WELLS FARGO SECURITIES

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1 NEW ISSUE BOOK-ENTRY-ONLY Dated: Date of Issuance OFFICIAL STATEMENT RATING (INSURED): S&P: AA+ (Stable Outlook) RATING (UNDERLYING): S&P: A+ (Stable Outlook) See MISCELLANEOUS Rating herein) In the opinion of Gray & Pannell LLP, Bond Counsel, assuming continuing compliance with the provisions of the Internal Revenue Code of 1986, as amended, the interest on the Series 2010 Bonds is not includable in the gross income of the recipients thereof for federal income tax purposes under existing law. In the opinion of Bond Counsel, interest on the Series 2010 Bonds will not be treated as an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the opinion of Bond Counsel, interest on the Series 2010 Bonds is exempt from present State of Georgia income taxation under existing statutes as described herein. See TAX TREATMENT herein. $36,475,000 SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 Due: June 15, as Shown on the Inside Cover The Savannah Economic Development Authority (the Issuer ) is offering $36,475,000 in aggregate principal amount of its Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 (the Series 2010 Bonds ). The proceeds of the sale of the Series 2010 Bonds will be loaned to SSU Community Development I, LLC, a Georgia limited liability company (the Borrower ) pursuant to the terms and provisions of a Loan Agreement, dated as of December 1, 2010 (the Loan Agreement ), between the Issuer and the Borrower. The Borrower s obligations under the Loan Agreement will be evidenced by a Promissory Note, dated as of December 1, 2010 (the Note ), from the Borrower in favor of the Issuer. Initially, the sole member of the Borrower is SSU COBA Endowment, Inc., which has been determined by the Internal Revenue Service to be exempt from federal income taxes as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the Code ). However, it is contemplated that SSU COBA Endowment, Inc. may be replaced as the sole member of the Borrower by another organization described in Section 501(c)(3) of the Code. The term Foundation initially means SSU COBA Endowment, Inc., and if it is replaced as the sole member of the Borrower by another Section 501(c)(3) organization, the term Foundation shall refer to such other Section 501(c)(3) organization. Proceeds of the Series 2010 Bonds will be used by the Borrower to: (a) finance in whole or in part the cost of (i) the purchase of land and its development for a sports and intramural complex to be conveyed to the Regents for use by the University as athletic fields, (ii) the construction and furnishing of three new buildings and the renovation of an existing building, to be used as student housing facilities containing 683 beds and related amenities, (iii) the demolition of an existing building to create a site for one of the new student housing buildings, and (iv) renovations and improvements to existing buildings (collectively, the Project ) located on the campus of Savannah State University (the University ); (b) fund capitalized interest on the Series 2010 Bonds; (c) fund a debt service reserve for the Series 2010 Bonds; and (d) pay the costs of issuing the Series 2010 Bonds. See PLAN OF FINANCING herein. The four residential buildings are to be constructed on four sites to be leased by the Board of Regents of the University System of Georgia (the Regents ) to the Borrower under four Ground Leases (each a Ground Lease ) the terms of which end June 30, The four residential buildings are to be leased by the Borrower to the Regents under four Rental Agreements (each a Rental Agreement ). Pursuant to each Rental Agreement, the Borrower will rent a completed student housing building to the Regents on an annually renewable basis for use by the University. The Regents will make fixed rental payments for the use and occupancy of the those buildings in amounts that the Borrower estimates will be sufficient in the aggregate to pay, among other things, debt service on the Series 2010 Bonds. See SECURITY FOR THE SERIES 2010 BONDS herein. The Series 2010 Bonds are being issued pursuant to a Trust Indenture and Security Agreement, dated as of December 1, 2010 (the Indenture ), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee ). Interest on the Series 2010 Bonds will be payable on June 15 and December 15 of each year, commencing June 15, The Series 2010 Bonds are to be issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof. The Series 2010 Bonds, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). Purchases will be made in book-entry-only form and no physical delivery of the Series 2010 Bonds will be made to Beneficial Owners (as herein defined). Payment of principal of, interest and premium, if any, on the Series 2010 Bonds will be made by the Trustee to Cede & Co., as nominee of DTC, and will subsequently be disbursed to Direct Participants (as herein defined) and thereafter to Beneficial Owners (as herein defined). See THE SERIES 2010 BONDS herein. The Series 2010 Bonds and any Additional Bonds (as herein defined) that may be issued are payable solely from the Trust Estate. The Trust Estate includes all rights, title and interest of the Issuer in and to (a) the Loan Agreement (except for the Issuer s rights to payment of fees and expenses and to indemnification pursuant to the terms thereof); (b) the Note; (c) the Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated as of December 1, 2010, from the Borrower in favor of the Issuer (the Security Deed ); (d) a Security Agreement, dated as of December 1, 2010, from the Borrower in favor of the Issuer (the Security Agreement ); (e) amounts held in any and all funds created under the Indenture; (f) moneys and securities and interest earnings thereon from time to time delivered to the Trustee under the terms of the Indenture; and (g) proceeds (cash and noncash) of any and all of the foregoing. See SECURITY FOR THE SERIES 2010 BONDS herein. The Series 2010 Bonds are subject to redemption prior to maturity under certain circumstances described herein and as set forth in the Indenture. See THE SERIES 2010 BONDS herein. The scheduled payment of principal of and interest on the Series 2010 Bonds when due will be guaranteed under an insurance policy (the Policy ) to be issued concurrently with the delivery of the Series 2010 Bonds by ASSURED GUARANTY MUNICIPAL CORP. (formerly known as Financial Security Assurance Inc.) ( AGM or the Bond Insurer ). For a description of the Policy and AGM, see BOND INSURANCE herein. For a form of the Policy, see Appendix K THE SERIES 2010 BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OR OBLIGATION OF THE REGENTS, THE UNIVERSITY, THE FOUNDATION, THE STATE OF GEORGIA (THE STATE ) OR ANY MUNICIPALITY OR POLITICAL SUBDIVISION THEREOF. THE SERIES 2010 BONDS ARE PAYABLE BY THE ISSUER SOLELY FROM THE TRUST ESTATE PLEDGED TO THE PAYMENT THEREOF UNDER THE INDENTURE. NO OWNER OF THE SERIES 2010 BONDS SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OR ANY MUNICIPALITY OR POLITICAL SUBDIVISION THEREOF TO PAY THE SERIES 2010 BONDS OR THE INTEREST OR PREMIUM THEREON OR ANY OTHER COST RELATING THERETO OR TO ENFORCE PAYMENT THEREOF AGAINST ANY PROPERTY OF THE STATE OR ANY MUNICIPALITY OR POLITICAL SUBDIVISION THEREOF. THE ISSUER HAS NO TAXING POWER. The Series 2010 Bonds are offered when, as, and if issued by the Issuer and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice and the approval of legality by Gray & Pannell LLP, Savannah, Georgia, Bond Counsel. Certain legal matters will be passed on for the Issuer by its counsel, Gray & Pannell LLP, Savannah, Georgia, for the Borrower and the Foundation by their counsel, Peck, Shaffer & Williams, LLP, Atlanta, Georgia, for the Borrower by its special counsel Strickland Brockington Lewis LLP, Atlanta, Georgia, as to certain documents of the Regents, for the Foundation by Epstein Becker & Green, P.C., Atlanta, Georgia, as to 501(c)(3) tax matters, and for the Underwriter by its co-counsel, Golden & Associates, P.C., Atlanta, Georgia and Seyfarth Shaw LLP, Atlanta, Georgia. Delivery of the Series 2010 Bonds to DTC in New York, New York, is expected on or about December 29, Dated: December 16, 2010 WELLS FARGO SECURITIES

2 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES OR YIELDS * $13,580,000 SERIAL BONDS June 15 of the Year Principal Amount Interest Rate Yield 2013 $630, % 2.290% 2014 $560, % 2.700% 2015 $650, % 3.050% 2016 $690, % 3.340% 2017 $720, % 3.780% 2018 $745, % 4.120% 2019 $780, % 4.420% 2020 $810, % 4.690% 2021 $840, % 4.860% 2022 $875, % 5.010% 2023 $920, % 5.110% 2024 $970, % 5.210% 2025 $1,015, % 5.300% 2026 $1,070, % 5.450% 2027 $1,125, % 5.500% 2028 $1,180, % 5.550% TERM BONDS $10,315, % Term Bonds, Due June 15, 2035, Priced to Yield 5.800% $12,580, % Term Bonds, Due June 15, 2041, Priced to Yield 5.920% 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 in connection with the offering contained herein, and if given or made, such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2010 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information contained in this Official Statement has been obtained from representatives of the University, the Borrower, public documents, records and other sources considered to be reliable. THE UNDERWRITER HAS PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS A PART OF, ITS RESPONSIBILITIES UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. The delivery of this Official Statement at any time does not imply that any information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not representations of fact. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2010 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE SEC ) OR ANY STATE SECURITIES AGENCY. THE SERIES 2010 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES AGENCY, NOR HAS THE SEC OR ANY STATE SECURITIES AGENCY PASSED

3 UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SERIES 2010 BONDS WILL BE SECURED BY THE FINANCIAL GUARANTY INSURANCE POLICY, GUARANTEED AS TO THE TIMELY PAYMENT OF PRINCIPAL AND INTEREST BY ASSURED GUARANTY MUNICIPAL CORP., AND HELD BY THE TRUSTEE. Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.) ( AGM ) makes no representation regarding the Series 2010 Bonds or the advisability of investing in the Series 2010 Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading Bond Insurance and in Appendix K - Specimen Municipal Bond Insurance Policy In making an investment decision, investors must rely on their own examination of Assured Guaranty Municipal Corp., the Issuer, the University, the Borrower, the Board of Regents of the University System of Georgia, the State and the terms of the offering, including the merits and risks involved. No federal or state securities commission or regulatory authority has recommended the Series 2010 Bonds. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Official Statement. Any representation to the contrary is a criminal offense. Neither the delivery of this Official Statement nor the sale of any of the Series 2010 Bonds implies that the information herein is correct as of any time subsequent to the date hereof.

4 TABLE OF CONTENTS INTRODUCTION... 1 General... 1 Purpose... 1 The Issuer... 1 The Regents... 2 The Borrower... 2 The University... 2 Trustee... 2 The Project... 2 Security for the Series 2010 Bonds... 2 Description of the Series 2010 Bonds... 3 Tax Treatment... 4 Professionals Involved in the Offering... 4 Offering and Delivery of the Series 2010 Bonds... 4 Continuing Disclosure... 4 Bondholders Risks... 4 Other Information... 4 THE ISSUER... 5 THE SERIES 2010 BONDS... 5 General... 5 Dates, Denominations and Payment Information... 5 Limited Obligations... 6 Optional Redemption of Bonds... 6 Mandatory Sinking Fund Redemption... 6 Extraordinary Redemption of Series 2010 Bonds... 7 General Provisions Regarding Optional, Extraordinary, and Mandatory Sinking Fund Redemptions... 7 Notice of Redemption... 8 No Partial Redemption After Default... 8 Partial Redemption... 8 Cancellation... 8 Issuance of Additional Bonds... 8 Book-Entry-Only System... 9 SECURITY FOR THE SERIES 2010 BONDS General The Ground Leases The Rental Agreements Debt Service Reserve Funds and Accounts Covenants BOND INSURANCE Bond Insurance Policy Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.) PLAN OF FINANCING THE PROJECT Description The Program Manager ANNUAL DEBT SERVICE REQUIREMENTS THE BORROWER AND THE FOUNDATION The Borrower The Foundation THE UNIVERSITY Introduction i Page

5 University Officials Biographies Enrollment Admissions Student Quality HOPE Scholarships Tuition, Fees and Charges Current University Housing Program The Project Financial Operations Review of Financial Statements BOARD OF REGENTS General Members University System Funding the University System Analysis of State General Fund Receipts Summary of Appropriation Allotments to Board of Regents CERTAIN BONDHOLDERS RISKS Introduction Limitations on Board of Regents Obligations Under Rental Agreements; Risk of Non-Renewal State Budgetary Constraints Reimbursement Obligations of Borrower Condemnation/Casualty Risk No Operating History Limited Assets of the Borrower Enforceability of Remedies Limited Obligations Construction Risks Ad Valorem Property Taxes Environmental Issues Change in Tax Law Limited Protection Against Loss of Tax Exemption Liquidation of Security May Not Be Sufficient in the Event of a Default Normal Risks Attending Any Investment in Real Estate LITIGATION The Issuer The Borrower Validation Proceedings Closing Certificates TAX TREATMENT General Discount Bonds Premium Bonds Information Reporting and Backup Withholding Georgia Income Tax Treatment MISCELLANEOUS Underwriting Rating Professionals Involved in the Offering 41 CERTIFICATION Appendix A Definitions Appendix B Copy of Indenture Appendix C Copy of Loan Agreement Appendix D Copy of Security Deed Appendix E Copy of Security Agreement Appendix F Financial Statements of the University for the Fiscal Year Ended June 30, 2010 Appendix G Form of Bond Counsel Opinion ii

6 Appendix H Appendix I Appendix J Appendix K Form of Disclosure Certificate Form of Rental Agreement for Building A Form of Ground Lease for Building A Specimen Municipal Bond Insurance Policy iii

7 OFFICIAL STATEMENT $36,475,000 SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT), SERIES 2010 INTRODUCTION General This Official Statement, including the cover page and the Appendices hereto, is provided to furnish certain information in connection with the sale by the Savannah Economic Development Authority, a public body corporate and politic and instrumentality of the State of Georgia (the Issuer ), of $36,475,000 in aggregate principal amount of its Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 (the Series 2010 Bonds ). Definitions of certain capitalized words used in this Official Statement are set forth in Appendix A Definitions hereto. This Introduction is not a summary of this Official Statement and is intended only for quick reference. It is only a brief description of and guide to, and is qualified in its entirety by reference to, more complete and detailed information contained in the entire Official Statement, including the cover page and the Appendices, and the documents summarized or described herein. Investors should fully review the entire Official Statement. The offering of the Series 2010 Bonds to potential investors is made only by means of the entire Official Statement, including the Appendices hereto. No person is authorized to detach this Introduction from the Official Statement or otherwise to use it without the entire Official Statement. Purpose The Series 2010 Bonds are being issued pursuant to a Trust Indenture and Security Agreement, dated as of December 1, 2010 (the Indenture ), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee ). The proceeds of the sale of the Series 2010 Bonds will be loaned to SSU Community Development I, LLC, a Georgia limited liability company (the Borrower ) pursuant to the terms and provisions of a Loan Agreement, dated as of December 1, 2010 (the Agreement ), between the Issuer and the Borrower. The Borrower s obligations under the Loan Agreement will be evidenced by a Promissory Note, from the Borrower in favor of the Issuer, dated as of the date of the Series 2010 Bonds (the Note ). Proceeds of the Series 2010 Bonds will be used by the Borrower to: (a) finance in whole or in part the cost of (i) the purchase of land and its development for a sports and intramural complex to be conveyed to the Regents for use by the University as athletic fields, (ii) the construction and furnishing of three new buildings and the renovation of an existing building, to be used as student housing facilities containing 683 beds and related amenities, (iii) the demolition of an existing building to create a site for one of the new student housing buildings, and (iv) renovations and improvements to existing buildings (collectively, the Project ) located on the campus of Savannah State University (the University ); (b) fund capitalized interest on the Series 2010 Bonds; (c) fund a debt service reserve for the Series 2010 Bonds; and (d) pay the costs of issuing the Series 2010 Bonds. See PLAN OF FINANCING herein. The Issuer The Issuer is a public body corporate and politic and an instrumentality of the State of Georgia created pursuant to the provisions of amendments to the Constitution of the State of Georgia contained in Ga. Laws 1951, page 854, et seq., Ga. Laws 1965, page 675, et seq., and Ga. Laws 1972, page 1620, et seq.; and those acts of the General Assembly of Georgia contained in Ga. Laws 1925, page 1451, et seq., Ga. Laws 1951, page 190, et seq., Ga. Laws 1955, page 170, et seq., Ga. Laws 1956, page 329, et seq., Ga. Laws 1958, page 2459, et seq., Ga. Laws 1967, page 2062, et seq., Ga. Laws 1972, page 1186, et seq., Ga. Laws 1975, page 3131, et seq., Ga. Laws 1977, 1

8 page 184, et seq., Ga. Laws 1977, page 898, et seq., Ga. Laws 1980, Page 380, et seq., Ga. Laws 1982, page 993, et seq., and Ga. Laws 1989, page 47, et seq. (collectively, the Act ). See THE ISSUER herein. The Regents The Regents is a constitutional body of the State of Georgia that governs, controls and manages the University System and all of the 35 colleges and universities in the University System, including the University. See THE REGENTS herein. The Project is located upon real property owned by the Regents. The Regents will lease the sites for four residential buildings to the Borrower pursuant to four Ground Leases (each a Ground Lease ) for a term ending June 30, The athletic field property is to be purchased and improved with proceeds of the Series 2010 Bonds, conveyed by the Borrower to the Regents, and operated by the University under a site license from the Regents. The cost of renovations of two historical buildings, Morgan Hall and Adams Hall, shall be funded with proceeds. The proceeds to be expended on the athletic field property, the improvements thereto and the cost of renovations of two historical buildings are to be recovered through the rents under the four Rental Agreements. The Borrower The Borrower was formed for the purpose of serving as the borrower of the proceeds of the Series 2010 Bonds and for, among other things, providing for the demolition of a building, the construction and renovations to buildings and renting same to the Regents pursuant to the four Rental Agreements (each a Rental Agreement ) on an annually renewable basis for use by the University. See THE BORROWER AND THE FOUNDATION herein. The University The University is a residential, coeducational member of the University System with an enrollment of 4086 students for Fall It is located in Savannah, Chatham County, Georgia. See THE UNIVERSITY herein. Trustee The Bank of New York Mellon Trust Company, N.A. has been designated as Trustee for the Series 2010 Bonds. The designated corporate trust office of the Trustee is 900 Ashwood Parkway, Suite 425, Atlanta, Georgia 30338, Attention: Cassandra Shedd. The Project The Project consists of: (i) the purchase of land and its development for a sports and intramural complex to be conveyed to the Regents for use by the University as athletic fields, (ii) the construction and furnishing of three new buildings and the renovation of an existing building, to be used as student housing facilities containing 683 beds and related amenities, (iii) the demolition of an existing building to create a site for one of the new student housing buildings, and (iv) renovations and improvements to existing buildings (collectively, the Project ) located on the campus of Savannah State University (the University ). See THE PROJECT herein. Security for the Series 2010 Bonds The Series 2010 Bonds and any Additional Bonds (as herein defined) that may be issued are payable solely from the Trust Estate. The Trust Estate includes all rights, title and interest of the Issuer in and to (a) the Loan Agreement (except for the Issuer s rights to payment of fees and expenses and to indemnification pursuant to the terms thereof); (b) the Note; (c) the Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated as of December 1, 2010, from the Borrower in favor of the Issuer (the Security Deed ); (d) a Security Agreement, dated as of December 1, 2010, from the Borrower in favor of the Issuer (the Security Agreement ); (e) amounts held in any and all funds created under the Indenture; (f) moneys and securities and interest earnings thereon from time to time delivered to the Trustee under the terms of the Indenture; and (g) proceeds (cash and noncash) of any and all of the foregoing. See SECURITY FOR THE SERIES 2010 BONDS herein. Pursuant to each Ground Lease, the Regents will lease to the Borrower the site upon which a student housing building is to be located for a primary term ending June 30, Upon the execution of each Ground Lease, the Borrower shall pay ground rent in advance of $10.00 per year. The Borrower may extend each Ground Lease for an additional five-years. The Form of the Ground Lease for the site of Building A is attached hereto as 2

