date (collectively, the Debt Service Payments ). Defaulted Interest means any interest on any Bond that is due and payable, but that is not punctually paid or duly provided for on any Interest Payment Date. Defeasance Account means the Account of the Bond Fund by that name created in Section 5.03(b) of the Trust Indenture. Defeasance Obligations means (a) cash (insured at all times by the Federal Deposit Insurance Corporation), (b) non-callable direct obligations of (including obligations issued or held in book-entry form on the books of) the Department of the Treasury of the United States of America ( Treasuries ), (c) evidences of Bondholdership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, or (d) pre-funded municipal obligations rated AAA and Aaa by S&P and Moody s, respectively. Discharged means, with respect to a series of Bonds, that all amounts due thereunder are actually and unconditionally due, if cash is available at the place of payment and no interest accrues thereafter with respect to such series of Bonds. Dissemination Agent means, (a) with respect to the Series 2016 Bonds, U.S. Bank National Association, in its capacity as dissemination agent under the Continuing Disclosure Agreement and its successors and assigns, and the dissemination agent under any successor agreement, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. DTC means The Depository Trust Company, New York, New York, or any successor securities depository. DTC Participant means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. Equipment means (a) with respect to the Series 2016 Project, the materials, equipment, machinery, furnishings, fixtures and other personal property acquired with the proceeds of the Series 2016 Bonds and described in Exhibit A attached to the Original Loan Agreement, and all replacements, substitutions and additions thereto, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project. "Event of Bankruptcy" shall mean the filing of a petition in bankruptcy by or against the Borrower under the Bankruptcy Code or the commencement of a proceeding by or against the Borrower under any other law concerning insolvency, reorganization or bankruptcy. A-6

57 Event of Default means each of the events specified in Section of the Trust Indenture and Section of the Loan Agreement. Event of Taxability means, with respect to any series of Tax-Exempt Bonds, the existence or absence of any circumstances that causes the interest thereon or on any portion thereof to become includable in the gross income of the Owner thereof for federal income tax purposes. Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee mean all reasonable services rendered, and all advances made and reasonable expenses incurred by the Trustee (in its capacity as Trustee and in its capacity as dissemination agent, paying agent and as registrar, as applicable) hereunder and under the other Bond Documents in connection with the execution thereof and the exercise and performance of its powers and duties hereunder and thereunder, including, without limitation, disbursements, advances to and reasonable fees and expenses of independent appraisers, accountants, consultants, counsel, agents and attorneys or other experts employed by it in the exercise and performance of its powers and duties hereunder or thereunder or otherwise, and all amounts set forth in Sections 2.12(e), 5.11(d), 11.01(b), 11.01(c) and 11.19, but shall not include Ordinary Services of the Trustee and Ordinary Expenses of the Trustee. Facility or Facilities means the buildings and Equipment of an existing approximate 950 bed student housing facility known as Wildcat Commons, Buildings 1-5, including an approximately 8,900 square foot student clubhouse and related amenities, facilities and improvements, located on the Property on the campus of the University. Favorable Opinion of Bond Counsel means an opinion of Bond Counsel addressed to the Issuer, the Borrower and the Trustee to the effect that the action proposed to be taken is not prohibited by the laws of the State or the Trust Indenture and will not adversely affect any exclusion from gross income for federal income tax purposes of interest on any Tax-Exempt Bonds. Any such opinion shall be in such form and contain such disclosures as may be required so that such opinion will not be treated as a covered opinion or a state or local bond opinion for purposes of Treasury Department regulations governing practice before the Internal Revenue Service (Circular 230) 31 C.F.R. pt. 10. Financing Statement(s) means, (a) with respect to the Series 2016 Bonds, the UCC-1 Financing Statement(s) filed under or in connection with the Indenture, the Leasehold Deed of Trust relating to the Series 2016 Project, the Security Agreement relating to the Series 2016 Bonds, and the Assignment of Agreements and Documents relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Fiscal Year means each 12-month period beginning on July 1 and ending on the succeeding June 30. Fixed Charges means, for any period, the sum of all cash outflows related to the Project that the Borrower cannot avoid without violating long-term contractual or legal obligations (those obligations which extend for a period greater than one year), including, but not limited to, (a) interest on Indebtedness other than Short-Term Indebtedness, and (b) scheduled payments of principal on Indebtedness other than Short-Term Indebtedness, provided, however, that Fixed Charges do not include payments made to the Ground Lessor under the Ground Lease, including any up-front or other lease payments, or any amounts payable in respect of any Indebtedness to the extent that such amounts are payable from the proceeds of such Indebtedness. Fixed Charges may be reduced for any Annual Period if funds sufficient to satisfy such Fixed Charges are irrevocably deposited with the Trustee and are dedicated to the payment of such Fixed Charges. Foundation means The University System of Georgia Foundation, Inc. a nonprofit corporation duly organized and existing under the laws of the State, and its successors and assigns. Funds means, collectively, all of the funds created pursuant hereto (each, a Fund ). GAAP means those principles of accounting set forth in pronouncements of the Financial Accounting Standards Board and its predecessors or pronouncements of the American Institute of Certified Public Accountants A-7

58 or those principles of accounting that have other substantial authoritative support and are applicable in the circumstances as of the date of application, as such principles are from time to time supplemented and amended. General Revenues means (a) the sum of (i) the gross rents, fees and receipts and operating and nonoperating revenues derived by the Borrower from the Bondholdership or operation of the Project including, without limitation, payments pursuant to the Rental Agreement, business or rental interruption insurance proceeds and proceeds of condemnation, sale or other disposition of the Project or any part thereof received by or on behalf of the Borrower; and (ii) Unrestricted Contributions, all as determined in accordance with GAAP, but excluding, in any event, (b) the sum of (i) earnings on amounts that are irrevocably deposited in escrow to pay the principal of or interest on indebtedness of the Borrower related to the Project; (ii) deposits received from residents of the Project and held by the Borrower until such time, if any, as the Borrower shall be permitted to apply such deposits to the payment of rent or to the repair and maintenance of the Project in accordance with the terms of a residency agreement, at which time such deposits shall constitute General Revenues; and (iii) revenues derived by the University from rental or commercial activities conducted within any portion of the Project while the Rental Agreement is in effect (the payments made by the Board to the Borrower pursuant to the Rental Agreement, however, shall be deemed General Revenues). Ground Lease means, (a) with respect to the Series 2016 Project, the Ground Lease Agreement effective as of the Series 2016 Closing Date between the Ground Lessor and the Borrower, as the same may be amended from time to time in accordance with the provisions thereof and hereof (including to provide for the issuance of Additional Bonds and the addition of additional property), and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project. Ground Lessor means the Board. Indebtedness means, but only to the extent incurred in connection with the Project or secured by a lien on the Project or the General Revenues; (a) all indebtedness, whether or not represented by bonds, debentures, notes or other securities, for the repayment of money borrowed; (b) all deferred indebtedness for the payment of the purchase price of properties or assets purchased; (c) all guaranties, endorsements (other than endorsements in the ordinary course of business), assumptions and other contingent obligations in respect of, or to purchase or to otherwise acquire, indebtedness of others; (d) all indebtedness secured by mortgage, pledge, security interest or lien existing on property owned that is subject to such mortgage, pledge, security interest or lien, whether or not the indebtedness secured thereby shall have been assumed; (e) swap or hedging obligations or other similar derivative or investment agreements that, under certain circumstances, require a payment upon termination; and (f) all capitalized lease obligations; provided, however, that for the purpose of computing Indebtedness, there shall be excluded any particular Indebtedness if, upon or prior to the maturity thereof, there shall have been irrevocably deposited with the proper depository in trust the necessary funds (or direct obligations of the United States of America not redeemable by the issuer thereof) for the payment, redemption or satisfaction of such Indebtedness, and thereafter such funds and such direct obligations of the United States of America so deposited shall not be included in any computation of the assets of the Borrower and the income derived from such funds and such direct obligations of the United States of America so deposited shall not be included in any computation of the income of the Borrower. Indenture means the Trust Indenture of even date herewith between the Issuer and the Trustee, as the same may be amended and/or supplemented from time to time in accordance with the provisions thereof. Independent Counsel means an attorney or firm of attorneys duly admitted to practice law before the highest court of any state of the United States of America or the District of Columbia and not in the full-time employment of the Issuer, the Borrower or the Trustee. Independent Engineer means an engineer or firm of engineers duly admitted to practice engineering in the State retained by or on behalf of the Borrower and reasonably acceptable to the Trustee with the requisite expertise in property management, maintenance and reporting, and not in the full time employment of the Issuer, the Borrower or the University. A-8

59 Insurance Consultant means any Person that is not the Issuer, the Borrower, or an Affiliate, appointed by the Borrower that is acceptable to the Trustee and the University, and that is qualified to survey risks and to recommend insurance coverage for student housing facilities and organizations engaged in like operations as that of the Project in the State, and that has a favorable reputation for skill and experience in such surveys and such recommendations and who may be a broker or agent with whom the Issuer or the Borrower transacts business. Insurance Fund means the Fund of that name created in Section 5.09 of the Trust Indenture. Interest Payment Dates means (a) with respect to the Series 2016 Bonds, April 1 and October 1 of each year, commencing April 1, 2017, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. IRS means the United States Internal Revenue Service or any successor agency or department. Issuance Cost Fund means the Fund of that name created in Section 5.05 of the Trust Indenture. Issuance Costs means, with respect to any series of Bonds: (a) the initial or acceptance fee of the Trustee (which includes the administration fee for the first year), the fees and taxes for recording and filing the Leasehold Deed of Trust, the Security Agreement, the Assignment of Agreements and Documents, UCC-1 Financing Statements and any curative documents reasonably deemed desirable to file for record in order to perfect or protect the leasehold interest of the Borrower in the Project or the lien or security interest created or granted by the Leasehold Deed of Trust, the Security Agreement or the Assignment of Agreements and Documents and the reasonable fees and expenses in connection with any actions or proceedings deemed desirable to perfect or protect the lien or security interest created or granted by the Leasehold Deed of Trust, the Security Agreement or the Assignment of Agreements and Documents in connection with the issuance thereof; (b) legal fees and expenses, underwriter s spread, underwriting fees, financing costs, Issuer s fees and expenses (including Issuer counsel s fees and expenses), financial advisor s fees, rating agency fees, accounting fees and expenses, consulting fees, Trustee s fees and expenses (including Trustee s counsel fees and expenses), paying agent and certifying and authenticating agent fees, Dissemination Agent s fees, publication costs, title insurance premiums, and printing and engraving costs incurred in connection with the authorization, sale, issuance and carrying of the series of Bonds and the preparation of the applicable Bond Documents and all other documents in connection therewith; and (c) other costs in connection with the issuance of the series of Bonds permitted by the Act to be paid or reimbursed from Bond proceeds. Issuer means the Development Authority of Peach County, a single jurisdictional public body and politic existing pursuant to the laws of the State, and its successors and assigns. Issuer s Agents means any elected or appointed official, director, member, officer, employee, representative or agent of the Issuer. Issuer Documents means, (a) with respect to the Series 2016 Bonds, collectively, the Trust Indenture, the Loan Agreement, the Bond Purchase Agreement relating to the Series 2016 Bonds and the Tax Regulatory Agreement relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Leasehold Deed of Trust means, (a) with respect to the Series 2016 Project, the Leasehold Deed To Secure Debt, Assignment of Rents and Leases and Security Agreement dated as of the Series 2016 Closing Date by the Borrower for the benefit of the Trustee, as the same may be amended and/or supplemented from time to time as permitted hereby (including to provide for the issuance of Additional Bonds), and (b) with respect to any other A-9

60 Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project. Loan means the loan or loans by the Issuer to the Borrower of the proceeds of the Bonds pursuant to Article III of the Loan Agreement and which is evidenced by the Borrower Notes. Loan Agreement means the Loan Agreement of even date herewith between the Issuer and the Borrower, as the same may be amended and/or supplemented from time to time in accordance with the provisions in the Loan Agreement (including to provide for the issuance of Additional Bonds). Loan Payments means the Basic Loan Payments and the Additional Loan Payments. Majority of the Bondholders means the Bondholders of more than 50% in aggregate principal amount of the Bonds then Outstanding, or if such provision applies only to a series of Bonds, the Bondholders of more than 50% in aggregate principal amount of the Bonds of such series then Outstanding. Moody s means Moody s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and if such corporation shall for any reason no longer perform the functions of a securities rating agency, Moody s shall be deemed to refer to any other nationally recognized securities rating agency designated by the Borrower, by notice to the Issuer and the Trustee, and not objected to by the Issuer. Whenever rating categories of Moody s are specified in the Trust Indenture, such categories shall be irrespective of gradations within a category. Net Proceeds means, when used with respect to any insurance or condemnation award paid to the Borrower or the Trustee, with respect to the sale or other disposition of a portion of the Project, or with respect to any other recovery on a contractual claim or claim for damage to or for taking of property, the gross proceeds from the insurance or condemnation award, sale or other disposition, or recovery remaining after payment of all expenses (including reasonable attorneys fees and any Extraordinary Expenses of the Trustee) incurred in the collection of such gross proceeds. Office of the Trustee means the corporate trust office of the Trustee currently located at 1349 West Peachtree Street, Two Midtown Plaza, Suite 1050, Atlanta, Georgia 30309, or at such other office as may be designated by the Trustee to the Issuer and the Borrower in writing. Operations Office of the Trustee means U.S. Bank National Association, 1349 West Peachtree Street, Two Midtown Plaza, Suite 1050, Atlanta, Georgia Opinion of Bond Counsel means an opinion of Bond Counsel addressed to the Issuer, the Borrower and the Trustee. Any such opinion shall be in such form and contain such disclosures as may be required so that such opinion will not be treated as a covered opinion or a state or local bond opinion for purposes of Treasury Department regulations governing practice before the Internal Revenue Service (Circular 230) 31 C.F.R. pt. 10. Ordinary Services of the Trustee and Ordinary Expenses of the Trustee mean those reasonable services rendered, and all advances made and reasonable expenses incurred by the Trustee (in its capacity as Trustee and in its capacity as dissemination agent, paying agent and as registrar, as applicable) hereunder and under the other Bond Documents, in connection with the execution thereof and the exercise and performance of its powers and duties hereunder and thereunder or otherwise of the type ordinarily performed by corporate trustees, dissemination agents, paying agents, or registrars, as applicable, under like documents, including, without limitation, disbursements, advances to and reasonable fees and expenses of independent appraisers, accountants, consultants, counsel, agents and attorneys or other experts employed by it in the exercise and performance of its powers and duties hereunder. Notwithstanding the foregoing, Ordinary Services of the Trustee shall only include such services of the Trustee in such capacities which are included without additional cost as part of the annual fee for acting in each such capacity, with all other services provided in such capacities being considered Extraordinary Services of the Trustee. A-10

61 Original Loan Agreement means the Loan Agreement dated as of October 1, 2016, excluding any amendments thereto. Outstanding Bonds or Bonds Outstanding means all Bonds that have been duly authenticated and delivered by the Trustee hereunder, except: (a) (b) Bonds theretofore canceled or required to be canceled by the Trustee; Bonds that are deemed to have been paid in accordance with Article IX of the Trust Indenture; and (c) Bonds in substitution for which other Bonds have been authenticated and delivered under Section 2.05 in the Trust Indenture. If the Indenture shall be discharged pursuant to Article IX thereof, no Bonds shall be deemed to be Outstanding within the meaning of this definition. Permitted Encumbrances means, as of any particular time; (a) liens for ad valorem taxes, special assessments and other charges not then delinquent or for taxes, assessments and other charges being contested in accordance with Section 6.03 of the Original Loan Agreement; (b) any lien on the Project obtained through the Bond Documents; (c) currently existing utility, access and other easements and rights of way, restrictions and exceptions described in the title policy required by Section 3.05 of the Original Loan Agreement; (d) inchoate mechanics and materialmen s liens that arise by operation of law, but that have not been perfected by the required filing of record, for work done or materials delivered after the date of recording the Leasehold Deed of Trust in connection with Additions or Alterations; (e) the mechanics and materialmen s liens permitted by Section 6.01 of the Original Loan Agreement; (f) utility, drainage, access and other easements which do not impact the intended use of the Project; and (g) liens or encumbrances securing Additional Bonds. Permitted Investments means any of the following securities: (a) direct or general obligations of or obligations guaranteed by, and representing a pledge of the full faith and credit of, the United States of America; (b) obligations, debentures, notes or other evidences of indebtedness issued or guaranteed by any of the following: Federal Home Loan Bank System; FNMA (excluding securities representing only interest payments); FHLMC (but only to the extent timely payment of principal and interest is guaranteed); Tennessee Valley Authority; or GNMA; (c) securities representing an undivided beneficial interest in identified payments to be made on an obligation listed in clause (a); (d) interest-bearing deposit accounts (which may be represented by certificates of deposit, time deposit open account agreements or other deposit instruments) in national or state banks or savings and loan associations which deposit accounts, to the extent not fully insured by the Federal Deposit Insurance Corporation, shall be in national or state banks whose debt obligations are rated in the highest short-term rating category by Moody s; (e) obligations issued by any state of the United States or any political subdivision thereof which are rated Aaa or better by Moody s at the time the obligations are acquired; (f) shares of a diversified open end management investment company, as defined in the Investment Company Act of 1940, which is a money market fund having a minimum asset value of $100,000,000 and which at the time of purchase is rated at least Aaa by Moody s; or (g) bonds, debentures, notes, commercial paper, certificates of deposit, interest bearing accounts (in financial institutions selected without regard for relative participation as qualified mortgage lenders in issuer A-11

62 programs, and which may include the Trustee), repurchase agreements and other investment agreements which are in each case issued or fully guaranteed by a person having unsecured debt obligations rated at the time of purchase not lower than Aaa by Moody s. Person means natural persons, firms, joint ventures, associations, trusts, partnerships, corporations, limited liability companies, public bodies and similar entities. Premises means, collectively, the Property and the Series 2016 Project. Prime Rate means the prime rate charged corporate borrowers by the commercial lending department of the Trustee, if any, or in the absence of such commercial lending department or rate, the rate designated the Prime Rate as published each Business Day in The Wall Street Journal. Project means the Series 2016 Project and any additional project acquired, constructed, furnished and equipped with the proceeds of Additional Bonds. hereto. Property means the land described in Exhibit A of the Trust Indenture and in any indenture supplemental Rating Agency means, at any point in time, any nationally recognized securities rating agency or service then rating a series of Bonds (collectively, the Rating Agencies ). Rebate Amount means, as of any Calculation Date, the amount that would have been required to be paid to the United States of America under 148(f) of the Code with respect to all Outstanding Bonds had all of such Bonds been Discharged on and as of such Calculation Date. Rebate Fund means the Fund of that name created in Section 5.12 of the Trust Indenture. Redemption Fund means the Fund of that name created in Section 5.04 of the Trust Indenture. Redemption Price means, with respect to Bonds or a portion thereof, the principal amount of such Bonds or portion thereof plus accrued interest, if any, plus the applicable premium, if any, payable on redemption thereof in the manner contemplated in accordance with its terms and the Trust Indenture. Regular Record Date means (a) with respect to the Series 2016 Bonds, the fifteenth day of the month (whether or not such day is a Business Day) immediately preceding each Interest Payment Date, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Regulations means the applicable treasury regulations promulgated under the Code or under 103 of the Internal Revenue Code of 1954, as amended, whether at the time proposed, temporary, final or otherwise. Reference herein to any specific provision of the Regulations shall be deemed to include a reference to any successor provision or provisions to such provision. Rental Agreement means the Rental Agreement dated as of October 1, 2016 by and between the Borrower and the Board for the use of the University, as amended from time to time. Replacement Reserve Fund means the Fund of the name created in Section 5.07 of the Trust Indenture. Requisite Number of Bondholders means the Bondholders of not less than two-thirds in aggregate principal amount of the Bonds then Outstanding or, if such provision applies only to a series of Bonds, the Bondholders of not less than two-thirds in aggregate principal amount of the Bonds of such series then Outstanding. A-12

63 Reserved Approval Rights means the rights of the Issuer under the Indenture and the Loan Agreement to receive notices and to give approvals and consents and to make determinations, and to execute and deliver supplements to and amendments of the Loan Agreement pursuant to Section thereto. Reserved Indemnity Rights means the rights of the Issuer and the Issuer s Agents to indemnification pursuant to the provisions of the Trust Indenture and the Loan Agreement, including without limitation the indemnification rights under Section 8.04 of the Original Loan Agreement. Reserved Payment Rights means the rights of the Issuer, the Issuer s Agents and the Issuer s Bond Counsel under the Indenture and the Loan Agreement to have the Borrower pay the reasonable fees and expenses incurred by the Issuer, the Issuer s Agents and the Issuer s Bond Counsel in connection with the issuance and sale of the Bonds and the performance of the Issuer s duties, and the exercise of the Issuer s rights, under the Indenture and the Loan Agreement, including without limitation the obligations of the Borrower under Sections 3.07(b), 5.02(b)(i)(B), 6.08 and of the Original Loan Agreement. Reserved Rights means, collectively, the Reserved Approval Rights, the Reserved Indemnity Rights and the Reserved Payment Rights. Responsible Officer means, when used with respect to the Trustee, any officer within the Corporate Trust Department (or any successor group of the Trustee) (including, without limitation, any vice president, assistant vice president, assistant secretary or any other officer or assistant officer of the Trustee designated by the Trustee) who is located at the Office of the Trustee. Revenue Fund means the Fund of that name created in Section 5.02 of the Trust Indenture. Revenues means, for any period, (a) General Revenues (other than Unrestricted Contributions) that have been deposited or credited to the Revenue Fund during such period, all as determined in accordance with GAAP, but excluding in any event (b) the sum of (i) any gains on the sale or other disposition of investments or fixed or capital assets not in the ordinary course of business; (ii) earnings on amounts that are irrevocably deposited in escrow to pay the principal of or interest on indebtedness of the Borrower related to the Project; (iii) earnings or gains resulting from any reappraisal, revaluation or write-up of assets; (iv) contributions from any Affiliate; (v) any unrealized gain resulting from changes in the value of investment securities or an interest rate hedge or protection agreement; (vi) insurance proceeds other than business or rental interruption insurance; and (vii) proceeds of condemnation, sale or other disposition of the Project or any part thereof received by or on behalf of the Borrower. S&P means Standard & Poor s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, and if such corporation shall for any reason no longer perform the functions of a securities rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating agency designated by the Borrower, by written notice to the Issuer and the Trustee, and not objected to by the Issuer. Whenever rating categories of S&P are specified in the Indenture, such categories shall be irrespective of gradations within a category. Securities Depository means DTC or any other recognized securities depository selected by the Issuer at the request of the Borrower, which maintains a book-entry system in respect of the Bonds and agrees to follow the procedures required to be followed hereunder by a Securities Depository, and shall include any substitute for or successor to the securities depository initially acting as Securities Depository. Securities Depository Nominee means, as to any Securities Depository, such Securities Depository or the nominee of such Securities Depository in whose name there shall be registered on the Bond Register the Bond certificates to be delivered to and immobilized at such Securities Depository during the continuation with such Securities Depository of participation in its book-entry system. Security means any of the property subject to the operation of the granting clauses contained in the Security Documents. A-13

64 Security Agreement means, with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Security Documents means, (a) with respect to the Series 2016 Bonds, collectively, the Trust Indenture, the Leasehold Deed of Trust relating to the Series 2016 Project, the Assignment of Agreements and Documents relating to the Series 2016 Project and the Loan Agreement (each, a Security Document ), and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Seller means Fort Valley State University Foundation Property, LLC, a Georgia limited liability company, as the seller of the Series 2016 Project to the Borrower. Series 2016 Bonds means the Series 2016 Bonds. Series 2016 Borrower Notes means the Series 2016 Borrower Note. Series 2016 Closing Date means the date on which authenticated Series 2016 Bonds are delivered to or upon the order of the Underwriter and payment is received therefor by the Trustee on behalf of the Issuer, which date shall also be the Dated Date of the Series 2016 Bonds. Series 2016 Loan means the loan by the Issuer to the Borrower of the proceeds of the Series 2016 Bonds pursuant to Section 3.01(a) of the Loan Agreement and which is evidenced by the Series 2016 Borrower Notes. Series 2016 Project means the purchase and acquisition by the Borrower of the buildings and Equipment of an existing approximate 950 bed student housing facility known as Wildcat Commons, Buildings 1-5, including an approximately 8,900 square foot student clubhouse and related amenities, facilities and improvements, located on the campus of the University, from the Fort Valley State University Foundation Property, LLC, including related amenities, facilities and improvements on the Property, all initially financed with the proceeds of the $44,060,000 Development Authority of Peach County, Student Housing Facilities Revenue Bonds (Fort Valley State University Foundation Property, LLC) Series 2006, financed with proceeds of the Series 2016 Bonds. Series 2016 Bonds means the Bonds designated Development Authority of Peach County Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 in the aggregate principal amount of $40,350,000 to be issued pursuant to the Indenture. Series 2016 Borrower Note means the Series 2016 Promissory Note of the Borrower dated as of the Series 2016 Closing Date, in the original principal amount of $40,350,000 payable to the Issuer, given to evidence the obligation of the Borrower to repay the Series 2016 Loan relating to the Series 2016 Bonds. Short-Term Indebtedness means any Indebtedness maturing not more than 365 days after it is incurred or that is payable on demand, except for any such Indebtedness that is renewable or extendable at the sole option of the debtor to a date more than 365 days after it is incurred, or any such Indebtedness that, although payable within 365 days, constitutes payments required to be made on account of Indebtedness expressed to mature more than 365 days after it was incurred. Sinking Fund Requirement means, with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Special Record Date means, for the payment of any Defaulted Interest, the date fixed by the Trustee pursuant to Section 2.08 of the Trust Indenture. State means the State of Georgia. Surplus Fund means the Fund of that name created in Section 5.10 of the Trust Indenture. A-14

65 Tax-Exempt Bonds means any Bonds the interest on which is intended to be excluded from the gross income of the Bondholders thereof for federal income tax purposes. Tax-Exempt Organization means (i) a Person organized under the laws of the United States of America or any state thereof which is an organization described in Section 501(c)(3) of the Code, which is exempt from federal income taxation under Section 501(a) of the Code, and which is not a private foundation within the meaning of Section 509(a) of the Code, or corresponding provisions of the federal income tax laws from time to time in effect, or (ii) a governmental unit as that term is used in Sections 103 and 145 of the Code. Tax Regulatory Agreement means, (a) with respect to the Series 2016 Bonds, the Tax Regulatory Agreement and all attachments thereto, dated as of the date of issuance of the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds. Trustee means the trustee and any co-trustee at the time serving as such hereunder. U.S. Bank National Association is the initial Trustee. Trust Estate means any and all property subject to the operation of the granting clauses in the Trust Indenture. Underwriter means Raymond James & Associates, Inc., and its successors and assigns. University means Fort Valley State University and shall also include the Board. Unrestricted Contributions means contributions to the Borrower from any Person or any governmental entity that are not restricted in any way that would prevent their application to the payment of debt service on Indebtedness of the Borrower related to the Project. USDA means the United States Department of Agriculture. USDA Loan means the loan to be made to the Borrower by the USDA for the Series 2016 Project. USDA Loan Commitment means the Letter of Conditions of USDA dated July 20, 2016, and the USDA s Take-Out Letter dated September 28, Introduction THE LOAN AGREEMENT The Loan Agreement, dated as of October 1, 2016, between USG Real Estate Foundation IV, LLC (the Company or the Borrower ) and the Issuer, is a contract which provides for the use of the proceeds of the Series 2016 Bonds issued by the Issuer to the Company for the purposes described under ESTIMATED SOURCES AND USES OF FUNDS in the Official Statement, for the payment of Loan Payments by the Company sufficient to pay the principal of, premium, if any, and interest on the Series 2016 Bonds, and for security for such obligations of the Company. Issuer Agreement to Issue Series 2016 Bonds The Issuer has agreed to issue the Series 2016 Bonds and use the proceeds therefrom to pay the cost of the purchase and acquisition from Fort Valley State University Foundation Property LLC (the Seller ) of the Facilities and Equipment of an existing approximate 950 bed student housing facility known as Wildcat Commons, Buildings 1-5, including an approximate 8,900 square foot student clubhouse and related amenities, facilities and improvements located on the campus of Fort Valley State University (the University ); fund interest on the Series 2016 Bonds (but not, in any case, in excess of two years interest on the Series 2016 Bonds; and pay all or a portion of the costs of issuing the Series 2016 Bonds. All obligations incurred by the Issuer under the Loan Agreement will A-15