9 Appendix J. Under the terms of the four Rental Agreements, the Borrower will rent the three new completed student housing buildings and the renovated Camilla Hubert Hall to the Regents on an annually renewable basis for use by the University. The Regents will make fixed rental payments for the use and occupancy of these buildings in amounts that the Borrower estimates will be sufficient to enable the Borrower to pay, among other things, the principal of and interest on the Series 2010 Bonds when the same become due and payable. The Regents obligation to pay rent under the Rental Agreement for each building will commence on the first day of the month following the issuance and delivery of a certificate of occupancy for such building. The initial term of each Rental Agreement will expire on June 30, 2012 (2013 in the case of Building C). Each Rental Agreement is renewable by the Regents on a year-to-year basis with the last renewal term ending June 30, If the Regents elects not to renew one or more Rental Agreements, the Borrower may not be able to rent the related buildings to another tenant for an amount sufficient to enable the Borrower to make its payments due under the Loan Agreement. See SECURITY FOR THE SERIES 2010 BONDS herein and Appendix I Form of Rental Agreement for Building A hereto. THE REGENTS HAS NOT PARTICIPATED IN THE ISSUANCE OF THE SERIES 2010 BONDS AND HAS NO MORAL OBLIGATION WITH RESPECT TO THE SERIES 2010 BONDS OR TO CONTINUE TO RENT THE PROJECT IN A MANNER SUPPORTIVE OF THE CREDITWORTHINESS OF THE SERIES 2010 BONDS. Description of the Series 2010 Bonds Redemption. The Series 2010 Bonds are subject to redemption prior to their stated maturity. See THE SERIES 2010 BONDS Redemption Provisions herein. Denominations. The Series 2010 Bonds are to be issued in denominations of $5,000 or any integral multiple thereof. See THE SERIES 2010 BONDS Dates, Denominations and Payment Information herein. Registration, Transfers and Exchanges. The Series 2010 Bonds will be issued in fully registered form. When in book-entry form, the Series 2010 Bonds will be issued to and held by The Depository Trust Company ( DTC ) or its nominee, Cede & Co., on behalf of the beneficial owners thereof (the Beneficial Owners ) and all transfers of beneficial ownership interests in such Series 2010 Bonds issued in book-entry form shall be effected by procedures by DTC with its participants for recording and transferring the ownership of beneficial interests in each such series of Series 2010 Bonds. If and when not in book-entry form, ownership of Series 2010 Bonds may be registered in the names of the respective holders thereof and may be transferred upon registration of surrender of such Series 2010 Bond to the Trustee, together with an assignment duly executed by the registered owner or his attorney or legal representative. If and when not in book-entry form, the Series 2010 Bonds are exchangeable for a like aggregate principal amount of Series 2010 Bonds of the same maturity in denominations of $5,000 or any integral multiple thereof. See THE SERIES 2010 BONDS Dates, Denominations and Payment Information herein. Payments. Interest on the Series 2010 Bonds is payable on June 15 and December 15 of each year (each such date, an Interest Payment Date ), commencing June 15, When the Series 2010 Bonds are in book-entry form, payment of the principal of and interest on Series 2010 Bonds will be made by the Trustee directly to Cede & Co., as nominee of DTC, and will subsequently be disbursed to DTC Participants (as herein defined) and thereafter to Beneficial Owners of the Series 2010 Bonds. When not in book-entry form, principal of and premium, if any, on any Series 2010 Bond shall be payable by check or draft in lawful money of the United States of America by presentation and surrender of this Series 2010 Bond at the principal corporate trust office of the Trustee, or at the duly designated office of any duly appointed alternate or successor paying agent. Payment of interest on any Series 2010 Bond that is not in book-entry form shall be made to the registered owner and shall be paid in lawful money of the United States of America by check or draft mailed on the applicable Interest Payment Date to the Person who was the registered owner as of the close of business on the applicable Record Date (as defined in the Indenture) at its address as it appears on the registration books of the Issuer maintained by the Trustee, as bond registrar, or at such other address as is furnished in writing by such registered owner to the Trustee. If and to the extent that there shall be a default in the payment of the interest due on any Interest Payment Date, such defaulted interest shall be paid to the owner in whose name such Series 2010 Bond is registered at the close of business on the Special Record Date (as defined in the Indenture) next preceding the date of payment of such defaulted interest. See THE SERIES

10 BONDS Book-Entry-only System herein. Tax Treatment For a more complete description of the Series 2010 Bonds, see THE SERIES 2010 BONDS herein. In the opinion of Gray & Pannell LLP, Bond Counsel, assuming continuing compliance with the provisions of the Internal Revenue Code of 1986, as amended, the interest on the Series 2010 Bonds is not includable in the gross income of the recipients thereof for federal income tax purposes under existing law. In the opinion of Bond Counsel, interest on the Series 2010 Bonds will not be treated as an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the opinion of Bond Counsel, interest on the Series 2010 Bonds is exempt from present State of Georgia income taxation under existing statutes as described herein. See TAX TREATMENT herein. Professionals Involved in the Offering The approval of legality of the Series 2010 Bonds will be passed on by Gray & Pannell LLP, Savannah, Georgia, Bond Counsel. Certain legal matters will be passed on for the Issuer by its counsel, Gray & Pannell LLP, Savannah, Georgia, for the Borrower and the Foundation by their counsel, Peck, Shaffer & Williams, LLP, Atlanta, Georgia, for the Borrower by its special counsel Strickland Brockington Lewis LLP, Atlanta, Georgia, as to certain documents of the Regents, for the Foundation by Epstein Becker & Green, P.C., Atlanta, Georgia, as to 501(c)(3) tax matters, and for the Underwriter by its co-counsel, Golden & Associates, P.C., Atlanta, Georgia and Seyfarth Shaw LLP, Atlanta, Georgia. Offering and Delivery of the Series 2010 Bonds The Series 2010 Bonds are offered when, as, and if issued by the Issuer and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice. The Underwriter expects to deliver the Series 2010 Bonds in definitive form through The Depository Trust Company in New York, New York, on or about December 29, 2010 Continuing Disclosure The Borrower has covenanted in a Continuing Disclosure Certificate (the Disclosure Certificate ) for the benefit of Bondholders to provide certain financial information and operating data (the Operating and Financial Data ), and to provide notices of the occurrence of certain enumerated events, if deemed by the Borrower to be material ( Material Events Notices ). The Borrower will file the Operating and Financial Data annually by the Borrower with the Electronic Municipal Market Access System ( EMMA ). If and when deemed appropriate, the Borrower will file Material Events Notices with EMMA. A form of the Disclosure Certificate is attached hereto as Appendix H. The covenants have been made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the Rule ). Bondholders Risks There are certain considerations and risks relating to an investment in the Series 2010 Bonds, which are set forth in this Official Statement under the caption CERTAIN BONDHOLDERS RISKS and which should be carefully reviewed by prospective purchasers of the Series 2010 Bonds. See CERTAIN BONDHOLDERS RISKS herein. Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change without notice. This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Issuer, the Borrower, the Regents, the Series 2010 Bonds, the Project, the Indenture, the Loan Agreement, the Note, the Security Agreement, the Security Deed, the Ground Leases, the Rental Agreements, the Disclosure Certificate and the security and sources of payment for the Series 2010 Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions and statutes, such contracts, and other documents are intended as summaries only and are qualified in their entirety by reference to such laws and documents, and references herein to the Series 2010 Bonds are qualified in their entirety to the form thereof included in the Indenture. A copy of the Indenture is attached hereto as Appendix B, a 4

11 copy of the Loan Agreement is attached hereto as Appendix C, a copy of the Security Deed is attached hereto as Appendix D, a copy of the Security Agreement is attached hereto as Appendix E, copy of the Rental Agreement for Building A is attached hereto as Appendix I, and a copy of the Ground Lease for the site of Building A is attached hereto as Appendix J. Copies of other documents and information are available, upon request and upon payment to the Trustee of a charge for copying, mailing and handling, from the Trustee at 100 Ashford Center North, Suite 520, Atlanta, Georgia 30339, Attention: Cassandra Shedd, telephone: (770) ; facsimile: (770) During the period of offering of the Series 2010 Bonds, copies of such documents are available, upon request and upon payment to the Underwriter of a charge for copying, mailing and handling, from the Underwriter at 301 South College Street, 9 th Floor, Charlotte, North Carolina 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. Nineteen members who are appointed pursuant to the provisions of the Act conduct the affairs of the Issuer. The Issuer is authorized to issue its revenue bonds and lend the proceeds of such revenue bonds to pay the costs of projects described in the Act. A project may be for any use, provided the members of the Issuer determine that the project and its use are for the public purposes of the Act, and the members of the Issuer have made such a determination with respect to the Project. The Issuer has previously issued bonds for the purpose of financing other projects for a number of other borrowers which are payable from revenues received from the respective borrowers. Revenue bonds issued by the Issuer for other borrowers may be in default as to principal or interest. The source of payment for other bonds previously issued by the Issuer for other borrowers is separate and distinct from the source of payment for the Series 2010 Bonds, and accordingly, any default by any such other borrower with respect to any of such other bonds is not considered a material fact with respect to the payment of the Series 2010 Bonds. The names of the members of the Issuer are: Thomas Hester (Chairman), David Paddison (Vice Chairman), Robert James (Secretary-Treasurer), Bill Hubbard, Cathy Hill, Cora Bett Thomas, Eli Karatassos, Greg Parker, J. Clifford McCurry, Kevin Jackson, Paul Hinchey, Richard Barrow, Scott Center, Shevon Carr, Stephen Green, Terry Coleman, W. Brooks Stillwell, Walter Carson, Jr. and Walter Evans. General THE SERIES 2010 BONDS The Series 2010 Bonds will be issued in the aggregate principal amount of $35,385,000,* will be dated the date of issuance, and will mature as described on the inside cover hereof, subject to the mandatory redemption provisions of the Indenture. The Series 2010 Bonds bear interest from their date of issuance, at the rates shown on the inside cover page of this Official Statement, payable on each Interest Payment Date until paid. The Series 2010 Bonds will be issued in book-entry form and registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). Dates, Denominations and Payment Information The Series 2010 Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. The Series 2010 Bonds will bear interest at the rates set forth on the inside cover hereof (computed on the basis of a 360-day year composed of twelve 30-day months), payable on each Interest Payment Date as described above. Each Bond authenticated prior to the first Interest Payment Date thereon shall bear interest from its dated date. Each Bond authenticated on or after the first Interest Payment Date thereon shall bear interest from the Interest Payment Date thereon next preceding the date of authentication thereof, unless such date of authentication shall be an Interest Payment Date to which interest on such Bond has been paid in full or duly provided for, in which case from such date of authentication; provided that if, as shown by the records of the Trustee, interest on such Bond shall be in default, such Bond shall bear interest from the date to which interest has been paid in full on such Bond or, if no interest has been paid on such Bond, its dated date. Each Bond shall bear interest on overdue principal and, to the extent permitted by law, on overdue premium, if any, and interest at the rate borne by such Bond. 5

12 Payment of principal and interest on the Series 2010 Bonds will be made as described below under Book-Entry-only System. However, in the event the book-entry system shall be discontinued, the following provisions shall pertain. Interest on each Bond shall be payable on each Interest Payment Date by check or draft mailed by first class mail on the date on which due to the person in whose name such Bond is registered on the registration books of the Issuer maintained by the Trustee at the close of business on the Record Date, except that any interest not so timely paid or duly provided for shall cease to be payable to the person who is the registered owner of such Bond as of the Record Date, and shall be payable to the person who is the registered owner of such Bond at the close of business on a special record date for the payment of such defaulted interest. Such special record date shall be fixed by the Trustee whenever moneys become available for the payment of such defaulted interest, and notice of the special record date shall be given by first class mail by the Trustee or by or on behalf of the Issuer to the registered owner thereof not less than 15 days prior thereto. Such interest shall be mailed to the registered owner at his or her address as shown on the bond register maintained by the Trustee on the Record Date. In the event that any owner of Series 2010 Bonds in an aggregate principal amount of at least $1,000,000 shall provide the Trustee on or prior to any Record Date with written wire transfer instructions, the interest on subsequent Interest Payment Dates shall be paid in accordance with such instructions, or to such securities depository, as the case may be, until the Trustee receives written notice to the contrary. The principal of and interest and redemption premium (if any) on the Series 2010 Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal of and redemption premium (if any) on the Series 2010 Bonds are payable only upon presentation and surrender thereof at the designated office of the Trustee. Limited Obligations THE SERIES 2010 BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OR OBLIGATION OF THE REGENTS, THE UNIVERSITY, THE FOUNDATION, THE STATE OR ANY MUNICIPALITY OR POLITICAL SUBDIVISION THEREOF. THE SERIES 2010 BONDS ARE PAYABLE BY THE ISSUER SOLELY FROM THE TRUST ESTATE PLEDGED TO THE PAYMENT THEREOF UNDER THE INDENTURE. NO OWNER OF THE SERIES 2010 BONDS SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OR ANY MUNICIPALITY OR POLITICAL SUBDIVISION THEREOF TO PAY THE SERIES 2010 BONDS OR THE INTEREST OR PREMIUM THEREON OR ANY OTHER COST RELATING THERETO OR TO ENFORCE PAYMENT THEREOF AGAINST ANY PROPERTY OF THE STATE OR ANY MUNICIPALITY OR POLITICAL SUBDIVISION THEREOF. THE ISSUER HAS NO TAXING POWER. Optional Redemption of Bonds Any Series 2010 Bonds maturing on and after June 15, 2021, shall be subject to optional redemption prior to maturity by the Issuer upon the written request of the Borrower pursuant to the Loan Agreement, from moneys on deposit in the Redemption Account, in whole or in part on any Business Day (in such order of maturities as may be specified by the Borrower and, if in part, in an Authorized Denomination) on or after June 15, 2020, at the redemption price of 100% of the principal amount of Series 2010 Bonds called for redemption plus accrued interest to the redemption date. Mandatory Sinking Fund Redemption (a) The Series 2010 Bonds maturing on June 15, 2035 shall be subject to mandatory redemption prior to maturity, in part by lot, in such manner as may be designated by the Trustee, on the following dates and in the following principal amounts at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date (the amount on June 15, 2035 to be paid at maturity rather than redeemed): June 15 of the Year Principal Amount 2029 $1,250, $1,320, $1,385, $1,465, $1,545,000 6

13 2034 $1,630, $1,720,000 (b) The Series 2010 Bonds maturing on June 15, 2041 shall be subject to mandatory redemption prior to maturity, in part by lot, in such manner as may be designated by the Trustee, on the following dates and in the following principal amounts at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date (the amount on June 15, 2041 to be paid at maturity rather than redeemed): June 15 of the Year Principal Amount 2036 $1,815, $1,915, $2,030, $2,145, $2,270, $2,405,000 Extraordinary Redemption of Series 2010 Bonds The Series 2010 Bonds are subject to extraordinary redemption prior to maturity (a) in the event of damage to or destruction of the Project or any part thereof or condemnation of or failure of title to the Project or any part thereof, to the same extent that the Loans are prepaid pursuant to the Loan Agreement, or (b) in the event that moneys are deposited in the Redemption Account (including excess proceeds of Series 2010 Bonds) pursuant to certain sections of the Loan Agreement and the Indenture, to the extent of such moneys deposited in the Redemption Account. See the following sections of the Loan Agreement in Appendix C hereto: 7.02 (Removal of Equipment), 8.01 (Damage and Destruction), 8.02 (Condemnation and Failure of Title), (Release of Certain Land and Subordination), (Option to Release Unimproved Land), (Granting of Easements), and (Option and Obligation to Prepay Loans in Certain Events) and the following section of the Indenture: 509(j) (Project Fund). If called for redemption in any such event, the Series 2010 Bonds shall be subject to redemption by the Borrower at any time in whole or in part (and if in part in an Authorized Denomination), in inverse order of maturities and ratably (to the extent practicable) among series, less than all of a single maturity to be selected by lot in such manner as may be determined by the Trustee, at the principal amount thereof plus accrued interest thereon to the redemption date and without premium. General Provisions Regarding Optional, Extraordinary, and Mandatory Sinking Fund Redemptions No redemption of less than all of the Series 2010 Bonds Outstanding shall be made unless the aggregate principal amount of Series 2010 Bonds to be redeemed is equal to $5,000 or integral multiples thereof. The Trustee may call Series 2010 Bonds for optional redemption or extraordinary optional redemption at least 40 days prior to the redemption date upon receipt by the Trustee of a Joint Written Request requesting such redemption. Each such Joint Written Request shall specify the principal amount of the Series 2010 Bonds to be called for redemption, the applicable redemption price or prices, and the provision or provisions specified in the Indenture pursuant to which such Series 2010 Bonds are to be called for redemption. No notice from the Issuer or the Borrower is required in order to redeem Series 2010 Bonds pursuant to a mandatory sinking fund redemption. In lieu of redeeming Series 2010 Bonds pursuant to the Indenture, the Trustee shall, at the written direction of the Issuer upon the written request of the Borrower pursuant to the Loan Agreement, use such funds otherwise available under the Indenture for redemption of Series 2010 Bonds to purchase Series 2010 Bonds of the same series in the open market on the redemption date then applicable under the Indenture at a price not exceeding the redemption price then applicable under the Indenture. Any Series 2010 Bonds so purchased in lieu of redemption shall be delivered to the Trustee for cancellation and shall be cancelled, all as provided in the Indenture. It is understood that in the case of any optional or extraordinary redemption or purchase and cancellation of Series 2010 Bonds, the Issuer shall receive credit against its mandatory sinking fund redemption obligation with respect to the Series 2010 Bonds redeemed or purchased in such order as the Borrower shall designate prior to the redemption or purchase and cancellation or, if no such election is made prior to such redemption or purchase and cancellation, in the inverse order thereof; provided, however, that following such reduction each such mandatory sinking fund redemption payment is made in an Authorized Denomination. 7

14 Notice of Redemption A copy of the notice of the call for any redemption identifying the Series 2010 Bonds to be redeemed shall be given by first class mail, postage prepaid, not less than 30 days and not more than 60 days prior to the date fixed for redemption, to the registered owners of Series 2010 Bonds to be redeemed at their addresses as shown on the registration books. Such notice shall specify the redemption date, the redemption price, the place and manner of payment, and that from the redemption date interest will cease to accrue on the Series 2010 Bonds that are the subject of such notice and shall include such other information as the Trustee shall deem appropriate or necessary at the time such notice is given to comply with any applicable law, regulation, or industry standard. Failure to give notice in the manner prescribed under the Indenture with respect to any Series 2010 Bond, or any defect in such notice, shall not affect the validity of the proceedings for redemption for any Series 2010 Bond with respect to which notice was properly given. Upon the happening of the above conditions and if sufficient moneys are on deposit with the Trustee on the applicable redemption date to redeem the Series 2010 Bonds to be redeemed and to pay interest due thereon and premium, if any, the Series 2010 Bonds thus called shall not after the applicable redemption date bear interest, be protected by the Indenture, or be deemed to be Outstanding under the provisions of the Indenture, whether or not such Series 2010 Bonds are presented and surrendered for payment on such date. If any Series 2010 Bond is registered as transferred or exchanged on the registration books maintained by the Trustee after notice has been given calling such Series 2010 Bond for redemption, the Trustee will attach a copy of such notice to the Series 2010 Bond issued in connection with such transfer or exchange. No Partial Redemption After Default Anything in the Indenture to the contrary notwithstanding, if there shall have occurred and be continuing an Event of Default of which the Trustee has notice as set forth in the Indenture, there shall be no redemption of less than all of the Series 2010 Bonds at the time Outstanding. Partial Redemption If less than all of the Series 2010 Bonds shall be called for redemption under any provision of the Indenture permitting such partial redemption, the particular Series 2010 Bonds or portions thereof to be redeemed shall be selected by the Trustee, in the principal amount designated to the Trustee by the Borrower or otherwise as required by the Indenture; provided, however, that (1) in the case of the redemption of less than all Series 2010 Bonds of the same maturities of any series, such redemption shall be by lot in such manner as the Trustee may determine among such Series 2010 Bonds, and (2) subject to other applicable provisions of the Indenture, the portion of any Series 2010 Bond to be redeemed shall be in a principal amount equal to an Authorized Denomination. In selecting Series 2010 Bonds for redemption, the Trustee shall treat each Series 2010 Bond as representing that number of Series 2010 Bonds which is obtained by dividing the principal amount of such Series 2010 Bond by the minimum Authorized Denomination. If it is determined that one or more, but not all, of the integral multiples of the Authorized Denomination of principal amount represented by any Series 2010 Bond is to be called for redemption, then, upon notice of intention to redeem such integral multiple of an Authorized Denomination, the owner of such Series 2010 Bond shall forthwith surrender such Series 2010 Bond to the Trustee for (a) payment to such owner of the redemption price of the integral multiple of the Authorized Denomination of principal amount called for redemption, and (b) delivery to such owner of a new Series 2010 Bond or Series 2010 Bonds of the same series and maturity in the aggregate principal amount of the unredeemed balance of the principal amount of such Series 2010 Bond. New Series 2010 Bonds representing the unredeemed balance of the principal amount of such Series 2010 Bond shall be issued to the registered owner thereof without charge therefor. Cancellation All Series 2010 Bonds that have been redeemed shall not be reissued but shall be cancelled and destroyed by the Trustee, in accordance with the Indenture. Issuance of Additional Bonds The Indenture permits the issuance of additional parity bonds, which, if issued, would be equally and ratably secured on a parity basis with the Series 2010 Bonds. See Section 5.09 of the Loan Agreement in Appendix C hereto and Sections 214 and 215 of the Indenture in Appendix B hereto. 8

15 Book-Entry-Only System The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the Series 2010 Bonds. The Series 2010 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 Series 2010 Bond will be issued for each maturity of the Series 2010 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest securities 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. The users of its regulated subsidiaries own DTCC. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Series 2010 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2010 Bonds on DTC s records. The ownership interest of each actual purchaser of each Series 2010 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 Series 2010 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 Series 2010 Bonds, except in the event that use of the book-entry system for the Series 2010 Bonds is discontinued. To facilitate subsequent transfers, all Series 2010 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 Series 2010 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 Series 2010 Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Series 2010 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 Series 2010 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2010 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2010 Bonds may wish to ascertain that the nominee holding the Series 2010 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 the notices be provided directly to them. 9

16 Redemption notices shall be sent to DTC. If less than all of the Series 2010 Bonds within a maturity 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 Series 2010 Bonds unless authorized by a Direct Participant in accordance with DTC s MMI 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 Series 2010 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds and principal and interest payments on the Series 2010 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 the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to 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, 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 redemption proceeds and principal and interest payments 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 securities depository with respect to the Series 2010 Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2010 Bonds are required to be printed and delivered to DTC. The Issuer or the Borrower may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Series 2010 Bonds will be printed and delivered. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Issuer and the Borrower believe to be reliable, but the Issuer and the Borrower take no responsibility for the accuracy thereof. General SECURITY FOR THE SERIES 2010 BONDS The Series 2010 Bonds are limited obligations of the Issuer payable solely from the Trust Estate. The Trust Estate includes all of the Issuer s right, title and interest in and to (a) the Loan Agreement (except for the Issuer s rights to payment of fees and expenses and to indemnification pursuant to the terms thereof and its right to receive and give notices and instructions and to comply with instructions, as provided therein); (b) the Note; (c) the Security Deed; (d) the Security Agreement; (e) amounts held in any and all funds created under the Indenture; (f) moneys and securities and interest earnings thereon from time to time delivered to the Trustee under the terms of the Indenture; and (g) proceeds (cash and noncash) of any and all of the foregoing. Pursuant to the Loan Agreement, the Issuer will lend the proceeds derived from the sale of the Series 2010 Bonds to the Borrower. Such loan will be evidenced by the Note, pursuant to which the Borrower will make payments to the Trustee for the account of the Issuer in amounts and at times sufficient to pay the principal of, premium, if any, and interest on the Series 2010 Bonds. To secure its obligations under the Loan Agreement and the Note and certain other obligations of the Borrower to the Issuer, the Borrower (1) will grant to the Issuer a first lien on and first security title to Borrower s leasehold interest in the Site, and will assign and pledge to the Issuer the Borrower s interest in the rents derived from the Rental Agreements, pursuant to a Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated as of December 1, 2010 (the Security Deed ), from the Borrower to the Issuer and (2) will grant to the Issuer a first priority security interest in (a) certain personal property which is included as a part of the Project, (b) certain revenues derived from the Project and (c) certain contracts to which the Borrower is a party, pursuant to a Security Agreement, dated as of December 1, 2010 (the Security Agreement ), between the Borrower and the Issuer. 10

17 Copies of the Indenture the Loan Agreement, the Security Deed and the Security Agreement are set forth in Appendices B, C, D and E, respectively. Reference should be made thereto and for the further covenants of the Issuer and the Borrower made in connection with those documents and to Appendix A for the definitions contained therein. The Ground Leases Pursuant to four Ground Leases, the Regents will lease to the Borrower, subject to a reservation of certain easements the sites upon which the four residential buildings are to be located for a term ending June 30, Upon the execution of each Ground Lease, the Borrower shall pay ground rent in advance of $10.00 per year. The Borrower may extend each Ground Lease for an additional five-years. The form of the Ground Lease for the site of Building A is attached hereto as Appendix J. The Rental Agreements The Borrower is to lease the three new buildings and the renovated Camilla Hubert Hall to the Regents under the four Rental Agreements. Each Rental Agreement shall be for a term commencing at 12:00 o clock A.M. on the first day of the first month following the issuance of a certificate of occupancy, but no earlier than August 1, 2011 (2012 in the case of Building C) and ending at 11:59 o'clock P.M. on July 31, 2012 (2013 in the case of Building C), unless terminated (hereinafter referred to as the Initial Term ). Thereafter the term of the Rental Agreements for Building A, Building B, Building C and Camilla Hubert Hall shall be coterminous and shall renew as set forth below. At the expiration of the Initial Term the Regents may extend the term of each Rental Agreement on a yearto-year basis for successive consecutive years (each year is hereinafter referred to as Renewal Term ) and ending on June 30, 2041 which is the date the final Renewal Term shall terminate. Under the terms of the four Rental Agreements, the Regents will make fixed rental payments for the use and occupancy of the four new student housing buildings, as completed, in aggregate amounts that the Borrower estimates will be sufficient to enable the Borrower to pay, among other things, debt service on the 2010 Bonds. The Regents shall provide self-insurance on fixtures, furnishing, equipment that it may use or store in such buildings. The Regents shall pay any applicable taxes and assessment, costs of janitorial services, rubbish removal, pest control and utilities. Under each Rental Agreement, the Regents shall pay to the Borrower, as additional rent an amount equal to the costs incurred by Borrower pursuant to Exhibit A, Stipulations 7, 8, and 21(a) and (b) of such Rental Agreement, to the extent insufficient funds are on deposit in Borrower s Repair, Replacement and Maintenance Fund to pay such costs. Under each Rental Agreement, Borrower agrees to establish and maintain an account to be used for the repair, replacement and maintenance of the related Building (the Repair, Replacement and Maintenance Fund ). In order to fund the Repair, Replacement and Maintenance Fund, the Regents shall pay to Landlord the amounts shown on Exhibit E of the such Rental Agreement as additional rent semi-annually, payable on the first day of each and every July and December during the term (commencing in the case of buildings A, B, and Camilla Hubert Hall on December 1, 2011 and in the case of building C on December 1, On or before July 1 of every five-year period commencing July 1, 2011 (with the first such report being due by June 30, 2016 or in the case of Building C, 2017), Landlord shall provide to Tenant an engineering report on the physical and mechanical condition of the Premises, performed by an engineer reasonably acceptable to Tenant. Such report shall include a capital asset replacement analysis, an evaluation of the adequacy of the semi-annual additional rent to fund the Repair, Replacement and Maintenance Fund, and a recommendation as to any required adjustment of the foregoing. The Regents and the Borrower shall implement any recommendations contained in the engineer s report, commencing with the next renewal term, if such Rental Agreement is renewed. See Appendix I for the form of the Rental Agreement for Building A. Each Rental Agreement terminates annually, subject to renewal, at the sole option of the Regents, and there can be no assurance that the Regents will renew it. Each Rental Agreement is a year-to-year operating lease that the Regents has no moral obligation to renew or keep in effect. If the Regents elects not to renew a Rental Agreement and it expires by its terms at the end of its initial term or any subsequent 12-month term, the Regents will have no further obligations under such Rental Agreement. If the Regents elects not to renew one or more Rental Agreements, the Borrower may not be able to rent the related buildings to other tenants for an amount sufficient to enable the Borrower to make its payments due under the Loan Agreement. The likelihood that the Regents will renew the Rental Agreements past the initial terms partially depends upon its continuing need for the student housing buildings that are subject to such Rental Agreements, and partially depends on the availability of appropriations received from the General Assembly of the State of Georgia (the General Assembly ). See BOARD OF REGENTS Funding 11

18 the University System, CERTAIN BONDHOLDERS RISKS Limitations on Board of Regents Obligations Under Rental Agreements; Risk of Non-Renewal and THE PROJECT Forecasted Revenue and Expense Statement herein. THE REGENTS HAS NO MORAL OBLIGATION WITH RESPECT TO THE SERIES 2010 BONDS OR TO CONTINUE TO RENT THE STUDENT HOUSING BUILDINGS IN A MANNER SUPPORTIVE OF THE CREDITWORTHINESS OF THE SERIES 2010 BONDS. Should the Borrower, for any reason whatever, be unable to deliver possession of any student housing building by the Commencement Date of the Initial Term of the related Rental Agreement, the Regents may terminate the related Rental Agreement and neither party shall have any further obligations thereunder. In the event Regents elects not to exercise Regents option to terminate that Rental Agreement, there shall be a total abatement of rent during the period between the applicable Commencement Date and the date upon which Borrower actually delivers possession of the related building to the Regents The Regents is not permitted to assign an Rental Agreement or sublet any residential housing building without the Borrower s express written consent; provided, however, the Regents may sublet components of the Project without first obtaining the consent of the Borrower for short-term (24 hours) educational purposes. Any assignment or subletting without the Borrower s consent will be void, and, at the option of the Borrower, on 30 days notice to the Regents, will operate to terminate that Rental Agreement. If any such housing building is damaged, by any cause whatever, as to be rendered unfit for occupancy by the Regents, and thereafter the building is not repaired by the Borrower, at its expense, with reasonable promptness and dispatch, then the Regents has the option to immediately cancel and terminate the related Rental Agreement by giving proper notice thereof. If such building is partially destroyed, by any cause whatever, but not rendered unfit for occupancy by Regents, then the Borrower, at its expense and with reasonable promptness and dispatch, will repair and restore the building to substantially the same condition as before the damage. If the building is partially destroyed there shall be a fair abatement in the rent payable during the time such repairs or rebuilding is being made. Full rental will recommence after completion of the repairs and restoration of such component of the building. The Regents will make the decision as to whether or not a component of the building is fit or unfit for occupancy by the Regents after making a reasonable assessment of damages. The Borrower is obligated under the Loan Agreement to maintain loss of rental insurance covering 24 months of rental payments. See CERTAIN BONDHOLDERS RISKS Condemnation/Casualty Risk herein. For a description of the condemnation and other provisions of the Rental Agreements, see the Rental Agreement for Building A at Appendix I hereto. Debt Service Reserve Pursuant to the Indenture, there is created and established with the Trustee a special trust fund for the benefit of the owners of the Series 2010 Bonds which is designated the Debt Service Reserve (the Debt Service Reserve ), which will be held in trust by the Trustee separate and apart from all other deposits and funds. A portion of the proceeds of the Series 2010 Bonds in the amount of $1,271,64.47 will be initially deposited into the Debt Service Reserve. Subject to limited exceptions set forth in the Indenture, moneys in the Debt Service Reserve may be applied to the payment of principal of and interest on the Series 2010 Bonds when other moneys are not available for such purposes. Funds and Accounts For a description of the other funds and accounts created under the Indenture, see Article V of the Indenture in Appendix B hereto. Covenants The Borrower has agreed in the Loan Agreement to various operational and financial covenants and restrictions upon itself and the Project, including, but not limited to, limitations on the incurrence of additional indebtedness, maintenance of certain amounts of insurance, limitations on mergers and transfers of assets, limitations on the creation of liens, and limitations on additional activities. See the Loan Agreement in Appendix C hereto. 12

19 BOND INSURANCE Bond Insurance Policy Concurrently with the issuance of the Series 2010 Bonds, Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.) ( AGM ) will issue its municipal bond insurance policy for the Series 2010 Bonds (the Policy ). The Policy guarantees the scheduled payment of principal of and interest on the Series 2010 Bonds when due as set forth in the form of the Policy included as Appendix K to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.) AGM is a New York domiciled financial guaranty insurance company and a wholly owned subsidiary of Assured Guaranty Municipal Holdings Inc. ( Holdings ). Holdings is an indirect subsidiary of Assured Guaranty Ltd. ( AGL ), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol AGO. AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. No shareholder of AGL, Holdings or AGM is liable for the obligations of AGM. Effective November 9, 2009, Financial Security Assurance Inc. changed its name to Assured Guaranty Municipal Corp. AGM s financial strength is rated AA+ (stable outlook) by Standard and Poor s Ratings Services, a Standard & Poor s Financial Services LLC business ( S&P ) and Aa3 (negative outlook) by Moody s Investors Service, Inc. ( Moody s ). On February 24, 2010, Fitch, Inc. ( Fitch ), at the request of AGL, withdrew its AA (Negative Outlook) insurer financial strength rating of AGM at the then current rating level. Each rating of AGM should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of any security guaranteed by AGM. AGM does not guarantee the market price of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn. Current Financial Strength Ratings On October 25, 2010, S&P published a Research Update in which it downgraded AGM s counterparty credit and financial strength rating from AAA (negative outlook) to AA+ (stable outlook). Reference is made to the Research Update, a copy of which is available at for the complete text of S&P s comments. In a press release dated February 24, 2010, Fitch announced that, at the request of AGL, it had withdrawn the AA (Negative Outlook) insurer financial strength rating of AGM at the then current rating level. Reference is made to the press release, a copy of which is available at for the complete text of Fitch s comments. On December 18, 2009, Moody s issued a press release stating that it had affirmed the Aa3 insurance financial strength rating of AGM, with a negative outlook. Reference is made to the press release, a copy of which is available at for the complete text of Moody s comments. AGM. There can be no assurance as to any further ratings action that Moody s or S&P may take with respect to For more information regarding AGM s financial strength ratings and the risks relating thereto, see AGL s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which was filed by AGL with the Securities and Exchange Commission (the SEC ) on March 1, 2010, AGL s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010, which was filed by AGL with the SEC on May 10, 2010, AGL s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, which was filed by AGL with the SEC on 13

20 August 9, 2010, and AGL s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010, which was filed by AGL with the SEC on November 9, Capitalization of AGM At September 30, 2010, AGM s consolidated policyholders surplus and contingency reserves were approximately $2,512,828,657 and its total net unearned premium reserve was approximately $2,305,542,616, in each case, in accordance with statutory accounting principles. Incorporation of Certain Documents by Reference Portions of the following documents filed by AGL with the SEC that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof: (i) The Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (which was filed by AGL with the SEC on March 1, 2010); (ii) The Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010 (which was filed by AGL with the SEC on May 10, 2010); (iii) The Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010 (which was filed by AGL with the SEC on August 9, 2010); and (iv) The Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010 (which was filed by AGL with the SEC on November 9, 2010). All information relating to AGM included in, or as exhibits to, documents filed by AGL pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, after the filing of the last document referred to above and before the termination of the offering of the Series 2010 Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the Internet at the SEC s website at at AGL s website at or will be provided upon request to Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.): 31 West 52 nd Street, New York, New York 10019, Attention: Communications Department (telephone (212) ). Any information regarding AGM included herein under the caption BOND INSURANCE Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.) or included in a document incorporated by reference herein (collectively, the AGM Information ) shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded. AGM makes no representation regarding the Series 2010 Bonds or the advisability of investing in the Series 2010 Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading BOND INSURANCE. PLAN OF FINANCING * The schedule below contains the estimated sources and uses of funds in connection with the issuance of the Series 2010 Bonds. Sources of Funds: Bond Proceeds Par Amount of Series 2010 Bonds $ 36,475, Net Original Issue Discount ( ) Premium ,616,