66 be limited obligations, payable solely from the Trust Estate. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS in the Official Statement. Term of the Loan Agreement The Loan Agreement shall become effective upon its execution and delivery and shall be in full force and effect until the Bonds shall have been fully paid (or provision for such payment shall have been made as provided in the Indenture), all fees, charges, indemnities and expenses of the Issuer and Trustee, have been fully paid or provision made for such payment (the payment of which fees, charges, indemnities and expenses shall be evidenced by a written certification of the Borrower that it has fully paid or provided for all such fees, charges, indemnities and expenses); and all other amounts due hereunder have been duly paid or provision made for such payment. All representations, certifications and covenants by the Borrower as to the indemnification of various parties and the payment of fees and expenses of the Issuer and the Trustee and all matters affecting the tax-exempt status of the Series 2016 Bonds, shall survive the termination of this Loan Agreement, but in all events continue to be subject to the provisions of the Indenture Loan Payments and Other Amounts Payable i. Basic Loan Payments. ii. Until the Debt Service Payments shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Indenture, the Borrower shall pay to the Trustee for the account of the Issuer as Basic Loan Payments, in each case for deposit into the Bond Fund, amounts sufficient to pay the Debt Service Payments as and when the same shall become due and all other sums payable under the terms of the Bonds. The Borrower shall pay to the Trustee for the account of the Issuer: (A) On the twentieth day of each March and September, a sum equal to the amount payable on the immediately succeeding Interest Payment Date as interest on the Series 2016 Bonds, or such lesser amount that, together with amounts already on deposit in the 2016 CI Subaccount, with respect to the Series 2016 Bonds, of the Capitalized Interest Account of the Bond Fund and available therefor, will be sufficient to pay interest on each series of the Series 2016 Bonds to become due on the immediately succeeding Interest Payment Date, as provided in the Indenture; (B) on the dates set forth in any amendment or amendments hereto executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of interest on such Additional Bonds; (C) on or before September 20, 2018, a sum equal to the principal due on October 1, 2018; (D) on the dates set forth in any amendment or amendments hereto executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of the principal of such Additional Bonds (whether at maturity or under any mandatory sinking fund or other similar redemption requirements of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds); and (E) on the Business Day prior to any date on which any Additional Bonds are to be redeemed pursuant to any mandatory redemption provisions of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds (other than mandatory sinking fund or other similar redemption pursuant to such supplemental indenture or indentures), an amount equal to the Redemption Price of such Additional Bonds to be redeemed (taking into account amounts then on deposit in the Bond Fund to be used for the payment of such Additional Bonds to be redeemed). iii. Each payment of Basic Loan Payments under the above provisions shall in all events be sufficient, after giving credit for funds held in the Bond Fund (including amounts held in the Capitalized Interest Account) and the Revenue Fund available for such purpose, to pay the total amount of interest A-16

67 payable on the Bonds on the immediately succeeding Interest Payment Date, each payment of Basic Loan Payments under the above provisions shall in all events be sufficient, after giving credit for funds held in the Bond Fund available for such purpose, to pay the total amount of principal payable in respect of the Bonds when due, and each payment of Basic Loan Payments under the above shall in all events be sufficient, after giving credit for funds held in the Redemption Fund available for such purpose, to pay the total Redemption Price of the Bonds on the applicable date of redemption. Any Basic Loan Payments shall be reduced or need not be made to the extent that there is money on deposit in the Bond Fund and/or the Redemption Fund in excess of scheduled payments of Basic Loan Payments plus the amount required for the payment of Bonds theretofore matured or called for redemption, the amount required for the payment of interest for which checks or drafts have been mailed by the Trustee, and past due interest in all cases where Bonds have not been presented for payment. Further, if the amount held by the Trustee in the Bond Fund and the Redemption Fund shall be sufficient to pay at the times required the Debt Service Payments then remaining unpaid, the Borrower shall not be obligated to make any further payments of Basic Loan Payments under the provisions of this Section. There shall also be a credit against remaining Basic Loan Payments for Bonds purchased or redeemed, and canceled, as provided in Article III of the Indenture or in any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds as provided therein. Additional Loan Payments. i. The Borrower shall pay (A) to the Trustee, until the Debt Service Payments shall have been fully paid (1) for credit or deposit into any Fund or Funds created under the Indenture or any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds, any and all additional amounts required to be allocated to or deposited into such Fund or Funds by any amendment or amendments hereto executed in connection with the issuance of Additional Bonds on the dates set forth therein; (2) on October 1 of each year, an amount equal to the annual fee of the Trustee for the Ordinary Services of the Trustee rendered and, on a monthly basis, the Ordinary Expenses of the Trustee incurred under the Indenture, as and when the same shall become due; (3) except as included in this clause, the reasonable fees and charges of any paying agents on the Bonds for acting as paying agents as provided in the Indenture, as and when the same shall become due; (4) the reasonable fees and charges of the Trustee for the Extraordinary Services of the Trustee rendered by it and the Extraordinary Expenses of the Trustee incurred by it under the Indenture, as and when the same shall become due; provided, that the Borrower may, without creating an Event of Default, contest in good faith the reasonableness of any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any such fees, charges, or expenses; and (5) any other amounts due to the Trustee by the Borrower pursuant to the Indenture; and (B) to the Issuer, (1) the fees of the Issuer and the fees of its counsel, prior to or contemporaneously with the issuance of the Series 2016 Bonds or as otherwise agreed by the Borrower and the Issuer; and (2) an amount sufficient to reimburse the Issuer for all fees and expenses reasonably incurred by it hereunder in connection with the Project, including, but not limited to, the reasonable fees and expenses of counsel for the Issuer and Bond Counsel, reasonable fees and expenses for any rebate consultant or analyst retained by the Issuer as a result of the Borrower s failure to comply with the provisions of the Loan Agreement (or similar provisions contained in an amendment to this Loan Agreement), and any expenses incurred as a result of any audit relating to the Bonds. The obligations of the Borrower to pay any such amounts to the Trustee shall survive the payment in full of the Bonds, the defeasance of the Bonds, and the removal or resignation of the Trustee. ii. Such Additional Loan Payments shall be billed to the Borrower by the Issuer or the Trustee from time to time, together with a statement certifying that the amount billed has been incurred or paid by such party for one or more of the above items. Amounts so billed shall be paid by the Borrower within 30 days after receipt of the bill by the Borrower. iii. If the Borrower shall fail to make any of the payments required in this Section, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid and shall bear interest at the highest rate of interest on the Bonds. A-17

68 iv. All amounts deposited in the Funds and Accounts created in the Indenture and available to be used to pay the amounts, fees, charges and expenses described in Section 5.02(b)(i) above in accordance with the terms of the Indenture shall be credited against the Borrower s obligation to make Additional Loan Payments to the extent such amounts are so used. Surplus Fund Payments. The Borrower shall make such payments to the Trustee as are required of the Borrower as described in the Indenture, including for capital expenditures or repairs and replacements in respect of, the Project, or which relate to the funding of the USDA Loan, Debt Service Payments to the extent that there are insufficient funds in the Revenue Fund, the Bond Fund and the Redemption Fund, and to fund any required payment to the Rebate Fund. Obligations of Company Unconditional The obligations of the Company to make the payments required pursuant to the Loan Agreement and to perform and observe any and all of the other covenants and agreements on its part contained in the Loan Agreement are a general obligation of the Company and are absolute and unconditional irrespective of any defense or any rights of setoff, recoupment or counterclaim it may otherwise have against the Issuer. The Company agrees that it shall not (i) suspend, abate, reduce, abrogate, diminish, postpone, modify or discontinue any payments described above under Loan Payments and Other Amounts Payable, (ii) fail to observe any of its other agreements contained in the Loan Agreement, the Series 2016 Note or the Security Deed, or (iii) except as described below under Option and Obligation to Prepay Loan Payments, terminate its obligations under the Loan Agreement, the Series 2016 Note, or the Security Deed for any contingency, act of God, event or cause whatsoever, including, without limiting the generality of the foregoing, failure of the Company to occupy or to use the Project as contemplated in the Loan Agreement or otherwise, any change or delay in the time of availability of the Project, any acts or circumstances which may impair or preclude the use or possession of the Project, any defect in the title, design, operation, merchantability, fitness or condition of the Project or in the suitability of the Project for the Company s purposes or needs, failure of consideration, any declaration or finding that any of the Bonds are unenforceable or invalid, the invalidity of any provision of the Loan Agreement or any of the other Bond Documents, any acts or circumstances that may constitute an eviction or constructive eviction, destruction of or damage to the Project, the taking by eminent domain of title to or the use of all or any part of the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either thereof or in the rules or regulations of any governmental authority, or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability, or obligation arising out of or connected with the Loan Agreement. Agreement to Deposit General Revenues All General Revenues shall be deposited and transferred in accordance with the Indenture. Maintenance and Operation of Project; Additions or Alterations The Company has agreed that during the Agreement Term it shall at its own expense (i) keep the Project in a safe condition, (ii) keep the Building and all other improvements forming a part of the Project in good repair and in good operating condition, making from time to time, subject to the requirements described below, all necessary and proper repairs thereto and renewals and replacements thereof, including external and structural repairs, renewals, and replacements, and (iii) use the Equipment in the regular course of its business only, within the normal capacity of the Equipment, without abuse, and in a manner contemplated by the manufacturer thereof, and cause the Equipment to be maintained in accordance with the manufacturer s then currently published standard maintenance contract and recommendations. The Company may, also at its own expense, from time to time make any Additions or Alterations to the Project it may deem desirable for its business purposes. Additions or Alterations to the Project so made by the Company shall be on the Premises, shall become a part of the Project, and shall become subject to the lien of the Security Deed. Any of such Additions or Alterations cost in excess of $500,000 shall be made only by contractors who furnish performance and labor and material payment bonds in the full amount of such contracts, made by the contractor thereunder as the principal and a surety company or companies reasonably acceptable to the Trustee as surety, and such bonds shall be in such form as is reasonably acceptable to the Trustee. Such bonds shall A-18

69 name the Company and the Trustee as obligees and all Net Proceeds received under such bonds shall be paid over to the Trustee and upon receipt of written direction from the Company, deposited into the Insurance Fund to be applied to the completion of the Additions or Alterations to the Project. Such money held by the Trustee in the Insurance Fund shall be invested from time to time, as provided in the Agreement. The Company agrees that at all times during the construction of Additions or Alterations that cost in excess of $500,000 it shall maintain or cause to be maintained in full force and effect Builder s Risk-Completed Value Form insurance to the full insurable value of such Additions or Alterations. The Borrower shall not permit any mechanics or materialmen s or other statutory liens to be perfected or remain against the Project for labor or materials furnished in connection with any Additions or Alterations so made by it; provided that it shall not constitute an Event of Default upon such liens being filed, if the Borrower shall promptly notify the Trustee in writing of any such liens, and the Borrower shall in good faith promptly contest such liens; in such event the Borrower may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom provided the Borrower shall furnish the Trustee with a bond or cash deposit equal to at least the amount so contested, which, in the case of cash, shall be placed into an account with the Trustee and held and invested for the purposes stated in this Section 6.01(c), or with an opinion of Independent Counsel reasonably acceptable to the Trustee stating that by nonpayment of any such items, the lien and security interest of the Leasehold Deed of Trust will not be materially endangered and neither the Project nor any material part thereof will be subject to imminent loss or forfeiture. The proceeds of the bond or cash deposit may be used by the Trustee to satisfy the lien if action is taken to enforce the lien and such action is not stayed. The bond or cash deposit shall be returned to the Borrower if the lien shall be successfully contested. If the Borrower shall be unable or shall otherwise fail to obtain such a bond or provide such a cash deposit or such an opinion of Independent Counsel, the Borrower shall promptly cause to be satisfied and discharged all such items by payment thereof. If the Borrower shall be unable or shall otherwise fail to obtain such a bond or provide such a cash deposit or such an opinion of Independent Counsel, or to satisfy and discharge the lien, the Trustee may, but shall be under no obligation to, satisfy and discharge the lien by payment thereof or provide security that shall cause the claimant to release the lien against the Project, and all amounts so paid by the Trustee shall be treated as an advance to the Borrower repayable in accordance with the Agreement. Removal of Equipment If no Event of Default under the Loan Agreement shall have occurred and be continuing, in any instance where the Company in its discretion determines that any items of Equipment or parts thereof have become inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary, the Company may remove such items of Equipment or parts thereof from the Premises and sell, trade in, exchange or otherwise dispose of them (as a whole or in part) without any responsibility or accountability to the Issuer or the Trustee, therefor, provided that the Company shall: i. Substitute and install anywhere in the Building or on the Premises items of replacement equipment or related property having equal or greater value or utility (but not necessarily having the same function) in the operation of the Project for the purpose for which it is intended, provided such removal and substitution shall not impair the nature of the Project, all of which replacement equipment or related property shall be free of all liens, security interests and encumbrances (other than Permitted Encumbrances), shall become subject to the security interest of the Security Deed and shall be held by the Company on the same terms and conditions as the items originally constituting Equipment, or ii. In the case of: (i) the sale of any such Equipment, (ii) the trade-in of such Equipment for other machinery, furnishings, equipment or related property not to become part of the Equipment and subject to the security interest of the Security Deed, or (iii) any other disposition thereof, the Company shall pay to the Trustee the proceeds of such sale or disposition or an amount equal to the credit received upon such trade-in for deposit into the Redemption Fund. In the case of the sale, trade-in or other disposition of any such Equipment to the Company or an Affiliate, the Company shall pay to the Trustee an amount equal to the greater of the amounts and credits received therefor or the fair market value thereof at the time of such sale, trade-in or other disposition (as certified in writing by the Company with evidence of the basis therefor) for deposit into the Redemption Fund. A-19

70 If prior to such removal and disposition of items of Equipment from the Building and the Premises, the Company has acquired and installed machinery, furnishings, equipment or related property with funds other than proceeds of the Bonds which become part of the Equipment and subject to the security interest of the Indenture, and which have equal or greater utility, but not necessarily the same functions, as the Equipment to be removed: the Company may take credit to the extent for the cost of such property against the requirement that it either substitute and install other machinery and equipment having equal or greater value or that it make payment to the Trustee for deposit into the Redemption Fund. The Company shall promptly report to the Trustee each such removal, substitution, sale or other disposition and shall pay to the Trustee such amounts as are described in (b) above, to be paid promptly into the Redemption Fund after the sale, trade-in or other disposition requiring such payment; provided, that no such report and payment need be made until the amount to be paid into the Redemption Fund on account of all such sales, trade-ins or other dispositions not previously reported in the aggregate has a value of at least $50,000. All amounts deposited into the Bond Fund in any of the circumstances described above shall be used by the Trustee ratably to redeem Bonds at their earliest redemption date pursuant to the optional redemption provisions described under THE SERIES 2016 BONDS - Redemption - Optional Redemption in the Official Statement (the Optional Redemption Provisions ). Taxes and Utility Charges The Company shall pay, as the same become due, (i) all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Project or any machinery, equipment, furnishings or other property installed by the Company thereon which, if not paid, will become a lien on the Project prior to or on a parity with the lien and security interest of the Security Deed or a charge on the revenues and receipts therefrom prior to or on a parity with the charge and security interest thereon and pledge of assignment thereon to be created and made in the Security Deed, and including all ad valorem taxes or payments in lieu of such taxes lawfully assessed upon the Project, (ii) all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Project, and (iii) all assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Project, provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Company shall be obligated to pay only such installments as are required to be paid during the Agreement Term. If the Company shall first notify the Trustee of its intention so to do, the Company may, at its own expense and in good faith, contest promptly any such taxes, assessments or other charges and in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom. Insurance Throughout the Agreement Term, the Company shall keep the Project or cause the same to be kept continuously insured in accordance with the terms of the Ground Lease and the Rental Agreement. i. The Net Proceeds of the insurance carried pursuant to the provisions of Section 6.04 of the Agreement shall be paid and applied as provided in Section 7.01 of the Agreement, and the Net Proceeds of insurance carried pursuant to the provisions of Sections 6.04 of the Agreement shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid. Damage and Destruction If the Project shall be destroyed or damaged (in whole or in part) by fire or other casualty, the Company shall promptly notify in writing the Issuer and the Trustee, and, unless the Bonds shall be paid in full from the Net Proceeds of insurance resulting from such destruction or damage, shall be obligated to continue to make the Loan Payments and shall not be entitled to any postponement, abatement or diminution thereof. A-20

71 Condemnation If title to or the temporary use of the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any Person acting under governmental authority, the Borrower shall promptly notify the Issuer and the Trustee, and, unless the Bonds shall be paid in full from the award made in such eminent domain proceedings, shall be obligated to continue to make the Loan Payments and shall not be entitled any postponement, abatement or diminution thereof. Annual Budget i. Following the termination of the Rental Agreement, at least 10 days prior to the first day of each Annual Period, the Company shall prepare a line-item operation and capital budget for the Project (the Annual Budget ) for the immediately succeeding Annual Period (or partial Annual Period, as the case may be) which shall include the monthly budgeted Expenses of the Project for such Annual Period and which shall have been approved by the Ground Lessor in accordance with the Ground Lease, if required. If the Company shall fail to prepare the Annual Budget for any Annual Period, the Annual Budget for the immediately preceding Annual Period shall continue in effect until the Annual Budget shall be prepared for the remainder of the applicable Annual Period. ii. To the extent that the Company shall deem it necessary at any time during any Annual Period, the Company shall submit a revised Annual Budget to the Ground Lessor and the Trustee declaring that the revisions are necessary to operate or maintain the Project and setting forth the reasons therefor which revised Annual Budget shall, for all purposes of this Loan Agreement (but without limitation of the Board s rights as Ground Lessor under the Ground Lease), be deemed the Annual Budget for the remainder of the applicable Annual Period. iii. A copy of each Annual Budget or revised Annual Budget shall be furnished to the Trustee and the Issuer as soon as possible, but in no event later than the beginning of the Annual Period. Continuing Disclosure The Company in the Agreement agrees it shall at all times remain party to the Continuing Disclosure Agreement, or if the Continuing Disclosure Agreement shall terminate, it shall enter into a similar agreement to provide for the dissemination of the financial statements and notices required by Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended. Covenants Regarding Maintenance of Company s Existence The Company has covenanted that while the Loan Agreement is in effect, it will maintain its legal existence as a Georgia single member limited liability company, will not consolidate with or merge into another corporation or permit another corporation to consolidate with or merge into it, and will not dissolve or otherwise dispose of all or substantially all of its assets. The Company may, without violating the agreement described above, consolidate, merge, sell or otherwise transfer to another Person all or substantially all of its assets as an entirety and thereafter dissolve, provided the surviving, resulting, or transferee (A) shall be authorized to do business in the State; (B) shall be a domestic corporation, partnership, or other entity, or if a natural person, a resident of the United States of America; (C) shall have the power to assume and shall assume in writing all of the obligations of the Borrower under the Bond Documents and shall deliver to the Trustee any security agreement necessary to ensure that after such consolidation, merger, sale, or other transfer, the Trustee shall have a security interest in all assets that constitute, or would have constituted, Collateral (as defined in the Security Agreement) prior to such consolidation, merger, sale or transfer, together with an opinion of counsel that all action has been taken to perfect such security interest to the extent perfection can be made by the filing of financing statements; (D) shall deliver to the Trustee a title insurance policy insuring that the surviving, resulting or transferee Person has a valid leasehold interest in the Property and insuring the Leasehold Deed of Trust as a first lien, subject only to the Permitted Encumbrances; (E) shall deliver to the Trustee an opinion of Independent Counsel to the effect that this Loan Agreement, as assumed by the surviving, resulting or transferee Person, the Borrower Notes, and the other Borrower Documents A-21

72 are valid and enforceable obligations of such Person, subject only to exceptions related to bankruptcy and other customary exceptions; and that immediately after the transition no Event of Default would exist under this Loan Agreement or the Indenture, or would exist upon notice and lapse of time as the result thereof; (F) shall deliver to the Trustee an opinion of Bond Counsel to the effect that such consolidation, merger, sale or transfer will not bring about an Event of Taxability; (G) shall have a fund balance or net worth, as the case may be, as reflected in the pro forma financial statements required to be furnished pursuant to this Section, not less than the fund balance or net worth, as the case may be, of the Company, as reflected in the most recent audited balance sheet of the Company furnished to the Trustee pursuant to the Agreement; (H) shall have obtained any required consent of the USDA; and (J) shall have obtained any required consent of the University or the Board. Notwithstanding the provisions above, the Comapny may, subject to the conditions of the Ground Lease and Rental Agreement, cause the substitution of its sole member to another Tax-Exempt Organization without the approval or consent of the Issuer, Trustee or Bond Counsel, upon the receipt of a Favorable Opinion of Bond Counsel. Permitted Indebtedness The Company covenants and agrees that, until all of its indebtedness and obligations under the Loan Agreement have been fully paid and discharged, the Company shall not, directly or indirectly, incur, assume, or guarantee any Indebtedness (secured or unsecured) except the following: (1) Indebtedness incurred as a result of the issuance of Additional Bonds; (2) Accounts payable incurred in the ordinary course of business; (3) Other Indebtedness if the Insurer consents thereto prior to its incurrence. USDA Direct Loan Commitment. (a) The Company has received the USDA Loan Commitment. In the Agreement the Company covenants to and for the benefit of the Owners of the Series 2016 Bonds (i) to comply in all material respects with the terms and conditions of the USDA Loan Commitment and to use its best efforts to obtain a loan from the USDA in an amount sufficient, together with any other funds available therefor, to pay the Series 2016 Bonds in full at or prior to maturity and (ii) to cause the proceeds of the loan from the USDA, if and when received, to be disbursed by the USDA directly to the trustee for deposit in a subaccount of the Bond Fund and to cause the same to be used to pay the Series 2016 Bonds in full at or prior to maturity. The Borrower agrees that the proceeds of the loan from the USDA shall not be commingled with any other funds of the Borrower. (b) If USDA is unable or unwilling to make the foregoing loan to the Company, the Company will use its best efforts to secure another source of funds to pay the Series 2016 Bonds in full at maturity. Assignment and Leasing With the prior written consent of the Board, the rights and obligations of the Company under the Agreement may be assigned and delegated, and the Project may be assigned or subleased, as a whole or in part, by the Company without the necessity of obtaining the consent of either the Issuer or the Trustee, subject, however, to each of the following conditions: i) the comapnay shall continue to remain primarily liable for payment of the Loan Payments and for the payment, performance and observance of the other obligations; ii) the assignee shall assume in writing the obligations of the Company under the Agreement, under the Ground Lease and under the Rental Agreement; iii) the Company shall furnish or cause to be furnished to the Issuer and the Trustee assurances that the Project will continue to be operated as a student housing facility and related facilities; iv) the Company will provide a Favorable Opinion of Bond Counsel or a ruling from the IRS to the effect that such assignment or sublease will not bring about an Event of Taxability; v) the assignment or sublease shall not give rise to a novation; vi) the Company shall, within 30 days after the execution thereof, furnish or cause to be furnished to the Issuer, the Trustee and the Board a true and complete copy of each such assignment or sublease; and vii) at any time when the Rental A-22

73 Agreement is no longer effective, the Company agrees that all residency agreements shall contain an attornment clause providing in effect that if at any time during the term of the residency agreement, the Trustee or the designee of the Trustee, or a subsequent purchaser at a foreclosure sale from the Trustee, shall become the owner of the Project, the resident under such residency agreement agrees, at the election and upon demand of any owner of the Project, to attorn, from time to time, to any such owner upon the terms and conditions set forth in the residency agreement and further, that at the request of the party to whom it has attorned, it will execute, acknowledge and deliver, without charge, from time to time, instruments acknowledging such attornment. Restrictions on Sale, Encumbrance, or Conveyance of the Project by the Company The Company agrees that, except as otherwise described in the Agreement and in the applicable Leasehold Deed of Trust, the Company shall not: (a) directly, indirectly or beneficially sell, convey or otherwise dispose of any part of its interest in the Project during the Agreement Term; (b) permit any part of the Premises to become subject to any mortgage, lien, claim of title, encumbrance, security interest, conditional sale contract, title retention arrangement, finance lease, or other charge of any kind, except for Permitted Encumbrances or except as otherwise permitted under the Agreement; and (c) assign, transfer or hypothecate (other than to the Trustee) any rent (or analogous payment) then due or to accrue in the future under any residency agreement or sublease of the Premises, except for Permitted Encumbrances or except as otherwise permitted in the Agreement. Events of Default The Loan Agreement provides that the occurrence of any one of the following will constitute an Event of Default : (a) The Borrower shall fail to pay the Basic Loan Payments required to be paid under the Agreement at the times specified therein and such failure shall continue for a period of three days. (b) The Borrower shall fail to pay the Basic Loan Payments required to be paid under the Agreement at the times specified therein and such failure shall continue for a period set forth in the amendment or amendments hereto executed in connection with the issuance of Additional Bonds. (c) The Company shall fail to pay the Basic Loan Payments required to be paid on or before September 20, 2018 equal to the principal due on October 1, 2018 under the Agreement and such failure shall continue for a period of three days, whether at maturity, by acceleration, call for redemption, or otherwise. (d) Any representation or warranty made by the Company in any statement or certificate furnished to the Issuer or the Trustee or the purchaser of any Bonds, in connection with the sale of any Bonds, or furnished by the Company pursuant hereto, shall prove to have been inaccurate in any material respect as of the date of the issuance or making thereof. (e) The Company shall fail to perform or cause to be performed any other covenant, condition, or provision hereof, other than as referred to in paragraph (a), (b), or (c) above or any covenant contained in the continuing disclosure covenant in the Agreement and to correct such failure within 30 days after written notice specifying such failure shall have been given to the Company by the Issuer or the Trustee. In the case of any such failure that cannot with due diligence be corrected within such 30-day period, but can be wholly corrected within a period of time not materially detrimental to the rights of the Trustee or the Issuer, it shall not constitute an Event of Default if corrective action shall be instituted by the Borrower within the applicable period and diligently pursued until the failure shall have been corrected in accordance with and subject to any directions or limitations of time established in writing by the Trustee. Before the Trustee acts or refrains from acting, with respect to this Section 10.01(e), the Trustee may consult with counsel, who may be counsel of or to the Issuer, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. (f) The Company shall (i) apply for or consent to the appointment of or the taking of possession by a receiver, custodian, trustee or liquidator of it or of all or a substantial part of its property or of the Project; (ii) fail to A-23

74 lift or bond promptly (if legally permissible) any execution, garnishment or attachment of such consequence as will impair the ability of the Company to carry on its operations at the Project; (iii) enter into an agreement of composition with its creditors; (iv) admit in writing its inability to pay its debts as such debts become due; (v) make a general assignment for the benefit of its creditors; (vi) commence a voluntary case under the federal bankruptcy law or any similar law in effect in a foreign jurisdiction (as now or hereafter in effect); (vii) file a petition or answer seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts; (viii) fail to controvert in a timely or appropriate manner or acquiesce in writing to any petition filed against it in an involuntary case under such federal bankruptcy law or any similar law in effect in a foreign jurisdiction; or (ix) take any action for the purpose of effecting any of the foregoing. (g) A proceeding or case shall be commenced, without the application of the Borrower, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding-up, or composition or adjustment of debts of the Borrower; (ii) the appointment of a trustee, receiver, custodian, liquidator, or the like of the Company or of all or any substantial part of the assets of it; or (iii) similar relief in respect of the Company under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition and adjustment of debts, and such proceeding or case shall continue undismissed or an order, judgment, or decree approving or ordering any of the foregoing shall be entered and shall continue unvacated and unstayed and in effect for a period of 90 days, whether consecutive or not. (h) The occurrence of an event of default under any of the Bond Documents other than the Continuing Disclosure Agreement. (i) The Company fails to maintain itself as a limited liability company organized under the State whose sole member is a Tax Exempt Organization and whose only asset is the Project. Remedies Upon the occurrence and continuation of an Event of Default, the Issuer or the Trustee, as the assignee of the Issuer, may take any one or more of the following remedial steps: i. The Trustee, as assignee of the Issuer, may at its option declare all unpaid installments of Basic Loan Payments and other amounts payable under the Agreement for the remainder of the Agreement Term to be immediately due and payable whereupon the same shall become immediately due and payable. ii. If any of the Bonds at the time shall be outstanding and unpaid, the Trustee may have access to and inspect, examine, and make copies of the books and records and any and all accounts, similar data, and income tax and other tax returns of the Company. iii. The Trustee, as assignee of the Issuer, may from time to time take whatever action at law or in equity or under the terms of the Bond Documents and the Company Documents may appear necessary or desirable to collect the Loan Payments and other amounts payable by the Company hereunder then due and/or thereafter to become due, or to enforce performance and observance of any obligation, agreement, or covenant of the Company under any of the Bond Documents or Company Documents. Amounts collected pursuant to action taken under the above provisions shall be applied in accordance with the provisions of the Indenture, or, if the Bonds shall have been fully paid (or provision for payment thereof shall have been made in accordance with the provisions of the Indenture) and the Borrower shall have paid all amounts due under sections of the Agreement, then any amounts remaining shall be paid to the University. A-24

75 THE INDENTURE Introduction The Trust Indenture, dated as of October 1, 2016, between the Issuer and the Trustee, is a contract for the benefit of the Bondholders which specifies the terms and details of the Series 2016 Bonds and which defines the security therefor. Establishment of Funds Revenue Fund The following trust funds are established with the Trustee under the Indenture: Revenue Fund Bond Fund Redemption Fund Issuance Cost Fund Acquisition Fund Replacement Reserve Fund Insurance and Condemnation Funds Surplus Fund Rebate Fund Replacement Revenue Fund The Borrower has agreed to deposit with the Trustee all General Revenues to the Revenue Fund promptly upon receipt. The amounts so transferred and deposited into the Revenue Fund maintained by the Trustee shall be disbursed by the Trustee each date described below in the following order: there shall be transferred to the Bond Fund: (i) on or before the twentieth day of each March and September, a sum equal to the amount payable on the immediately succeeding Interest Payment Date as interest on the Series 2016 Bonds, or such lesser amount that, together with amounts already on deposit in the Series 2016 CI Subaccount, of the Capitalized Interest Account of the Bond Fund and available therefor, will be sufficient to pay interest on the Series 2016 Bonds to become due on the immediately succeeding Interest Payment Date, as provided herein, it being anticipated the full amount of the interest on the Series 2016 Bonds will be paid from the Series 2016 CI Subaccount; (ii) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of interest on such Additional Bonds; (iii) on or before September 20, 2018, a sum equal to the principal due on October 1, 2018, it being anticipated that the principal of the Series 2016 Bonds will be paid with proceeds of the USDA Loan; (iv) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of the principal of such Additional Bonds (whether at maturity or under any mandatory sinking fund or other similar redemption requirements of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds); (v) on the Business Day prior to any date on which any Additional Bonds are to be redeemed pursuant to any mandatory redemption provisions of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds (other than mandatory sinking fund or other similar A-25

76 redemption pursuant to such supplemental indenture or indentures), an amount equal to the Redemption Price of such Additional Bonds to be redeemed (taking into account amounts then on deposit in the Bond Fund and the Redemption Fund to be used for the payment of such Additional Bonds to be redeemed); there shall be paid to the Trustee: (i) to the extent not previously paid, on October 1(or the immediately succeeding Business Day if such day is not a Business Day) the annual fee of the Trustee for the Ordinary Services of the Trustee payable each year, plus the Ordinary Expenses of the Trustee incurred hereunder and under the other Bond Documents, as and when the same shall become due; (ii) except as included in clause (i) above, the reasonable fees and charges of any paying agents on the Bonds for acting as paying agents as provided herein, payable as and when the same shall become due; (iii) the reasonable fees and charges of the Trustee for the Extraordinary Services of the Trustee rendered by it and the Extraordinary Expenses of the Trustee incurred by it hereunder and under the other Bond Documents, as and when the same shall become due; provided, that the Borrower may, without creating an Event of Default hereunder, contest in good faith the reasonableness of any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any such fees, charges or expenses; there shall be paid to the Issuer (as certified in writing to the Trustee by the Issuer) on October 1 (or the immediately succeeding Business Day if such day is not a Business Day), an amount sufficient to reimburse the Issuer for all unpaid fees and expenses, if any, reasonably incurred by the Issuer under the Loan Agreement in connection with the Project, including, but not limited to, the reasonable fees and expenses of counsel for the Issuer and Bond Counsel, if any; [Reserved]; there shall be transferred to the Rebate Fund on the dates that the Borrower provides any calculation of the Rebate Amount to the Trustee in accordance with Section 5.12(b) hereof, the amounts determined by the Borrower to be equal to the excess, if any, of the Rebate Amount so calculated over the amount then in the Rebate Fund; there shall be transferred to the Replacement Revenue Fund, any and all amounts paid to the Borrower under the Rental Agreement as reserve for replacements and to the appropriate fund or funds other than the Surplus Fund any and all additional amounts required to be deposited into such fund or funds by any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds on the date(s) specified therein; [Reserved]; and on the 5th day of each April and October (or the immediately succeeding Business Day if the twentieth day of a month is not a Business Day) any amounts remaining therein shall be transferred or credited to the Surplus Fund. Bond Fund There shall be deposited into the Bond Fund from the Revenue Fund all Basic Loan Payments received by the Trustee from the Borrower pursuant to the Original Loan Agreement, and all other money received by the Trustee under and pursuant to any of the provisions of the Loan Agreement when accompanied by written directions from the Borrower that such money is to be paid into the Bond Fund. Except as provided in paragraph (d) of this Section and Sections 5.15 and hereof, money in the Bond Fund (with the exception of the Defeasance Account) shall be used solely to pay the Debt Service Payments on the Bonds. Not later than 12:00 noon (Eastern) A-26

77 on any date Debt Service Payments are due (other than principal of Bonds to be paid from money in the Redemption Fund pursuant to Section 5.04 hereof), the Trustee shall withdraw money from the Bond Fund sufficient to make such Debt Service Payment and shall make such Debt Service Payment to the Owner of such Bonds entitled thereto. Upon receipt of the proceeds of the USDA Loan, pursuant to Section 8.15 of the Original Loan Agreement, the Trustee shall deposit such proceeds in a separate subaccount in the Bond Fund created by the Trustee upon receipt of such USDA Loan proceeds and shall use such proceeds to pay the Series 2016 Bonds in full at or prior to maturity. There are created by the Issuer and ordered established with the Trustee three accounts within the Bond Fund, to be designated respectively, the Capitalized Interest Account, the Defeasance Account and the Payment Account. In connection with the issuance of the Series 2016 Bonds, there are also hereby created by the Issuer and ordered established with the Trustee a separate subaccount within the Capitalized Interest Account designated the 2016 CI Subaccount, a separate subaccount within the Defeasance Account designated the 2016 Defeasance Subaccount and a separate subaccount within the Payment Subaccount designated the 2016 Payment Subaccount. The Trustee shall also establish separate subaccounts within the Capitalized Interest Account, the Defeasance Account and the Payment Account with respect to each series of Additional Bonds. There shall be deposited into the 2016 CI Subaccount of the Capitalized Interest Account the amount set forth in Section 6.01(a) hereof. On each date that transfers to the Bond Fund are required by Section 5.02(a)(i) or (iii) hereof while there are funds on deposit in the Capitalized Interest Account of the Bond Fund, the Trustee shall transfer (i) from the 2016 CI Subaccount to the 2016 Payment Subaccount of the Bond Fund the lesser of (A) an amount equal to any such transfer required in respect of the Series 2016 Bonds on that date, or (B) the amount remaining in the 2016 CI Subaccount and (ii) from any subaccount of the Capitalized Interest Account created in respect of a series of Additional Bonds to the Bond Fund the lesser of (A) an amount equal to any such transfer required in respect of such series of Bonds on that date, or (B) the amount remaining in such subaccount. After a Project is placed in service, the Borrower may direct in writing that the amounts held in the Capitalized Interest Account or related subaccount of the Capitalized Interest Account shall be transferred to the related subaccount of the Payment Account of the Bond Fund or to the Redemption Fund and used to redeem the related series of Bonds as provided therein. There shall be deposited into the subaccounts of the Defeasance Account all amounts deposited to pay and discharge a particular series of the Bonds pursuant to Article IX hereof, including proceeds of any refunding Bonds, which subaccounts shall hold no other money. Money in the subaccounts of the Defeasance Account shall be used solely to pay the purchase price of, and the Debt Service Payments on, the series of Bonds with respect to which such subaccount shall have been established. There shall be deposited into the subaccounts of the Payment Account all other payments made in respect of the related Bond and Loan Agreement for the payment of Debt Service Payments on the related series of Bonds. Upon the occurrence of an Event of Default, the Trustee may use money in the Bond Fund other than proceeds of the USDA Loan and money in the 2016 CI Subaccount to pay the fees and expenses of the Trustee prior to the making of any payments to the Bondholders. Except as provided in Article III hereof or any corresponding Article in an indenture supplemental hereto, no part of the Basic Loan Payments in the Bond Fund shall be used to redeem, prior to maturity, a part of the Bonds Outstanding; provided, that whenever the amount of Available Moneys in the Bond Fund from any source whatsoever and proceeds of the USDA Loan are sufficient to redeem all of the Bonds Outstanding hereunder, to pay interest to accrue thereon to such redemption date, and to pay all costs and expenses accrued and to accrue to such redemption date, if so directed by the Borrower pursuant to the Loan Agreement, the Issuer covenants and agrees to take and cause to be taken the necessary steps to redeem all of said Bonds on the immediately succeeding redemption date for which the required redemption notice may be given. The Trustee shall withdraw sufficient funds from the Payment Accounts of the Bond Fund to pay Debt Service Payments on the related series of Bonds as the same become due and payable and to make said funds so withdrawn available to the paying agent or agents, if any, for the purpose of paying said Debt Service Payments. If on any Bond Payment Date there are insufficient funds in the Bond Fund and the Redemption Fund available therefor to pay Debt Service Payments for a series of Bonds then due, the Trustee shall transfer to the A-27

78 Bond Fund, or shall send written notice to the Borrower to transfer to the Trustee for deposit to the Bond Fund, an amount equal to such insufficiency from the following Funds in the following order of priority: first, the related Account of the Redemption Fund, second, the Surplus Fund, and third, the Replacement Reserve Fund. Redemption Fund All money required to be transferred or deposited pursuant to Section 5.06(c), Sections 6.02, 7.01 and 7.02 of the Original Loan Agreement, the Leasehold Deed of Trust and pursuant to the provisions of any amendment to the Loan Agreement shall be deposited into the Redemption Fund. Money in the Redemption Fund shall be used only to pay the principal of Bonds or that portion of the Redemption Price of Bonds corresponding to principal in the manner specified in the Trust Indenture (or in such corresponding provisions contained in a supplemental indenture). Not later than 12:00 noon (Eastern) on any date principal or Redemption Price of any Bond is due, the Trustee shall withdraw money from the Redemption Fund sufficient to make such payment and shall make such payment to the Owner of such Bonds entitled thereto. The Trustee shall establish a separate Account within the Redemption Fund (i) with respect to each series of Bonds; and (ii) if more than one series of Bonds shall be issued on the same date, with respect to each such multiple series of Bonds, (iii) with respect to any amounts transferred to the Redemption Fund from the 2016 Proceeds Account of the Acquisition Fund pursuant to Section 5.06(c) hereof, and (iv) with respect to any other amounts transferred to the Redemption Fund in accordance with the terms of any supplemental indenture. Subject to the provisions of paragraph (c) of this Section, but notwithstanding anything else contained herein to the contrary, any amounts required to be deposited in the Redemption Fund for the redemption of a particular series or multiple series of Bonds in accordance with any of the Bond Documents shall be deposited in the applicable Account or Accounts thereof, and, prior to the occurrence of an Event of Default, any amounts in an Account of the Redemption Fund may be used only to make payments on the series of Bonds in respect of which such Account was established. All amounts transferred to the Redemption Fund from the Capitalized Interest Account of the Bond Fund or the 2016 Proceeds Account of the Acquisition Fund pursuant to Section 5.06(c) hereof to redeem Bonds shall be used to redeem only the principal portion thereof. When (i) the amount of the remaining Debt Service Payments on the Outstanding Bonds shall be equal to or less than the sum of the balance of the Bond Fund and the balance of the Redemption Fund, and (ii) all other amounts owed under the Loan Agreement and this Indenture shall have been paid, money held in the Redemption Fund shall be deposited into the Bond Fund and credited against payments of Loan Payments required under Section 5.02 of the Loan Agreement (or otherwise required pursuant to an amendment to the Loan Agreement) or may be used in such other manner for which an Opinion of Bond Counsel has been obtained. If all Outstanding Bonds have been called for redemption, and on the redemption date, the amounts held in the Defeasance Accounts (including amounts deposited to the Defeasance Accounts for purposes of redeeming the Bonds), the Redemption Fund, the Acquisition Fund, the Insurance and Condemnation Funds and the Surplus Fund are sufficient to redeem all Outstanding Bonds, the Borrower may direct the Trustee to transfer the funds in the Defeasance Account, the Acquisition Fund, the Insurance and Condemnation Funds and the Surplus Funds to the Redemption Fund and the Trustee shall comply with such direction. Issuance Cost Fund The Issuance Cost Fund is a trust fund used to pay Issuance Costs and will be funded with proceeds of the sale of the Series 2016 Bonds. See PLAN OF FINANCING in the Official Statement. Within the Issuance Cost Fund, there is hereby created by the Issuer and ordered established a separate account designated as the 2016 COI Account. There shall be deposited into the 2016 COI Account of the Issuance Cost Fund from the sale of the Series Except for authorized disbursements on the Series 2016 Closing Date, money in the Issuance Cost Fund shall be disbursed in this manner upon receipt of a requisition for payment, executed by an Authorized Borrower Representative, and the Trustee is hereby authorized and directed to make each disbursement upon receipt of such a requisition. The Trustee is entitled to rely on any such requisition in such form as proper approval and direction to disburse funds from the 2016 COI Account of the Issuance Cost Fund. The Trustee shall have no duty to review or investigate the accuracy of the requisition. A-28

79 If any funds remain in the 2016 COI Account of the Issuance Cost Fund on the earlier of the receipt by the Trustee of a certificate of the Borrower stating that all Issuance Costs have been paid or one year from the date of issuance and delivery of the Series 2016 Bonds, the Trustee shall transfer any funds remaining in the 2016 COI Account of the Issuance Cost Fund to the 2016 Proceeds Account of the Acquisition Fund. The Trustee shall establish a separate Account within the Issuance Cost Fund with respect to each series of Additional Bonds issued hereunder. If any funds remain in any other Account of the Issuance Cost Fund after similar dates relating to the issuance of other series of Bonds, the Trustee shall transfer such funds to the comparable Account of the Acquisition Fund for that series. The Trustee shall keep and maintain adequate records pertaining to the Issuance Cost Fund and all disbursements therefrom, and after all amounts are disbursed from the Issuance Cost Fund, the Trustee shall, if requested by the Borrower, file an accounting thereof with the Issuer and the Borrower Acquisition Fund The Trustee shall deposit into the Acquisition Fund as and when received by the Trustee any money or additional money paid to the Trustee under the Loan Agreement or the Indenture for credit or transfer to the Acquisition Fund. Money in the Acquisition Fund shall be transferred at the direction of the Borrower to fund the acquisition of the Project from the Seller. Except for authorized disbursements on the Series 2016 Closing Date, money in the Acquisition Fund shall be disbursed upon receipt of a requisition for payment, executed by an Authorized Borrower Representative, and the Trustee is hereby authorized and directed to make each disbursement upon receipt of such a requisition. The Trustee is hereby authorized and directed to make each disbursement required by the aforesaid provisions of the Loan Agreement. The Trustee is entitled to reasonably rely on any such requisition in such forms as proper approval and direction to disburse funds from the Acquisition Fund. The Trustee shall have no duty to review or investigate the accuracy of the requisition. The Trustee shall establish a separate Account or Accounts within the Acquisition Fund with respect to each series of Additional Bonds issued hereunder. The provisions governing such Account or Accounts shall be set forth in the supplemental indenture pursuant to which Additional Bonds are authorized. All proceeds of the Series 2016 Bonds and investment earnings thereon remaining in the Acquisition Fund on the date six months after issuance of the Series 2016 Bonds, less amounts retained or set aside to meet costs not then due and payable or that are being contested, shall be used for other capital expenditures related to the Project approved by the University with the consent of the Borrower, which consent shall not be unreasonably withheld; provided, however, that a Favorable Opinion of Bond Counsel with respect to such expenditure shall have been obtained. If there are no such additional capital expenditures, such excess amounts shall be transferred (i) to the 2016 Payment Subaccount of the Bond Fund and used for the payment of principal of the Series 2016 Bonds provided the Borrower shall deliver to the Trustee a Favorable Opinion of Bond Counsel; or (ii) if the Borrower shall fail to deliver such an opinion, to the Redemption Fund by the Trustee and used to redeem Series 2016 Bonds on the earliest possible date for which notice may be given in accordance with the Indenture. Upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Acquisition Fund shall not be disbursed, but shall instead be applied to the Debt Service Payment or redemption price of the Series 2016 Bonds. If all Outstanding Bonds have been called for redemption, and on the redemption date, the amounts held in the Defeasance Accounts (including amounts deposited to the Defeasance Accounts for purposes of redeeming the Bonds), the Redemption Fund, the Acquisition Fund, the Insurance and Condemnation Funds and the Surplus Fund are sufficient to redeem all Outstanding Bonds, the Borrower may direct the Trustee to transfer the funds in the Defeasance Account, the Acquisition Fund, the Insurance and Condemnation Funds and the Surplus Funds to the Redemption Fund and the Trustee shall comply with such direction. A-29

80 Replacement Reserve Fund The Replacement Reserve Fund is a trust fund into which the Company is required to make periodic deposits. There shall be deposited into the Replacement Reserve Fund amounts paid by the Board for deposit therein pursuant to Exhibit B, Section 4 of the Rental Agreement. Amounts on deposit in the Replacement Reserve Fund may be issued from time to time at the direction of the Borrower, and earnings with respect thereto shall be retained in the Replacement Reserve Fund. Funds in the Replacement Reserve Fund shall, so long as the Rental Agreement remains in effect and the Board is not in default thereunder, be applied to the maintenance and improvement of the Project in accordance with the terms of the Rental Agreement. The Trustee shall disburse funds in the Replacement Reserve Fund to or at the written direction of the Borrower to make repairs and replacements to the Project or, in accordance with the Rental Agreement, to reimburse the Board thereof. Insurance and Condemnation Funds The Insurance Fund and the Condemnation Fund are trust funds into which, under certain circumstances, Net Proceeds of insurance or condemnation awards, respectively, are to be paid to the Trustee and deposited in the Insurance or Condemnation Fund and used to prepay Basic Loan Payments or to repair, rebuild, restore, or replace the Project. See The Loan Agreement Damage and Destruction and Condemnation herein. Surplus Fund The Trustee shall credit or deposit into the Surplus Fund any amounts remaining in the Revenue Fund in accordance with the Trust Indenture and any other funds deposited thereto at the direction of the Borrower. Money in the Surplus Fund may be used by the Trustee to pay expenses of, or to make capital expenditures or repairs and replacements in respect of, the Project, or which relate to the funding of the USDA Loan; provided that, such funds shall be disbursed upon written direction, executed by an Authorized Borrower Representative, and the Trustee is hereby authorized and directed to issue its checks for each disbursement upon receipt of such a direction. Money in the Surplus Fund may also be used to pay Debt Service Payments and to fund any required payment to the Rebate Fund, and the Issuer hereby authorizes and directs the Trustee to withdraw funds from the Surplus Fund to make such Debt Service Payments to the extent that there are insufficient funds in the Revenue Fund, the Bond Fund and the Redemption Fund (in such order of priority) available therefor on such date, which authorization and direction the Trustee hereby accepts. Amounts credited to or held in the Surplus Fund shall be available on a monthly basis to make the monthly credits or deposits required from the Revenue Fund under the Trust Indenture. Upon the defeasance or payment of all Outstanding Bonds, amounts held in the Surplus Fund shall be transferred to the Borrower and applied to (i) the funding of any required reserves relative to the USDA Loan and (ii) the payment of any costs associated with the defeasance or payment of the Bonds and the funding of the USDA Loan. Any remaining amounts in the Surplus Fund may be released to or at the direction the Borrower and treated by the Borrower as revenues of the Series 2016 Project. Rebate Fund The Rebate Fund is a special trust fund, which will be held, invested, expended, and accounted for in accordance with the Tax Agreement. Moneys in the Rebate Fund shall not be considered moneys held under the Indenture and shall not constitute part of the Trust Estate held for the benefit of the Bondholders of the Bonds or the Issuer. Moneys in the Rebate Fund shall be held in trust by the Trustee and shall be held for future payments to the United States of America as directed by the Company and as contemplated under the provisions of the Tax Agreement. A-30

81 Investments Moneys in the Revenue Fund, the Bond Fund, the Redemption Fund, the Issuance Cost Fund, the Acquisition Fund, the Insurance Fund, the Condemnation Fund, the Surplus Fund, the Replacement Reserve Fund, the Rebate Fund, or any Accounts therein, reserves in connection with contested liens, or other special trust funds created under the Indenture, shall be invested and reinvested by the Trustee at the direction of the Authorized Company Representative in accordance with the provisions of the Loan Agreement. In the absence of any such written direction by an Authorized Borrower Representative to the Trustee, such amounts shall be invested by the Trustee in the Federated Treasury Obligations Fundor such other fund then being utilized by the Trustee that meets the requirements of (f) under the definition of Permitted Investments so long as such Fund or fund, as the case may be, remains a Permitted Investment and is then available for such deposit, or, if such Fund or fund, as the case may be, is no longer a Permitted Investment or not available, such amounts shall be held by the Trustee uninvested. Additional Bonds So long as no Event of Default hereunder shall then be existing (or so long as such Event of Default shall be cured upon the issuance of the Additional Bonds) and provided that written confirmation has been received by the Issuer from Moody s that the issuance of the subject Additional Bonds will not adversely affect the rating on the Series 2016 Bonds or on any other Additional Bonds then outstanding, Additional Bonds may be issued by the Issuer upon the written request of the Borrower to provide funds to pay the costs of improvements to or related to the Facility or the Property; the costs of the issuance and sale of the Additional Bonds and capitalized or funded interest for such period and such other costs reasonably related to the financing as shall be agreed upon by the Borrower and the Issuer. Such Additional Bonds shall be issued on a parity with the Series 2016 Bonds and shall be secured by the lien and security interests granted by the Leasehold Deed of Trust relating to the Series 2016 Project and the Security Agreement relating to the Series 2016 Bonds, equally and ratably with the Series 2016 Bonds, and shall be payable from the Bond Fund and the Redemption Fund. Such Additional Bonds shall be issued in such series and principal amounts, shall be dated, shall bear interest at such rate or rates, shall be subject to redemption at such times and prices and shall mature in such years as the indenture supplemental hereto authorizing the issuance thereof shall fix and determine and shall be authenticated as provided herein. Except in the case of Section 2.11of the Trust Indenture, the Borrower may not incur any additional Indebtedness. The Borrower may not incur any additional Indebtedness in the form of guarantees or derivatives in the form of credit default swaps or total-rate-of-return swaps or similar instruments. Events of Default Each of the following is an Event of Default within the meaning of the Trust Indenture: payment of any installment of interest on any Bond shall not be made by or on behalf of the Issuer when the same shall become due and payable; or payment of the principal of any Bond shall not be made by or on behalf of the Issuer when the same shall become due and payable at maturity; or the failure to perform in a punctual manner any other of the covenants, conditions, agreements or provisions contained in this Indenture or any agreement supplemental hereto and the continuation of such failure for 30 days after receipt by the Issuer of a written notice from the Trustee specifying such failure and requiring the same to be remedied and stating that such notice is a Notice of Default ; provided, however, that if such performance requires work to be done, action to be taken or conditions to be remedied that by their nature cannot reasonably be done, taken or remedied as the case may be, within such 30-day period, no Event of Default shall be deemed to have A-31

82 occurred or to exist if, and so long as, the Issuer shall begin such performance within such period and shall diligently and continuously prosecute the same to completion; or an Event of Default shall have occurred under any of the other Bond Documents other than the Continuing Disclosure Agreement. If an Event of Default occurs, the Trustee shall mail to the Issuer, all Bondholders and the Borrower written notice of the occurrence of any Event of Default within 30 days after the Trustee shall be deemed to have notice that any Event of Default has occurred. The Trustee shall mail to the Issuer and the Borrower (i) notice of any Event of Default or promptly on occurrence of such default; and (ii) notice of any other Event of Default known to the Trustee within 15 days of the Trustee s knowledge thereof. Right to Enforce Payment of the Bonds Unimpaired. Nothing in Article X of the Trust Indenture shall affect or impair the right of any Owner to enforce the payment of the Debt Service Payments on his, her or its Bond or the obligation of the Issuer to pay the Debt Service Payments on each Bond to the Owner thereof at the time and place in the Bond expressed. Rights of Bondholders to Require Trustee to Pursue Remedies If an Event of Default occurs and is continuing, and if requested so to do by Bondholders of not less than 25% in aggregate principal amount of Bonds then Outstanding and if indemnified as provided in the Indenture, but only at the direction of the Insurer, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by the Indenture as the Trustee, being advised by counsel, shall deem most expedient in the interests of all Bondholders. In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of holders of the Bonds, each representing less than a majority in aggregate principal amount of the Bonds Outstanding, the Trustee, in its sole discretion, may determine what action, if any, shall be taken. Restrictions Upon Actions by Individual Bondholders No Owner shall have any right to institute any suit, action or proceeding in equity or at law on any Bond or for the execution of any trust hereunder or for any other remedy hereunder unless the Issuer or the Bondholders of not less than 25% in aggregate principal amount of Bonds then Outstanding previously shall have given to the Trustee written notice of the Event of Default on account of which such suit, action or proceeding is to be instituted, and unless also the Issuer or the Bondholders shall have made a written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such action, suit, or proceedings in its or their name, and unless, also, there has been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within sixty (60) days after the receipt of such request and offer of indemnity. Such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of the Indenture or to any other remedy hereunder. Notwithstanding the foregoing provisions of the Indenture and without complying therewith, the Bondholders of not less than 25% in aggregate principal amount of Bonds then Outstanding may institute any such suit, action or proceeding in their own names for the benefit of all Bondholders hereunder. It is understood and intended that, except as otherwise above provided, no one or more Bondholders have any right in any manner whatsoever by his, her, its or their action to affect, disturb or prejudice the security of the Indenture, or to enforce any right hereunder except in the manner provided, that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Bondholders and that any individual rights of action or other right given to one or more of such Bondholders by law are restricted by the Indenture to the rights and remedies provided in the Trust Indenture. A-32