21 Other Sources of Funds State MRR Funds $ 574, Total Sources $ 36,190, Estimated Uses of Funds: Project Fund $ 30,500, Capitalized Interest (1) 3,099, Debt Service Reserve (2) 1,271, Delivery Date Expenses (3) 1,319, Total Uses of Funds $ 36,190, (1) Represents a portion of the interest payments on certain of the Series 2010 Bonds that are payable on or prior to February 1, (2) This amount fully funds the Debt Service Reserve in an amount equal to 50% of the least of (a) ten percent of the original aggregate principal amount of the Series 2010 Bonds; (b) 125% of the average annual principal and interest requirements on the Series 2010 Bonds in any Fiscal Year; or (c) the maximum annual principal and interest requirements on the Series 2010 Bonds in any Fiscal Year. (3) Includes, without limitation, Underwriter s compensation, legal fees and expenses, initial Trustee s fees, the Bond Insurance premium, the Regent s fee and other related costs. Description THE PROJECT The Project consists of a number of components described below. Building A, being a three-story student housing building of approximately 31,232 square feet containing 106 beds which is expected to be complete prior to July 31, 201l and leased to the Regents under a Rental Agreement. Building B, being a three-story student housing building of approximately 45,564 square feet containing 173 rental beds which is expected to be complete prior to July 31, 2011 and leased to the Regents under a Rental Agreement. Building C, being a four story student housing building of approximately 85,349 square feet containing 327 beds which is expected to be complete prior to July 31, 2012 and leased to the Regents under a Rental Agreement. The restoration of Camilla Hubert Hall to a residential hall, to contain approximately 77 beds which is expected to be complete prior to July 31, 2011 and leased to the Regents under a Rental Agreement. The demolition of an existing student housing facility having 180 rental beds, Peacock Hall, for use as a site for Building C, which is to have approximately total 327 beds, as stated above. The renovation of two historical buildings, Morgan Hall and Adams Hall, that are owned by the Regents. There is not to be a Rental Agreement on these buildings, but the costs of the renovations are to be included in the rents to be paid under the above-referenced Rental Agreements. The acquisition of approximately three acres of land on which a sports and intramural complex (consisting of a softball field, a baseball field, tennis courts, a multipurpose field, and a concession facility) with appropriate access road and parking spaces are to be developed. This portion of the Project is to be donated to the Regents and is to be used by the University under a site license. There is not to be a Rental Agreement on these facilities, but the costs thereof are to be included in the calculation of the rents to be paid under the Rental Agreement for Building C.. The Program Manager The Program Manager is Hal Gibson Companies, L.L.C., a Georgia limited liability company founded in March During this time ( HGC ) has expanded their staff from two employees to twelve employees. HGC offers three locations to serve the Southeast Region: West Point, Georgia; Savannah, Georgia; and Lanett, Alabama. 15

22 After 11 years as Facilities Manager at Hughes Aircraft, five years as Director of Plant Operations and Chief Facilities Officer at Columbus State University and five years as Assistant Vice Chancellor for Facilities and Operations for the Regents of the University System of Georgia, Hal Gibson made the decision to venture out and put his years of experience to work as a Program Management Consultant. The main focus of HGC has been in Program Management. The first year and a half of HGC s existence were focused on the Georgia Department of Economic Development - West Point Economic Development Super Site and the Georgia State Financing and Investment Commission - DTAE/KIA Training Center along with various small private sector projects. The Super Site is the home of KIA Automotive s first North American Automobile Assembly Plant. HGC has now developed into a full service Program Management firm with an emphasis on exceptional customer service. Its personnel are carefully selected based on leadership skills, decision-making ability, experience and personality. The following are student housing project in which HGC has been or is currently involved: (i) Georgia State University, Atlanta, Georgia 320 beds - $17,900,000 (completed); East Georgia College, Swainsboro, Georgia 200 beds - $8,000,000 (current); and Savannah State University, Savannah, Georgia 606 beds - $32,200,000; Dalton College, Albany, Georgia-Phase II 252 beds - $11,000,000 and Phase III beds amount to be determined The Design/Build Contractor The construction contractor is Hardin Construction Company, LLC ( Hardin ), a Georgia limited liability company that was created December 2, It is the successor of a construction business started in 1946 to build housing for returning World War II veterans under the Veterans Emergency Housing Act guaranteeing $400 million for new factory-built homes. Hardin now has offices in Atlanta, Austin, Orlando, Raleigh and Tampa. It has completed projects in 28 states, the Caribbean and Mexico. Its projects have included, office buildings, hotels, retail centers, condominiums, university facilities, healthcare and public assembly projects. Hardin supports the participation of minority and women owned business enterprises in its projects, and its work with minority, women and local firms reflects its deep and persistent commitment to broadening the construction community and the local economy. Hardin has completed more than 720 projects in Georgia, including, the following education-related projects: Georgia Institute of Technology Undergraduate Residence Hall, Atlanta, Georgia, Kennesaw State University-Village Centre, Kennesaw, Georgia, Savannah Tech Collegiate Center & Laboratory North & South Classroom Buildings, Savannah, Georgia, University of Georgia Intramural Field Parking Deck, Athens, Georgia, and the University of Georgia Performing Arts Center Parking Deck, Athens, Georgia. Set forth below is information on certain of Hardin s officers. Brantley Barrow is Chairman of Hardin. He is responsible for the overall strategic direction and executive management of the firm, and also oversees the company s financial affairs, human resource, risk management and information technology areas. He has over 30 years of financial and management experience in the construction and real estate industries. He was former national president of the Construction Financial Management Association ( CFMA ) and a former president and a founding director of the Georgia Chapter of CFMA. He serves as a member of many boards including Young Harris College, the Terry College of Business Alumni Association at the University of Georgia, The Metro Atlanta Chamber of Commerce, The Buckhead Coalition, Atlanta Habitat for Humanity, Inc., March of Dimes Georgia Chapter and Junior Achievement of Georgia, Inc., where is a former chairman. He is also a certified Construction Industry Financial Professional and Certified Public Accountant. Mr. Barrow holds an associate of education degree from Young Harris College and the bachelor of business administration (summa cum laude) from the University of Georgia in Athens, Georgia. William A. Pinto is President of Hardin. In his 35-year tenure with Hardin, he has directed or overseen construction management of every product type that Hardin as endeavored to build. As President, he is responsible for leading strategic growth and overseeing Hardin s broad-based construction operations. In 1998 he was inducted into the University of Florida s Construction Hall of Fame after winning the Distinguished Builder Award from the M.E. Rinker, Sr. School of Building Construction. Awarded by a diverse group of representatives from the industry s major trade and professional organizations, this honor recognized Mr. Pinto s dedication to construction excellence, his active support of the industry and his outstanding civic and community involvement. In 2005, the Atlanta chapters of the Professional Construction Estimators Association of America (PCEA) and the American Society of Professional Estimators (ASPE), with the prestigious Golden Hammer Award, honored Mr. Pinto. This honor recognizes Mr. Pinto s significant contributions to both the construction industry and the community. Mr. Pinto is a member of the American Institute of Constructors and serves on the Executive Committee to the Advisory Council of the M. E. Rinker, Sr., School of Building Construction. He also was the 2002 Chairman of the Board of Directors of the Associated Builders and Contractors of Georgia. In 1996, he served a seven-year term as President of the Board of CEFGA (Construction Education Foundation of Georgia), a nonprofit education foundation chartered to address the current and future craft training needs of Georgia s commercial and industrial construction 16

23 industry. He is the immediate past Chairman of the Board of Trustees for Atlanta Technical College after ten years on that board. Mr. Pinto is the past Chairman of the National Center for Construction Education and Research (NCCER). He also serves as President of the Board of Glencastle Constructors, is a member of the Board of Directors of the Metropolitan Atlanta YMCA and is the Chairman of Theatre in the Square board. Mr. Pinto graduated from the University of Florida with both bachelor s and master s degrees in building construction before joining Hardin in Stephen C. Bachman is a Senior Vice President of Hardin and is responsible for the administration and management of construction operations across one of Hardin s business units, Steve Bachman has more than 35 years of construction industry experience. His knowledge spans project management, project planning, preconstruction, cost consulting, purchasing, scheduling, estimating and value management. Mr. Bachman joined Hardin in 1974 as a project engineer and is now a senior vice president and company shareholder. Since that time Mr. Bachman has been responsible for numerous hotel, large assembly and mixed-use projects totaling over 7200 hotel rooms; 3,060,000 million square feet of convention, conference center and public assembly space; and 2250 multi-family residential units. Mr. Bachman has worked for clients in both the private and public sectors throughout the Southeast and nationally, including Philadelphia, Chicago, Denver, Boston, Puerto Rico and Mexico City. In addition to his hospitality/residential and convention/conference center focus, Mr. Bachman has experience in retail, office, warehouse, mixed-use, student housing, performing arts centers, historical renovation and adaptive reuse, foreign and branch office operations, development, and joint ventures. Mr. Bachman is Hardin s current representative to the Advisory Committee for the Georgia Governor s Mentor Protégé Program and serves as a construction industry arbitrator for the American Arbitration Association. Mr. Bachman holds a bachelor s degree in contracting and construction from Syracuse University (Utica College) and a master s degree in building construction from the University of Florida. Jeffery R. Traeger is Hardin s a Senior Vice President of Finance and is a company shareholder and a member of the company s management committee. He is responsible for general and project accounting, financial and tax reporting and compliance, risk management, cash management, payroll, and information technology. In this multifaceted role, Mr. Traeger brings over 30 years of construction financial management expertise, has negotiated everything from the purchase of Hardin s new corporate office in Atlanta to the security of the company s irreplaceable data assets. Mr. Traeger joined Hardin in 1979 and served as project accountant on the Georgia Port Authority project in Savannah, Georgia, and the Knoxville Hilton in Knoxville, Tennessee. After stints as assistant controller, controller and vice president-controller, Mr. Traeger was promoted to senior vice president of finance in Mr. Traeger currently serves on the board of directors of the Construction Financial Management Association, Georgia Chapter, and the executive committee (as treasurer) and board of directors of the Associated Builders and Contractors, Inc., Georgia Chapter. He is a 2007 graduate of Leadership Cobb, and a member of the Leadership Cobb Alumni Association. Active in his church, he has served in various leadership roles including stints as chairman of the board of trustees, building committee member and stewardship committee member. Mr. Traeger is CPA-licensed in the state of Georgia and a member of the AICPA and the Georgia Society of CPAs. Mr. Traeger has a bachelor s degree in business administration, majoring in accounting from Armstrong Atlantic State University in Savannah, Georgia The Design/Build Contract Project: The Design/Build Contract between Hardin and the Regents relates to the following components of the (1) The construction of three new buildings, Buildings A, B, and C, for student housing facilities described above, with some on-site parking, appropriate ratio of handicapped parking spaces, and specified loading and unloading areas. Peacock Hall, a dormitory containing 180 beds and approximately 36,000 square feet shall be demolished as part of this project in order that its site may serve as the site for Building C. Peacock Hall will be made available to the design builder for demolition by May, Occupancy of the three buildings is planned to be delivered in two phases. Buildings A and B, consisting of 279 beds, will be delivered for occupancy by August 1, In order to meet residential requirements for the fall semester, the Regents requires a Certificate of Occupancy by July 31, Building C must be delivered for occupancy 11 ½ months after vacating Peacock Hall. (2) Existing historic structures Adams and Morgan Halls shall be renovated with proceeds of the Series 2010 Bonds. Adams Hall, an historic building containing approximately 10,000 square feet, shall be rehabilitated as part of this project. Adams Hall originally served as the dining hall for the university. The rehabilitation is to involve improvements to and preservation of the building, which is to be used as the activity center for the new student housing. As such, the Adams Hall will have game room, lounge spaces, and meeting 17

24 space. Morgan Hall, an historic building containing approximately 7,000 square feet, shall be rehabilitated as part of this project. Morgan Hall currently houses the Art Department. The rehabilitation is to involve improvements and preservation of the building to be used as the living learning center for the new student housing. As such, the building will have a computer lab, classrooms, meeting rooms, and lounge and study space. Morgan Annex will remain in its current state. (3) Camilla Hubert Hall is an existing three story wood structure that has recently been gutted. The building envelope was refurbished and a new roof installed. The project scope will provide interior buildout for new student suites to contain approximately 77 beds. This will include new mechanical and electrical systems, as well as a new elevator. Occupancy of the new suites is scheduled for August 1, In the event of the Hardin s delay in performance, Hardin has agreed to pay liquidated damages, as follows: Building A: $ / per day, plus $55.00 per bed/per day to house students at an alternate location, and $1,200 per day for shuttle service to transport students to/from alternate housing location to/from Savannah State University campus, for each day after August 1, 2011, that the building is not materially complete. Building B: $1, / per day, plus $55.00 per bed/per day to house students at an alternate location, and $1,200 per day for shuttle service to transport students to/from alternate housing location to/from Savannah State University campus, for each day after August 1, 2011, that the building is not materially complete. Camilla Hubert Hall: $ / per day, plus $55.00 per bed/per day to house students at an alternate location, and $1,200 per day for shuttle service to transport students to/from alternate housing location to/from Savannah State University campus, for each day after August 1, 2011, that the building is not materially complete. Building C, Morgan Hall, Adams Hall: $3, / per day, plus $55.00 per bed/per day to house students at an alternate location, and $1,200 per day for shuttle service to transport students to/from alternate housing location to/from Savannah State University campus, for each day after August 1, 2012, that the project is not materially complete. ANNUAL DEBT SERVICE REQUIREMENTS The principal (including principal payable at maturity and by mandatory redemption) and interest payment requirements with respect to the Series 2010 Bonds are shown on the next page. (BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK) 18

25 Period Ending Principal Coupon Interest Debt Service Annual Debt Service 6/15/ , , , /15/ , , /15/ , , ,909, /15/ , , /15/ , % 954, ,584, ,539, /15/ , , /15/ , % 945, ,505, ,450, /15/ , , /15/ , % 933, ,583, ,517, /15/ , , /15/ , % 923, ,613, ,536, /15/ , , /15/ , % 909, ,629, ,539, /15/ , , /15/ , % 895, ,640, ,535, /15/ , , /15/ , % 880, ,660, ,540, /15/ , , /15/ , % 864, ,674, ,539, /15/ , , /15/ , % 846, ,686, ,533, /15/ , , /15/ , % 828, ,703, ,531, /15/ , , /15/ , % 807, ,727, ,534, /15/ , , /15/ , % 784, ,754, ,538, /15/ , , /15/2025 1,015, % 760, ,775, ,535, /15/ , , /15/2026 1,070, % 734, ,804, ,539, /15/ , , /15/2027 1,125, % 706, ,831, ,538, /15/ , , /15/2028 1,180, % 677, ,857, ,534, /15/ , , /15/2029 1,250, % 645, ,895, ,540, /15/ , , /15/2030 1,320, % 610, ,930, ,541, /15/ , , /15/2031 1,385, % 574, ,959, ,534, /15/ , , /15/2032 1,465, % 536, ,001, ,538, /15/ , , /15/2033 1,545, % 496, ,041, ,537, /15/ , , /15/2034 1,630, % 453, ,083, ,537, /15/ , , /15/2035 1,720, % 408, ,128, ,537, /15/ , , /15/2036 1,815, % 361, ,176, ,538, /15/ , , /15/2037 1,915, % 309, ,224, ,533, /15/ , , /15/2038 2,030, % 254, ,284, ,538, /15/ , , /15/2039 2,145, % 196, ,341, ,537, /15/ , , /15/2040 2,270, % 134, ,404, ,538, /15/ , , /15/2041 2,405, % 69, ,474, ,543, ,475,000 39,796, ,271, ,271,

26 THE BORROWER AND THE FOUNDATION The Borrower SSU Community Development I, LLC (the Borrower ), was organized on July 16, 2010 as a Georgia limited liability company. It is a special purpose entity that as created for the sole purpose of acting as the Borrower in the financing described herein. Other than the portion of the Project that is to be leased to the Regents, it has no other material assets and other than rent to be received under the Rental Agreements, it is expected to have no other material income. The Foundation Initially, the sole member of the Borrower is SSU COBA Endowment, Inc., which has been determined by the Internal Revenue Service to be exempt from federal income taxes as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the Code ). However, it is contemplated that SSU COBA Endowment, Inc. may be replaced as the sole member of the Borrower by another organization described in Section 501(c)(3) of the Code. The term Foundation initially means SSU COBA Endowment, Inc., and if it is replaced as the sole member of the Borrower by another Section 501(c)(3) organization, the term Foundation shall refer to such other Section 501(c)(3) organization. The Foundation is not obligated to made any payments under the Loan Agreement or any other payments relating to the Series 2010 Bonds, so no financial information the Foundation is provided herein. Introduction THE UNIVERSITY The University is a unit of the University System of Georgia and was founded in 1890, making it the oldest public historically black college or university in Georgia. The University serves undergraduate and graduate students. Students may choose from 23 undergraduate and five graduate degree programs offered through the Colleges of Business Administration, Liberal Arts and Social Sciences, and Sciences and Technology. Savannah State is one of the few institutions in the country to offer the Bachelor of Arts degree in Homeland Security and Emergency Management, which prepares a new generation of leaders to lead recovery efforts in the aftermath of natural and man-made disasters. The Georgia Tech Regional Engineering Program is available at Savannah State. Students take engineering courses in Savannah and earn a Bachelor of Science degree in civil, computer, electrical or mechanical engineering from Georgia Tech. Savannah State also offers the region s only four-year Naval ROTC program with tuition-assisted training in science and technology leading to military and related technology careers. The University s mission is to graduate students prepared to perform at high levels of economic productivity, social responsibility and excellence in their chosen fields of endeavor in a changing global community. The University s mission is consistent with the core missions of the University System of Georgia and the senior universities within the system. The educational goal is realized through program offerings leading to baccalaureate and master s degrees in the College of Business Administration, the College of Liberal Arts and Social Sciences and the College of Sciences and Technology. The College of Business Administration offers courses in accounting, computer information services, international business management, and management and marketing. The College of Liberal Arts and Social Sciences offers courses in fine arts, the humanities, recreation, social and behavioral sciences, and social work, and offers a Master of Public Administration program. The College of Sciences and Technology offers courses in biology and life sciences, chemistry, mathematics, physics, computer science technology, engineering technology, military science and naval science. In 1996, the Regents elevated Savannah State College, along with twelve other regional state colleges, to the status of state universities. The University has approximately 145 faculty members, making the average full time student to faculty ratio 19:1. Nearly 70% of the faculty holds terminal degrees in their respective fields. The University s campus is located within the city limits of Savannah, Georgia on an approximately 173- acre tract of land. The University campus has been developed in a coastal, urban, port city setting and serves residential and commuter students from diverse educational, geographical and racial backgrounds. In the beautiful 20