83 Waivers of Events of Default The Trustee may in its discretion waive any Event of Default under the Indenture and rescind its consequences and shall waive any Event of Default under the Indenture and its consequences and shall rescind any declaration of maturity of principal of and interest on the Bonds upon the written request of Majority Bondholders; provided, however, that there shall not be waived any Event of Default in the payment when due of the (i) principal of any Outstanding Bonds at the date of maturity specified therein or upon proceedings for redemption pursuant to any mandatory sinking fund payments required or (ii) interest or premium on any such Bonds, unless prior to such waiver or rescission the consent of the Bondholders of 100% in aggregate principal amount of Bonds then Outstanding to such waiver shall have been obtained and all arrears of interest and all arrears of payments of principal or premium, if any, when due, with interest on such overdue amounts (to the extent permitted by law) at the rate borne by the Bonds, and all expenses of the Trustee in connection with such default, shall have been paid or provided for. In the case of any such waiver or rescission, or in case any proceeding taken by the Trustee on account of any such default shall have been discontinued or abandoned or determined adversely to the Trustee, then and in every such case the Issuer, the Trustee, and the Bondholders shall be restored to their former positions and rights under the Indenture respectively, but no such waiver or rescission shall extend to any subsequent or other default or impair any right consequent thereon. All waivers under the Indenture shall be in writing. Notice to Bondholders if Default Occurs If a default occurs of which the Trustee is required to take notice or if notice of default is given to the Trustee, the Trustee shall give such notice to the Company and the Issuer and shall give written notice thereof by first-class mail, within 15 days (unless such default is cured or waived), to the Bondholders of all Bonds then Outstanding shown by the registration books maintained by the Trustee. In addition, the Trustee shall immediately notify the Insurer if at any time there are insufficient moneys to make any payments of principal and/or interest as required and immediately upon the occurrence of any Event of Default hereunder. Application of Funds All money received by the Trustee pursuant to any right given or action taken under this Indenture (other than amounts held in the Rebate Fund) shall, after payment of the costs and expenses of the proceedings resulting in the collection of such money and the fees and expenses of the Trustee, be deposited in the Bond Fund and applied to the payment of the Debt Service Payments then due and unpaid in accordance with the provisions of this Indenture. Anything in this Indenture to the contrary notwithstanding, if at any time the money in the Bond Fund shall not be sufficient to pay the interest on or the principal of the Bonds as the same shall become due and payable (either by their terms or by acceleration of maturities under the provisions of Section of the Trust Indenture), such money, together with any money then available or thereafter becoming available for such purpose, whether through the exercise of the remedies provided for in this Article or otherwise, shall be applied as follows: (i) if the principal of all Bonds shall not have become or shall not have been declared due and payable, all such money shall be applied as follows: FIRST, to the payment to the persons entitled thereto of all installments of interest on Bonds then due and payable in the order in which such installments became due and payable and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment, ratably according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in such Bonds; SECOND, to the payment to the persons entitled thereto of the unpaid principal of any Bonds that shall have become due and payable (other than Bonds deemed to have been paid under Article IX of the Trust Indenture), in the order of their due dates, and, if the amount available shall not be sufficient to pay in full the principal of Bonds due and payable on any particular date, then to the payment ratably according to the amount of such principal due on such date, to the persons entitled thereto without any discrimination or preference; and A-33

84 THIRD, to the payment of the interest on and the principal of Bonds, to the purchase and retirement of Bonds, and to the redemption of Bonds, all in accordance with this Indenture; (ii) if the principal of all Bonds shall have become or shall have been declared due and payable, all such money shall be applied to the payment of principal and interest then due on the Bonds, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference; and (iii) if the principal of all Bonds shall have been declared due and payable and if such declaration thereafter shall have been rescinded and annulled under Section of the Trust Indenture, then, subject to Section 10.04(a)(ii) of the Trust Indendute, if the principal of all Bonds shall later become due and payable or shall be declared due and payable, the money then remaining in and thereafter accruing to the Bond Fund shall be applied in accordance with Section 10.04(a)(i) of the Trust Indenture. Whenever money is to be applied by the Trustee under this Section, the Trustee shall apply such money at such times and from time to time, as the Trustee in its sole discretion shall determine, having due regard for the amount of such money available for such application and the likelihood of additional money becoming available for such application in the future; the setting aside of such money, in trust for the proper purpose, constitutes proper application by the Trustee, and the Trustee shall incur no liability whatsoever to the Issuer, the Borrower and any Owner or to any other person for any delay in applying any such money so long as the Trustee shall act with reasonable diligence, having due regard for the circumstances, and ultimately shall apply the same in accordance with such provisions of this Indenture as may be applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such money, it shall set the date (which must be an Interest Payment Date unless the Trustee shall deem another date more suitable) on which such application is to be made. The Trustee shall give notice by first-class mail, postage prepaid, to all Bondholders of the setting of any such date and shall not be required to make payment to the Owner of any Bonds until such Bonds are surrendered to the Trustee for cancellation if fully paid. Defeasance The Indenture will remain in full force and effect until the principal of and interest on the Bonds have been fully paid and all other payments required by the Indenture and the Loan Agreement have been made. All Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid and defeased if (i) there shall have been irrevocably deposited with the Trustee, in trust, either Available Monies in an amount which shall be sufficient, along with any other moneys held by the Trustee and available therefor, or Government Obligations not redeemable by the issuer thereof purchased with Available Monies, the principal of and interest on which when due, without reinvestment, will provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient, to pay when due the principal or redemption price, if applicable, and interest due and to become due on such Bonds on and prior to the redemption date or maturity date thereof, as the case may be, and an amount equal to the Trustee s and any paying agents necessary and proper fees, compensation and expenses under the Indenture accrued and to accrue until such redemption date or date of maturity, (ii) in the event such Bonds are to be redeemed and are subject to immediate redemption, the Issuer shall have given the Trustee in form satisfactory to it irrevocable written instructions to give notice of redemption of such Bonds as provided in the Indenture, (iii) in the event said Bonds are to be redeemed and are not by their terms subject to redemption within the next succeeding 60 days, the Issuer shall have given the Trustee in form satisfactory to it irrevocable written instructions to (a) give notice of redemption of such Bonds as provided in the Indenture not less than 30 nor more than 60 days prior to a date on which such Bonds are subject to redemption and (b) give, as soon as practicable in the same manner as a notice of redemption of such Bonds as provided in the Indenture, a notice to the Bondholders of such Bonds stating that the deposit required by (i) above has been made with the Trustee, stating that said Bonds are deemed to have been paid in accordance with Article IX of the Indenture, and stating such maturity or redemption dates upon which moneys are to be available for the payment of the principal of, premium, if any, and interest on such Bonds, (iv) in the event said Bonds are to be redeemed and A-34

85 are not by their terms subject to redemption within the next succeeding 60 days, there shall have been submitted to the Issuer of the Bonds to be redeemed and the Trustee a certificate of a certified public accountant (the Accountant s Verification ) to the effect that the deposit required by (i) above will provide funds sufficient to pay when due the principal or redemption price, if applicable, and interest due and to become due on such Bonds on and prior to the redemption date or maturity date thereof, as the case may be, (v) there shall have been delivered to the Trustee, the Insurer, and the Issuer a Favorable Opinion of Bond Counsel; (vi) there shall have been submitted to the Issuer, the Insurer, and the Trustee an opinion of Independent Counsel (the Defeasance Opinion ) that (a) the escrow deposit will not constitute a voidable preference or transfer under the Federal Bankruptcy Code, as amended, or any other similar state or federal statute in the event the Obligor becomes a debtor within the meaning of the Federal Bankruptcy Code, as amended, or comes within the protection of such similar state or federal statute ( Insolvency Event ), and (b) in such Insolvency Event, the escrow deposit will not be treated as part of the estate of the Company; and (vii) the Insurer shall consent in writing. The items described in (i), thorough (vi) of the preceding paragraph may be submitted with respect to any particular Bonds or series of Bonds (whether upon or prior to the maturity or the redemption date of such Bonds), in which case such Bonds shall no longer be deemed to be Outstanding and shall be deemed to be paid within the meaning of this Article, and the Bondholders of such Bonds shall be secured only by such deposit and not by any other part of the Security. In the event that Bonds are refunded in an advance refunding, there shall be submitted to the Insurer and approved by the Insurer in writing prior to such advance refunding (i) the escrow agreement in connection with the advance refunding, (ii) legal opinions regarding the validity and enforceability of the escrow agreement, (iii) the Accountant s Verification, and (iv) the Defeasance Opinion. If moneys or Government Obligations have been deposited or set aside with the Trustee pursuant to the Indenture for the payment of Bonds and interest and premium thereon, if any, and such Bonds shall not have in fact been actually paid in full, no amendment to the provisions of Article XII of the Indenture governing defeasance shall be made without the consent of the Owner of each Bond affected thereby. Amendment of the Indenture The Issuer and the Trustee may, without the consent of or notice to any of the Bondholders, enter into an amendment to this Indenture or an indenture supplemental to this Indenture for any one or more of the following purposes: (i) to cure any error, ambiguity or formal defect or omission in, or to correct or supplement any defective provision of, this Indenture; (ii) to add to the covenants and agreements of, and limitations and restrictions upon, the Issuer in this Indenture or other covenants, agreements, limitations and restrictions to be observed by the Issuer for the protection of the Bondholders; (iii) to evidence the appointment of a separate trustee or a co-trustee, or the succession of a new trustee or the appointment of a new or additional paying agent or Bond Registrar; (iv) to grant to or confer upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, benefits, security, liabilities, duties or authority that may lawfully be granted to or conferred or imposed upon the Bondholders or the Trustee or either of them; (v) collateral; to subject to the lien and security interest hereof additional revenues, properties or (vi) to modify, amend or supplement this Indenture or any indenture supplemental hereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect or to permit the qualification of any Bonds for A-35

86 sale under the securities laws of any state, and, if they so determine, to add to this Indenture or any indenture supplemental hereto such other terms, conditions and provisions as may be permitted by the Trust Indenture Act of 1939, as amended, or any similar federal statute; (vii) to modify, amend or supplement this Indenture in such manner as to assure the continued exclusion of the interest on any Tax-Exempt Bonds from the gross income of the Bondholders thereof for federal income tax purposes; (viii) to comply with any provisions of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or any rules or regulations promulgated thereunder; (ix) to reflect a change in applicable law; provided that the Trustee shall determine that such amendment or supplemental indenture does not prejudice the rights of Bondholders; or (x) to make any other change herein that, in the judgment of the Trustee (which may be in reliance upon an opinion of counsel), shall not materially adversely affect the Bondholders or impair the Security. The Issuer and the Trustee may, without the consent of or notice to any of the Bondholders, enter into an amendment to indenture or indentures supplemental to the Indenture (i) in connection with the issuance of any Additional Bonds in accordance with the Indenture and the inclusion of additional property within the Trust Estate in connection therewith, (ii) to the extent necessary with respect to the land and interests in land, buildings, furnishings, machinery, equipment and all other real and personal property that may form a part of the Project, so as to identify the same more precisely or add additional land or interests in land, buildings, furnishings, machinery, equipment or real or personal property as Security; or (iii) with respect to any changes required to be made in the description of the Security in order to conform with similar changes made in the Loan Agreement. Exclusive of indentures supplemental to the Indenture described in (a) and (b) above, the Requisite Number of Bondholders shall have the right, from time to time, anything contained in this Indenture to the contrary notwithstanding, to consent to and approve the execution by the Issuer and the Trustee of an amendment to this Indenture or such indenture supplemental hereto as shall be deemed necessary and desirable by the Issuer for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture, in any amendment to this Indenture, or in any supplemental indenture; provided, however, that nothing contained in this Section shall permit, or be construed as permitting; (a) an extension of the stated maturity or reduction in the principal amount of, or a reduction in the rate or an extension of the time of payment of interest on, or a reduction of any premium payable on the redemption of, any Bonds, without the consent of every Owner of such Bonds, (b) the creation of any lien or security interest (other than any Permitted Encumbrances) prior to or on a parity with the lien and security interest hereof, without the consent of the Owners of all the Bonds at the time Outstanding that would be affected by the action to be taken, (c) a reduction in the amount, or an extension of the time of any payment, required by the mandatory sinking fund redemption provisions of the Indenture, or of any mandatory sinking fund redemption provisions in connection with any Additional Bonds, without the consent of the Owners of all the Bonds at the time Outstanding that would be affected by the action to be taken, (d) a reduction in the aforesaid aggregate principal amount of Bonds the Owners of which are required to consent to any such amendment or supplemental indenture, without the consent of the Owners of all the Bonds at the time Outstanding, (e) the modification of the trusts, powers, obligations, remedies, privileges, rights, duties or immunities of the Trustee, without the written consent of the Trustee (f a privilege or priority of any Bond or Bonds over any other Bond or Bonds, without the consent of the Owners of all the Bonds then Outstanding or (g) the release of or requirements for the release of the Indenture, without the consent of the Bondholders of all of the Bonds at the time Outstanding which would be affected by the action to be taken. Amendment of Other Bond Documents The Issuer and the Trustee shall, without the consent of or notice to the Bondholders, but with prior notice to the Insurer, consent to any amendment, change or modification of the Bond Documents other than the Indenture as may be required (i) by the provisions of the Loan Agreement and the Indenture, (ii) in connection with the issuance of Additional Bonds as provided in the Indenture, (iii) for the purpose of curing any ambiguity or formal A-36

87 defect or omission therein, or to correct or supplement any defective provisions of the Bond Documents (iv) in connection with the land and interests in land, buildings, machinery, equipment and other real or personal property described in the Security Deed so as to identify more precisely the same or to substitute or add additional land or interests in land, buildings, machinery, equipment or other real or person property, (v) so as to add additional rights acquired in accordance with the provisions of the Bond Documents, (vi) to substitute a new Company under the Loan Agreement as provided therein, (vii) to comply with any provisions of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or any rules or regulations promulgated thereunder, (viii) to give effect to any amendment to the Indenture, or (ix) in connection with any other change therein which, in the judgment of the Trustee, does not prejudice the Trustee or materially adversely affect the Bondholders. Except for the amendments, changes or modifications as provided in the preceding paragraph, neither the Issuer nor the Trustee shall consent to any other amendment, change or modification of the Bond Documents or any of them other than this Indenture without giving notice to and obtaining the written approval or consent of the Requisite Number of Bondholders given and procured as in the Trust Indenture; provided, however, that nothing in this paragraph or in the preceding paragraph hereof shall permit or be construed as permitting, (i) an extension of the time for payment of any amounts payable under the Loan Agreement or a reduction in the amount of any payment or in the total amount due under the Loan Agreement, without the consent of the Owners of all of the Bonds at the time Outstanding; or (ii) a reduction in the aforesaid aggregate principal amount of Bonds the Owners of which are required to consent to any such amendment, change or modification of such other Bond Documents, without the consent of the Owners of all of the Bonds at the time Outstanding. If at any time the Issuer and the Borrower shall request the consent of the Trustee to any such proposed amendment, change or modification of such other Bond Documents, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modification to be given in the same manner as provided by the Indenture with respect to supplemental indentures. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the Office of the Trustee for inspection by all Bondholders. If, within 60 days or such longer period as shall be prescribed by the Issuer following the giving of such notice, the Trustee and the Requisite Number of Bondholders (or, if required, all of the Bondholders) shall have consented to and approved the execution thereof as herein provided, no Owner of any Bond shall have any right to object to any of the terms and provisions contained therein or to the operation thereof or in any manner to question the propriety of the execution thereof or to enjoin or restrain the Trustee from consenting to the execution thereof or to enjoin or restrain the Issuer or the Borrower from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such amendment, change or modification as in this Section permitted and provided, such other Bond Documents shall be and be deemed to be modified, changed and amended in accordance therewith. Trustee s Right to Payment under the Indenture Under the Indenture, upon an Event of Default, moneys received by the Trustee are to be applied to the fees and expenses of the Trustee, including attorneys fees, prior to payments of interest on and principal of the Bonds. The Trustee The Trustee hereby accepts the trusts imposed upon it by this Indenture, represents and covenants that it is fully empowered under applicable laws and regulations to accept said trusts, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions, and no implied covenants or obligations shall be read into this Indenture against the Trustee: The Trustee, prior to the occurrence of an Event of Default of which it is deemed to have actual knowledge under Section 11.01(k) and after the waiving or curing of all Events of Default of which it is deemed to have knowledge under Section 11.01(k) that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth herein. In case an Event of Default of which it is deemed to have knowledge under Section 11.01(k) shall have occurred (which shall not have been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture and the other Security Documents, and use the same degree of care and skill in their exercise, as a reasonable person would exercise or use under the circumstances in like situations. A-37

88 The Trustee may execute any of the trusts or powers hereunder and perform any of its duties by or through attorneys, accountants, agents or receivers, and shall not be responsible for the acts of any attorneys, accountants, agents or receivers appointed by it in good faith and without negligence. Any reasonable costs or expense of hiring such attorneys, accountants, agents or receivers shall be reimbursed by the Borrower. Before the Trustee acts or refrains from acting, it may require an officer s certificate or advice of counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or advice. Any reasonable costs or expenses incurred by the Trustee in connection with hiring such counsel shall be paid or reimbursed by the Borrower. The Trustee shall not be liable for any action it takes or omits to take which in good faith it believes to be authorized or within its powers. The Trustee shall not be responsible for any recital contained herein or in the Bonds (except in respect to the authentication certificate of the Trustee endorsed on the Bonds) or for insuring the property conveyed hereby or for collecting any insurance money or for the validity of the execution by the Issuer hereof or any supplemental indentures hereto or instruments of further assurance or for the validity or sufficiency of the Security for the Bonds issued hereunder or intended to be secured hereby or for the value or title of the property conveyed hereby or otherwise as to the maintenance of the security hereof. The Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Issuer or on the part of the Borrower under the Loan Agreement or this Indenture except as set forth herein. The Trustee shall not be accountable for the use of the proceeds from the sale of the Bonds disbursed in accordance with the terms hereof, for the use or application of any property, or money released or paid out in accordance with the provisions hereof, of the Loan Agreement or any written instructions provided pursuant to this Indenture. The Trustee may become the Owner of Bonds secured hereby with the same rights that it would have if not Trustee. The Trustee may act on any statement, request, affidavit, certificate, opinion, or other document which it in good faith believes to be genuine and to have been signed by the proper person or persons or to have been prepared and furnished pursuant to any of the provisions of the Indenture; and the Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may reasonably rely upon the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. Any action taken, or omitted to be taken, by the Trustee pursuant to this Indenture upon the request or authority or consent of any person who, at the time of making such request or giving such authority or consent, is the Owner of any Bond shall be conclusive and binding upon all future Owners of the same Bond and of any Bond or Bonds issued in exchange therefor or upon transfer of or in place thereof. As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper, or proceedings, the Trustee shall be entitled to conclusively rely upon a certificate signed by the Issuer and upon a certificate signed on behalf of the Borrower by an Authorized Borrower Representative as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default of which the Trustee shall have been notified or of which it shall be deemed to have notice as provided in Section 11.01(k), shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed necessary or advisable, but shall in no case be bound to secure the same. The Trustee may accept a certificate of the Issuer to the effect that a resolution in the form therein set forth has been adopted by the Issuer as conclusive evidence that such a resolution has been duly adopted and is in full force and effect. The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be answerable with respect to any such permissive right for other than its negligence or willful misconduct. A-38

89 Default except: The Trustee shall not be required to take notice or be deemed to have notice of any Event of (i) failure by the Issuer or the Borrower to cause to be made any of the payments to the Trustee required to be made by Article V hereof; and (ii) failure by the Borrower to make any of the payments to the Trustee required to be made by Section 5.02 of the Original Loan Agreement, unless the Trustee shall be specifically notified in writing of such failure by the Issuer or by a Majority of the Bondholders. All notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered to a Responsible Officer at the Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume no default exists except as aforesaid. Notwithstanding any other provision of this Indenture, no right of the Trustee to indemnification and shall relieve the Trustee from responsibility for making Debt Service Payments when due from money available to it or accelerating the Bonds as required pursuant to Section hereof. The Trustee shall not be liable for any debts contracted or for damages to persons or to personal property injured or damaged or for salaries or nonfulfillment of contracts during any period in which it may be in the possession of or managing any Project as in this Indenture provided, other than for its negligence or willful misconduct. At any and all reasonable times the Trustee and its duly authorized agents, attorneys, experts, engineers, accountants and representatives shall have the right, but not the duty, to inspect any and all of the Project, including all books and papers pertaining to any Project and the Bonds, and to take such memoranda from and in regard thereto as may be desired, subject to the limitations imposed upon such rights of inspection pursuant to Section 8.02 of the Loan Agreement. The Trustee shall not be required to give any bond or surety in respect of the execution of its trusts and powers hereunder or otherwise in respect of the premises hereof or to file any returns or reports to any court in the execution of its trusts. Notwithstanding anything elsewhere in this Indenture contained, the Trustee shall have the right, but shall not be required, to demand, in respect of the authentication of any Bonds, the withdrawal of any cash, the release of any property or the taking of any action whatsoever within the purview hereof, the delivery of any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, in addition to that by the terms hereof required as a condition of any such action by the Trustee, deemed reasonably necessary for the purpose of establishing the right of the Issuer to the authentication of any Bonds, the withdrawal of any cash, the release of any property or the taking or omitting of any other action by the Trustee. All money received by the Trustee or any paying agent shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds except to the extent required by law or by this Indenture. Neither the Trustee nor any paying agent shall be under any liability for interest on any money received hereunder except such as may be agreed upon. The Trustee may construe any provision hereof insofar as such may appear to it to be ambiguous or inconsistent with any other provision hereof, and any construction of any such provision by the Trustee shall be binding upon the Bondholders and the Issuer. The Trustee shall not be liable and shall be fully protected with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of a Majority of the Bondholders relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee under this Indenture. A-39

90 No provisions hereof shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. In situations where a Favorable Opinion of Bond Counsel or an opinion of Bond Counsel is required or requested to be delivered under this Indenture, the Loan Agreement or the applicable Tax Regulatory Agreement after the date of delivery of the Bonds, the Trustee shall accept (unless otherwise directed by the Borrower) an opinion in such form and with such disclosures as may be required so that such opinion will not be treated as a covered opinion for purposes of the United States Treasury Department regulations governing practice before the Internal Revenue Service (Circular 230) 31 C.F.R. pt. 10. Notwithstanding the foregoing, the Trustee shall not be answerable for other than its gross negligence or willful misconduct. Whether or not therein expressly so provided, every provision of the Indenture relating to the conduct of, or affecting the liability of, or affording protection to the Trustee shall be subject to the Trust Indenture. The Trustee has no responsibility for complying with Section 148 of the Internal Revenue Code of The Trustee s sole responsibility is to perform certain administrative actions to enable the Issuer to fulfill its obligations under the Act. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. In accepting the trust hereby created, the Trustee acts solely as Trustee for the holders of the securities and not in its individual capacity and all persons, including without limitation the holders of the Bonds, the Issuer and/or the Borrower having any claim against the Trustee shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein. Removal of the Trustee. The Trustee may be removed at any time (a) by the Issuer for any breach of the trusts set forth herein or any failure or refusal to act as trustee; (b) by an instrument or concurrent instruments in writing delivered to the Trustee and to the Issuer and signed by a Majority of the Bondholders; or (c) by an instrument in writing delivered to the Trustee and to the Issuer signed by the Borrower, provided no Event of Default under this Indenture or the Loan Agreement shall have occurred and be continuing. Removal of the Trustee shall not be effective until a successor or temporary Trustee shall have been appointed pursuant to the Trust Indenture and the Trustee shall have been paid for all Ordinary Services and Extraordinary Services of the Trustee rendered hereunder and for all Ordinary Expenses and Extraordinary Expenses of the Trustee incurred hereunder. The Trustee s rights to indemnity, the Trustee s rights to any unpaid amounts due to the Trustee, and the Trustee s rights to reimbursement of fees and expenses and any other amount due to the Trustee under the Trust Indenture shall survive any such removal of the Trustee. Appointment of Successor Trustee; Temporary Trustee. In case the Trustee hereunder shall (i) resign or be removed; or (ii) be dissolved or shall be in the course of dissolution or liquidation, or in case it shall be taken under the control of any public officer or officers or of a receiver appointed by a court or otherwise become incapable of acting hereunder, a successor may be appointed by an instrument executed by an Authorized Issuer Representative and executed by an Authorized Borrower Representative; provided, that if a successor trustee shall not be so appointed within 10 days after notice of resignation shall have been mailed or an instrument of removal shall have been delivered as provided in the Trust Indenture, respectively, or within 10 days of the Issuer s knowledge of any of the events specified in in the Trust Indenture, then a Majority of the Bondholders, by an instrument or concurrent instruments in writing signed by or on behalf of such Owners, delivered personally or sent by registered or certified mail to the Issuer and the Borrower, may designate a successor trustee. Until a successor trustee shall be appointed by the Bondholders in the manner above provided, the Issuer, upon written notice to the Borrower, shall appoint a temporary trustee to fill such vacancy, and any such temporary trustee so appointed by the Issuer shall immediately and without further act be superseded by the successor trustee so appointed by the Bondholders. Notice of the appointment of a successor trustee shall be given in the same manner as provided in the Trust Indenture with respect to the resignation of the Trustee. A-40

91 In case at any time the Trustee shall resign and no appointment of a successor trustee shall be made pursuant to the foregoing provisions of this Article prior to the date specified in the notice of resignation as the date when such resignation shall take effect, the Owner of any Bond or the resigning Trustee may apply to any court of competent jurisdiction to appoint a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper, appoint a successor trustee. A-41

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93 APPENDIX B FORM OF BOND COUNSEL OPINION October 28, 2016 Development Authority of Peach County Fort Valley, Georgia RE: $40,350,000 Development Authority of Peach County Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 (the Series 2016 Bonds ) Ladies and Gentlemen: We are acting as bond counsel in connection with the issuance of the above captioned Series 2016 Bonds. In such capacity, we have examined such law and such certified proceedings and other documents as we have deemed necessary to render this opinion, including the judgment of validation, as filed in the Superior Court of Peach County, Georgia. All capitalized terms used herein but not defined here shall the meanings ascribed thereto in the hereinafter defined Indenture. The Series 2016 Bonds are issued pursuant to the Development Authorities Law, O.C.G.A. Section et seq., as amended, the Revenue Bond Law, O.C.G.A. Section et seq., as amended, and a resolution (the Bond Resolution ) duly adopted on September 16, 2016 by the Board of the Development Authority of Peach County (the Authority ). The Series 2016 Bonds are being issued under a Trust Indenture, dated as of October 1, 2016 (the Indenture ) between the Authority and U.S. Bank National Association, as trustee (the Trustee ). The Authority and USG Real Estate Foundation IV, LLC (the Company ), a Georgia limited liability company, have entered into a Loan Agreement, dated as of October 1, 2016 (the Loan Agreement ), pursuant to which the Company has agreed to pay to the Authority such loan payments as will always be sufficient to pay the principal of, premium, if any, and interest on the Series 2016 Bonds as the same become due. Under the Indenture, the rights of the Authority under the Loan Agreement (except for Reserved Rights as defined therein) are pledged and assigned by the Authority as security for the Series 2016 Bonds. The Series 2016 Bonds are payable solely from the payments to be made by the Company under the Loan Agreement (the Revenues ). As to questions of fact material to our opinion, we have relied upon (a) representations of the Authority and the Company, (b) certified proceedings and other certifications of public officials furnished to us, and (c) certifications furnished to us by or on behalf of the Company (including certifications made in the Tax Regulatory Agreement relating to the Series 2016

94 Bonds, dated the date of issuance of the Series 2016 Bonds, among the Authority, the Company, and the Trustee which are material to Paragraph 4 below), without undertaking to verify the same by independent investigation. In all such examinations, we have assumed the genuineness of all signatures, the authenticity of all documents presented to us as originals, and the conformity to original documents of all copies submitted to us as certified, conformed, or photographic copies. As to certificates, we have assumed the same to be properly given and to be accurate. With respect to matters of fact relevant to this opinion, we have relied, without independent verification of the accuracy or completeness of the matters set forth therein, on the representations and warranties of the parties thereto set forth in the documents and instruments pursuant to which the Bonds are being issued and secured, as well as in certificates of officers of the Issuer and the Company delivered in connection with the issuance of the Series 2016 Bonds. In our capacity as Bond Counsel, we have not been engaged or undertaken to express and we do not express any opinion (other than as may be expressly set forth herein) with respect to (a) the legal existence or the due authorization, execution, or delivery by or enforcement against the Company of any instrument or agreement in connection with the project financed with the proceeds of the Series 2016 Bonds (the Project ) or the Series 2016 Bonds, (b) title to the Project or compliance with zoning, land use, and related laws, (c) the status of any lien or matter of record or security interest purported to be created in connection with the foregoing, (d) the accuracy, completeness, or sufficiency of the official statement relating to the Series 2016 Bonds (the Official Statement ) (except to the extent stated in our supplemental opinion addressed to Raymond James & Associates, Inc. and dated the date hereof) or any other offering material relating to the Series 2016 Bonds, or (e) the financial condition or capabilities of the Authority or the Company. Based upon the foregoing and subject to the qualifications that follow, we are of the opinion, as of the date hereof and under existing statutes, regulations, rulings, and court decisions, that: 1. The Authority is validly existing as a public body and corporate duly created and existing under the laws of the State of Georgia with the power and authority to (a) adopt the Bond Resolution and perform the agreements on its part contained therein, (b) issue, sell, and deliver the Series 2016 Bonds and use the proceeds thereof upon the terms and conditions and for the purposes set forth in the Loan Agreement and in the Indenture, (c) enter into and perform its obligations under the Loan Agreement and the Indenture, and (d) create the assignment, pledge, and security interest under the Indenture in favor of the owners of the Series 2016 Bonds. 2. The Bond Resolution has been duly adopted by the Authority, and the Loan Agreement and the Indenture have been duly authorized, executed, and delivered by the Authority and constitute valid and binding obligations of the Authority enforceable upon the Authority. The Indenture creates a valid lien on the Revenues and on the rights of the Authority under the Loan Agreement (except for Reserved Rights as defined therein). B-2

95 3. The Series 2016 Bonds (a) have been duly authorized, executed, and issued by the Authority and delivered to the Trustee for authentication, and (b) are valid and binding special or limited obligations of the Authority payable solely from the Revenues. 4. Under the laws, regulations, rulings and judicial decisions in effect as of the date hereof, interest on the Series 2016 Bonds is excludible from gross income for federal income tax purposes, pursuant to the Internal Revenue Code of 1986, as amended (the Code ). Furthermore, interest on the Series 2016 Bonds will not be treated as a specific item of tax preference, under Section 57(a)(5) of the Code, in computing the alternative minimum tax for individuals and corporations; provided, however, it should be noted that with respect to corporations, such interest is taken into account in determining adjusted current earnings pursuant to Section 56(c) of the Code for purposes of computing federal alternative minimum taxable income pursuant to Section 55 of the Code. The opinion set forth in the preceding sentence is subject to the condition that the Authority and the Company comply with all requirements of the Tax Code that must be satisfied subsequent to the issuance of the Series 2016 Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Authority and the Company have covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Series 2016 Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2016 Bonds. 5. Under the laws, regulations, rulings and judicial decisions in effect as of the date hereof, interest on the Series 2016 Bonds is exempt from present Georgia income taxes. Except as expressly stated above, we express no opinion as to any other federal or any other state income tax consequences of acquiring, carrying, owning, or disposing of the Series 2016 Bonds. Owners of the Series 2016 Bonds should consult their tax advisors as to the applicability of any collateral tax consequences of ownership of the Series 2016 Bonds, which may include purchase at a market discount or at a premium, taxation upon sale, redemption, or other disposition, and various withholding requirements. The opinions expressed in this opinion letter are subject to the following: B-3

96 The rights of the owners of the Series 2016 Bonds and the enforceability of the Series 2016 Bonds, the Indenture and the Loan Agreement are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors rights generally, and by equitable principles, whether considered at law or in equity. In this opinion letter issued in our capacity as Bond Counsel, we are opining only upon those matters set forth herein, and we are not passing upon the accuracy, adequacy or completeness of statements made in connection with any offer or sale of the Series 2016 Bonds or upon any federal or state tax consequences arising from the receipt or accrual of interest on or the ownership or disposition of the Series 2016 Bonds, except those specifically addressed herein. With respect to matters in (1) and (2) above, we are relying on the legal opinion of counsel to the Authority, as to the organization and existence of the Authority, and the due authorization, execution and delivery by and enforceability against the Authority of the Series 2016 Bonds, the Indenture and the Loan Agreement. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Very truly yours, B-4

97 APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT

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99 CONTINUING DISCLOSURE AGREEMENT $40,350,000 Development Authority of Peach County Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 CUSIP: AY4 This Continuing Disclosure Agreement (this Disclosure Agreement ) dated as of October 1, 2016, is executed and delivered by USG Real Estate Foundation IV, LLC (the Borrower ) and Digital Assurance Certification, LLC, as the initial Dissemination Agent (the Dissemination Agent ), in connection with the issuance of $40,350,000 Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project), Series 2016 (the Bonds ). The Bonds were issued pursuant to a Trust Indenture, dated as of October 1, 2016 (the Indenture ), between the Development Authority of Peach County (the Issuer ) and U.S. Bank National Association, as trustee (the Trustee ). The proceeds of the sale of the Bonds are being applied by the Issuer to make a loan to the Borrower pursuant to the terms and conditions of a Loan Agreement dated as of October 1, 2016 between the Issuer and the Borrower (the Loan Agreement ), to provide funds for (a) the purchase and acquisition from Fort Valley State University Foundation Property LLC of the facilities and equipment of an existing approximate 950 bed student housing facility known as Wildcat Commons, Buildings 1-5, including an approximate 8900 square foot student clubhouse and related amenities, facilities and improvements (the Project ) located on the campus of Fort Valley State University (the University ); (b) the payment of interest on the Bonds; and (c) the payment of costs and expenses incident to the issuance of the Bonds. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Borrower and the Dissemination Agent for the benefit of the holders of the Bonds and in order to comply with the Rule (defined below). The Borrower and the Dissemination Agent acknowledge that the Issuer has undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Agreement, and has no liability to any person, including any holder of the Bonds, with respect to any such reports, notices or disclosures. Section 2. Definitions. The terms set forth below shall have the following meanings in this Disclosure Agreement, unless the context clearly otherwise requires. Capitalized terms not otherwise defined herein shall have the meanings assigned thereto in the Indenture. Annual Financial Information means the financial information and operating data described in Schedule I. C-1

100 Annual Financial Information Disclosure means the dissemination of disclosure concerning Annual Financial Information and the dissemination of the Audited Financial Statements as set forth in Section 4. Audited Financial Statements means the audited financial statements of the Borrower relating to the Project, if any, prepared pursuant to the standards and as described in Schedule I. Commission means the Securities and Exchange Commission. Dissemination Agent means any agent designated as such in writing by the Borrower and which has filed with the Trustee a written acceptance of such designation, and such agent s successors and assigns. The initial Dissemination Agent is Digital Assurance Certification, LLC. EMMA means the Electronic Municipal Market Access facility for municipal securities disclosure of the MSRB. Exchange Act means the Securities Exchange Act of 1934, as amended. Fiscal Year of the Borrower means any period of twelve consecutive months adopted by the Borrower as its fiscal year for financial reporting purposes and shall initially mean the twelve (12) month period commencing on July 1 of each calendar ear and ending on June 30 of the immediately succeeding calendar year. Material Event means the occurrence of any of the events with respect to the Bonds set forth in Schedule II. Material Events Disclosure means dissemination of a notice of a Material Event as set forth in Section 6. MSRB means the Municipal Securities Rulemaking Board. Participating Underwriter means each broker, dealer or municipal securities dealer acting as an underwriter in any primary offering of the Bonds and Raymond James & Associates, Inc. in its capacity as underwriter for the Bonds. Prescribed Form means, with regard to the filing of Annual Financial Information, Audited Financial Statements and notices of Material Events with the MSRB at (or such other address or addresses as the MSRB may from time to time specify), such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information. Rule means Rule 15c2-12 adopted by the Commission under the Exchange Act, as the same may be amended from time to time. State means the State of Georgia. Undertaking means the obligations of the Borrower pursuant to Sections 4 and 6. C-2

101 Section 3. CUSIP Number. The CUSIP Number of the Bonds is AY4. Section 4. Annual Financial Information Disclosure. Subject to Section 10 of this Disclosure Agreement, the Borrower hereby covenants that it will, or will direct the Dissemination Agent to, disseminate the Annual Financial Information in Prescribed Form to the MSRB not later than 210 days after the end of each Fiscal Year of the Borrower, commencing with the fiscal year ending in The Borrower further covenants that it will, or will direct the Dissemination Agent to, disseminate the Audited Financial Statements in Prescribed Form to the MSRB not later than 210 days after the end of each Fiscal Year of the Borrower, commencing in Not later than 15 business days prior to each said date, the Borrower shall provide the Annual Financial Information and the Audited Financial Statements, if any, to the Dissemination Agent. In each case, the Annual Financial Information and the Audited Financial Statements, if any, may be submitted as a single document or as separate documents comprising a package. If by 15 business days prior to each date specified above for providing the Annual Financial Information and the Audited Financial Statements to the MSRB, the Dissemination Agent has not received a copy of the Annual Financial Information and the Audited Financial Statements, the Dissemination Agent shall contact the Borrower to determine if the Borrower is in compliance with this Section 4. If the Dissemination Agent is unable to verify that the Annual Financial Information and the Audited Financial Statements have been provided to the MSRB by the dates required in this Section 4, the Dissemination Agent shall send a notice to the MSRB in substantially the form attached as Exhibit A. The Dissemination Agent shall file a report with the Borrower and the Trustee (if different than the Dissemination Agent) certifying whether it has received and provided the Annual Financial Information and the Audited Financial Statements pursuant to this Disclosure Agreement, and if it has received the Annual Financial Information and the Audited Financial Statements from the Borrower, stating the dates it was provided to the MSRB. If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the Borrower will disseminate a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs. If any amendment is made to this Disclosure Agreement, the Annual Financial Information for the year in which such amendment is made (or in any notice or supplement provided to the MSRB) shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided. Section 5. [Reserved]. Section 6. Material Events Disclosure. Subject to Section 10 of this Disclosure Agreement, the Borrower hereby covenants that it will disseminate or cause the Dissemination Agent to disseminate, in a timely manner, not in excess of ten (10) business days after the occurrence of the event, Material Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Bonds or C-3

102 defeasance of any Bonds need not be given under this Disclosure Agreement any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Bonds pursuant to the Indenture. The Borrower is required to deliver such Material Events Disclosure to the Dissemination Agent in the same manner as provided by Section 4 of this Disclosure Agreement, no later than five (5) business days prior to the date for dissemination of such information to the MSRB (unless a shorter time period is acceptable to the Dissemination Agent). Section 7. Duty To Update EMMA/MSRB. The Borrower and the Dissemination Agent shall each determine, in the manner each deems appropriate, whether there has occurred a change in the MSRB s address or filing procedures and requirements under EMMA each time it is required to file information with the MSRB. Section 8. Consequences of Failure of the Borrower To Provide Information. The Borrower (or the Dissemination Agent, as and to the extent provided in Section 4) shall give notice in a timely manner, not in excess of ten (10) business days after the occurrence of the event, to the MSRB in Prescribed Form of any failure to provide Annual Financial Information Disclosure when the same is due hereunder. In the event of a failure of the Borrower to comply with any provision of this Disclosure Agreement, the Trustee, subject to prior receipt of indemnification satisfactory to it and payment of its fees and expenses, including fees and expenses of its counsel (whether incurred before trial, at trial, on appeal or in any bankruptcy or arbitration proceeding), at the written request of the Issuer or the holders of at least 25% aggregate principal amount of Outstanding Bonds, shall, or any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Borrower to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture or the Loan Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the Borrower to comply with this Disclosure Agreement shall be an action to compel performance. Section 9. Amendments; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Borrower and the Dissemination Agent may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, if: (a) The amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Borrower or type of business conducted; (b) This Disclosure Agreement, as amended, or the provision, as waived, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances in the opinion of counsel expert in federal securities laws acceptable to the Borrower, the Issuer and the Dissemination Agent; and (c) The amendment or waiver does not materially impair the interests of the holders of the Bonds, as determined either by parties unaffiliated with the Issuer or the Borrower (such as the Trustee) or by an approving vote of the holders of the Bonds C-4

103 holding a majority of the aggregate principal amount of the Bonds pursuant to the terms of the Indenture at the time of the amendment; or (d) The amendment or waiver is otherwise permitted by the Rule in the opinion of counsel expert in federal securities laws acceptable to the Borrower, the Issuer and the Dissemination Agent. Section 10. Termination of Undertaking. The Undertaking of the Borrower shall be terminated hereunder when the Borrower upon legal defeasance, prior redemption or payment in full of all of the Bonds. The Borrower shall give notice to, or shall cause notice to be given to, the MSRB in a timely manner and in Prescribed Form if this Section is applicable. If the Borrower s obligations under the Loan Agreement are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Agreement in the same manner as if it were the Borrower and the original Borrower shall have no further responsibility hereunder. The Borrower shall not transfer its rights and obligations under the Loan Agreement unless the transferee agrees to assume the obligations of the Borrower hereunder. Section 11. Dissemination Agent. The Borrower may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such agent, or such Dissemination Agent may resign upon thirty (30) days prior written notice to the Borrower, with or without the Borrower appointing a successor Dissemination Agent. The Dissemination Agent shall be entitled to reasonable compensation for its services hereunder and reimbursement of its out of pocket expenses (including fees and expenses of its counsel). The Dissemination Agent shall have no obligation to disclose information about the Bonds except as expressly provided herein. The fact that the Dissemination Agent or any affiliate thereof may have any fiduciary or banking relationship with the Borrower, apart from the relationship created by the Rule shall not be construed to mean that the Dissemination Agent has actual knowledge of any event or condition except as may be provided by written notice from the Borrower. Section 12. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Borrower from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Financial Information Disclosure or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Agreement. If the Borrower chooses to include any information from any document or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Agreement, the Borrower shall not have any obligation under this Disclosure Agreement to update such information or include it in any future disclosure or notice of the occurrence of a Material Event. Section 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Borrower, the Dissemination Agent, if any, the Issuer, the Trustee and the holders of the Bonds, and shall create no rights in any other person or entity. Section 14. Recordkeeping. The Borrower and, to the extent submitted by the Dissemination Agent, the Dissemination Agent, shall maintain records of all Annual Financial C-5

104 Information Disclosure and Material Events Disclosure, including the content of such disclosure, the names of the entities with whom such disclosure was filed and the date of filing such disclosure. Section 15. Indemnification. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Dissemination Agent s obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Borrower has provided such information to the Dissemination Agent as required by this Disclosure Agreement. The Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Dissemination Agent shall have no duty or obligation to review or verify any information, or any other information, disclosures or notices provided to it by the Borrower and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Borrower, the holders of the Notes or any other party. The Dissemination Agent shall have no responsibility for the Borrower s failure to report to the Dissemination Agent a Material Event or a duty to determine the materiality thereof. The Dissemination Agent shall have no duty to determine or liability for failing to determine whether the Borrower has complied with this Disclosure Agreement. The Dissemination Agent may conclusively rely upon certifications of the Borrower at all times. The obligations of the Borrower under this Section 15 shall survive resignation or removal of the Dissemination Agent and defeasance, redemption or payment of the Notes. The Dissemination Agent may, from time to time, consult with legal counsel (either inhouse or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and expenses of such counsel shall be payable by the Borrower. All documents, reports, notices, statements, information and other materials provided to the MSRB under this Disclosure Agreement shall be provided in an electronic format and accompanied by identifying information as prescribed by the MSRB. Section 16. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Remainder of Page Intentionally Left Blank] C-6

105 IN WITNESS WHEREOF, the Borrower and the Dissemination Agent have executed this Disclosure Agreement under seal on the date and year first written above. USG REAL ESTATE FOUNDATION IV, LLC By: USGREF MANAGER, LLC, its Manager By Sachin Shailendra, President [Signature Page to FVSU Continuing Disclosure Agreement] C-7

106 DIGITAL ASSURANCE CERTIFICATION, LLC, as Dissemination Agent By Name Title [Signature Page to FVSU Continuing Disclosure Agreement] C-8

107 SCHEDULE I ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED FINANCIAL STATEMENTS Annual Financial Information means financial information and operating data exclusive of Audited Financial Statements as set forth below. All or a portion of the Annual Financial Information and the Audited Financial Statements as set forth below may be included by reference to other documents which have been submitted to the MSRB or filed with the Commission. The Borrower shall clearly identify each such item of information included by reference. The Borrower intends to provide Annual Financial Information and Audited Financial Statements that include information related to the Project. Annual Financial Information will be provided to the MSRB not later than 210 days after the end of each Fiscal Year of the Borrower, commencing in Audited Financial Statements as described below should be filed at the same time as the Annual Financial Information. If Audited Financial Statements are not available when the Annual Financial Information is filed, unaudited financial statements shall be included, and Audited Financial Statements will be provided to the MSRB within 10 business days after availability to the Borrower. Audited Financial Statements will be prepared in accordance with generally accepted accounting principles in the United States as in effect from time to time. If any change is made to the Annual Financial Information as permitted by Section 4 of the Disclosure Agreement, including for this purpose a change made to the fiscal year end of the Borrower, the Borrower will disseminate a notice to EMMA of such change in Prescribed Form as required by such Section 4. Annual Financial Information shall consist of the following financial information and operating data: Updates of the information contained under the following headings or tables in the Official Statement for the Bonds: THE SERIES 2016 PROJECT Series 2016 Project Unit Configurations THE UNIVERSITY Enrollment, Freshman Admission Statistics, Existing On-Campus Housing and Room Charges, Wildcat Commons Occupancy C-9

108 SCHEDULE II EVENTS WITH RESPECT TO THE BONDS FOR WHICH MATERIAL EVENTS DISCLOSURE IS REQUIRED 1. Principal and interest payment delinquencies. 2. Non-payment-related defaults, if material. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. 7. Modifications to rights of security holders, if material. 8. Bond calls, if material, and tender offers. 9. Defeasances. 10. Release, substitution or sale of property securing repayment of the securities, if material. 11. Rating changes. 12. Bankruptcy, insolvency, receivership or similar event of the Borrower The consummation of a merger, consolidation or acquisition involving the Borrower or the sale of all or substantially all of the assets of the Borrower, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. 15. Notice of the occurrence of an event of default under the Ground Lease. 16. Notice of the occurrence of any event of default under the Rental Agreement or of the System s failure to exercise any renewal right thereunder. 1 This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Borrower in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Borrower, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Borrower. C-10

109 EXHIBIT A NOTICE TO EMMA OF FAILURE TO FILE REPORT Name of Issuer: Development Authority of Peach County Name of Bond Issue: $40,350,000 Student Housing Revenue Bonds (USG Real Estate Foundation IV, LLC Project) Series 2016 Name of Borrower: USG Real Estate Foundation IV, LLC Date of Issuance: October 28, 2016 NOTICE IS HEREBY GIVEN that the Borrower has not provided an Annual Financial Information Disclosure with respect to the above named Bonds as required by the Continuing Disclosure Agreement dated as of October 1, 2016 between USG Real Estate Foundation IV, LLC and Digital Assurance Certification, LLC, as Dissemination Agent. The Borrower has notified the Dissemination Agent and the Trustee that the Borrower anticipates the Annual Financial Information Disclosure will be filed by. Dated:. DIGITAL ASSURANCE CERTIFICATION, LLC, on behalf of USG Real Estate Foundation IV, LLC By Name Title cc: USG Real Estate Foundation IV, LLC C-11

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111 APPENDIX D USDA LOAN COMMITMENT

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113 July 20, 2016 Mr. Sachin Shailendra, President USGREF Manager, LLC, Manager USG Real Estate Foundation IV, LLC 270 Washington Street, SW Suite 7002 Atlanta, Georgia Dear Mr. Shailendra: This letter establishes conditions that must be understood and agreed to by you before further consideration may be given to your application. This letter is not to be considered as loan approval or as a representation as to the availability of funds. The docket may be completed on the basis of a direct Community Facilities loan not to exceed $41,245,000. The loan will be administered by USDA, Rural Development. These loan funds will be used for the costs associated with the acquisition of the leasehold interest of the improvements known as Wildcat Commons, Phase I at Fort Valley State University in Fort Valley, Peach County, Georgia. Phase I consists of five residential buildings containing 951 beds and a clubhouse. The residence halls and clubhouse are being acquired from the Fort Valley State University Foundation Property, LLC. Any change in project cost, source of funds, scope of services, or any other significant changes in the project or USG Real Estate Foundation IV, LLC must be reported to and approved by Rural Development by written amendment to this letter. Any changes not approved by Rural Development shall be reason for discontinuing processing of the application. The proposed funding for this project is set forth on the attached copy of Form RD , Association Project Fund Analysis. If Rural Development makes the loan, you may make a written request that the interest rate be the lower of the rate in effect at the time of loan approval or the time of loan closing. If you do not request the lower of the two interest rates, the interest rate charged will be the rate in effect at the time of loan approval. The loan will be considered approved on the date a signed copy of Form RD , Request for Obligation of Funds, is mailed to you. Form RD , Letter of Intent to Meet Conditions, will be used to exercise your choice of the lower interest rate. The conditions are as outlined below: A. Organization: Consideration for this loan is based on the USG Real Estate Foundation IV, LLC being properly organized and operating under Georgia Law. B. Maximum Amount of Loan to be Considered: $41,245,000 Rural Development Georgia State Office Community Programs Division 355 E. Hancock Ave, RM 304 Athens, GA Voice (706) TDD (706) Fax (855) USDA is an equal opportunity provider, employer, and lender. If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at or at any USDA office, or call (866) to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter to us by mail at U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington, D.C , by fax (202) or at program.intake@usda.gov. D-1

114 Page 2 USG Real Estate Foundation IV, LLC July 20, 2016 C. Repayment Schedule: The loan will be repayable over a period not to exceed twenty (20) years from the date of loan closing. The first payment will be due one year from the date of loan closing and will be a fully amortized installment of both principal and interest. All payments thereafter will be due annually on the same day each year. If the loan is closed on the 29th, 30th or 31st day of the month, the due date of the installment will be the 28th day of the month. Interest will accrue on the basis of a 365-day year. For planning purposes only, use an interest rate of 2.75% and an amortization factor of per $1,000, which equates to an annual payment of $2,708,972. You will be required to complete Form RD , Authorization Agreement for Preauthorized Debt, for all new and existing indebtedness to Rural Development. This will allow for your payment to be electronically debited from your account on the date your payment is due. The Fort Valley Area Rural Development Office will provide more information on this payment process. D. Reserves: Reserves must be properly budgeted to maintain the financial viability of any operation. Reserves are important to fund unanticipated emergency maintenance and repairs, and assist with debt service should the need arise. Reserves can also be established and maintained for the anticipated and expected expenses including but not limited to operation and maintenance, customer deposits, debt service, capital improvements, and depreciation of short-lived assets. It has been determined as part of this finance plan proposal that you will fund the Debt Service Reserve from excess cash flow (savings from interim financing as compared to long-term USDA financing) during the term of the acquisition note, if excess cash flow is available. Such excess cash flow will be utilized to make a lump sum deposit at the closing of the Direct CF loan. The remaining balance of the Reserve requirement, if any, will be made in equal monthly payments of $22,575 until the Reserve account is fully funded at $2,708,972. If disbursements are made, the LLC will begin to make monthly deposits in the amount of $22,575 until the fully funded level of $2,708,972 is reached. E. Existing Reserve Contribution: $3,711,848 The existing Reserve Account has a balance of approximately $3,711,848. These funds will be made available at closing to defease the prior debt related to Wildcat Commons, Phase I. Evidence as to the availability of these funds is to be provided to USDA prior to closing the Bond Anticipation Note. F. Security Requirements: The loan will be evidenced by a Promissory Note, leasehold mortgage, a pledge of all revenue from the facility, and other agreements between you and RHS as set forth in Form RD , "Loan Resolution Security Agreement. Prior to the adoption of the "Loan Resolution Security Agreement," the Managers of the Manager of the LLC, at a properly called meeting, must review and adopt Form RD , "Resolution of Members or Stockholders." Your attorney must provide us with a metes and bounds legal description of the facility which should be included in the Leasehold Mortgage. The real estate interest to be acquired must be appraised by an independent third party qualified fee appraiser. The appraiser must give an opinion regarding the market value of the real property. The appraised value of the real property must be at least $41,245,000. D-2

115 Page 3 USG Real Estate Foundation IV, LLC July 20, 2016 The LLC will enter into a Ground Lease as lessee with the Board of Regents as the lessor. At a minimum, the term of the Ground Lease match the term of the LLC debt with the USDA. The LLC will then enter into a Rental Agreement as lessor with the Board of Regents as lessee on behalf of Fort Valley State University. The Rental Agreement will set forth the lease payments and management of the facility. The term of the Rental Agreement will be one year, with sufficient renewal options of one year coterminous with the term of the USDA debt. As stated in the Financial Feasibility Report dated January 22, 2016, rental payments will be an obligation of the University System of Georgia. This must be made clear in the Rental Agreement. The Board of Regents will have the right to terminate the Ground Lease only upon the occurrence of an event of default by the LLC. The Ground Lease cannot be terminated for convenience. The Ground Lease may contain provisions that would prohibit the Board of Regents from terminating the Ground Lease if the event of default was caused by the actions of Fort Valley State University as lessee under the rental agreement. If an event of default occurs, sufficient cure rights will exist under the Ground Lease that would give USDA as lender notice of the default and the opportunity to cure that default, thereby preserving its rights in the collateral. USDA as lender will also have replacement rights of the LLC as the lessee under the Ground Lease and the lessor under the Rental Agreement. Draft copies of the proposed Ground Lease, Rental Agreement, and Leasehold Mortgage must be reviewed and accepted by the USDA, Office of General Counsel prior to loan closing. G. Mitigation Measures: None H. General Requirements: 1. USG Real Estate Foundation IV, LLC may not borrow any money from any source, enter into any contract or agreement, or incur any other liabilities in connection with making enlargements, improvements or extensions to, or for any other purpose in connection with Wildcat Commons Phase I (exclusive of normal maintenance) without the prior written consent of the Government if such undertaking would involve the source of funds pledged to repay the debt to Rural Development. 2. Prior to the issuance of the 24-month acquisition note, it will be necessary for our Area Office to conduct a Compliance Review. Your office s full cooperation will be necessary in accomplishing this certification and review. During the review, the representative of the Area Office will complete and execute Form RD 400-8, Compliance Review. The nondiscrimination posters, And Justice for All and Equal Employment Opportunity are to be displayed at your office and facilities. 3. Prior to the issuance of this letter of conditions, you will have certified on at least two different occasions as to your inability to finance this project from your own resources or from other credit at reasonable rates and terms that would allow you to operate the project properly and efficiently. This was based on prevailing private and D-3