27 and unique setting of a live oak forest situated next to a salt marsh estuary, the University is well positioned for the study of commercial, technological, environmental and urban issues. There are approximately 330 buildings on the campus and over two thousand existing rental beds. Complementing the University s core academic facilities are a full range of recreational facilities for students, faculty and staff including two gymnasiums, a pool, tennis and basketball courts, a putting green, baseball, softball and soccer fields and a state of the art fitness center. The University meets the costs of its operations primarily through state appropriations, tuition, room and board fees, gifts and grants and investment income. Approximately 40% of the University s total annual operating costs are met through tuition and room and board fees. The Regents establishes tuition annually. In 2006, the Regents introduced a guaranteed, fixed for four tuition rate for incoming freshmen. The current in State tuition for incoming freshmen is $ 2, per semester and room and board fees range from approximately $1, to $1, per semester. For the academic year, 28% of students at the University have HOPE Scholarships. In addition, various other grant and loan programs are available to students of the University. For the current academic year, 90% of the University s students are receiving some type of financial aid. For the current academic year, 80% of the University s students are Georgia residents, 15% are from out of state and 5% are international students. University Officials Biographies Professionals with extensive educational, financial and governmental experience manage the University. The administrative management team includes the following persons. Earl G. Yarbrough, Sr. is the University s 12 th president. He assumed the post on July 2, Prior to joining the University, Dr. Yarbrough served as a full professor and former provost and vice president for academic and student affairs at Virginia State University ( VSU ) in Petersburg, Virginia. Dr. Yarbrough was the chief academic and student affairs officer at VSU from 1998 to Dr. Yarbrough managed approximately $75 million in state and federal funds, tuition and fees, research dollars, and grants and gifts awarded to VSU. As provost, Dr. Yarbrough directed VSU s five-year strategic plan and supervised VSU s day-to-day academic concerns. Under Dr. Yarbrough s leadership, VSU established a school of Engineering, Science and Technology and a School of Graduate Studies, Research and Outreach. Dr. Yarbrough also has administrative experience at two other public historically black universities. He served as the first dean of the School of Technology at North Carolina Agricultural and Technical State University in Greensboro, North Carolina from 1986 to 1998 and chair of the Industrial Technology Department at the University of Arkansas at Pine Bluff in Pine Bluff, Arkansas, from 1984 to Dr. Yarbrough earned a Ph.D. in industrial education from Iowa State University in Ames, Iowa, in 1976, a master of arts in industrial studies from California State University at Los Angeles, California in 1974 and a bachelor of arts in industrial education from Wichita State University in Wichita, Kansas in Savannah State University President Earl G. Yarbrough, Sr. draws on the expertise of a 12-member cabinet in guiding the university. Curdedra N. Andrews is director of Savannah State s Title III Program. She has served in various administrative positions since joining that office in 2005, including a promotion to interim director in August Previously, she held executive level national marketing positions with Friedman s Jewelers and Carson Products. A Savannah State graduate, she received a certificate in Grants Management from Management Concepts in 2008 and her master s degree from Webster University this year. Sandra McCord Best, Ed.D. is director of Human Resources. She came to Savannah State from a long leadership career in private and governmental human resources positions. She previously served as corporate HR director with a Southeast retail chain and later headed the personnel department of Savannah-Chatham County Public Schools, one of the area s largest employers. She earned her doctorate in Educational Leadership from Fielding Graduate University, and master s and bachelor s degrees from Savannah State University. Elaine S. Campbell, CPA, director of Internal Audit and Advisory Services, has been associated with Savannah State since taking a faculty position in the College of Business Administration in She moved to the administrative ranks in She also previously worked at the City of Savannah and Gulfstream Aerospace. A graduate of Clark Atlanta University, she holds master s degrees from Savannah State and Georgia Southern University. Irvin R. Clark, Ed.D., vice president for Student Affairs, has been with Savannah State in a series of increasingly responsible positions for 17 years. Before joining Savannah State, Clark was a graduate assistant 21

28 football coach for Florida A&M University (FAMU) and played professional football for the Tampa Bay Buccaneers. He completed a four-year stint in the U.S. Navy before graduating from FAMU. He received his doctorate from Fielding Graduate University and earned a master s degree from Savannah State. Michael G. Crow, Ph.D., director of Institutional Research & Planning, assumed this role in 1997 following assignments as a tenured history professor, academic dean and vice president in Calif., Mich., Pa., and Fla. Educated in the universities of California and Michigan, he consults and presents workshops on research, planning and accrediting, and continues teaching history. Scholarly interests range from cultural & economic history to organizational culture and student retention. Jeff Delaney became chief information officer for Computer Services and Information Technology in He previously served as manager of Technology Support Services at Georgia College & State University in Milledgeville. He previously held academic posts at Macon State College and Middle Georgia College, and has worked in private industry. He holds a bachelor s degree from the University of Maryland, a master s degree from Georgia College & State University and is pursuing a doctorate from Georgia Southern University. Claud Flythe, D.A., has been vice president for Administration since His career at Virginia State University began in 1968 and included service as a coach in numerous sports and as athletic director. He retired there in 2003 after 10 years as chief of staff and vice president for special affairs. He went on to serve in the administration of Shaw University, his undergraduate alma mater. He holds a doctor of arts degree from Middle Tennessee State University and a master s degree from Indiana University. Joy Haliburton is Vice President for University Advancement. She joined the University in March Previously she was assistant vice president at Virginia State University, having begun there in 2003 as director of Development. Her professional career commenced in 1980 as a political organizer in the American Labor and Civil Rights Movement(s), where she wrote grants for youth leadership development, political education, voter registration and get-out-the-vote programs that she also directed. A graduate of the University of Maryland at College Park, Haliburton also holds a graduate certificate from Indiana University. Edward B. Jolley Jr., CPA, serves as vice president for Fiscal Affairs. Prior to joining Savannah State, Jolley served as vice president for financial affairs and treasurer at Saint Paul s College in Lawrenceville, Virginia. He did his undergraduate work at Morgan State University in Baltimore and holds a master s degree from Regis University in Denver. He is earning a doctorate at the University of Maryland Eastern Shore. Joseph J. Steffen Jr. is University Counsel. He is a cum laude Wake Forest University history graduate who earned his law degree from the College of William and Mary. A Savannahian since 1999, he has been active in business, civic and community organizations. He previously was in the private practice of law, served two terms as a city councilman and remains a respected political commentator. Mary C. Wyatt, Ph.D. is Vice President for Academic Affairs. She came to the University after four years as president of Roanoke-Chowan Community College in Ahoskie, North Carolina. She was also a professor and administrator at Lincoln University and associate professor at Virginia State University, her undergraduate alma mater. Wyatt holds a doctorate from Florida State University and her master s degree from Washington State University. Enrollment The following table sets forth information concerning the University s fall semester enrollment, undergraduate and graduate students, during the following academic years. University Total Enrollment Total Year Undergraduate Graduate FTE Enrollment ,

29 Admissions The following table shows the number of freshmen applications received and students accepted and enrolled in the University during the past five academic years. Year Applied Accepted Acceptance Rate Enrolled Matriculation Rate % % % % % % % % % % % % Student Quality The following table sets forth the mean Scholastic Aptitude Test (SAT) scores for the University s fall freshmen and the national norm during the past five academic years: Academic Year HOPE Scholarships University Fall Freshman SAT Mean National SAT Mean The State of Georgia offers the HOPE Scholarship, which is funded entirely by the Georgia Lottery, that is available to any Georgia resident who graduates from high school with a 3.0 or better average and maintains a 3.0 or better average in college. Since the HOPE Program began in 1993, over $4.6 billion in HOPE funds have been awarded to more than 1.2 million students attending Georgia's colleges, universities, and technical colleges. The HOPE Scholarship provides qualifying students of the University a scholarship in the amount of full tuition and mandatory fees plus a book allowance. The HOPE program is facing a $244 million shortfall for the 2010 fiscal year. That figure is expected to increase to $371 million by the end of the 2012 fiscal year, according to The Atlanta Journal-Constitution. The program has reserves to cover the shortfalls for the next two years. The following table sets forth the number of University student receiving HOPE Scholarship awards and the total amount of those awards during the past five fiscal years. Fiscal Year Number of Awards Amount of Awards ,106, ,314, ,795, ,042, ,245, ,507,

30 Tuition, Fees and Charges The following tables set forth the tuition and fees schedule for in-state and out-of-state undergraduate students for the past five academic years: Undergraduate In-state Academic Year Per Term Tuition 1 Per Semester Fees In-State Total per Semester Fall Fall Fall Fall Fall Fall Undergraduate Out-of-State Academic Year Per Semester Tuition 1 Per Semester Fees In-State Total per Semester Fall Fall Fall Fall Fall Fall Graduate In-State Academic Year Per Semester Tuition Per Semester Fees In-State Total per Semester Fall Fall Fall Fall Fall Fall Graduate Out-of-State Academic Year Per Semester Tuition Per Semester Fees In-State Total per Semester Fall Fall Fall Fall Fall Fall Tuition and fees are for full time status 12 hours for undergraduate and 9 hours for graduate students. Current University Housing Program Currently the University has 2251 rental beds (including beds in Peacock Hall which is to be demolished to provide a site for a new student housing building). When the Project is completed, the University will have approximately 2808 beds. The University is committed to the value of residence life experiences as an integral part of its academic mission. No On-Campus Requirement. Demand for student housing remains high. Currently, the University does not have an on-campus residency requirement. However, freshmen from outside the Chatham County, Georgia, area are expected to reside on campus during their first year. All students are encouraged to apply for housing at the beginning of the academic year, summer school, and any semester proceeded by a break in continued residence. The residential housing range of room rent is $1,434-$2,890 per semester. 24

31 Residential Facilities. All residents of the following facilities are required to sign an annual contract/lease agreement for the academic year. American Campus Communities (the Manager ) is managing University Village and Indigo Pointe pursuant to management agreements with the Borrower. See THE MANAGER herein. Residential Facility Style Building Capacity Year Acquired Bostic Hall (all male) Traditional Bowen-Smith Hall (Co-ed) Traditional Peacock Hall (Co-ed)* Traditional Freshmen Living/Learning Center (Co-ed) Suites University Village (Co-ed) Apartments University Commons (Co-ed)) Apartments Total Capacity 2251 *Peacock Hall is to be demolished to provide a site for Building C Source: Savannah State University Office of Residential Services and Programs. Bostic Hall. Bostic Hall can accommodate 200 male students and the student population is a mixture of all classifications. The first floor has a lobby area with seating, cable TV and vending machines. Students have access to a kitchen where they can use the microwaves to prepare small meals. Bostic Hall is equipped with a keyless entry system, a surveillance camera system, laundry rooms and a computer lab. Each floor has a centralized bathroom. Each room is equipped with basic cable, wireless Internet access and phone lines that provide local service. The rooms in the residence hall are furnished with two desks, chairs, chests of drawers, closets and two-twin size (36 x 80) beds. Bowen-Smith Hall. Bowen-Smith Hall is a co-ed residential facility (120 females/80 males). The first, second and third floors are assigned to females and the fourth and fifth floors are assigned to males. Bowen-Smith Hall has a lobby area with seating, cable TV and vending machines. Students have access to a kitchen where they can use the microwaves to prepare small meals. Bowen-Smith Hall is equipped with a keyless entry system that provides access to the building and individual floors, a surveillance camera system, laundry rooms and a computer lab. Each floor has a centralized bathroom and a separate grooming room. Each room is equipped with basic cable, wireless Internet access and phone lines that provide local service. The rooms in the residence halls are furnished with two desks, chairs, chests of drawers, closets and two-twin size (36 x 80) beds. Peacock Hall. This residence hall was closed in 2001 and re-opened in 2005 to accommodate the demand for on campus housing. It is a co-ed facility that can accommodate 120 female and 60 male students. The second and third floors are assigned to females and the first floor is assigned to males. Peacock Hall has a lobby area with comfortable sitting, cable TV and vending machines. Peacock Hall is equipped with a keyless entry system which provides access to the building and individual floors. Each floor has a centralized bathroom and laundry room. Each room is equipped with basic cable, wireless Internet access and phone lines that provide local service. The rooms in the residence halls are furnished with two desks, chairs, chests of drawers, closets and two-twin size (36 x 80) beds. Peacock Hall is to be demolished to provide a site for new Building C. Although the bed capacity Peacock Hall will be lost by way of such demolition, Building C will more than replace that bed capacity. Freshman Living/Learning Center. The Freshmen Living/Learning Center has 296 available spaces for freshmen students only. The rooms are separated into several clusters to create small communities. The Freshman Living/Learning Center offers (i) 40 beds in 20 units that each contain 2 single rooms (the Two Person Clusters ), (ii) 176 beds in 44 units that each contain 2 double rooms (the Four Person Clusters ), (iii) 80 beds in 10 units (the Eight Person Clusters ) and (iv) a resident assistant suite with 10 beds. The Freshman Living/Learning Center is equipped with a lobby area with vending machines, a keyless entry system that provides access to the building and individual floors, computer labs, catering kitchen, laundry room, seminar room and a recreation room. The rooms are furnished with desks, chairs, chests of drawers, closets and twin size (regular 36 x 80) beds. University Commons. The University Commons, formerly Manchester Apartments and then Indigo Point Apartments, were purchased by the University in University Commons provides a great location with a 25

32 unique apartment and townhome living environment for 705 co-ed upper-class students. All units are fully furnished with kitchens and utilities. The amenities in the apartment are private bedroom with a twin (extra long) bed and private bathrooms available, laundry room, computer lab, fully furnished units with sofa, coffee table and end table, and entertainment center, full kitchens, microwaves, stove, refrigerator and kitchen table. The floor plans are: one bedroom, one bathroom townhome, two bedroom, one bathroom townhome, three bedroom, two bathroom townhome, and four bedroom, two bathroom townhome. University Village. The University Village accommodates a total of 660 upper-class male and female students. University Village offers 150 four-bedroom/four-bathroom units, 18 two-bedroom/two bathroom units and 24 one-bedroom/one-bathroom units. The apartments have a common area, which is furnished with a sofa, a coffee table, one end table, an entertainment center and each bedroom is furnished with a desk and chair and an oversized twin bed. Each apartment also has a kitchen, which includes a microwave, electric stove, refrigerator with automatic ice makers, kitchen table set for four and cabinet space. The rent includes wireless Internet connectivity, trash collection, cost of heating water, sewer service, basic cable TV, a utility allowance of $40 ($10 for water, $30 for electricity), laundry facilities, and a computer lab. Housing Statistics Residential Facility Fall 2007 Fall 2008 Fall 2009 Fall 2010 Bostic Hall Bowen-Smith Hall Peacock Hall* Freshman Living and Learning Center University Village University Commons Total Beds Source: Savannah State University Institutional Research and Student Affairs Office *Peacock Hall is to be demolished to provide a site for Building C Source: Savannah State University Institutional Research and Student Affairs Office The Project Proceeds of the Series 2010 Bonds will be used by the Borrower to: (a) finance in whole or in part the cost of (i) the purchase of land and its development for a sports and intramural complex to be conveyed to the Regents for use by the University as athletic fields, (ii) the construction and furnishing of three new buildings and the renovation of an existing building, to be used as student housing facilities containing 683 beds and related amenities, (iii) the demolition of an existing building to create a site for one of the new student housing buildings, and (iv) renovations and improvements to existing buildings (collectively, the Project ) located on the campus of Savannah State University (the University ); (b) fund capitalized interest on the Series 2010 Bonds; (c) fund a debt service reserve for the Series 2010 Bonds; and (d) pay the costs of issuing the Series 2010 Bonds. See PLAN OF FINANCING herein. Financial Operations The University meets the costs of its operations primarily through state appropriations, tuition, gifts and grants, and investment income. The Regents allocates and disburses funds to the institutions of the University System of Georgia on an annual basis. The following summary of the revenues and expenses of the University for the three fiscal years ended June 30, 2008 through 2010 shows, among other things, the appropriation trends by the Regents to the University and the University s historic collection of tuition and fees. An audited copy of the University s Financial Report for the fiscal year ended June 30, 2010 is included as Appendix F hereto. 26

33 Statement of Revenues, Expenses and Changes in Net Assets Years Ended June 30, 2008 through June 30, OPERATING REVENUES Student Tuition and Fees 11, ,912,811 18,092,646 Less: Scholarship Allowances -5,384,832-7,667,874-10,660,680 Grants and Contracts Federal 13,315,557 7,447,503 9,033,568 State 107,383 98, ,183 Other 3789, , ,292 Rents and Royalties 5, ,155 Sales and Services of Educational Departments 348, , ,562 Auxiliary Enterprises Residence Halls 4,464,020 8,240,776 9,975,351 Bookstore 108,770 76, ,831 Food Services 3,332,030 4,795,031 5,515,028 Parking/Transportation 5, , ,453 Health Services 413, , ,464 Intercollegiate Athletics 1,856,592 2,051,092 2,781,091 Other Organizations 18,539 22,592 25,753 Other Operating Revenues 73,667 66, ,818 Total Operating Revenues 30,793,401 30,340,497 36,920,515 OPERATING EXPENSES Salaries: Faculty 8,343,305 9,469,824 10,025,487 Staff 13,486,063 14,422,543 14,880,770 Employee Benefits 6,627,341 7,151,324 7,276,903 Other Personal Services 368, , ,421 Travel 567, , ,630 Scholarships and Fellowships 3,826,020 4,023,342 6,174,419 Utilities 2,995,775 3,804,309 3,836,370 Supplies and Other Services 12,563,153 18,149,495 17,819,998 Depreciation 3,125,238 5,651,637 5,525,067 Total Operating Expenses 51,902,854 63,560,440 66,475,065 Operating Income (Loss) -21,109,453-33,219,943-29,554,550 NON-OPERATING REVENUES (EXPENSES) State Appropriations 18,892, ,240 15,502,685 Federal Stimulus Stabilization Funds 3,105,050 Grants and Contracts - Other Federal 13,818,499 State 25,221 Other 1,235,059 9,070,618 Gifts 517,761 1,901,386 1,125,052 Interest and Other Investment Income -440, , ,553 Interest Expense -2,352,293 Other Nonoperating Revenues /Expenses -35,755-2,352,336 81,441 Net nonoperating Revenues 20,169,847 27,271,851 31,672,208 Income /Loss Before Other Revenues, Expenses, Gains or Losses -939,606-5,948,092 2,117,658 Capital Grants and Gifts - State 3,676,595 14,508, ,965 Increase/(Decrease) in Net Assets 2,736,989 8,560,023 2,915,623 NET ASSETS Net Assets Beginning of Year, as Originally Reported 61,535,620 64,272,609 72,832,632 Net Assets-End of Year 64,272,609 72,832,632 75,748,255 27

34 Review of Financial Statements As a unit of the University System of Georgia and accordingly an organizational unit of the State of Georgia, the financial statements and compliance activities of the University are examined by the Department of Audits to the extent the department considers necessary in order to prepare the basic financial statements of the State of Georgia. The University s Audited Financial Statement for the fiscal year ending June 30, 2010 is attached hereto as Appendix F. BOARD OF REGENTS THE REGENTS HAS NO MORAL OR LEGAL OBLIGATION WITH RESPECT TO THE SERIES 2010 BONDS OR TO CONTINUE TO RENT THE PROJECT IN A MANNER SUPPORTIVE OF THE CREDITWORTHINESS OF THE SERIES 2010 BONDS. THE REGENTS HAS MADE NO REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT CONCERNING THE REGENTS. General The Regents is a constitutionally created agency of the State of Georgia. It governs, controls and manages all of the 35 public institutions of higher education within the University System. Members The 18 members of the Regents are appointed by the Governor and confirmed by the Senate on a rotating basis to serve seven-year terms. The members consist of one member from each of the 13 congressional districts in Georgia and five additional at-large members from Georgia. The Regents conducts its operations through its staff. The Regents elects a Chancellor, who serves as its chief executive officer and as the chief administrative officer of the University System. In the history of the Regents, 11 individuals have served as Chancellor. On February 6, 2006, Erroll B. Davis, Jr. assumed the position of Chancellor. Beginning in 2000, Mr. Davis served as Chairman of the Board of Alliant Energy Corporation ( Alliant ), an energy holding company with $8.3 billion in total assets and annual operating revenues of $3.0 billion. Mr. Davis joined Alliant in 1998 as president and chief executive officer. He retired from his dual roles as president and CEO of Alliant in July 2005, and retained the position of Chairman of the Board of Directors. Prior to the creation of Alliant, from 1990 to 1998 Mr. Davis served as president and CEO of WPL Holdings, a utility holding company. From 1978 to 1990, Mr. Davis rose through the senior management ranks at Wisconsin Power and Light Company, starting as vice president of finance and ending as CEO and president. He has also held corporate finance positions at Xerox Corporation and Ford Motor Company. Mr. Davis higher education experience includes serving as a member of the University of Wisconsin System Board of Regents from and as a former chairman of the board of trustees of Carnegie Mellon University, of which he is a life member. He presently serves as a member of the Board of Trustees of the University of Chicago. Chancellor Erroll B. Davis plans to retire at the end of June, The Regents has commenced the recruiting process to find a replacement and has appointed a twenty (20)-member search committee that includes Regents, college and university presidents, business leaders, professors and a student. Longtime University of Georgia President Michael Adams is on the search committee. The recruiting process includes a website where people can suggest candidates for the job and give feedback to the search committee. The national search will take about nine months and the goal is to have a new chancellor in place by July 1,