116 Page 4 USG Real Estate Foundation IV, LLC July 20, 2016 cooperative rates and terms in or near your community for loans for similar purposes and periods of time. 4. By accepting this loan, you are also agreeing to refinance the unpaid balance if at any time in the future it should appear to Rural Development that you are able to obtain loans for such purposes from responsible private or cooperative sources at reasonable rates and terms. 5. Your funding needs will be reassessed before loan closing. The reassessment will include the necessary revisions of the loan docket and the Letter of Conditions. The reassessment and revisions will be based on revised project costs and Rural Development regulations in effect at the time the loan was approved. Any loan funds not needed to complete the proposed project will be deobligated. Professional services of the following may be necessary: engineer, architect, attorney, bond counsel, accountant, auditor, appraiser, and financial advisory or fiscal agent (if desired by the LLC). Contracts and other forms of agreement between the applicant and its professional and technical representatives are required and are subject to Agency concurrence. Details of the costs of these professional services must be provided prior to loan closing. 6. This financial assistance is subject to your compliance with Title VI of the Civil Rights Act of 1964, and the Age Discrimination Act of Awards made under this program are subject to the provisions contained in the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2013, P.L. No , Division A, Sections 738 and 739, regarding corporate felony convictions and corporate federal tax delinquencies. To comply with these provisions, ALL applicants must complete attachment Representation Regarding Felony Conviction or Tax Delinquent Status For Corporate Applicants paragraph (1) of this representation, AND all corporate applicants also must complete paragraphs (2) and (3) of this representation. 8. Adequate insurance coverage must be maintained for the life of the Rural Development financing. You are encouraged to consult with your attorney, and insurance agent to determine the amount of coverage you should maintain to protect the financial interest of USG Real Estate Foundation IV, LLC and Rural Development. 9. Audits An annual audit under the Single Audit Act is required if you expend more than $750,000 in Federal financial assistance per fiscal year or you expend more than the adjusted OMB federal financial assistance threshold effective at time of audit preparation. The total Federal funds expended from all sources shall be used to determine Federal financial assistance expended. Expenditures of interim financing are considered Federal expenditures. All audits are to be performed in accordance with 2 CFR Part 200, as adopted by USDA through 2 CFR Part 400. Further guidance on preparing an acceptable audit can be obtained from the Agency. It is not intended that audits required by this part be separate and apart from audits performed in accordance with State and local D-4

117 Page 5 USG Real Estate Foundation IV, LLC July 20, 2016 laws. To the extent feasible, the audit work should be done in conjunction with those audits. The audit must be prepared by an independent licensed Certified Public Accountant, or a State or Federal auditor if allowed by State law, and must be submitted within 9 months of your fiscal year end. If an audit is required, you must enter into a written agreement with the auditor and submit a copy to the Agency. The audit agreement may include terms and conditions that the borrower and auditor deem appropriate; however, the agreement should include the type of audit or financial statements to be completed, the time frame in which the audit or financial statements will be completed, what type of reports will be generated from the services provided, and how irregularities will be reported. Financial Statements If you expend less than $750,000 in Federal financial assistance per fiscal year and all other requirements as identified in 2 CFR Part 200 have been met, you may submit financial statements in lieu of an audit which include at a minimum IRS form 990 provided it includes a balance sheet and an income and expense statement. You may use Form RD 442-2, Statement of Budget, Income and Equity, and 442-3, Balance Sheet, or similar format to provide the financial information. The financial statements must be signed by the appropriate borrower official and submitted within 60 days of your fiscal year end. The LLC will maintain a debt service coverage ratio of at least 1.0 including any deposits that were required to be made to the Debt Service Reserve Account during the reporting period. If the debt service coverage ratio (Annual rental payment from Rental Agreement /Annual Principal and Interest Payments) based on a review of the annual audit is below 1.0, the Applicant will be required to provide the State Office with quarterly financial reports, semester /quarter enrollment figures for Fort Valley State University and a fiscal strategy report which documents how the debt service requirement will be achieved. Annual Budget and Projected Cash Flow: Thirty days prior to the beginning of each fiscal year, you will be required to submit an annual budget and projected cash flow to this office. You should submit two copies of Form RD 442-2, Statement of Budget, Income and Equity, (Attachment No. ), Schedule 1, page 1; and Schedule 2, Projected Cash Flow. The only data required at this time on Schedule 1, page 1, is Columns 2 & 3. All of Schedule 1, page 2 and Schedule 2, Projected Cash Flow will be required. You may submit annual budgets on other financial statements for cash flow projections rather than Form RD With the submission of the annual budget, you will be required to provide a current rate schedule, a current listing of the Board or Council members and terms. Quarterly Reports Borrowers receiving their first loan from RD, will be required to submit two copies of Form RD 442-2, Schedule 1, page 1, columns 2-6, as appropriate, and page 2. You may submit historical quarterly financial statements on a format other than Form RD This information should be received in the servicing office thirty days after the end of each of the first three quarters of the fiscal year. The audited financial statements will be used for the fourth quarter reports. Quarterly Reports will be required for the first three fiscal years of operation. The Area Office will notify you in writing when Quarterly Reports are no longer required. D-5

118 Page 6 USG Real Estate Foundation IV, LLC July 20, 2016 I. Loan Closing: The LLC will acquire the leasehold interest in Wildcat Commons, Phase I through the use of a 24-month acquisition note. The USDA loan will close at the end of the term of that note or when the LLC requests closing prior to the end of the 24-month term. Pre-closing of the loan will be required. Loan funds will not be requested and disbursed until after all loan closing documents have been executed. Any questions concerning the pre-closing process should be addressed to the Area Specialist in the Fort Valley Rural Development Area Office. J. Owner and Attorney Responsibilities: Attachments A and B are the requirements (action items) to be met by each respective party prior to closing of the loan. All parties should work together, along with the Area Specialist, in meeting these requirements in a timely manner. If the conditions set forth in this letter are not met within 24 months from the date hereof, Rural Development reserves the right to discontinue the processing of the application. Rural Development will meet with USG Real Estate Foundation IV, LLC s officials, attorney, and any other parties that may be involved in the project the second month after the date of Form RD , Letter of Intent to Meet Conditions. The purpose of this meeting will be to determine the progress that has been made in complying with the Letter of Conditions and to review goals and establish a timetable for completing work on the conditions that have not yet been satisfied. Additional meetings for the same purpose will be held at 30-day intervals. If you desire that further consideration be given to your application the following forms need to be executed: Forms RD , Loan Resolution Security Agreement; , Letter of Intent to Meet Conditions; 400-1, Equal Opportunity Agreement; 400-4, Assurance Agreement; 442-7, Operating Budget; , Request for Obligation of Funds; , Applicant Certification Federal Collection Policies for Consumer or Commercial Debts; Form AD-1047, Certification Regarding Debarment, Suspension and Other Responsibility Matters - Primary Covered Transactions; and Certification for Contracts, Grants, and Loans. You have the full cooperation of this Agency. If we can be of any further assistance to you, please let us know. All inquiries and responses to this Letter of Conditions should be made to Hope Williams, State Office Specialist, at or by at hope.williams@ga.usda.gov. Sincerely, JOHN E. STANEK Community Programs Director Attachments: A Owner s Responsibilities B Attorney s Responsibilities D-6

119 ATTACHMENT A Owner s Responsibilities This attachment does not replace the Letter of Conditions, but is an integral part of it. All items listed in Attachment B are also your responsibilities, as owner, in addition to the following items: 1. The President of the Manager must adopt Form RD , Loan Resolution Security Agreement. Prior to the adoption of the Loan Resolution Security Agreement, the members of the LLC, at a properly called meeting, must review and adopt Form RD , Resolution of Members or Stockholders. 2. Form AD-1047, Certification Regarding Debarment, Suspension and Other Responsibility Matters Primary Covered Transaction must be executed by the President. If the President is unable to certify to any of the statements in this certification, she must attach an explanation to the proposal. The LLC agrees by executing this form, it will not knowingly enter into any transactions with persons debarred, suspended, declared ineligible or voluntarily excluded from participation in this project unless authorized by Rural Development. The LLC further agrees by executing this form that it will include Form AD-1048, Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion Lower Tier Covered Transactions, a copy of which is attached, without modification, in all transactions in this project. The LLC will obtain and maintain in its files an executed copy of Form AD-1048 for each participant providing services for this project in excess of $25, The President must execute Form RD , Applicant Certification Federal Collection Policies for Consumer or Commercial Debts indicating her understanding of actions the Federal government may take in the event that the LLC fails to meet its scheduled loan payments. 4. Section 504 of the Rehabilitation Act of 1973, as amended, applies to all Federally Financed Programs and Activities. In order to comply with the law, it is your responsibility as a recipient of Federal financial assistance to make your programs and activities accessible to and useable by persons with disabilities. You should conduct a self evaluation immediately, and if necessary, develop a transition plan for the removal of any structural barriers. The self evaluation must be conducted with the assistance of persons or organizations that are knowledgeable about accessibility issues such as an architect, etc. In addition to structural barriers, policies and procedures must be reviewed. These self evaluations are to be submitted to the Area Office within 30 days of the date of this letter. If structural barriers are found, these will need to be removed prior to loan closing or the start of construction whichever occurs first. 5. Prior to loan closing, the LLC must provide and obtain approval from the Rural Development Area Office for its accounting and financial reporting system, including the required Agreement for Services with its auditor. Management reports will furnish the management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial conditions. 6. Form RD 442-2, Statement of Budget, Income and Equity (Schedule 1, Statement of Budget, Income and Equity and Schedule 2, Projected Cash Flow ) and Form RD 442-3, Balance Sheet will be utilized in submitting management data to Rural Development. (The Area Office will discuss this in more detail later). D-7

120 7. Evidence of adequate insurance and fidelity bond coverage must be provided to Rural Development prior to loan and grant closing or the beginning of construction, whichever occurs first. The use of deductibles may be allowed by Rural Development, provided you have adequate financial resources to cover potential claims requiring payment of the deductible. The following guideline should be observed in obtaining/maintaining fidelity bond coverage: All persons who have access to your funds are to have fidelity bond coverage. This coverage may be provided either for all individual positions or persons or through blanket coverage that will adequately protect the interest of you and Rural Development. Rural Development will normally expect the amount of coverage to approximate the total amount of the annual principal and interest payment for the Rural Development loan. Form RD , Position Fidelity Schedule Bond or similar forms may be used in writing the coverage. Rural Development may require changes in insurance and fidelity bond coverage as it may determine is necessary to adequately protect the government s financial interest. 8. The LLC is to appoint one member of its governing body to serve as liaison with Rural Development. This person should be knowledgeable of the project and available to work with Rural Development and the LLC s attorney and architect. 9. The attached Certification for Contracts, Grants, and Loans, RD Instruction 1940-Q, Exhibit A-1, must be executed by the President and returned to Rural Development. The LLC must also require that the language of this certification be included in the award documents for all contracts and subcontracts exceeding $100,000. The recipients of such contracts and subcontracts, must complete and submit to the LLC a certification. The LLC must retain these certifications in its files and make them available for Rural Development examination upon request. 10. Furnish a current list of the President, Officers and Board Members of the Manager of the LLC, their terms of office, and samples of their signatures. D-8

121 Attachment B Attorney's Responsibilities (Community Facilities) This attachment does not replace the Letter of Conditions, but is an integral part of it: 1. Execute a Legal Services Agreement with the applicant for providing the necessary legal services for the proposed project (4 copies). Rural Development guidelines should be used in preparing this Agreement. (Provide within 15 days) 2. Issue a certification as to any judgments and/or litigation pending or outstanding against the applicant. This should include an opinion on the effect that such litigation might have on the security liens that will secure the loan. (2 copies) A similar certification must be furnished to Rural Development at loan closing and prior to the release of each advance of loan funds from the Finance Office. 3. Assist applicant with the acquisition of necessary properties, rights-of-way, and easements for the proposed project. This includes ground leases and management agreements. 4. Issue Preliminary Title opinions on the properties owned or to be acquired by the applicant utilizing Form RD , Preliminary Title Opinion. This is to include all properties that will be a part of the facilities securing the loan(s). (2 copies) 5. Cooperate with Rural Development in assisting applicant with the closing of the loan including the preparation of the Leasehold Mortgage. 6. Issue Final Title Opinions on the properties described in #4 above utilizing Form RD , "Final Title Opinion. (2 copies) 7. Complete and execute Form RD , "Report of Lien Search" (2 copies) 8. Complete Security Agreement and Financing Statement on forms prepared by the Regional Attorney and file Financing Statement with Clerk of Court(s) immediately after the loan is closed. Other forms, such as those from the Secretary of State's office, are not acceptable for perfecting the USDA, Rural Development lien. 9. Issue on the date of loan closing a certification of the government's lien on the applicant's revenues. 10. Provide necessary assistance to applicant in obtaining other necessary agreements, third party contracts, etc. (2 copies of each) D-9

122 -USDA United September 28,2016 States Department of Agriculture Mr. Zack Buckner U.S. Bank National Association 1349 West Peachtree Street, NW Two Midtown Plaza, Suite 1050 Atlanta, Georgia RE: USG Real Estate Foundation IV, LLC BANs approximating $41,245,000 Dear Mr. Buckner: The USGRealEstate Foundation IV, LLC (the "USDAApl2lical}rL~1'1 behalf of Fort Valley State. University, through the Development Authority of Peach County (the "Issuer") will issue Bond Anticipation Notes (BANs) in order to provide interim financing for the acquisition of Wildcat Commons, Phase I on the campus of Fort Valley State University. The BANs, in the approximate amount of $41,245,000, are being issued pursuant to certain Resolutions adopted by the parties. The purpose of this letter is to confirm understandings on behalf of USDA. It has been determined by the applicant and USDA that the conditions of loan closing can be or have been met. Presently, USDA has no reason to believe that such conditions cannot be met. USDA Community Facilities Direct Loan Funds in the amount of $41,245,000 have been obligated for this proposal. These funds will be used to payoff the principal amount of the BANs. It is proposed by the applicant, with the approval of USDA, that proceeds from the BANs will be used to provide for interest to maturity and to pay for authorized and legally eligible expenses incurred by the applicant. We will schedule the USDA loan to be closed when all loan conditions have been met. When the permanent loan is closed, USDA will disburse its loan proceeds to the Trustee Bank to pay off the BANs. We appreciate your assistance and look forward to working with you on this important project. Rural Development Georgia State Office Community Programs Division 355 E. Hancock Ave, RM 304 Athens, GA Voice (706) TOO (706) Fax (855) USDA is an equal opportunity provider, employer, and lender. If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at or at any USDA office, or call (888) to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter to us by mail at U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington, D.C , by fax (202) or at program.intake@usda.gov. D-10

123 APPENDIX E FORM OF GROUND LEASE

124 [THIS PAGE INTENTIONALLY LEFT BLANK]

125 No. of Two Executed Original Counterparts. COUNTERPART OF. STATE OF GEORGIA; COUNTY OF PEACH: GROUND LEASE [Wildcat Commons Phase I] THIS GROUND LEASE (hereinafter referred to as the Ground Lease or the Lease ) is made and entered this day of, 2016, by and between the BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA, whose address for purposes of this Lease is: Attention: Vice Chancellor for Facilities, 270 Washington Street, S.W., Atlanta, Georgia 30334, Party of the First Part, (hereinafter referred to as Lessor ), and USG REAL ESTATE FOUNDATION IV, LLC, a Georgia limited liability company, whose address for purposes of this Lease is c/o University System of Georgia Foundation, Inc., 270 Washington Street, SW, Suite 7002, Atlanta, Georgia 30334, Attention: Candace Sommer (hereinafter referred to as Lessee ), for the use of certain real property located on the campus of Fort Valley State University, a unit of the University System of Georgia (hereinafter referred to as Institution ). W I T N E S S E T H T H A T: WHEREAS, Lessor is the owner of certain premises consisting of approximately 9.26 acres improved with five student residential buildings containing 951 student beds, a student clubhouse, and related amenities collectively known as Wildcat Commons Phase I situated on the campus of the Institution, more particularly described in Exhibit A attached hereto (hereinafter referred to as the Premises ); and WHEREAS, Lessee desires to lease the Premises from Lessor; and WHEREAS, at its meeting of August 10, 2016, Lessor determined the Premises to no longer be advantageously useful to the Institution or other units of the University System of Georgia ( University System ), but only for the purpose of operating and maintaining the Premises; and further approved the leasing of the Premises to Lessee under the conditions set forth in this Lease; and WHEREAS, Lessor s leasing of the Premises is for the purposes of operating and maintaining the Premises for the benefit of the Institution. NOW, THEREFORE, in consideration of the mutual promises herein contained, upon the following terms and conditions to be paid and kept by Lessee, Lessor grants and leases, and Lessee does hereby accept, take and lease, the Premises from Lessor. This Lease creates in Lessee an estate for years.

126 1. USE OF PROPERTY 1.1 The Premises shall be used by Lessee for the sole purpose of operating and maintaining the Premises for Lessor s educational and housing purposes. 1.2 Without limitation of the foregoing, Lessee shall not: (a) use the Premises for any illegal purpose, nor for any purpose inimical to the health, safety and welfare of the public, or (b) commit, or suffer to be committed, any waste in or on the Premises, nor shall it create or permit any nuisance in or on the Premises. 1.3 Lessor retains a non-exclusive easement on, over, under, upon, across, or through the Premises together with the right of ingress and egress to adjoining land of Lessor as may be reasonably necessary for Lessor to operate the Institution provided the use of such easement by Lessor does not unreasonably interfere with Lessee s operation, maintenance or use of the Premises. Lessor retains non-exclusive easements to all utility lines crossing the Premises that provide service to the property owned by Lessor surrounding the Premises; such easements shall include the ability of Lessor to maintain, repair and replace such utilities. 2. OCCUPANCY Lessee shall occupy the Premises continuously throughout the Term of this Lease and shall not desert, surrender, abandon or cease using the Premises during the term of this Lease. As hereinafter used, Term shall collectively refer to the Primary Term and any extension thereof. 3. RENT For and as rent for the Premises, Lessee covenants and agrees to keep each and every term and condition of this Lease required to be kept by Lessee, each of which shall constitute rent for the Premises, in addition to payment by Lessee to Lessor of the following amounts of rent: 3.1 Lessee shall pay in advance to Lessor the sum of TEN DOLLARS ($10.00) per year, payable in advance upon execution of this Lease. 3.2 Lessee shall also pay to Lessor, as additional rent, all costs and expenses which Lessor incurs as a result of any default of Lessee or failure on the part of Lessee to comply with any provisions of this Lease. 2

127 4. TERM AND TERMINATION 4.1 Unless sooner terminated as hereinafter provided, the Primary Term shall begin upon the execution of this Lease. 4.2 The Primary Term of this Lease shall end at 11:59 o clock P.M. prevailing legal time in Atlanta, Georgia, on June 30, 2037, unless sooner terminated as hereinafter provided. During the Primary Term or any extension thereof, this Lease shall automatically terminate, without the need of either party s written consent and concurrence, upon the date of repayment in full of any of Lessee s outstanding secured indebtedness securing the leasehold interest on the Premises existing on the date of the execution of this Lease (the Primary Indebtedness ) and release of the leasehold security deed securing the Primary Indebtedness; provided, however, that no termination shall occur upon any refinancing of Primary Indebtedness if the lender in connection with such refinancing is an assignee of any existing leasehold security deed or the beneficiary of a successor leasehold security deed. Lessee may terminate this Lease during the Primary Term only upon not less than thirty (30) days written notice to Lessor and, subject to Lessor s rights under Section 9.3, conveyance to Lessor of all Lessee s right and title to all improvements then existing on the Premises free and clear of any liens or encumbrances, providing that so long as any leasehold security deed exists (as specifically permitted under this Lease), Lessee may not terminate this Lease without the written consent and concurrence of the holder of such security deed including the cancellation of any security interest held upon the leasehold interest and conveyance to Lessor of all right and title of Lessee to all improvements then existing on the Premises. 4.3 The termination date of the Primary Term shall automatically extend, for a period of five (5) years, if any obligation of the Lessee to pay an amount secured directly or indirectly by any leasehold security deed permitted under Section 9.5 remains outstanding on the expiration date of the Primary Term. Any such extension for this purpose shall terminate on the earlier to occur of (a) the end of any such extension period, or (b) the date of repayment in full of the secured indebtedness and release of the leasehold security deed. 4.4 Upon expiration of this Lease (including any renewals or extensions thereof), if and only if Lessor determines the continued rental of the Premises is in the best interest of the Institution and the University System, Lessor may grant Lessee a usufruct in the Premises for fair market rental value and under terms to be mutually agreed upon by Lessor and Lessee. 4.5 Subject to Sections 4.3, 4.4, and 9.3, upon expiration or termination of this Lease, all rights and interests of Lessee (and all persons whomsoever claiming by, under or through Lessee) in and to the Premises shall wholly cease and title to the Premises, including but not limited to all permanent improvements, erections and additions constructed on the Premises by Lessee, shall vest in Lessor without further act or conveyance, and without liability to make compensation therefore to Lessee or to anyone whatsoever, and shall be free and discharged from all and every lien, encumbrance, claim and charge of any character created or attempted to be created by Lessee at any time other than pursuant to the specific terms of this Lease. This provision shall not relieve Lessee from liability for having left the Premises in unsound or unsafe 3

128 condition or with encumbered title. Lessee, upon the request of Lessor, covenants and agrees to execute a quitclaim deed releasing all such rights in the Premises, and improvements constructed by Lessee in a form and substance acceptable to Lessor. 4.6 Subject to Section 9.5, in addition to the termination provisions set forth in Section 4.2, if Lessee shall, after ten (10) days notice thereof, default in the performance of any of the stipulations, covenants, terms, conditions, agreements or provisions of this Lease; then and in any of the above events, Lessor, at its option, may at once or thereafter (but only during the continuance of such default), terminate this Lease. Upon such termination by default the provisions of Section 4.5 shall apply and Lessor may forthwith re-enter the Premises and repossess itself and remove all persons and effects therefrom, using such force as may be necessary without being guilty of trespass, forcible entry, detainer or other tort. 5. INTENTIONALLY DELETED. 6. HOLDING OVER Lessee shall not use or remain in possession of the Premises after the termination of this Lease. Any holding over or continued use and/or occupancy of the Premises by Lessee after the expiration or any termination of the Primary Term of this Lease, without consent from Lessor, shall not constitute a Tenancy-At-Will in Lessee, but Lessee shall be a Tenant-At-Sufferance, subject to the provisions of Section INSPECTION Lessee hereby acknowledges that it has fully inspected the Premises and that the Premises is accepted and is in satisfactory and a suitable condition for the use intended by Lessee as hereinabove provided for in this Lease. 8. NO JOINT VENTURE Nothing contained in this Lease shall make, or shall be construed to make, Lessor or Institution and Lessee partners in, of, or joint venturers with each other, nor shall anything contained in this Lease render, or shall be construed to render, either Lessor, Institution or Lessee liable to a third party for the debts or obligations of the other INTENTIONALLY DELETED. 4

129 9.2 Any and all temporary improvements, erections or additions constructed on the Premises by Lessee, which are not a part of the Premises, shall continue to be and remain the property of Lessee, and may be removed by the Lessee, in whole or in part, at any time before the termination of this Lease. If Lessee removes any or all temporary improvements, erections or additions it has constructed on the Premises, Lessee agrees to repair any and all damage resulting to the Premises from such removal. 9.3 Upon the expiration (including any renewal periods) or earlier termination of this Lease, Lessor may, at the option of Lessor, notify Lessee that any or all improvements, temporary and permanent, placed upon the Premises by Lessee should be removed at the expiration or earlier termination of the Lease in which event Lessee shall remove such as expeditiously as possible. Lessor herein grants to Lessee a license to enter the Premises, said license shall take effect upon the termination or expiration of this Lease for the sole and exclusive purpose of removing such. Lessee s right to use said license is contingent upon Lessor s notification to Lessee that permanent improvements shall be removed from the Premises. 9.4 Lessee, at all times during the Term of this Lease, at its sole cost and expense, shall keep the Premises and the Improvements in good order, condition and repair, ordinary wear and tear excepted. Lessee's obligations hereunder include, without limitation, all necessary repairs and replacements of the Premises, structural or otherwise, ordinary or extraordinary, foreseen and unforeseen, including but not limited to the exterior and interior windows, doors and entrances, signs, floor coverings, columns, and partitions, and lighting, heating, plumbing and sewage facilities, and air conditioning equipment. Lessor shall not be required to make any repairs of any kind or nature, in, on or to the Premises during the Term of this Lease. 9.5 Lessee shall have the right to mortgage and/or otherwise encumber the Premises to the extent of its leasehold interest only. Lessor hereby consents to the encumbrance of the Premises during the Primary Term by, first, a leasehold security deed in favor of U.S. Bank National Association, as trustee (together with its successors and assigns, the Trustee ) for the holders of Student Housing Bond Anticipation Notes issued by the Development Authority of Peach County (the Notes ) and, subsequently, a leasehold security deed to or for the benefit of the United States Department of Agriculture-Rural Development (the USDA ) securing a loan by USDA the proceeds of which will be used to retire the Notes. Lessor agrees to give any lender written notice of any default by Lessee under this Lease, provided lender has given Lessor timely notice of lender and lender s contact information and timely notice of any change in lender or lender s contact information, and lender shall have a period of time after lender s receipt of the notice of default (thirty (30) days in the case of a default in the payment of any sum due hereunder; sixty (60) days in the case of all other defaults; provided, however, that such periods shall be extended so long as reasonably necessary to enable a lender pursuing a cure or a foreclosure of its leasehold security deed with commercially reasonable diligence to complete such cure or foreclosure) in which to cure, or to cause to be cured, any such default, before Lessor may exercise any right or remedy hereunder or as otherwise available to Lessor. Lessor further agrees and acknowledges that, upon any termination of this Lease pursuant to the provisions of Section 4.6 hereof, Lessor will enter into a replacement lease with lender or 5

130 lender s designee, on terms and conditions substantially identical to those contained in this Lease and that lender shall have such time as reasonably required by lender to correct or cure any default or any condition which, with the giving of notice or passage of time or both, would constitute a default existing thereunder as of the date of execution of such replacement lease by lender or lender s designee. Lessor agrees and acknowledges that the Trustee has provided notice of the loan of the proceeds of the Notes and that the Trustee s notice address is [U.S. Bank National Association, 1349 West Peachtree Street NW, Suite 1050, Atlanta, GA 30309]. Notwithstanding any other provision of this Lease, Lessor shall not be required to subordinate this Lease to any other interest of any person or entity lending money for the Premises, and all such interests or instruments shall be subordinate to this Lease. If any lender requires recordation of this Lease, both parties hereby consent to such recordation, and either party may record this Lease in that event. Lessee shall not permit any liens to be placed against the Premises, and if such liens are filed, Lessee shall cause prompt removal of such liens. 9.6 INTENTIONALLY DELETED. 10. INDEMNIFICATION AND HOLD HARMLESS 10.1 In consideration of the benefits to be derived herefrom, Lessee shall be responsible to the Lessor during the Term of this Lease for all injury or damage of any kind resulting from any negligent act or omission or breach, failure or other default regarding the occupancy of the Premises by the Lessee, or any of its subcontractors, its agents, employees or others working at the direction of Lessee or on its behalf, regardless of who may be the owner of the property. The Lessee is responsible for insuring its tools, equipment, fixtures, trade fixtures and personal property and Lessor shall not be liable for any loss or damage to such tools, equipment, fixtures and personal property Lessee hereby agrees to indemnify and hold harmless the Lessor, the Institution, the State of Georgia and its departments, agencies and instrumentalities and all of their respective officers, members, employees, directors and agents (hereinafter collectively referred to as the Indemnitees ) from and against any and all claims, demands, liabilities, losses, costs or expenses for any loss including but not limited to bodily injury (including death), personal injury, property damage, expenses, and attorneys fees, arising out of or resulting from the performance of this Lease due to liability to a third party or parties, or due to any act or omission on the part of the Lessee, its agents, employees or others working at the direction of Lessee or on its behalf, or due to any breach of this Lease by the Lessee, or due to the application or violation of any pertinent Federal, State or local law, rule or regulation. This indemnification extends to the successors and assigns of the Lessee. This indemnification obligation survives the termination of this Lease and the dissolution or, to the extent allowed by law, the bankruptcy of the Lessee. If and to the extent such damage or loss (including costs and expenses) as covered by this indemnification is paid by the State Tort Claims Trust Fund, the State Insurance and Hazard Reserve Fund, and other self-insured funds (all such funds hereinafter collectively referred to as the Funds ) established and maintained by the State of Georgia Department of Administrative Services (hereinafter DOAS ) the Lessee agrees to reimburse the Funds for such monies paid out by the Funds. 6

131 This indemnification applies where the Indemnitees are partially responsible for the situation giving rise to the claim, provided however, that this indemnification does not apply to the extent of the sole negligence of the Indemnitees This indemnification does not extend beyond the scope of this Lease and the work undertaken thereunder. Nor does this indemnification extend to claims for losses or injuries or damages incurred directly by the Indemnitees due to breach or default by the Indemnitees under the terms and conditions of this Lease. 11. INSURANCE 11.1 Insurance Certificates. Unless waived in writing, or otherwise provided by the Lessor the Lessee shall procure the insurance coverages identified below at the Lessee s own expense and shall furnish the Lessor an insurance certificate listing the Lessor as the certificate holder. The insurance certificate must provide the following: (a) Name and address of authorized agent (b) Name and address of insured (c) Name of insurance company(ies) (d) Description of policies (e) Policy Number(s) (f) Policy Period(s) (g) Limits of liability (h) Name and address of Lessor as certificate holder (i) Lease number, Name of Facility and Address of Premises (j) Signature of authorized agent (k) Telephone number of authorized agent (l) Mandatory forty-five (45) days notice of cancellation/non-renewal (See Section 11.2(a)) Policy Provisions. Each of the insurance coverages required below (i) shall be issued by a company licensed by the Insurance Commissioner to transact the business of insurance in the State of Georgia for the applicable line of insurance, and (ii) shall be an insurer with a Best Policyholders Rating of A- or better and with a financial size rating of Class VIII or larger. Each such policy shall contain the following provisions: (a) The insurance company agrees that the policy shall not be canceled, changed, allowed to lapse, or allowed to expire until forty-five (45) days after the Lessor has received written notice thereof as evidenced by return receipt of registered letter or until such time as other insurance coverage providing protection equal to protection called for in this Lease shall have been received, accepted, and acknowledged by the Lessor. Such notice shall be valid only as to the Premises and the address of the Premises shall be required in said notice. 7

132 (b) The policy shall not be subject to invalidation as to any insured by reason of any act or omission of another insured or any of its officers, employees, agents or other representatives ( Separation of Insureds ). (c) Each insurer is hereby notified of the statutory requirements that the Attorney General of the State shall represent and defend the Indemnitees but will, without limiting the authority of the Attorney General, consider attorneys recommended by the insurance company for appointment as Special Assistant Attorney General to represent and defend the Indemnitees. The insurance company may, at the option of the Attorney General, have the right to participate in the defense of the Indemnitees. In the event of litigation, any settlement on behalf of the Indemnitees must be expressly approved by the Attorney General. (d) Self-insured retention in any policy for All Risk shall not exceed $10, except for Catastrophic Perils including Flood, Earthquake and Windstorm which shall not exceed $50, Insurance Coverages. The Lessee agrees to purchase and have the authorized agent state on the insurance certificate that the following types of insurance coverages, consistent with the policies and requirements of O.C.G.A , have been purchased by the Lessee, during the Construction Term and Primary Term of this Lease. The minimum required coverages and liability limits which may be amended from time to time during the term of this Ground Lease by Lessor to reflect then current reasonable and standard limits by giving Notice to Lessee pursuant to Section 20 and both parties shall execute an amendment to this Ground Lease to reflect the change are as follows: (a) Workers Compensation. In the event Lessee has employees, the Lessee agrees to provide Workers Compensation coverage in accordance with the statutory limits as established by the General Assembly of the State of Georgia. A group-insurer must submit a certificate from the Georgia Board of Workers Compensation approving the group insurance plan. A selfinsurer must submit a certificate from the Georgia Board of Workers Compensation stating the Lessee qualifies to pay its own workers compensation claims. The Lessee shall require all subcontractors performing work or occupying the Premises under this Lease to obtain an insurance certificate showing proof of Workers Compensation and shall submit a certificate on the letterhead of the Lessee in the following language prior to the commencement of any construction period: This is to certify that all contractors and subcontractors performing work or occupying the Premises are covered by their own worker s compensation insurance or are covered by the Lessee s worker s compensation insurance. (b) Employers Liability Insurance. In the event Lessee has employees, the Lessee shall also maintain Employers Liability Insurance Coverage with limits of at least: (i) Bodily Injury by Accident - $3,000,000 each accident; and (ii) Bodily Injury by Disease - $3,000,000 each employee. 8

133 The Lessee shall require all contractors and subcontractors performing work or occupying the Premises under this Lease to obtain an insurance certificate showing proof of Employers Liability Insurance Coverage and shall submit a certificate on the letterhead of the Lessee in the following language prior to the commencement of occupancy: This is to certify that all contractors and subcontractors performing work or occupying the Premises are covered by their own employers liability insurance or are covered by the Lessee s employers liability insurance. (c) Commercial General Liability Insurance. The Lessee shall provide Commercial General Liability Insurance (2013 ISO Occurrence Form or equivalent) which shall include, but need not be limited to, coverage for bodily injury and property damage arising from premises and operations liability, products and completed operations liability, personal injury and advertising liability, contractual liability, fire legal liability, blasting and explosion, collapse of structures and underground damage liability. The Commercial General Liability Insurance shall provide at minimum the following limits: Coverage Limit 1. Premises and Operations $3,000,000 per Occurrence 2. Products and Completed Operations $3,000,000 per Occurrence 3. Personal Injury and Advertising $3,000,000 per Occurrence 4. Contractual $3,000,000 per Occurrence 5. Fire Legal $3,000,000 per Occurrence 6. Blasting and Explosion $3,000,000 per Occurrence * 7. Collapse of Structures $3,000,000 per Occurrence * 8. Underground Damage $3,000,000 per Occurrence * 9. General Aggregate $3,000,000 this Lease only * Required during any construction period. Additional Requirements for Commercial General Liability Insurance: (1) The policy shall name as additional insureds the officers, members, agents and employees of the Lessor, and the State of Georgia, but only with respect to claims arising out of work, occupancy of the Premises or performance under this Lease for which the Georgia Tort Claims Act, O.C.G.A et seq. is not the exclusive remedy. (2) The policy must provide primary coverage limits for any claims not covered by the Georgia Tort Claims Act. (3) The policy or policies must be on an occurrence basis. (4) The policy must include separate aggregate limits per Premises/location. (d) Commercial Umbrella Liability Insurance. Commercial Umbrella Liability Insurance Policy to provide excess coverage above the Commercial General Liability, and the Workers 9

134 Compensation and Employers Liability to satisfy the minimum limits set forth herein. The minimum amount of Umbrella limits required above the coverages and minimum limits stated in 11.3(a), (b), and (c) shall be: $2,000,000 per Occurrence $2,000,000 Aggregate Additional Requirements for Commercial Umbrella Liability Insurance: (1) The policy shall name as additional insureds the officers, members, agents and employees of the Lessor, the Institution and the State of Georgia, but only with respect to claims arising out of work, occupancy of the Premises or performance under this Lease for which the Georgia Tort Claims Act, O.C.G.A et seq. is not the exclusive remedy. (2) The policy must provide primary coverage for any claims not covered by the Georgia Tort Claims Act. (3) The policy must be on an "occurrence" basis. (e) Builders Risk Insurance. During any construction period only, Lessee shall provide a Builder s Risk Insurance Policy to be made payable to the Lessor and Lessee as their interests may appear. The policy amount should be equal to 100% of the improvement construction contract sum, written on a 2002 Causes of Loss - Special Form, or its equivalent. All deductibles shall be the sole responsibility of Lessee or the contractor, and in no event shall the amount of any deductible exceed $10, The policy shall be endorsed as follows: The following may occur without diminishing, changing, altering or otherwise affecting the coverage and protection afforded the insured under this policy: (i) Furniture and equipment may be delivered to the insured premises and installed in place ready for use; and (ii) Partial or complete occupancy by Lessee or Lessor, and (iii) Performance of work in connection with construction operations insured by the Lessee or Lessor, by agents or sublessees or other contractors of Lessee or Lessor, or by contractors of the Lessee or Lessor. (f) Property Insurance. Lessee shall provide a Fire and Hazard Property Insurance Policy to be made payable to the Lessor and Lessee as their interests may appear. The policy amount should be equal to 100% of the replacement value of the Premises, written on a 2002 Causes of Loss - Special Form, or its equivalent. All deductibles shall be the sole responsibility of Lessee, and in no event shall the amount of the All Risk deductible exceed $10,

135 11.4 Termination of Obligation to Insure. Unless otherwise expressly provided to the contrary, the obligation to insure as provided herein continues throughout the Primary Term and shall not terminate until this Lease has been terminated Failure of Insurers. The Lessee is responsible for any delay resulting from the failure of its insurance carriers to furnish proof of proper coverage in the prescribed form Waiver of Insurance for Additional Insureds. Unless otherwise expressly provided to the contrary, the obligation of Lessee to name as additional insureds the officers, members, agents and employees of the Lessor, the Institution and the State of Georgia for claims arising out of work or occupancy of the Premises under this Lease for which the Georgia Tort Claims Act, O.C.G.A et seq. is not the exclusive remedy is hereby waived to the extent and during any term or renewal term of any rental agreement under which the Lessor is occupying the Premises; provided, however, that this waiver does not apply to any insurance requirements in this Lease applicable to any construction period in which renovation, rehabilitation or other work is being performed on the Premises. 12. UTILITIES At its sole cost and expense, Lessee shall cause to be furnished and shall pay for all water, gas, light, power, sanitation (sewerage or otherwise), garbage pick-up and disposal, telephone and other utilities or services required for Lessee s use of the Premises. 13. TAXES AND ASSESSMENTS 13.1 Lessee covenants and agrees, during its use and/or occupancy of the Premises, to pay or cause to be paid, to the public officer charged with collection thereof and before any of the same shall become delinquent and shall indemnify, protect, save and hold harmless Lessor from the payment of (a) any and all taxes, assessments, license fees, excises, imposts, fees and charges of every sort, nature and kind, hereinafter collectively referred to as impositions, which during Lessee s use and/or occupancy of the Premises, may be assessed, levied, charged or imposed against or with respect to the Premises, including, but not limited to, the building, fixtures, equipment and personal property, if any there be, located therein or thereon; and (b) any impositions assessed, levied, charged or imposed on or with respect to the conduct of Lessee s business in or on the Premises Nothing herein shall obligate or require the payment of any imposition by Lessee, unless such obligation or requirement is provided by law. Lessee may contest the validity, legality or amount of any imposition in the manner provided by law after posting of security with (and acceptable to) Lessor in an amount equal to the amount of the imposition claimed to be due. Within ten (10) days after the payment of Lessee of any imposition, Lessee shall furnish Lessor with a copy of said receipt evidencing such payment. 11

136 14. DESTRUCTION OF OR DAMAGE TO PROPERTY If the Premises are totally or partially destroyed or rendered untenantable by storm, fire, earthquake, hurricane or other natural catastrophe, this Lease shall not terminate, but Lessor shall permit Lessee to rebuild, or at Lessee s option, Lessee may terminate this Lease (subject, however, to the consent and concurrence of the holder of the leasehold security deed) and invoke the provisions of Section REPAIR Lessee shall operate, maintain and repair the Premises, and any building built thereon in accordance with the existing rules, regulations, and policies of the Lessor, and in accordance with the provisions of this Lease. 16. HAZARDOUS SUBSTANCES 16.1 Lessee shall not bring, deposit, or allow to be brought or deposited, in or upon the Premises any pollutant or harmful substance, except for substances ordinarily used in the care and maintenance of the Premises and in compliance with all other applicable provisions of this Lease Lessee warrants that it will not allow any of the following to occur on the Premises, regardless of cause: (A) any generation, treatment, recycling, storage or disposal of any hazardous substance; (B) any underground storage tank, surface impoundment, lagoon or other containment facility for the temporary or permanent storage, treatment or disposal of hazardous substances; (C) any landfill or solid waste disposal area; (D) any asbestos-containing material as defined by the Toxic Substances Control Act; (E) any polychlorinated biphenyl (PCB) used in hydraulic oils, electric transformers or other equipment; or (F) any release or threatened release of hazardous substance to the environment in forms or quantity requiring remedial action under environmental laws. In addition, Lessee warrants that it will not allow any violations of environmental laws on the Premises, regardless of cause. Lessee s obligation in no way extends to any environmental condition of the Premises existing prior to Lessee s possession. 17. INSPECTION For the purpose of inspecting the Premises, Lessee shall permit Lessor at reasonable times to enter in and on the Premises. 12

137 18. NO DISCRIMINATION In its occupancy and use of the Premises, Lessee shall not discriminate against any person on the basis of race, color, national origin, age or disability. This covenant of the Lessee may be enforced by termination of this Lease, (provided that notice of the breach of such covenant shall have been given to any leasehold mortgagee and such breach shall not have been cured, as provided in Section 9 of this Lease), injunction, and any other remedy available at law to Lessor. 19. TRANSFER, ASSIGNMENT AND SUBLETTING 19.1 Lessee shall not transfer or assign (whether by instrument or operation of law or, if applicable, by withdrawal, sale, gift, exchange, change in partnership ownership or membership, change in stock ownership, merger, consolidation, dissolution or reorganization of any type) this Lease or any right or privilege of Lessee hereunder without the prior written consent, in Lessor s sole discretion, of Lessor. Lessee shall not sublet the Premises or any building located thereon or part thereof, or any right or privilege appurtenant thereto, nor permit nor suffer any party other than Lessee to use or occupy the Premises or any portion thereof without the prior written consent, in Lessor s sole discretion, of the Lessor. Any transfer, assignment or subletting without the prior written consent of Lessor shall be void ab initio and shall at the option of Lessor terminate this Lease. Lessor s consent to a transfer, assignment or subletting, or to any use or occupancy by a party other than Lessee, shall not invalidate or constitute a waiver of this provision, and each subsequent transfer, assignment and subletting, and each subsequent use and occupancy by a party other than Lessee shall likewise be made only with the prior written consent of Lessor. Execution, delivery and performance of the Rental Agreement between the parties of even date herewith shall not be deemed to violate this Section Nothing contained in Section 19 shall limit or is intended to limit the rights of Lessee under Section 9.5; and the enforcement by the holder of a leasehold security deed encumbering the Premises, including the foreclosure of such security deed or transfer of Lessee s leasehold interest in lieu of foreclosure, shall not be restricted or prohibited hereunder or subject to Lessor s consent. In addition, if any leasehold mortgagee (or its successor, assign, designees or nominee) succeeds to the interest of Lessee under this Lease, then such mortgagee (or its successor, assign, designee or nominee) shall have (a) the right, with the consent of Lessor, which shall not be unreasonably withheld, to further transfer or assign this Lease or to sublet the Premises, anything to the contrary herein contained notwithstanding, and (b) all the rights, options and privileges of the Lessee under this Lease. 20. NOTICES All notices, statements, reports, demands, requests, consents, approvals, waivers and authorizations, hereinafter collectively referred to as notices, required by the provisions of this 13

138 Lease to be secured from or given by either of the parties hereto to the other shall be in writing (whether or not the provision hereof requiring such notice specifies written notice) and the original of said notice shall be sent by United States Certified Mail - Return Receipt Requested, postage prepaid and addressed to the recipient party at such party s hereinabove set forth address. The sender of said notice shall request the United States Postal Service to Show to whom, date and address of delivery of said notice on the returned receipt. The day upon which such notice is so mailed shall be deemed the date of service of such notice. The parties hereto agree that, even though notices, where applicable, shall be addressed to the attention of the person or title, or both if applicable, hereinabove set forth, valid and perfected delivery of notice shall be accomplished under this Lease even though the said named person or the person holding said title is not the person who accepts or receives delivery of the said notice. Any notice, so mailed, the text of which is reasonably calculated to apprise the recipient party of the substance thereof and the circumstances involved, shall be deemed sufficient under this Lease. Either party hereto may from time to time, by notice of the other, designate a different person or title, or both as applicable, address or addresses to which notices to said party shall be given. 21. TIME IS OF THE ESSENCE All time limits stated herein are of the essence of this Lease. 22. NON-WAIVER No failure of Lessor to exercise any right or power given to Lessor under this Lease, or to insist upon strict compliance by Lessee with the provisions of this Lease, and no custom or practice of Lessor or Lessee at variance with the terms and conditions of this Lease, shall constitute a waiver of Lessor s right to demand exact and strict compliance by Lessee with the terms and conditions of this Lease. 23. RIGHTS CUMULATIVE All rights, powers and privileges conferred by this Lease upon Lessor and Lessee shall be cumulative of, but not restricted to, those given by law. 24. BINDING EFFECT Each of the terms and conditions of this Lease shall apply, extend to, be binding upon, and inure to the benefit or detriment of the parties hereto, to the successors and assigns of Lessor, and to the extent that Lessor has consented to a transfer or assignment of this Lease (if such consent is required) to the successors and assigns of Lessee, and to any leasehold mortgagee and its successors and assigns. Subject to the foregoing, whenever a reference to the parties hereto is made, such reference shall be deemed to include the successors and assigns of said party, the same as if in each case expressed. 14

139 25. INTERPRETATION Should any provision of this Lease require judicial interpretation, it is agreed and stipulated by and between the parties that the court interpreting or construing the same shall not apply the presumption that the provisions hereof shall be more strictly construed against one party by reason of the rule of construction that an instrument is to be construed more strictly against the party who prepared the same. 26. GEORGIA AGREEMENT This Lease shall be governed by, construed under, performed and enforced in accordance with the laws of the State of Georgia. 27. SECTION HEADINGS The brief headings or title preceding each section herein are merely for purposes of section identification, convenience and ease of reference, and shall be completely disregarded in the construction of this Lease. 28. COUNTERPARTS This Lease is executed in two (2) counterparts which are separately numbered but each of which is deemed an original of equal dignity with the other and which is deemed one and the same instrument as the other. 29. THIRD PARTY BENEFICIARY Nothing in this Lease, whether express or implied, is intended to confer upon any other party other than the parties hereto and each holder of a leasehold security deed and their respective successors and assigns, any right or interest whatsoever. No party other than the parties hereto and each holder of a leasehold security deed is entitled to rely in any way upon the warranties, representations, obligations, indemnities or limitations of liability whatsoever in this Lease. 30. SPECIAL STIPULATIONS The Special Stipulations on Exhibit B, attached hereto are hereby incorporated by reference herein. To the extent that the Special Stipulations set forth on Exhibit B conflict with 15

140 any of the foregoing terms and conditions of this Lease, the said Special Stipulations shall control. 31. SEVERABILITY If any provision of this Lease, or any portion thereof, should be ruled void, invalid, unenforceable or contrary to public policy by any court of competent jurisdiction, then any remaining portion of such provision and all other provisions of this Lease shall survive and be applied, and any invalid or unenforceable portion shall be construed or reformed to preserve as much of the original words, terms, purpose and intent as shall be permitted by law. 32. ENTIRE AGREEMENT This Lease constitutes the entire Lease between the parties. This Lease supersedes all prior negotiations, discussions, statements and agreements between Lessor and Lessee with respect to the Premises and Lessee s use and occupancy thereof. No member, officer, employee or agent of Lessor or Lessee has authority to make, or has made, any statement, agreement, representation or contemporaneous agreement, oral or written, in connection herewith amending, supplementing, modifying, adding to, deleting from, or changing the terms and conditions of this Lease. No modification of or amendment to this Lease shall be binding on either party hereto unless such modification or amendment shall be properly authorized, in writing, properly signed by both Lessor and Lessee and incorporated in and by reference made a part hereof. [CONTINUED ON NEXT PAGE] 16

141 IN WITNESS WHEREOF, Lessor, acting pursuant to and in conformity with a properly considered and adopted Resolution and acting by and through its duly authorized hereinafter named representatives, and Lessee, acting pursuant to and in conformity with a properly considered and adopted Resolution and acting by and through its duly authorized hereinafter named officers, have caused these presents to be signed, sealed and delivered all as of the date hereof. LESSOR: BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA By: JIM JAMES Vice Chancellor for Facilities L.S. Attest: SAM BURCH Secretary to the Board L.S. Signed, sealed and delivered as to Lessor in the presence of: (Seal Affixed Here) Unofficial Witness Official Witness, Notary Public My Commission Expires: APPROVAL OF INSTITUTION: By President [SIGNATURES CONTINUED ON NEXT PAGE] 17

142 [SIGNATURES CONTINUED FROM PREVIOUS PAGE] APPROVED: By: NATHAN DEAL Governor Attest: BRIAN P. KEMP Secretary of State (Great Seal of the State of Georgia) Signed, sealed and delivered as to Governor in the presence of: Unofficial Witness Official Witness, Notary Public My Commission Expires: [SIGNATURES CONTINUED ON NEXT PAGE] 18

143 [SIGNATURES CONTINUED FROM PREVIOUS PAGE] LESSEE: USG REAL ESTATE FOUNDATION IV, LLC By: USGREF MANAGER, LLC, its Manager By: President L.S. (Seal Affixed Here) Signed, sealed and delivered as to Lessee in the presence of: Unofficial Witness Official Witness, Notary Public My Commission Expires: 19

144 EXHIBIT A LEGAL DESCRIPTION TOGETHER WITH THE FOLLOWING DESCRIBED APPURTENANT EASEMENTS, WHICH SHALL INURE TO THE BENEFIT OF THE LESSEE, ITS SUCCESSORS AND ASSIGNS, AND UNLESS SOONER TERMINATED AS PROVIDED BELOW, SHALL RUN WITH THE ESTATE FOR YEARS IN THE PREMISES AND ANY RENEWALS OR EXTENSIONS OF SAID ESTATE: UTILITY EASEMENT A non-exclusive easement to establish, connect, or maintain utilities on, over, across and through Lessor s tract or parcel of land adjacent to the Premises lying in or being in Land Lot 215 of the 9 th District of Peach County, Georgia on the campus of Fort Valley State University. VEHICULAR ACCESS EASEMENT A non-exclusive easement for vehicular access on, over, across and through designated driveways or streets on Lessor s tract or parcel of land adjacent to the Premises lying in or being in Land Lot 215 of the 9 th District of Peach County, Georgia on the campus of Fort Valley State University.

145 PARKING EASEMENT A non-exclusive easement for driving and parking vehicles on, over, across and through designated parking lots on Lessor s tract or parcel of land adjacent to the Premises lying in or being in Land Lot 215 of the 9 th District of Peach County, Georgia on the campus of Fort Valley State University (the Parking Easement Area ). PEDESTRIAN ACCESS EASEMENT A non-exclusive easement for pedestrian ingress, egress and access on, over, across and through designated walkways on Lessor s property adjacent to the Premises, and the Parking Easement Area (the Access Easement Area ). Without limiting the generality of the foregoing, there following easements specifically burden the real property more particularly described as follows:

146 VEHICULAR ACCESS EASEMENT; PARKING EASEMENT; PEDESTRIAN ACCESS EASEMENT:

147 VEHICULAR ACCESS EASEMENT: The non-exclusive easements granted herein shall expire automatically upon the expiration or earlier termination of the Lease as same shall be renewed or extended.

148 EXHIBIT B Special Stipulations None

149 APPENDIX F FORM OF RENTAL AGREEMENT

150 [THIS PAGE INTENTIONALLY LEFT BLANK]

151 Counterpart No. of Two Original Executed Counterparts. Counterpart of the STATE OF GEORGIA; COUNTY OF PEACH: RENTAL AGREEMENT [Wildcat Commons Phase I] THIS RENTAL AGREEMENT (hereinafter Agreement ), made and entered into this day of, 2016, by and between USG Real Estate Foundation IV, LLC, a Georgia limited liability company, whose address is c/o University System of Georgia Foundation, Inc., 270 Washington Street, SW, Suite 7002, Atlanta, Georgia 30334, Attention: Candace Sommer, Party of the first part, (hereinafter referred to as Landlord ), and the BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA, for the use of FORT VALLEY STATE UNIVERSITY ( Institution ), a unit of the University System of Georgia, whose address is 270 Washington Street, Sixth Floor, Atlanta, Georgia 30334, party of the second part, (hereinafter referred to as Tenant ): W I T N E S S E T H: ARTICLE I PREMISES RENTED AND USE OF PREMISES Landlord, in consideration of the rents agreed to be paid by Tenant and of the covenants, agreements, provisions and stipulations herein agreed to be mutually kept and performed by the parties hereto, does hereby this day grant, demise and rent, upon the terms and conditions herein stated, unto Tenant those certain premises situated on the campus of the Institution in Peach County, Georgia, consisting of approximately 9.26 acres improved with five student residential buildings containing 951 student beds, a student clubhouse and related amenities collectively known as Wildcat Commons Phase I, together with all the improvements, tenements and appurtenances, thereunto belonging or in any wise appertaining, including the right of ingress and egress thereto and therefrom at all times (hereinafter referred to as Premises ) located as more particularly described in Exhibit C, which is attached hereto and incorporated herein by this reference. Tenant does hereby rent and take from Landlord, upon the terms and conditions herein stated, for the use of educational functions and student housing, the Premises. ARTICLE II FIXED RENTAL Tenant agrees to pay Landlord, at its above stated address, or at such other address or addresses as may be designated in writing from time to time by Landlord, rent in the amount and at the times designated on Exhibit E : Rental Schedule, which is attached hereto and incorporated by this reference, (hereinafter referred to as Rent ) for the use and rent of the Premises. ARTICLE III TERM This Rental Agreement shall be for a term commencing at 12:00 o clock A.M., on the above date this Agreement is made and entered into (the Commencement Date ), and ending at 11:59 o clock P.M. on June 30, 2017 (hereinafter referred to as the Expiration Date ) unless terminated earlier as hereinafter provided (hereinafter referred to as the Initial Term ).