35 office: Set forth below is a list of the members of the Regents showing their respective districts and terms of Regents District Term Larry R. Ellis State-at-Large August 1, 2009 January 1, 2016 Donald M. Leebern, Jr. State-at-Large January 1, 2005 January 1, 2012 A. Felton Jenkins, Jr., Vice Chair State-at-Large January 1, 2006 January 1, 2013 Robert F. Hatcher State-at-Large January 1, 2006 January 1, 2013 Larry Walker State-at-Large August 1, 2009 January 1, 2016 James A. Bishop First District January 1, 2007 January 1, 2011 Doreen Stiles Poitevint Second District January 13, 2004 January 1, 2011 C. Thomas Hopkins, Jr. Third District April 16, 2010 January 1, 2017 Wanda Yancey Rodwell Fourth District January 1, 2005 January 1, 2012 Frederick E. Cooper Fifth District July 15, 2010 January 1, 2017 Kessel Stelling, Jr. Sixth District January 1, 2008 January 1, 2015 Richard L. Tucker Seventh District January 28, 2005 January 1, 2012 W. Mansfield Jennings, Jr. Eighth District January 6, 2006 January 1, 2013 James R. Jolly Ninth District January 1, 2008 January 1, 2015 William H. Nesmith, Jr. Tenth District March 13, 2008 January 1, 2015 Willis J. Potts, Jr., Chair Eleventh District March 7, 2006 January 1, 2013 Benjamin J. Tarbutton, III Twelfth District January 6, 2006 January 1, 2013 Kenneth R. Bernard, Jr. Thirteenth District January 1, 2007 January 1, 2014 Robert E. Watts is Chief Operating Officer of the Board of Regents and J. Burns Newsome is Vice Chancellor, Legal Affairs, and Secretary of the Board of Regents. University System The University System consists of 35 institutions: four research universities (the University of Georgia, Georgia Institute of Technology, Georgia State University, and Medical College of Georgia), two regional universities (Georgia Southern University and Valdosta State University), thirteen state universities, eight state colleges and eight two-year colleges. These institutions enroll more than 270,000 students and employ more than 11,000 faculty and 28,600 staff to provide teaching and related services to students and the communities in which they are located. All of the property of the constituent institutions comprising the University System is owned or leased by the Regents. The President of each institution in the University System is the executive head of the institution and all of its departments. Each President is responsible to the Chancellor for the operation and management of the institution he or she leads and for the execution of the directives of the Chancellor and the Regents. Funding the University System All appropriations made for the use of any or all institutions in the University System are required by the Georgia Constitution to be paid to the Regents in a lump sum, with the power and authority in the Regents to allocate and distribute the same among the institutions under its control in such way and manner and in such amounts as will further an efficient and economical administration of the University System. Each year the Regents compiles the budget requests of all 35 member colleges and universities and presents a total funding request for the University System to the Governor. The Governor reconciles the State of Georgia s available resources with total requests and submits a budget proposal to the Georgia General Assembly (the General Assembly ). Upon adoption of the budget, the Regents receives a lump sum amount of funding from the General Assembly for the University System. The Regents then allocates and disburses these funds to the individual institutions on the basis of strategic initiatives for the University System. The individual institutions then use these allocations to prepare detailed, line item budgets for consideration by the Regents. Upon approval by the Regents, the budgets are adopted by each institution and used to monitor and control their economic resources. 29

36 As with all State agencies, the Regents is funded on an annual appropriation basis. The Regents ability to make payments under the Rental Agreements may depend upon the financial condition of the State and the State s ability and willingness to make appropriations to the University System. The supplemental State budget for fiscal year 2010 (HB 947) reduced overall spending levels to meet a decline in the State s general fund revenues. Pursuant to HB 947 the Regents total general fund appropriation for fiscal year 2010 decreased by 14.7% to $1,724,637,318 as compared to the amended fiscal year 2009 appropriation. The Regents also received an additional $280,410,317 in federal stimulus funds for fiscal year Prior to the end of fiscal year 2010, the Governor determined that because of unexpected continued revenue declines, fiscal year 2010 revenues would not be sufficient to fully fund appropriation allotments per HB 947. Pursuant to procedures established by the State s budgetary statutes, the Governor s Office of Planning and Budget withheld $27,135,755 of the Regents general fund appropriation allotments. The withholdings, however, were partially offset by accelerating to fiscal year 2010 $23,186,142 of federal stimulus funds that had been allocated for expenditure in fiscal year The withholdings had the effect of reducing the appropriation to the Regents to $1,697,501,563 for fiscal year For fiscal year 2011, the Regents total general fund appropriation is budgeted to increase by 11.5%, as compared to the amended fiscal year 2010 appropriation, to $1,923,161,990. There can be no assurance that the State s fiscal year 2011 revenues will be sufficient to fully fund the Regents total budgeted general fund appropriation for fiscal year Under the State s budget statutes, in the event the Governor determines that fiscal year 2011 revenues may not be sufficient to fully fund appropriation allotments, the Governor s Office of Planning and Budget may withhold appropriation allotments to all State agencies, including the Regents, as necessary to maintain spending within actual revenues for fiscal year The Regents currently is budgeted to receive an additional $23,186,142 in federal stimulus funds for fiscal year 2011; however, as described above, these funds were advanced to fiscal year The fiscal year 2011 Appropriations Bill (HB 948) has not been amended to reflect the advancement of federal stimulus funds to fiscal year 2010; however, such action is expected when the General Assembly considers the supplemental budget bill for fiscal year On July 21, 2010, the Governor s Office of Planning and Budget issued instructions to all State agencies, including the Regents, to take appropriate action to control expenditures and withhold four percent from allotment requests, beginning with the August 2010 allotment, in anticipation that State agency budgets will be reduced by at least four percent for fiscal year The Governor s Office of Planning and Budget also instructed State agencies, including the Regents, to submit alternative expenditure reduction plans of four percent, six percent and eight percent for the fiscal year 2011 budget by September 1, The Governor s Office of Planning and Budget noted in the instructions that the State, in its fiscal year 2011 budget, assumed that Congress would extend the increased Federal Medicaid Assistance Percentage from January to June of 2011 and budgeted approximately $375 million from this revenue source. The inability of Congress to date to extend the increased Federal Medicaid Assistance Percentage, together with the need to plan for the possibility of other revenue reductions, led the Governor s Office of Planning and Budget to issue the budget reduction instructions. On August 2, 2010, the Governor s Office of Planning and Budget instructed State agencies, including the Regents, to submit alternative expenditure reduction plans of six percent, eight percent and ten percent for the fiscal year 2012 budget. There can be no assurance that future legislatures will continue to make appropriations at current levels, whether due to declining revenues resulting from unfavorable economic conditions, a change in philosophy as to the size of the State s government, or other reasons. Likewise, there can be no assurance that the Regents will allocate funds to renew any of the Rental Agreements, whether due to declining appropriations from the State, reduced need for the property rented by the Regents, declining enrollment at the College or other reasons. Analysis of State General Fund Receipts The following table sets forth by category the budget-based State revenues available for appropriation for the five fiscal years ended June 30,

37 Fiscal Year Ended June 30, Alcoholic Beverages Tax $ 152,459,425 $ 157,818,125 $ 181,560,133 $ 167,397,928 $169,668,539 Estate Tax 42,930,113 12,786,406 1,426,030 12,325 82,990 Income Tax Corporate 729,640, ,730,327 1,019,117, ,966, ,718,310 Income Tax Individual 7,276,607,819 8,021,933,827 8,820,794,306 8,829,480,885 7,814,552,113 Insurance Premium Tax and Fees 331,612, ,982, ,745, ,218, ,338,992 Motor Fuel Excise and Motor Carrier Mileage Tax 487,295, ,942, ,929, ,634, ,265,508 Prepaid Motor Fuel Sales Tax 330,537, ,216, ,105, ,155, ,825,680 Motor Vehicle License Tax 285,353, ,994, ,931, ,648, ,405,915 Property Tax General and Intangible 66,489,431 72,138,489 77,842,189 80,257,696 83,106,994 Sales and Use Tax General 5,215,447,136 5,711,915,442 5,915,521,040 5,796,653,340 5,306,490,689 Tobacco Products Tax 249,070, ,503, ,276, ,691, ,271,910 Total Taxes 15,167,443,845 16,500,961,980 17,830,249,357 17,695,117,754 15,780,727,640 Total Regulatory Fees and Sales 646,552, ,797,609 1,010,192,281 1,032,694, ,934,164 Total Other Revenues Retained (1) 975,928,352 1,004,428,684 1,055,537,333 1,071,321,695 1,065,703,810 Total Cash Receipts $16,789,925,019 $18,343,188,273 $19,895,978,972 $19,799,134,318 $17,832,365,614 (1) Other Revenues Retained includes Lottery Funds, Tobacco Settlement Funds, Guaranteed Revenue Debt Common Reserve Fund Interest Earnings, Brain and Spinal Injury Trust Fund, Job and Growth Tax Relief, and Other. (NOTE: Amounts may not add precisely due to rounding.) Sources: Fiscal Year 2005, Report of the State Auditor, Georgia Department of Audits and Accounts; Fiscal Years , Budgetary Compliance Report, State Accounting Office. The following table sets forth unaudited revenues ($000 s) of the State in certain categories for the fiscal years ended June 30, 2009 and 2010, respectively. Fiscal Years Ended ($000 s) June 30, 2009 June 30, 2010 General Fund (Unaudited) (Unaudited) $ Change % Change Tax Revenues: Alcoholic Beverages Tax $ 166,619 $ 167,801 $ 1, % Estate Tax 83 (83) Income Tax Corporate 694, ,761 (9,953) -1.4 Income Tax Individual 7,801,185 7,021,855 (779,330) Motor Fuel Excise Tax 438, ,386 5, Prepaid Motor Fuel Sales Tax 422, ,241 (37,586) -8.9 Motor Vehicle License Tax (1) 287, ,237 (2,291) -0.8 Property Tax General and Intangible 82,764 85,744 2, Net Sales and Use Tax General (2) 5,342,569 4,778,812 (563,757) Tobacco Products Tax 229, ,810 (2,863) -1.2 Total Tax Revenues 15,466,291 14,079,647 (1,386,644) -9.0 Other Revenues: Other Fees and Sales (3) 152, ,177 (33,573) Total Taxes/Other Revenues $15,619,041 $14,198,824 $(1,420,217) -9.1% (1) The Motor Vehicle Division began collecting Auto Sales Tax funds in January An adjustment was made to reclassify Sales Tax collections from Motor Vehicle to Other Fees and Sales, to reflect a transaction in June of fiscal year This revenue was then reclassified to Sales Tax the next month. (2) As of FY 2009, the local sales tax distribution changed to reflect exact cash distributions for the current month based upon total sales tax collections. (3) Other Fees and Sales include taxes and fees that have been deposited with the State, but the returns have not been processed. The undistributed amounts, when processed, are reclassified to the proper accounts. It also includes unclaimed property collections. (NOTE: Amounts may not add precisely due to rounding.) Source: State of Georgia Department of Revenue. 31

38 Summary of Appropriation Allotments to Board of Regents The following table summarizes the appropriation allotments to the Regents made from State General Funds for the five fiscal years ended June 30, Fiscal Year Ended June 30, (Unaudited) State General Funds $1,802,771,336 $1,917,562,898 $2,121,723,333 $2,006,476,398 $1,683,481,490 (1) Tobacco Settlement Funds 16,232,554 15,732,554 20,337,799 16,205,466 14,020,073 (1) Total $1,819,003,890 $1,933,295,452 $2,142,061,132 $2,022,681,864 $1,697,501,563 (1) (1) Cash allotments. Source: , State Accounting Office; 2010 Board of Regents Office of Fiscal Affairs. Introduction CERTAIN BONDHOLDERS RISKS In analyzing the Series 2010 Bonds and in order to make an informed investment decision, potential investors should carefully consider the following risk factors prior to making a decision to purchase the Series 2010 Bonds. The following risk factors are not intended to be exhaustive of the general or specific risk factors relating to the purchase of the Series 2010 Bonds. Additional risk factors relating to the purchase of the Series 2010 Bonds are described throughout this Official Statement, whether or not specifically designated as risk factors. Recent Developments Concerning Municipal Bond Insurers The scheduled payment of principal of and interest on the Series 2010 Bonds when due will be guaranteed under the Policy to be issued concurrently with the delivery of the Series 2010 Bonds by the Bond Insurer. However, recent developments which have been the subject of substantial discussion in the financial press and which affect the bond insurance business, including that of the Bond Insurer, have had a serious adverse effect on the financial condition of a number of bond insurers, weakening their credit status as reflected in their credit ratings. Therefore, when making an investment decision on the Series 2010 Bonds a prospective Bondowner should look principally to the ability of the Borrower to pay principal and interest on the Series 2010 Bonds and not simply to the Bond Insurer s ability to pay claims under the related Policy. No review of the business or affairs of the Bond Insurer has been conducted in connection with the offering of the Series 2010 Bonds. Neither the Issuer, the Borrower, the University, the Regents nor the Underwriter can give any assurance as to the Bond Insurer s ability to pay claims under the Policy. See BOND INSURANCE and Appendix K hereto for further information concerning the Bond Insurer and the Policy, including instructions for obtaining certain financial information concerning the Bond Insurer. Limitations on Board of Regents Obligations Under Rental Agreements; Risk of Non-Renewal The Regents has the option to renew each Rental Agreement on a year-to-year basis through at least the final maturity of the Series 2010 Bonds. The Borrower believes that the Project will aid the University in fulfilling its educational mission and that it is likely that the Regents will renew the Rental Agreements for successive renewal terms throughout the term of the Series 2010 Bonds; however, the renewal of the Rental Agreements during any of these successive renewal terms is at the sole option and discretion of the Regents. There can be no assurance that the State and the Regents will deem it in their best interests to continue to occupy and utilize the Project for the entire term of the Series 2010 Bonds. There can also be no assurance that the Regents will continue to renew the Rental Agreements for each renewal term throughout the term of the Series 2010 Bonds. The likelihood that the Rental Agreements will be renewed will depend upon, among other things, the continuing need of the Regents for the Project, the appropriation of funds by the General Assembly to the Regents in sufficient amounts to enable the Regents to pay the rents due under the Rental Agreements, and the Regents not substituting more desirable rental space for the Project. 32

39 The Rental Agreements and the obligations of the Regents thereunder do not and will not constitute a pledge, liability or a charge upon the funds of the State or of the Regents and do not and will not constitute a debt or general obligation of the State or of the Regents. Neither the State nor the Regents is or will pledge its faith, credit to the payment of principal of or interest due with respect to the Series 2010 Bonds. The taxing power of the State is not pledged to the payment of principal of or interest due with respect to the Series 2010 Bonds. THE REGENTS HAS NO MORAL OBLIGATION WITH RESPECT TO THE SERIES 2010 BONDS OR TO CONTINUE TO RENT THE PROJECT IN A MANNER SUPPORTIVE OF THE CREDITWORTHINESS OF THE SERIES 2010 BONDS OR THE FINANCING OF THE PROJECT. If a Rental Agreement is not renewed by the Regents and, as a result, the Borrower (which has no assets other than its interest in the 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 Project as provided in the Security Deed. In the event of such nonrenewal, the Regents obligation to pay the rental 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 Project; however, the 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 Project for an amount sufficient to pay debt service on the Series 2010 Bonds or that any amount realized upon a liquidation of the Project will be sufficient to provide for the payment of the Series 2010 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 the Revenue Shortfall Reserve. From fiscal year 2008 to fiscal year 2009, the State s budget-based revenues available for appropriation declined approximately 10 percent, and from fiscal year 2009 to fiscal year 2010, further significant declines of such revenues were experienced by the State although final figures are not available yet for fiscal year The balance of the State s Revenue Shortfall Reserve, net of the 1% adjustment for K-12 education mid-year appropriations, declined from approximately $1.025 billion as of June 30, 2008 to approximately $104 million as of June 30, 2009; a projection of the Revenue Shortfall Reserve balance as of June 30, 2010 is not available yet. Federal stimulus funds and other funds that are not expected to recur in fiscal year 2012 constitute a significant portion of the anticipated sources of funds for budgeted expenditures for fiscal year In addition, the inability of Congress to date to extend the increased Federal Medicaid Assistance Percentage, together with the need to plan for the possibility of other revenue reductions, led the Governor s Office of Planning and Budget to issue budget reduction instructions for fiscal years 2011 and Should the State s revenues and other sources of funds available to pay expenditures continue to decline, it may be necessary for the General Assembly in the future to reduce appropriations to the Regents, which in turn may adversely affect the ability of the Regents to renew the Rental Agreement. Reimbursement Obligations of Borrower Under the Rental Agreement, the Borrower is obligated to reimburse the Regents for any payments for insurance coverage that extend beyond the final terms 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 Regents for any capital expenditures paid for or by the Regents 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. If the Regents elects not to renew the Rental Agreement and it expires by its terms at the end of the initial term or any subsequent 12-month term, the Regents will have no further obligations thereunder. If the Regents elects not to renew the Rental Agreement, the Borrower may not be able to rent the Project to another tenant for an amount sufficient to enable the Borrower to make its payments due under the Loan Agreement. In addition, the Regents obligation to pay the cost of all insurance coverages, taxes and maintenance and repairs of the 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. 33

40 Such reimbursement obligations of the Borrower and required payments above the budget cap described above shall be paid from the Surplus Fund. See Section 507 relating to Surplus Fund in the Indenture in Appendix B hereto. Condemnation/Casualty Risk The Regents has the right to terminate the Rental Agreement or to reduce its rental payment if certain casualty events or condemnation proceedings occur. If these events or proceedings occur, there can be no assurance that payments under the Rental Agreement will be sufficient to pay debt service on the Series 2010 Bonds, or in the case of a termination due to a condemnation of the Project in whole, that the proceeds will be sufficient to pay the Series 2010 Bonds. No Operating History The Borrower has never operated student housing facilities. The Borrower has no operating history and no net worth. The Borrower is relying upon the Regents agreement to rent the Premises and operate it as an integral part of the University s facilities. If the Regents should cease to rent the Premises, the Borrower has neither the staff nor the expertise needed to manage and market the Premises. Neither the Regents nor the University as any obligation to pay debt service on the Series 2010 Bonds. Limited Assets of the Borrower The Borrower s assets and revenues available to make the payments required by the Loan Agreement are limited to its interest in the Project and the rents and revenues from the Project, including rents payable under the Rental Agreement. The Borrower has no other assets or revenues available to make payments required by the Loan Agreement or to satisfy any liabilities incurred as a result of ownership of the Project. Enforceability of Remedies The remedies available to the Trustee or the owners of the Series 2010 Bonds upon an Event of Default under the Indenture, the Loan Agreement, the Security Deed or the Rental Agreement are in many respects dependent upon judicial actions that are often subject to discretion and delay. It is noted that certain proceeds of the 2010 Bonds will finance the athletic field land and improvements and the renovation of the two historic buildings that are not subject to the lien of the Security Deed and, as a result, the security for the 2010 Bonds is not fully collateralized. The enforceability of remedies or rights with respect to the Series 2010 Bonds may be limited by state and federal laws, rulings and decisions affecting remedies and by bankruptcy, reorganization, insolvency or other laws affecting creditors rights or remedies heretofore or hereafter enacted. Under existing constitutional and statutory law and judicial decisions, including specifically federal bankruptcy law, certain remedies specified by the Indenture, the Loan Agreement, the Security Deed and the Rental Agreement may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2010 Bonds, the Indenture, the Loan Agreement, the Security Deed and the Rental Agreement will be qualified as to the enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. While the Borrower has pledged its interest in the rental payments to be made under the Rental Agreement and has mortgaged its interest in the Project under the Security Deed to secure the payment of the Series 2010 Bonds, the Rental Agreement and the Project constitute property of the Borrower. If the Borrower were to file a petition for relief under federal bankruptcy law, the filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the Borrower and its property and as an automatic stay of any act or proceeding to enforce a lien upon its property. If the bankruptcy court so ordered, the Borrower s property, including its revenues, could be used for the benefit of the Borrower s bankruptcy estate, despite the claims of the Trustee with respect to the Indenture, the Security Deed or the Security Agreement, but only by giving appropriate recognition to the right of the Trustee as a secured creditor entitled to adequate protection to the extent of the value of the secured claim. If a bankruptcy court concludes that the Trustee has adequate protection, 34

41 it may (1) substitute other security for the property subject to the lien of the Indenture, the Security Deed or the Security Agreement and (2) subordinate the lien of the Indenture, the Security Deed or the Security Agreement (a) to claims by persons supplying goods, services or credit to the Borrower after bankruptcy, and (b) to the administrative expenses of the bankruptcy proceeding. In addition, the bankruptcy laws permit wide latitude with respect to the adoption of a reorganization plan even though the plan has not been accepted by the owners of a majority in aggregate principal amount of the Series 2010 Bonds, if such owners are provided with the value of their claim or the indubitable equivalent thereof. The amount realized by the Trustee might depend on a federal bankruptcy court s interpretation of indubitable equivalent and adequate protection under the existing circumstances. The various legal opinions to be delivered concurrently with the delivery of the Series 2010 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 and by bankruptcy, insolvency, reorganization, fraudulent conveyance, or other similar laws affecting the enforcement of creditors rights generally. Section of the Official Code of Georgia Annotated provides that no authority created under the Constitution or laws of the State of Georgia shall be authorized to file a petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. Section of the Official Code of Georgia Annotated also provides that no chief executive or other governmental officer, governing body, or organization shall be empowered to cause or authorize the filing by or on behalf of any authority created under the Constitution or laws of the State of Georgia of any petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. Limited Obligations THE SERIES 2010 BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OR OBLIGATION OF THE ISSUER, THE REGENTS, THE UNIVERSITY, THE FOUNDATION, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. THE SERIES 2010 BONDS ARE PAYABLE BY THE ISSUER SOLELY FROM THE TRUST ESTATE PLEDGED TO THE PAYMENT THEREOF UNDER THE INDENTURE. NO OWNER OF THE SERIES 2010 BONDS SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OR ANY POLITICAL SUBDIVISION THEREOF, TO PAY THE SERIES 2010 BONDS OR THE INTEREST OR PREMIUM THEREON OR ANY OTHER COST RELATING THERETO OR TO ENFORCE PAYMENT THEREOF AGAINST ANY PROPERTY OF THE ISSUER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. THE ISSUER HAS NO TAXING POWER. Construction Risks Each Rental Agreement shall be for a term commencing at 12:00 o clock A.M on the first day of the first month following the issuance of a certificate of occupancy for the building that is the subject of such Rental Agreement, but no earlier than August 1, 2011 (2012 in the case of Building C), hereinafter referred to as the Commencement Date ) and ending at 11:59 o'clock P.M. on July 31, 2012 (2013 in the case of Building C ) unless terminated earlier as therein provided (hereinafter referred to as the Initial Term ). The Regents obligation to pay rent with respect to the building to which a Rental Agreement relates commences with the Commencement Date. Interest will be paid with proceeds of the Series 2010 Bonds, and the principal payments on the Series 2010 Bonds do not start until after the guaranteed completion date. If completion of the Project is delayed beyond its guaranteed completion date, receipt of rents under the Rental Agreement will be delayed and the Borrower may be unable to make payments sufficient to satisfy its obligations under the Loan Agreement. See SECURITY FOR THE SERIES 2010 BONDS The Rental Agreement herein. The timely completion of the Project is dependent upon, among other factors, promptly obtaining approvals and permits from various governmental agencies and the absence of delays due to labor disputes, site difficulties, delays in delivery and shortages of materials, and adverse weather conditions and other events of force majeure. The cost of completing the Project may be affected by factors beyond the control of the Borrower, 35

42 including increasing material costs, labor disputes, site difficulties, energy and material shortages, subcontractor defaults, adverse weather conditions, and other unforeseen contingencies. There can be no assurance that the Borrower will complete the Project in accordance with its present construction schedule and construction budget. The construction contract for the Project obligates the contractor to substantially complete construction of the Project on or before a guaranteed completion date for a guaranteed maximum price and contains a provision providing for a daily penalty equal to at least the daily debt service (net of capitalized interest) on the Series 2010 Note in the event completion is delayed. The obligations for construction and timely completion of the Project are also to be secured by labor and material payment and performance bonds. There can be no assurance that construction of the Project will be completed within the time provided by the construction contract or that the damages suffered by the Borrower as a result thereof can be recovered without costly and time-consuming litigation. In addition, there can be no assurance that the obligations of any surety under the payment and performance bonds can be enforced without costly and time-consuming litigation. If cost overruns resulting from delays, change orders, or other causes are experienced, the Borrower has no other source of funds with which to complete the Project, and the only source of funds that will be potentially available to complete the Project is Additional Bonds. The issuance of Additional Bonds will be completely dependent on the willingness of the Regents to amend the Rental Agreement to increase the rents payable thereunder to provide a source of funds to pay the debt service on the Additional Bonds, as to which no assurance can be given. Accordingly, there can be no assurance that the Project will be completed if cost overruns are experienced. Ad Valorem Property Taxes The Borrower believes that the Project will be exempt from ad valorem property taxation. Although the Borrower believes that it has a sound basis to assert that the 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 Project, which would reduce the Borrower s revenues available to make payments under the Loan Agreement. The Regents has agreed to pay the ad valorem taxes under the Rental Agreement should any such taxes be assessed. Environmental Issues Arrowood Environmental Group, Inc. ( Arrowood ) conducted a Phase I Environmental Site Assessment (the ESA ) and Georgia Environmental Policy Act Study (the GEPA ), dated September 30, 2010, for the real property upon which the Project will be located. The objective of the ESA was to identify the presence of recognized environmental conditions which previously existed or currently exist at the site. The term recognized environmental conditions is defined as the presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, groundwater or surface water of the property. In conducting the ESA, Arrowood identified no recognized environmental conditions with respect to the site. The GEPA identified no GEPA-defined concerns that will cause significant adverse environmental effects. Arrowood does not have any recommendations for additional environmental investigations of the site. Change in Tax Law Future legislation, if enacted into law, or clarification of the Code, or court decisions, may cause interest on the Series 2010 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. Purchasers should consult their own tax advisers regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. Limited Protection Against Loss of Tax Exemption The Internal Revenue Service (the IRS ) audits tax-exempt bonds. The Series 2010 Bonds may be, from time to time, subject to audits by the IRS. Bond Counsel will render an opinion with respect to the tax-exempt 36

43 status of the Series 2010 Bonds, as described under the caption, TAX TREATMENT herein. Opinions of counsel are not binding on the IRS or the courts and are not guarantees. No ruling with respect to the tax-exempt status of the Series 2010 Bonds has been or will be sought from the IRS. There can be no assurance that an audit of the Series 2010 Bonds will not adversely affect the federal income tax status of interest on the Series 2010 Bonds. There is no provision for the redemption of the Series 2010 Bonds or for the payment of additional interest on the Series 2010 Bonds in the event that interest on the Series 2010 Bonds becomes includable in gross income for federal income tax purposes. In the event that interest on the Series 2010 Bonds becomes includable in gross income for federal income tax purposes, the value and marketability of the Series 2010 Bonds would likely be adversely affected. The Borrower has covenanted and agreed in the Loan Agreement to comply with the provisions of the Code relating to the exclusion from gross income of interest payable on the Series 2010 Bonds. The Indenture and the Loan Agreement contain provisions designed to assure compliance with such covenant. The Rental Agreement, however, contains no covenants by the Regents relating to the use of the Project in a manner designed to preserve the exclusion from gross income of the interest on the Series 2010 Bonds, and the Regents is not bound by the covenants contained in the Loan Agreement. The Rental Agreement does prohibit the Regents from assigning the Rental Agreement or subletting the Project without the prior consent of the Borrower, which may not be unreasonably withheld, and the Borrower has covenanted to not consent to any such assignment or sublease that would adversely affect the exclusion from gross income of the interest on the Series 2010 Bonds. In addition, the nonrenewal of the Rental Agreement and the failure to re-let the Project to another governmental entity pursuant to a lease characterized as a conditional sale agreement for federal income tax purposes could result in loss of the tax exemption of the interest on the Series 2010 Bonds. The occurrence of an event that results in the interest payable on the Series 2010 Bonds being includable in the gross income of the owners of the Series 2010 Bonds for federal income tax purposes is not an event of default under the Indenture and does not give rise to a redemption of the Series 2010 Bonds or to the payment to the owners of the Series 2010 Bonds of any amount denoted as supplemental interest, additional interest, penalty interest, liquidated damages, or otherwise, in addition to the amounts otherwise payable to the owners of the Series 2010 Bonds. Interest on the Series 2010 Bonds may become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2010 Bonds by reason of the Regents failure to comply with the requirements of federal tax law, and the Trustee will have no remedies available to it to mitigate the adverse economic effects to the owners of the Series 2010 Bonds of such inclusion by reason of the Regents noncompliance. Liquidation of Security May Not Be Sufficient in the Event of a Default It has been the experience of lenders in recent years that attempts to foreclose on commercial property or otherwise realize upon security for obligations are frequently met with defensive measures, such as protracted litigation or bankruptcy proceedings, and that such defensive measures can greatly increase the expense and time involved in achieving such foreclosure or other realization. The liquidation value of assets in a bankruptcy or creditors proceeding is typically less than the replacement value of such assets for an ongoing business operation. The practical use of the Project is limited to its special use for the Regents; it will not be generally suitable for commercial or industrial uses. Consequently, it may be difficult to find a buyer or tenant for the Project if it were necessary to foreclose on the Project. In addition, the same factors that lead to foreclosure may substantially reduce the value of the Project. If it becomes necessary to foreclose the lien of the Security Deed on the Project, net proceeds received from any foreclosure sale may be less than the aggregate principal amount of the Series 2010 Bonds outstanding. Normal Risks Attending Any Investment in Real Estate There are many diverse risks attending any investment in real estate, not within the Borrower s control, which may have a substantial bearing on the desirability of the Project to the Regents. Such risks include possible adverse use of adjoining land, fire or other casualty, condemnation, decline in the neighborhood and local or general economic conditions, and changing governmental regulations. 37

44 LITIGATION The Issuer There is no litigation now pending or threatened against the Issuer of which the Issuer has knowledge which restrains or enjoins the issuance or delivery of the Series 2010 Bonds or questions or affects the validity of the Series 2010 Bonds or the proceedings and authority under which they are to be issued. To the Issuer s knowledge, neither the creation, organization, or existence of the Issuer, nor the title of the present officials of the Issuer is being contested or questioned. The Issuer has no knowledge of any pending litigation that questions in any manner the right of the Issuer to enter into the Indenture or the Loan Agreement or to secure the Series 2010 Bonds in the manner provided in the Indenture. The Borrower No litigation and no proceedings are pending or threatened against the Borrower which would affect the sale of the Series 2010 Bonds, the security therefor, or the ability of the Borrower to perform its obligations under the Loan Agreement, the Rental Agreement or the Security Deed. Validation Proceedings The State instituted proceedings in the Superior Court of Chatham County, Georgia to validate the Series 2010 Bonds and the security therefor. The State was the plaintiff in the proceeding, and the Issuer and the Borrower were the defendants. A final judgment confirming and validating the Series 2010 Bonds and the security therefor was entered on November 22, Under Georgia law, the judgment of validation will be forever conclusive with respect to the validity of the Series 2010 Bonds and the security therefor against the Issuer and the Borrower. The Regents was not a party defendant in the validation proceeding, and the enforceability of the Rental Agreement against the Regents was not a subject of the judgment of validation of the Series 2010 Bonds. Closing Certificates At closing of the sale of the Series 2010 Bonds by the Underwriter, the Issuer and the Borrower will each deliver to the Underwriter a certificate (1) that no litigation is pending or threatened against it that would have a material effect on the issuance or validity of the Series 2010 Bonds or the security for the Series 2010 Bonds or on its financial condition, and (2) that the information contained in this Official Statement relating to it does not contain any misstatement 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. Neither the Regents nor the State has made nor will make any representation as to itself or the accuracy or completeness of the information contained in this Official Statement, including the financial statements included as Appendix F hereto. General TAX TREATMENT The Code establishes certain requirements which must be met concurrently with, and subsequent to, the issuance of the Series 2010 Bonds, in order that the interest on the Series 2010 Bonds be and remain excluded from the gross income of the recipients thereof for federal income tax purposes. At the time of issuance and delivery of the Series 2010 Bonds, the Issuer and the Borrower will make certain representations, certifications and covenants which are intended to assure compliance with such requirements. In the event of the inaccuracy of such representations and certifications, or the non-compliance with such covenants, interest on the Series 2010 Bonds may be required to be included in the gross income of the recipients thereof, retroactively to the date of issuance of the Series 2010 Bonds under certain circumstances. On the date of issuance and delivery of the Series 2010 Bonds, Gray & Pannell LLP, Savannah, Georgia, Bond Counsel, will deliver an opinion to the effect that the interest on the Series 2010 Bonds, under existing 38

45 statutes, regulations and judicial decisions, is excluded from the gross income of the owners of the Series 2010 Bonds for federal income tax purposes. In addition, in the opinion of Bond Counsel, interest on the Series 2010 Bonds will not be treated as an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. No opinion will be expressed with respect to any other federal tax consequences of the receipt or accrual of interest on the Series 2010 Bonds. The opinion of Bond Counsel will state that it assumes the accuracy of the representations and certifications of the Issuer and the Borrower and the continued compliance with the covenants related to the exclusion of interest on the Series 2010 Bonds from gross income. Prospective purchasers of the Series 2010 Bonds should be aware that ownership of the Series 2010 Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with excess net passive income, foreign corporations subject to branch profits tax and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Series 2010 Bonds. Bond Counsel has not expressed an opinion regarding the collateral federal income tax consequences that may arise with respect to the Series 2010 Bonds. Prospective purchasers of the Series 2010 Bonds should consult their tax advisors as to the collateral federal income tax and state tax consequences to them of owning the Series 2010 Bonds. Discount Bonds In the opinion of Bond Counsel, under existing law, the original issue discount of each serial Series 2010 Bond maturing on June 15, 1018 through 2028, inclusive, and the term Series 2010 Bonds maturing June 15, 2035 and 2041 (the Discount Bonds ), to the extent properly allocable to each owner of such Discount Bond, is excluded from gross income for federal income tax purposes with respect to such owner. The original issue discount is the excess of the stated redemption price at maturity of such Discount Bond over the initial offering price to the public, excluding underwriters and other intermediaries, at which price a substantial amount of such Discount Bonds were sold. Under Section 1288 of the Code, original issue discount on tax-exempt obligations accrues on a constant yield to maturity basis. The amount of original issue discount that accrues during any period to an owner of a Discount Bond who acquires such Discount Bond in this offering generally equals (i) the issue price of such Discount Bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of such Discount Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable on such Discount Bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excluded from gross income for federal income tax purposes to the same extent as any stated interest on the Discount Bond, and will increase the owner s tax basis in such Discount Bond for the purpose of determining gain or loss upon a subsequent sale, exchange, payment, or redemption. Any gain realized by an owner from a sale, exchange, payment, or redemption of a Discount Bond would be treated as gain from the sale or exchange of such Discount Bond. Owners of Discount Bonds who purchase those Discount Bonds other than at the initial offering price or do not purchase those Discount Bonds in the initial offering should consult their own tax advisors as to the federal tax consequences of owning Discount Bonds. All Owners of Discount Bonds should consult their own tax advisors with respect to the state and local tax consequences of owning Discount Bonds. Under the tax laws of certain state and local jurisdictions, the amount of interest considered to have accrued to an owner of a Discount Bond may also be deemed to be received in the year of such accrual, even though there will not be a corresponding cash payment, rather than upon the disposition, redemption, or maturity of such Discount Bond for purposes of determining such owner s income tax liability under such state or local tax laws. 39

46 Premium Bonds The Series 2010 Bonds maturing on June 15, 2013 through 2017, inclusive (the Premium Bonds ) are being sold at prices in excess of the principal amount thereof. Under the Code, the excess of an owner s cost basis of a bond over the principal amount of such bond (other than a bond held as inventory, stock in trade, or for sale to customers in the ordinary course of business) is generally characterized as bond premium. For federal income tax purposes, bond premium is amortized over the term of the related bond. An owner will therefore be required to decrease its basis in the Premium Bonds by the amount of amortizable bond premium attributable to each taxable year it holds Premium Bonds. The amount of amortizable bond premium attributable to each taxable year is determined on an actuarial basis at a constant interest rate compounded on each interest payment date. The amortizable bond premium attributable to Series 2010 Bonds is not deductible for federal income tax purposes. Purchasers of Premium Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of the treatment of bond premium upon sale, redemption, or other disposition of Premium Bonds. Information Reporting and Backup Withholding Interest paid on tax-exempt bonds, such as the Series 2010 Bonds, is subject to information reporting to the Internal Revenue Service in a manner similar to interest paid on taxable obligations. This reporting requirement does not affect the excludability of interest on the Series 2010 Bonds from gross income for federal income tax purposes. However, in conjunction with that information reporting requirement, the Code subjects certain noncorporate owners of Series 2010 Bonds, under certain circumstances, to backup withholding at (i) the fourth lowest rate of tax applicable under Section 1(c) of the Code (i.e., a rate applicable to unmarried individuals) for taxable years beginning on or before December 31, 2010; and (ii) the rate of 31% for taxable years beginning after December 31, 2010, with respect to payments on the Series 2010 Bonds and proceeds from the sale of Series 2010 Bonds. Any amounts so withheld would be refunded or allowed as a credit against the federal income tax of such owner of Series 2010 Bonds. This withholding generally applies if the owner of Series 2010 Bonds (i) fails to furnish the payor such owner s social security number or other taxpayer identification number ( TIN ), (ii) furnished the payor an incorrect TIN, (iii) fails to properly report interest, dividends, or other reportable payments as defined in the Code, or (iv) under certain circumstances, fails to provide the payor or such owner s securities broker with a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such owner is not subject to backup withholding. Prospective purchasers of the Series 2010 Bonds may also wish to consult with their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding and the procedures for obtaining exemptions. Georgia Income Tax Treatment In the opinion of Bond Counsel, under existing statutes, interest on the Series 2010 Bonds is exempt from all present state income taxation within the State of Georgia. Interest on the Series 2010 Bonds may or may not be subject to state or local income taxation in jurisdictions other than Georgia under applicable state or local laws. Purchasers of the Series 2010 Bonds should consult their tax advisors as to the taxable status of the Series 2010 Bonds in a particular state or local jurisdiction other than Georgia. Underwriting MISCELLANEOUS Wells Fargo Securities is the trade name for certain capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, a member of NYSE, FINRA and SIPC, Wells Fargo Institutional Securities, LLC, a member of FINRA and SIPC, and Wells Fargo Bank, National Association. Wells Fargo Securities, LLC carries and provides clearing services for Wells Fargo Institutional Securities, LLC customer accounts. Wells Fargo Bank, National Association ("WFBNA"), the sole underwriter of the Series 2010 Bonds, has entered into an agreement (the "Distribution Agreement") with Wells Fargo Advisors, LLC ("WFA") for the retail distribution of certain municipal securities offerings, including the Series 2010 Bonds. Pursuant to the Distribution 40