152 ARTICLE IV OPTION TO RENEW OR EXTEND TERM The Landlord, in consideration of the premises and of the covenants, agreements, provisions and stipulations herein agreed to be mutually kept and performed by the parties to this Agreement, does hereby give and grant unto the Tenant the exclusive right, privilege and option of renewing or extending this Agreement at the expiration of the Initial Term on a year to year basis for twenty (20) consecutive years (each year is hereinafter referred to as a Renewal Term ) until June 30, 2037, upon which date the final Renewal Term shall terminate. The Initial Term and Renewal Terms shall be collectively referred to as the Term. Each Renewal Term shall be granted upon the same terms, conditions, covenants, provisions, stipulations and agreements as herein set forth and at the rental rate stipulated on Exhibit E ; provided, that notice of the Tenant s desire, through the President or Vice President of Business Operations of Fort Valley State University, a unit of the University System of Georgia, to exercise such option shall be given to the Landlord at least sixty (60) days prior to the expiration date of the immediately preceding Initial Term or Renewal Term. It is further provided that this option may be exercised by the Tenant only in the event that the Tenant is not in material breach of this Agreement. ARTICLE V CONFLICTS The stipulations, provisions, covenants, agreements, terms and conditions, contained in the attached Exhibits A, B, C, D and E are incorporated into this Agreement by this reference. In the event of conflict, the special stipulations in Exhibit B shall take precedence over any conflicting terms in this Agreement or in the other Exhibits. (SIGNATURES BEGIN ON NEXT PAGE)

153 IN WITNESS WHEREOF, Landlord and Tenant, by and through their authorized representatives, have hereunto executed, signed, and delivered this Agreement in duplicate the day, month, and year first above written, each of the said parties keeping one of the copies hereof. USG Real Estate Foundation IV, LLC By: USGREF Manager, LLC, its Manager Signed as to Landlord, in the presence of: By: L.S. President Unofficial Witness Notary Public (Seal) BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA By: Jim James, Vice Chancellor for Facilities Attest: Sandra Neuse, Associate Vice Chancellor for Development & Administration SIGNED as to Board Of Regents of the University System of Georgia in the presence of: Unofficial Witness (Seal) Notary Public Approval of Institution By: President

154 EXHIBIT A STIPULATIONS, PROVISIONS, COVENANTS, AGREEMENTS, TERMS AND CONDITIONS OF AGREEMENT 1. COVENANTS OF TITLE AND QUIET ENJOYMENT Landlord covenants that Landlord is seized with an Estate for Years in the Premises and warrants that Tenant will lawfully, quietly and peacefully have, hold, use, possess, enjoy, and occupy the Premises for the Term without any suit, hindrance, interruption, inconvenience, eviction, ejection, or molestation by the Landlord or by any other person or persons whatsoever. If Tenant is deprived of Tenant s right to lawfully, quietly and peacefully have, hold, use, possess, enjoy and occupy the Premises, for any reason whatever, Tenant shall have the option to terminate this Agreement by giving the Landlord notice provided however that if Landlord's title shall come into dispute or litigation and Tenant is deprived of possession and use of the Premises, the Tenant shall nonetheless continue its scheduled payment of rent without abatement. 2. LANDLORD'S FAILURE TO DELIVER PREMISES AT COMMENCEMENT OF TERM Should the Landlord, for any reason whatever, be unable to deliver possession of the Premises to the Tenant on the Commencement Date of the Initial Term, Tenant shall have the option of terminating this Agreement by giving the Landlord notice thereof and this Agreement shall be null and void as of the date of the notice and neither party shall have any further obligations hereunder. In the event Tenant elects not to exercise Tenant s option to terminate this Agreement, there shall be a total abatement of rent during the period between the Commencement Date and the date upon which Landlord actually delivers possession of the Premises to the Tenant. 3. LANDLORD S INSURANCE (a) Insurance Certificates. Landlord shall procure the insurance coverage identified in Exhibit D and shall furnish the Tenant an insurance certificate listing the Tenant as the certificate holder. The insurance certificate must provide the following: (i) (ii) (iii) (iv) (v) (vi) (vii) Name and address of authorized agent; Name and address of insured; Name of insurance company(ies); Description of policies; Policy number(s); Policy period(s); Limits of liability;

155 (viii) (ix) (x) (xi) (xii) Name and address of Landlord as certificate holders; Lease number, Name of Facility and Address of Premises; Signature of authorized agent; Telephone of authorized agent; and Mandatory forty-five (45) days notice of cancellation-renewal. (b) Policy Provisions. Each of the insurance coverages required (i) shall be issued by a company licensed by the Insurance Commissioner to transact the business of insurance in the State of Georgia for the applicable line of insurance, and (ii) shall be issued by an insurer (or, for qualified self-insured or group of self-insureds, a specific excess insurer provider) with a Best Policyholders Rating of A- or better and with a financial size rating of a class VIII or larger. Each such policy shall contain the following provisions: (i) The insurance company agrees that the policy shall not be canceled, changed, allowed to lapse, or allowed to expire until forty-five (45) days after the Landlord and Tenant have received written notice thereof as evidenced by return receipt of registered letter or until such time as other insurance coverage providing protection equal to protection called for in this Agreement shall have been received, accepted and acknowledged by the Landlord and the Tenant. Such notice shall be valid only as to the Premises and the address of the Premises shall be included in said notice. (ii) The policy shall not be subject to invalidation as to any insured by reason of any act or omission of another insured or any of its officers, employees, agents or other representatives ( Separation of Insureds ). (iii) Each Insurer is hereby notified that the statutory requirements that the Attorney General of the State shall represent and defend the Indemnitees, but will, without limiting the authority of the Attorney General, consider attorneys recommended by the insurance company for appointment as Special Assistant Attorney General to represent and defend the Indemnitees. The insurance company shall have the right to participate in the defense of the Indemnitees. In the event of litigation, any settlement on behalf of the Indemnitees must be expressly approved by the Attorney General. (iv) Self-insured retention, except for qualified self-insurers or group self-insurers, in the All Risk policy shall not exceed $10,000 except that deductibles for Catastrophic Perils including Flood, Earthquake, and Windstorm, shall not exceed $50, (c) Termination of Obligation to Insure. Unless otherwise expressly provided to the contrary, the obligation to insure as provided herein continues throughout the term of this Agreement and shall not terminate until this Agreement has been terminated.

156 (d) Failure of Insurers. The Landlord is responsible for any delay resulting from the failure of its insurance carriers to furnish proof of proper coverage in the prescribed form. 4. USE OF PREMISES AND TENANT S INSURANCE REQUIREMENTS (a) Tenant shall use the Premises for its educational and administrative functions and for any purpose within the powers of the University System of Georgia (the University System ). No use shall be made of the Premises, nor acts done which will cause a cancellation of or an increase in the existing rate of fire, casualty and other extended coverage insurance insuring the Premises, without first consulting with Landlord who shall obtain appropriate insurance endorsements. Tenant shall submit payment of the increase in premium for such endorsements. Tenant shall not sell, or permit to be kept for use in or about the Premises, any article or articles which may be prohibited by the standard form of fire insurance policies unless the policy is endorsed as set forth in this paragraph. (b) Tenant shall insure or self-insure at its own cost and expense its fixtures, furnishings, equipment and personal property which it may use or store on the Premises. Tenant will provide third party liability coverage arising from the acts of its officers, members, and employees through the Georgia Tort Claims Act, O.C.G.A et seq. and the self-insurance funds maintained pursuant to Georgia Law. The Georgia Tort Claims Act provides coverage for $1,000,000 per person and $3,000,000 per occurrence for claims covered by the Act. 5. TAXES AND ASSESSMENTS During the Term of this Agreement, Landlord covenants to pay off, satisfy and discharge, as they become due, all assessments, taxes, levies and other charges, general or special, of whatever name, nature and kind, which are or may be levied, assessed, imposed and charged upon the Premises herein demised and rented. 6. JANITORIAL SERVICES, RUBBISH REMOVAL, TERMITES, RODENTS AND PESTS, UTILITIES (a) Landlord shall furnish, without additional charge, janitorial services for general cleaning of the Premises. Landlord shall use care to select honest and efficient employees. Landlord shall be responsible to the Tenant for the negligence, theft, fault and misconduct of such employees. Tenant agrees to report promptly to the Landlord any neglect of duty or any incivility on the part of such employees, which in any way interferes with the full enjoyment of the Premises.

157 (b) Landlord shall keep the Premises clean, both inside and outside at its own expense, and shall see that all garbage, trash, and all other refuse is removed from the Premises. (c) Landlord shall, at its own expense, keep the Premises free from infestation by termites, rodents, and other pests and shall repair all damage caused to the Premises by the same during the Term of this Agreement. (d) Landlord shall furnish all water, electricity, gas, fuel, oil, light, heat and power or any other utility used by the Tenant while occupying the Premises. No deduction shall be made from the rent due to a stoppage in the services of water, electricity, gas, fuel, oil, coal, light, heat, and power or any other utility unless caused by the act or omission of Landlord. In the event of interruption in the water, electricity, gas, fuel, oil, coal, light, heat and power service, Landlord will proceed with all due diligence to restore same. 7. NOTICE TO LANDLORD OF DAMAGE OR DEFECTS Tenant shall provide Landlord with notice of any accident to or any defects in the Premises and such damage or defects shall be remedied by the Landlord at Landlord s expense no later than sixty (60) days after Landlord s receipt of such notice provided that if the repair cannot be completed within sixty (60) days, Landlord shall have made reasonable progress towards remedying the damage or defect prior to the expiration of the sixty days. Landlord shall repair or correct all damage or defects in a commercially reasonable manner. 8. REPAIRS BY LANDLORD During the Term of this Agreement, Landlord, shall, at its sole cost and expense, service, replace, keep and maintain in good order and repair each and every part and portion of the Premises together with any improvements or additions the Landlord might install in or place upon the Premises during the Term of this Agreement. Services, replacements, or repairs made by the Tenant to the Premises or to any improvements or additions made by the Landlord, shall not be construed as a waiver by the Tenant of this provision. Landlord shall have no obligation to service, replace, keep and maintain or repair additions or improvements made to the Premises by Tenant. 9. ENTRY FOR INSPECTION AND REPAIRS, ALTERATIONS OR ADDITIONS Tenant shall permit Landlord, its agents or employees, to enter into and upon the Premises at all reasonable times for the purpose of inspecting the Premises or for the purpose of maintaining or making repairs alterations or additions to any portion of the Premises. Landlord s entry shall not interfere with Tenant s business or quiet use and enjoyment of the Premises.

158 10. TENANT IMPROVEMENTS With the express written consent of the Landlord first having been had and obtained, the Tenant may make, at its own expense, such improvements, erections, and alterations as are necessary to adapt the Premises for the conduct of the Tenant's business. All improvements, erections and additions installed in or placed upon the Premises by the Tenant, whether permanently affixed thereto or otherwise, shall continue and remain the property of the Tenant, and may be removed by the Tenant, in whole or in part, at or before the expiration or earlier termination of this Agreement or upon a reasonable time thereafter. If the Tenant removes any or all of the improvements, erections and additions it has installed in or placed upon the Premises, the Tenant agrees to repair any specific damage directly resulting to the Premises from such removal to the condition existing at the beginning of the tenancy, normal wear and tear excepted. 11. REMOVAL OF FIXTURES BY TENANT At any time before the expiration or earlier termination of this Agreement, or upon a reasonable time thereafter, Tenant shall have the right and privilege to remove all fixtures, equipment, appliances and movable furniture that Tenant has placed in or upon the Premises. 12. SURRENDER OF PREMISES At the expiration, or earlier termination, of this Agreement, Tenant shall surrender the Premises in good order and condition; ordinary wear and tear, damage by fire, acts of God, the elements, other casualties, condemnation and/or appropriation, and damage or defects arising from the negligence or default of the Landlord excepted. 13. ABANDONMENT, WASTE AND NUISANCE Tenant shall not abandon or vacate the Premises without cause during the Term of this Agreement. Tenant shall not commit, or suffer to be committed any waste upon the Premises, or any nuisance, or other act or thing which may disturb the enjoyment of other Tenants, if any, in the building in which Premises are located. 14. HOLDING OVER Any holding over, continued or occupancy of the Premises by the Tenant after the expiration of the Term of this Agreement shall operate and be construed as a tenancyat-will and Tenant shall continue Tenant s occupancy at the same rental rate and under

159 the same terms and conditions in force at the expiration of the immediately preceding Initial Term or Renewal Term. 15. ENTRY FOR CARDING In the event, Tenant does not exercise the renewal or extension option provided herein, then Landlord may, within thirty (30) days immediately preceding the expiration of the then current Initial Term or Renewal Term of this Agreement, place a card or sign in the Premises advertising the Premises "For Sale" or "For Rent". Landlord may enter the Premises at reasonable hours to show the Premises to prospective purchasers or tenants so long as Landlord s entry does not interfere with the quiet use and enjoyment of Tenant. 16. DEFAULT (a) It shall be an event of default (hereinafter referred to as Event of Default ) if (i) Tenant fails to pay rent when due and fails to cure such default within thirty (30) business days (hereinafter referred to as Rental Cure Period ) after written notice of such default is received by Tenant from Landlord; or (ii) If either party fails to perform any of its obligations under this Agreement other than the provisions requiring the payment of Rent, and fails to cure such default within thirty (30) days after notice of such default is received ( hereinafter referred to as Cure Period ) by the defaulting party from the non-defaulting party provided that it will not be an Event of Default if the default cannot be cured within the Cure Period and the defaulting party promptly commences and diligently proceeds the cure to completion within sixty (60) days after the expiration of the Cure Period; or (iii) the Landlord is adjudicated a bankrupt; or a permanent receiver is appointed for the Landlord and such receiver is not removed within sixty (60) days after the appointment of the receiver. (b) If the Event of Default that is not cured by the defaulting party within the applicable cure period, the non-defaulting party may pursue remedies as are available at law or in equity. 17. DESTRUCTION OF OR DAMAGE TO PREMISES In the event the Premises are wholly or partially damaged or destroyed, by any cause whatever, as to be rendered unfit for occupancy by the Tenant, and the Premises are not thereafter repaired by the Landlord at its expense with reasonable promptness and

160 dispatch, the Tenant shall nonetheless continue its scheduled payment of rent without abatement. 18. CONDEMNATION (a) In the event, during the Term of this Agreement, the whole or a portion of the Premises are appropriated or taken by any Municipal, County, State, Federal or other authority for any public or quasi-public use through the exercise of the power of eminent domain or condemnation proceeding, or sold to the possessor of such power under the threat of its exercise, or if by reason of law, ordinance or by court decree, whether by consent or otherwise, the use of the Premises by the Tenant for the purpose is prohibited; the Tenant shall nonetheless continue its scheduled payment of rent without abatement. (b) The rights of the Landlord shall in no way prejudice or interfere with any claim which the Tenant may have against the authority exercising the power of eminent domain or condemnation for damages or otherwise for destruction of or interference with the business of the Tenant in the Premises. Tenant agrees that it will not request, encourage or support the use of the State s power of eminent domain to frustrate the purposes of this Agreement; provided, however that nothing herein shall limit or restrict the State s right to exercise in good faith the power of eminent domain for appropriate governmental purposes. 19. CHANGE IN OWNERSHIP OF PREMISES; CONTINUING OBLIGATION TO PAY RENT No change or division in the ownership of the Premises, or of the rents payable hereunder, however accomplished, shall operate to enlarge the obligations or diminish the rights of the Tenant. Further, no change or division in ownership shall be binding on the Tenant for any purpose until the Tenant shall have been furnished with a certified copy of the recorded instrument, or other legally authenticated written instrument, evidencing such change or division in ownership. 20. NOTICE OF APPOINTMENT OF AGENT Tenant shall be under no obligation to recognize any agent for the collection of rent accrued or to accrue hereunder or otherwise authorized to act with respect to the Premises until notice of the appointment and the extent of the authority of such agent shall be first given to the Tenant by the party appointing such agent.

161 21. COMPLIANCE WITH LAWS, ORDINANCES AND REGULATIONS (a) Landlord shall be responsible for compliance with all applicable laws, ordinances, and regulations, including permitting and zoning ordinances and requirements and local and state building codes, life safety codes, security, and the holding of a current and proper certificate of occupancy. (b) Notwithstanding any provisions of this Agreement to the contrary, Landlord is solely responsible for assuring that the Premises and all common areas are at all times in compliance with Title III of the Americans with Disabilities Act of 1990, 42 USC et seq. (hereinafter the ADA ) as amended, and with all regulations promulgated pursuant to the ADA (hereinafter the Regulations ). Except for any remodeling or alterations to the Premises after the commencement date of this Agreement due to an election by Tenant to remodel (but not including any remodeling or alterations at the beginning of the Term of this Agreement to make the Premises initially suitable for Tenant), Landlord shall be solely responsible for all costs and expenses associated with ADA compliance. Landlord shall not charge Tenant for, or seek reimbursement from Tenant for, any expenditures, capital or otherwise, associated with conforming the Premises or common areas to the requirements of the ADA and the Regulations. (c) Landlord and Tenant hereby certify that the provisions of law contained in Title 45 Chapter 10 of the Official Code of Georgia Annotated which prohibit full-time and part-time public officials and employees of the State of Georgia from engaging in certain transactions with the State or state agencies have not and will not be violated in any respect by this Agreement. 22. HAZARDOUS MATERIALS (a) As used in this Agreement, the term Hazardous Materials shall mean and include any substance that is or contains petroleum, asbestos, polychlorinated biphenyls, lead, or any other substance, material or waste which is now or is hereafter classified or considered to be hazardous or toxic under any federal, state or local law, rule, regulation or ordinance relating to pollution or the protection or regulation of human health, natural resources or the environment (collectively Environmental Laws ) or poses or threatens to pose a hazard to the health or safety of persons on the Premises or any adjacent property. (b) Tenant agrees that during its use and occupancy of the Premises it will not permit Hazardous Materials to be present on or about the Premises except in a manner and quantity necessary for the ordinary performance of Tenant s business and that it will comply with all Environmental Laws relating to the use, storage or disposal of any such Hazardous Materials.

162 (c) If Tenant s use of Hazardous Materials on or about the Premises results in a release, discharge or disposal of Hazardous Materials on, in, at, under, or emanating from, the Premises or the property in which the Premises are located, Tenant agrees to investigate, clean up, remove or remediate such Hazardous Materials in full compliance with (a) the requirements of (i) all Environmental Laws and (ii) any governmental agency or authority responsible for the enforcement of any Environmental Laws; and (b) any additional requirements of Landlord that are reasonably necessary to protect the value of the Premises or the property in which the Premises are located. Landlord shall also have the right, but not the obligation, to take whatever action with respect to any such Hazardous Materials that it deems reasonably necessary to protect the value of the Premises or the property in which the Premises are located. All costs and expenses paid or incurred by Landlord in the exercise of such right shall be payable by Tenant upon demand. (d) Upon reasonable notice to Tenant, Landlord may inspect the Premises for the purpose of determining whether there exists on the Premises any Hazardous Materials or other condition or activity that is in violation of the requirements of this Agreement or of any Environmental Laws. The right granted to Landlord herein to perform inspections shall not create a duty on Landlord s part to inspect the Premises, or liability on the part of Landlord for Tenant s use, storage or disposal of Hazardous Materials, it being understood that Tenant shall be solely responsible for all liability in connection therewith. (e) Tenant shall surrender the Premises to Landlord upon the expiration or earlier termination of this Agreement free of debris, waste or Hazardous Materials placed on or about the Premises by Tenant or its agents, employees, contractors or invitees. (f) The provisions of this Section shall survive the expiration or earlier termination of this Agreement. 23. ASSIGNMENT AND SUBLETTING (a) Tenant shall not assign this Agreement, or any interest therein, and shall not sublet the Premises or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person to occupy or use the Premises, or any portion thereof, without the express written consent of Landlord first having been obtained, which consent shall not unreasonably be withheld, delayed or conditioned. Any such assignment or subletting without such consent shall be void, and shall, at the option of the Landlord, on thirty (30) days notice to Tenant, terminate this Agreement. Consent to one assignment and/or subletting shall not waive this provision, and all later assignments and/or sublettings shall likewise be made only on the prior consent of Landlord, which consent shall not unreasonably be withheld. (b) The voluntary or other surrender of this Agreement by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord,

163 terminate all or any existing sublets or subtenancies, or may, at the option of Landlord, operate as an assignment to it of any or all such sublets or subtenancies. (c) Notwithstanding the subparagraph 23(a) Tenant may sublet the Premises without first obtaining the consent of Landlord for educational or related uses or other uses that are reasonably contemplated by the parties so long as the term of any such use is less than twenty-four (24) hours. 24. SUBORDINATION This Agreement shall be subject and subordinate to all existing liens and encumbrances against the Premises and all rights and obligations contained therein; provided, however that as to all such liens and encumbrances and any future liens and encumbrances, as a condition precedent to any such subordination, the holder of the lien or encumbrance agrees, so long as the Tenant is not in material default under this Agreement, to the continuing possession of the Premises by Tenant under the same financial provisions and substantive terms and conditions set forth in this Agreement. 25. LANDLORD S FINANCING (a) Tenant has not and will not participate in the structuring, offering, or issuance of bonds or other financing with respect to the Premises and Tenant shall have no obligation with respect to the bonds or the financing of the Premises and no moral obligation to continue to rent the Premises in a manner supportive of the creditworthiness of the bonds or financing. (b) Without first notifying the Landlord, Tenant will not perform any activity on the Premises that will adversely affect the tax-exempt status of any debt instrument of Landlord relating to the Premises. In the event the administrative office of the Board of Regents is made aware of a use that may have an adverse affect, Tenant will contact Landlord as soon as practicable after being made aware of the use or anticipated use. (c) Tenant shall exercise reasonable efforts to prevent the purchase of any bonds or other debt instrument issued to finance or refinance the Premises by any other instrumentality or department of the State of Georgia. 26. NOTICE Any notice, statement, demand, request, consent, approval and authorization required to be given by any party to the other party pursuant to this Agreement shall be given in writing to such other party at the physical or electronic mail address set forth below and shall be deemed to have been properly given, rendered or made only if (i) personally delivered by reputable private courier services, (ii) sent by first-class mail, postage

164 prepaid certified or registered with return receipt requested, (iii) sent by Federal Express or other comparable commercial overnight delivery service, or (iv) sent by electronic mail to the party entitled thereto. Any notice shall be deemed to have been given, rendered or made on the day (x) so delivered unless such day is not a business day, in which case such delivery shall be deemed to be made as of the next succeeding business day, or (y) upon telephonic confirmation of receipt from the party s principal addressee if sent by electronic mail. Each party hereto shall have the right at any time and from time to time to specify another physical or electronic mail address and addressee to whom notice thereunder should be given, upon five (5) days written notice thereof to the other party. The notice addresses for the parties shall be as follows: To Landlord: USG Real Estate Foundation IV, LLC c/o University System of Georgia Foundation, Inc. 270 Washington Street, SW, Suite 7002 [7005?] Atlanta, Georgia Attention: Candace Sommer candace.sommer@usg.edu To Tenant: Board of Regents of the University System of Georgia 270 Washington Street, SW, Sixth Floor Atlanta, Georgia Attention: Vice Chancellor for Facilities jim.james@usg.edu with copy to: Fort Valley State University Bldg. C. V. Troup, Rm State University Drive Fort Valley, Georgia Attention: Vice President for Business & Finance loomism@fvsu.edu 27. BINDING EFFECT ON HEIRS, ASSIGNS, ETC. Each of the stipulations, provisions, terms, conditions, covenants, agreements and obligations contained in this Agreement shall apply, extend to, be binding upon and inure to the benefit or detriment of each and every one of the heirs, legal representatives, devisees, legatees, next-of-kin, successors and assigns of the respective parties hereto, and shall be deemed and treated as covenants real running with the Premises during the Term of this Agreement. Whenever a reference to the

165 parties hereto is made, such reference shall be deemed to include the heirs, legal representatives, devisees, legatees, next-of-kin, successors and assigns of said party, the same as if in each case expressed. Time is of the essence in this Agreement. 28. TIME OF ESSENCE 29. WAIVER OF RIGHTS The waiver by Landlord, or by Tenant, of any breach of any stipulation, provision, term, covenant, agreement or condition herein contained shall not be deemed to be a waiver of such stipulation, provision, term, covenant, agreement or condition on any subsequent breach of the same or any other stipulation, provision, term, covenant, agreement or condition herein contained. 30. INVALIDITY OF PROVISION OR PORTION OF PROVISION Should any provision or portion of such provision of this Agreement be held invalid, the remainder of this Agreement or the remainder of such provision shall not be affected thereby. 31. ENTIRE AGREEMENT This Agreement, including Exhibits A, B, C, D and E embodies and sets forth all the provisions, agreements, conditions, covenants, terms and understandings between the parties relative to the Premises. There shall be no provisions, agreements, conditions, covenants, terms, understandings, representations or inducements either oral or written, between the parties other than are herein set forth. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the parties herein unless reduced to writing and signed by all the parties to this Agreement. END OF EXHIBIT A

166 EXHIBIT B SPECIAL STIPULATIONS 1. Tenant Responsibility for Services: Notwithstanding any other provision of this Agreement, Tenant, as the principal occupant of the building, shall be solely responsible for discharging the obligations set forth in Exhibit A, Stipulation 6 of this Agreement, and such responsibility shall be paid directly by Tenant. Such responsibility has been taken into account in establishing the rent established in this Agreement. 2. Tenant Responsibility for Insurance: Notwithstanding any other provision of this Agreement, during the term of this Agreement, Tenant as sole occupant of the Premises shall be responsible for the payment of all insurance coverages set forth in Exhibit A Stipulation 3 and Exhibit D and any other insurance coverages maintained by Landlord with respect to the Premises or otherwise; such responsibility shall be paid by special rent assessment. Landlord may require payment of such special rent assessment by forwarding insurance invoices directly to Tenant, which invoices Tenant shall pay on or prior to the relevant due date. In addition to the foregoing, any payment or payments made by Tenant for insurance coverage, as provided in this Exhibit B, Stipulation 2 or Exhibit A, Stipulation 3 or Exhibit D of this Agreement, which coverage extends beyond the Term of this Agreement (whether due to cancellation, non-renewal or expiration by its express terms) shall be immediately reimbursed to Tenant by Landlord. 3. Tenant Responsibility for Taxes and Assessments: Notwithstanding any other provision of this Agreement, during the Term of this Agreement, Tenant shall pay Landlord as additional rent an amount equal to all assessments, taxes, levies and other charges set forth in Exhibit A, Stipulation 5 of this Agreement. Tenant s payment of such additional rent to Landlord shall be within ninety (90) days of Tenant s receipt of supporting documentation evidencing Landlord s payment of such expense. Such responsibility has been taken into account in establishing the rent established in this Agreement. 4. Tenant Responsibility for Maintenance and Repairs: (a) Landlord has established and maintains a reserve account for capital repairs and replacements (the "Repair and Replacement Reserve") to the Premises. In order to fund the Repair and Replacement Reserve, Tenant, through its applicable institution, shall pay Landlord additional rent as indicated on Exhibit "E" of this Agreement. Landlord shall obtain prior written consent from Tenant, which shall not be unreasonably withheld, for any expenditure or projected aggregate of expenditures for the same repair or replacement from the Repair and Replacement Reserve that will be $200,000 or greater.

167 During the exercised renewal term beginning on July 1, 2018 and ending on June 30, 2019 and any subsequently exercised renewal term three (3) years from the last renewal term a FCAR (as defined below) was completed, Landlord will, on or before March 31st of the respective renewal term, complete a Facilities Condition Assessment Report ("FCAR") on the physical and mechanical condition of the Premises. The FCAR shall provide information pursuant to established Board of Regents of the University System of Georgia reporting guidelines; and be performed by an engineering firm that is reasonably acceptable to Tenant. Landlord shall pay all costs for the FCAR, which may be paid from the Repair and Replacement Reserve. The parties hereto will work together to confer, schedule and implement any capital repair and replacement project recommendations contained in the FCAR, or needed during the Term of this Agreement. (b) Notwithstanding any other provision of this Agreement, to the extent there are insufficient funds in the Repair and Replacement Reserve to pay for any capital repair and replacement, Landlord shall exhaust any other supplemental reserve funds available to Landlord to eliminate or mitigate the Repair and Replacement Reserve shortfall. To the extent a shortfall remains, Tenant shall address the shortfall by paying to Landlord as additional rent the cost of all necessary repairs and replacements which exceed available funds in the Repair and Replacement Reserve. (c) For purposes of this section, any consent, review, or other action required by the Tenant herein shall specifically be performed by the Office of Fiscal Affairs, and the Office of Real Estate and Facilities at the University System of Georgia ("System Office") and not the applicable institution, unless otherwise provided herein or directed by the System Office. 5. Cap on Tenant s Obligations in this Exhibit B Special Stipulations 2, 3 and 4 Hereinabove: Tenant s maximum obligation pursuant to Exhibit B, Stipulations 2, 3 and 4, collectively shall not exceed the moneys budgeted by Fort Valley State University in the applicable fiscal year for such purpose, which budget shall be subject to annual review and modification. If and to the extent Tenant pays for expenditures having a useful life beyond the term of this Agreement which expenditures Landlord has previously agreed to in writing, then Landlord shall immediately (upon the effective date of such termination) reimburse Tenant for that portion of such expenditures not inuring to the benefit of Tenant. 6. Conveyance to Tenant: After the payment by the Tenant to the Landlord of all rent and other sums due and payable to Landlord for the Initial Term and all Renewal Terms through and including the final Renewal Term under the terms of this Agreement, the Landlord shall gift the Premises to the Tenant by limited warranty deed within fortyfive (45) days of Tenant s approval to accept the gift. END OF EXHIBIT B

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169 EXHIBIT C LEGAL DESCRIPTION END OF EXHIBIT C