47 Agreement, WFBNA will share a portion of its underwriting compensation with respect to the Series 2010 Bonds with WFA. WFBNA and WFA are both subsidiaries of Wells Fargo & Company. Subject to the terms and conditions of a Bond Purchase Agreement, the Issuer has agreed to sell to the Underwriter and the Underwriter has agreed to purchase from the Issuer, subject to certain conditions, all but not less than all of the Series 2010 Bonds at a purchase price of $35,616, (which reflects a premium of $71, and an original issue discount of $929,585.90), but does not reflect the underwriter s compensation or underwriter s discount of $237, The Borrower has agreed to indemnify the Underwriter against certain liabilities arising under the securities laws with respect to this Official Statement and the offering of the Series 2010 Bonds. The Bond Purchase Agreement provides that the Underwriter will purchase all of the Series 2010 Bonds if any are purchased. The Underwriter intends to offer the Series 2010 Bonds to the public initially at the offering prices set forth on the inside cover hereof, which offering prices may subsequently be changed without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other dealers in offering the Series 2010 Bonds to the public. The Underwriter may offer and sell the Series 2010 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. Rating Standard & Poor s Ratings Services, LLC, a subsidiary of The McGraw-Hill Companies, Inc. ( S&P ) has assigned the Series 2010 Bonds a rating of A+ (Stable). S&P is expected to assign a rating of AA+ (Stable Outlook) based upon the understanding that simultaneously with the delivery of such Series 2010 Bonds a municipal bond insurance policy insuring the payment of the Series 2010 Bonds will be issued by AGM. The rating reflects only the view of S&P. An explanation of the significance of the rating given by S&P may be obtained from S&P at the following address: Standard & Poor s Ratings Services, a subsidiary of The McGraw- Hill Companies, Inc., 55 Water Street, 45 th Floor, New York, New York Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions made by the agency. There is no assurance that such rating will continue for any given period of time or that such rating may not be revised upward, downward or withdrawn entirely by S&P if, in the judgment of the agency originally establishing the rating, circumstances so warrant. Any such downward change or withdrawal of such rating may have an adverse effect on the liquidity and market price of the Series 2010 Bonds. None of the Underwriter, the Borrower, the Foundation, the University, the Regents or the Issuer has undertaken any responsibility, after the issuance of the Series 2010 Bonds, to oppose any such change or withdrawal. Professionals Involved in the Offering The approval of legality of the Series 2010 Bonds will be passed on by Gray & Pannell LLP, Savannah, Georgia, Bond Counsel. Certain legal matters will be passed on for the Issuer by its counsel, Gray & Pannell LLP, Savannah, Georgia, for the Borrower and the Foundation by their counsel, Peck, Shaffer & Williams, LLP, Atlanta, Georgia, for the Borrower by its special counsel Strickland Brockington Lewis LLP, Atlanta, Georgia, as to certain documents of the Regents, for the Foundation by Epstein Becker & Green, P.C., Atlanta, Georgia, as to 501(c)(3) tax matters, and for the Underwriter by its co-counsel, Golden & Associates, P.C., Atlanta, Georgia and Seyfarth Shaw LLP, Atlanta, Georgia. [REMAINDER OF PAGE INTENTIONALLY BLANK] 41

48 CERTIFICATION Except for the information set forth under the heading THE ISSUER and LITIGATION The Issuer and Validation Proceedings as it relates to the Issuer, the Issuer has not participated in the preparation of this Official Statement and makes no representation with respect to the accuracy or completeness of any of the material contained in this Official Statement. The Issuer is not responsible for providing any purchaser of the Series 2010 Bonds with any information relating to the Series 2010 Bonds or any of the parties in this transaction referred to in this Official Statement or for the accuracy or completeness of any such information obtained by any purchaser. The Issuer and the Borrower have approved the execution, delivery and use of this Official Statement. SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY SSU COMMUNITY DEVELOPMENT I, LLC By: President By: Manager By: Manager 42

49 Appendix A Definitions

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51 Appendix A Definitions The following definitions are from the Indenture, the Loan Agreement, the Security Deed and the Security Agreement. Accountant means a certified public accountant, or a firm of certified public accountants, who or which is independent as that term is defined in Rule 101 and related interpretations of the Code of Professional Ethics of the American Institute of Certified Public Accountants, of recognized standing, who or which does not devote his or its full time to the Borrower or its Affiliates (but who or which may be regularly retained by the Borrower or its Affiliates). Account Debtor means any Person who is or may become obligated under or on account of an Account. Accounts means all accounts, contract rights, chattel paper, instruments, and documents (excluding Contract Documents) received by or on behalf of the Borrower from or in connection with the ownership, operation, or leasing of any property of the Borrower located at the Locations and all rights to receive the same, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise); excluding, however, all gifts, grants, bequests, donations, and contributions that are specifically designated or restricted at the time of making thereof by the donor or maker as being for certain specified purposes inconsistent with the application thereof to the payments due under the Obligations, and the income derived therefrom to the extent specifically required by such designation or restriction. Act means local amendments to the Constitution of the State of Georgia contained in Ga. Laws 1951, page 854, et seq., Ga. Laws 1965, page 675, et seq., and Ga. Laws 1972, page 1569, et seq.; and those acts of the General Assembly of Georgia contained in Ga. Laws 1925, page 1451, et seq., Ga. Laws 1951, page 190, et seq., Ga. Laws 1955, page 170, et seq., Ga. Laws 1956, page 329, et seq., Ga. Laws 1958, page 2459, et seq., Ga. Laws 1967, page 2062, et seq., Ga. Laws 1972, page 1186, et seq., Ga. Laws 1975, page 3131, et seq., Ga. Laws 1977, page 184, et seq., Ga. Laws 1977, page 898, et seq., Ga. Laws 1980, Page 380, et seq., Ga. Laws 1982, page 993, et seq., and Ga. Laws 1989, page 47, et seq. Additional Bonds means the additional parity Bonds, including Completion Bonds, authorized to be issued by the Issuer pursuant to the terms and conditions of Section 214 of the Indenture. Additional Loans means any loan or loans made by the Issuer to the Borrower in connection with the issuance of Additional Bonds, the repayment of which will be evidenced by the Additional Notes. Additional Notes means the additional parity promissory notes made by the Borrower and payable to the Issuer to evidence the Borrower s obligation to pay Loan Repayments in order to repay the Additional Loans, and any promissory notes issued in substitution or exchange therefor. 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, fixtures, and equipment therefor, and including the restoration, reconstruction, or replacement of buildings, equipment, or other property damaged or destroyed by fire or other casualty or taken by or under the threat of condemnation or for which title is lost. Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, (i) control when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the power to appoint and remove its directors, the ownership of voting securities, by contract, membership, or otherwise, and (ii) the terms controlling and controlled have meanings correlative to the foregoing. A-1

52 AGM means the Bond Insurer. Architect means the Person or Persons designated as such pursuant to the Development Agreement. Assignment of Contract Documents means the Assignment of Contract Documents, dated as of December 1, 2010, between the Issuer and the Borrower, collaterally assigning the Borrower s rights under the agreements with the Developer. Authorized Borrower Representative means the person at the time designated to act on behalf of the Borrower by written certificate furnished to the Issuer and the Trustee, containing the specimen signature of such person and signed on behalf of the Borrower by the Chairman, Vice Chairman, President or the Manager of the Borrower. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. Authorized Denomination means $5,000 or any integral multiple thereof. Authorized Issuer Representative means the person at the time designated to act on behalf of the Issuer by written certificate furnished to the Borrower and the Trustee, containing the specimen signature of such person and signed on behalf of the Issuer by the President or Chairman of the Issuer. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. Beneficial Owner shall have the meaning specified in Section 213 of the Loan Agreement. Bond Counsel means any firm of nationally recognized bond counsel experienced in matters relating to tax-exempt financing, selected by the Borrower and reasonably acceptable to the Trustee. Bond Documents means, collectively, the Borrower Contracts, the Real Estate Documents and the Indenture. Bond Insurer shall mean Assured Guaranty Municipal Corp., a New York stock insurance company, and its successors and assigns. Bond Resolution means the resolution of the Issuer that authorized the Series 2010 Bonds.. Bonds means the Series 2010 Bonds and all series of Additional Bonds from time to time authenticated and delivered under the Indenture. Bond Year means the twelve-month period beginning June 16 of each calendar year and ending on June 15 of the next succeeding calendar year. Borrower means SSU Community Development I, LLC a limited liability company duly formed and existing under the laws of the State of Georgia. Borrower Contracts means, collectively, the Loan Agreement, the Notes, the Security Deed, the Security Agreement, the Assignment of Contract Documents and the Contract Documents. Business Day means a day that is not (a) a Saturday, Sunday, or legal holiday on which banking institutions in the State of Georgia, the State of New York, or the state in which the Principal Office of the Trustee is located are required or authorized by law or other governmental action to close or (b) a day on which the New York Stock Exchange is closed. Capitalized Interest Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Capital Lease means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. Closing Date means the date of the initial issuance and delivery of any series of Bonds. A-2

53 Code means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. Collateral means, collectively, the Premises, the Rents, the Leases, the Leasehold Estate and the Property that is the subject of a grant of a security interest in Section 202 of the Security Deed. Completion Bonds means Bonds issued for the purpose of financing the completion of the construction or equipping of the Project for which Bonds were previously issued; provided that the term Completion Bonds shall only include that principal amount of Bonds which is necessary to (i) finance the completion of such construction or equipping to the extent necessary to provide a completed and equipped Project of substantially the type and scope contemplated at the time that such Bonds previously issued were originally issued, and in accordance with the Plans and Specifications for such Project as originally prepared with only such changes as have been made in conformance with the Loan Agreement, (ii) pay any related issuance expenses, including any underwriting discount, (iii) fund any capitalized interest relating thereto, and (iv) fund the Debt Service Reserve Requirement with respect to such Bonds. Completion Date means the date of completion of the construction and equipping of the Project, as that date shall be certified as provided in Section 6.02 of the Indenture Construction means, in addition to new construction, reconstruction and renovation, and constructing and construct includes references to reconstructing and renovating and reconstruct and renovate, as the case may be. Consultant means an Independent Person that is a nationally recognized professional management consultant having, in the good faith opinion of the Borrower, the skill and experience necessary to render the particular report required and that is reasonably acceptable to the Trustee and the Bond Insurer. Insurer. Consultant s Report means a written report of a Consultant delivered to the Trustee and the Bond Contract Documents means any and all tenant contracts, license agreements, rental agreements, franchise agreements, management contracts, construction contracts, renovation agreements, development agreements, project management agreements, architect s agreements, plans and specifications, and other contracts, licenses, and permits now or hereafter affecting any Property located at the Locations, including, without limitation, the contracts described in Exhibit B to the Security Deed as the same may be supplemented from time to time), together with all rights and privileges of any nature thereunder accruing, together with any changes, renewals, supplements, addenda, amendments, consolidations, extensions, revisions, modifications, or guarantees of performance of obligations to the Borrower under the foregoing contracts, all of the Borrower s rights and title to modify, alter, or amend the foregoing contracts, to terminate the foregoing contracts, and to waive or release the performance or observance of any obligation or condition of the foregoing contracts, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise). Counsel means an attorney duly admitted to practice law before the highest court of any state in the United States of America or the District of Columbia, or any law firm, who or which, as the case may be, is not unsatisfactory to any recipient of the opinion required to be rendered by such Counsel. Debt Service Coverage Ratio means, for any particular period of time, the ratio (stated as a percentage) determined by dividing Income Available for Debt Service for such period by the Maximum Annual Debt Service Requirement. Debt Service Requirement means the total principal and interest coming due on the Bonds, whether at maturity or upon mandatory redemption, in any specified period. The principal of and interest on Bonds shall be excluded from the determination of the Debt Service Requirement to the extent that the same were or are expected to be paid from amounts on deposit on the date of calculation (or Bond Proceeds to be deposited on the date of issuance of the proposed Bonds) in the Project Fund, the Capitalized Interest Account or the Debt Service Reserve. The Trustee may request and rely upon a certification of the Debt Service Requirement. A-3

54 Debt Service Reserve Credit Facility means the letter of credit, insurance policy, or surety bond, together with any substitute or replacement therefor, if any, complying with the provisions of the Loan Agreement, thereby fulfilling all or a portion of the Debt Service Reserve Requirement. Debt Service Reserve Credit Facility Provider means any provider of a Debt Service Reserve Credit Facility. Debt Service Reserve means the trust fund so designated, which is created pursuant to Section 503 of the Indenture. Debt Service Reserve Requirement means (A) with respect to the Series 2010 Bonds, the sum of $1,271, and (B) with respect to any Additional Bonds, the least of (i) 10% of the original face amount of any Additional Bonds, (ii) 125% of the average annual Debt Service on any Additional Bonds, or (iii) the Maximum Annual Debt Service on any Additional Bonds in any Bond Year (the "3 Part Test Amount") or such lesser amount as may be acceptable to the owners of any Additional Bonds, provided that such lesser amount acceptable to any owners of any Additional Bonds may not be less than 50% of the 3 Part Test Amount; provided further that the amount of principal due in any Bond Year shall be determined, in the case of Bonds subject to mandatory redemption pursuant to Section 304(c) of the Indenture and similar provisions in any supplemental indenture, by the principal amount of Bonds to be redeemed by mandatory redemption in such Bond Year. Defaulted Interest means any interest on any Bond that is due and payable, but which is not punctually paid or duly provided for on any Interest Payment Date. Developer means Hardin Construction Company, a limited liability Company. Development Agreement means the Design Build Agreement, between the Developer and the Regents, assigned to the Borrower. DTC means The Depository Trust Company, New York, New York or its nominee, or its successors and assigns, or any other depository performing similar functions under the Indenture. Equipment means all machinery, apparatus, equipment, fittings, furniture, furnishings, fixtures (whether actually or constructively attached or affixed to the land located at the Locations or to any buildings, structures, or other improvements located thereon and including all trade, domestic, and ornamental fixtures), and other articles of tangible personal property of every kind, description, and nature whatsoever now or hereafter located at, in, upon, or under the Locations or the buildings, structures, or other improvements at the Locations or used or usable in connection with any present or future operations conducted or to be conducted at the Locations or the buildings, structures, or other improvements at the Locations, and all parts, accessories, and special tools and all increases, additions, and accessions thereto and substitutions and replacements therefor, including, without limiting the generality of the foregoing, all building materials, supplies, goods, machinery, fixtures, and equipment now or hereafter delivered to the Locations and placed on the land located at the Locations for the purpose of being affixed to or installed or incorporated or otherwise used in the buildings, structures, or other improvements now or hereafter located at the Locations or on any part or parcel of the land located at the Locations, including but not limited to, lumber, plaster, cement, shingles, roofing, plumbing, pipe, lath, wallboard, cabinets, nails, sinks, toilets, furnaces, heaters, brick, tile, water heaters, screens, window frames, glass, doors, flooring, paint, lighting fixtures and unattached refrigerating, and cooking, heating, and ventilating appliances and equipment, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise). Event of Default means, in the case of the Indenture, the events specified in Section 801 of the Indenture and, in the case of the Loan Agreement and the Security Deed, the events specified in Section of the Loan Agreement. Expenses of Operation and Maintenance means all expenses reasonably incurred in connection with the operation and maintenance of the Project, including salaries, wages, the cost of materials and supplies, rentals of leased property, if any, management fees, the cost of audits, Trustee s, paying agent s, and bond registrar s fees and expenses, payment of premiums for insurance required by the Loan Agreement and other insurance that the Borrower deems prudent or obligates itself in rental agreements to carry on the Project and its operations, and, A-4

55 generally, all expenses, exclusive of debt service on Bonds, and depreciation or amortization, which under GAAP are properly allocable to operation and maintenance; however, only such expenses as are reasonably and properly necessary or desirable for the proper operation and maintenance of the Project shall be included. Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee mean all reasonably necessary services rendered and all expenses incurred by the Trustee under the Indenture, including reasonable counsel fees, costs and expenses, other than Ordinary Services of the Trustee and Ordinary Expenses of the Trustee. Fair Market Value means (i) with respect to real property, the market value for such property as established by an independent real estate appraiser who is a member of the American Institute of Real Estate Appraisers selected by the Borrower and reasonably acceptable to the Trustee and the Bond Insurer and (ii) with respect to property other than real property, the current market value of such property as established by a broker, appraiser, or other expert selected by the Borrower and reasonably acceptable to the Trustee and the Bond Insurer Whenever the Fair Market Value of property is required to be established pursuant to the Loan Agreement, such valuation shall be made in writing and delivered to the Trustee and the Bond Insurer. Financial Guaranty Insurance Policy shall mean the insurance policy issued by the Bond Insurer guaranteeing the scheduled payment of principal and interest on the Series 2010 Bonds when due. Fiscal Year means the 12-month period ending on December 31 of each year, or such other 12-month period set forth in an Officer s Certificate of the Borrower filed with the Trustee as the fiscal year of the Borrower for accounting purposes. Except as otherwise provided herein, whenever reference is made in the Loan Agreement to a determination of revenues, expenses, debt coverage, or other accounting calculations to be made for, or with respect to, a Fiscal Year, such reference shall be to that Fiscal Year immediately preceding the date of such determination or calculation for which audited financial statements have been prepared and are then available. Fitch means Fitch, Inc., or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Borrower and acceptable to the Bond Insurer. The notice address of Fitch shall be One State Street Plaza, New York, New York Foundation initially means SSU COBA Endowment, Inc., which has been determined by the Internal Revenue Service to be exempt from federal income taxes as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the Code ). However, it is contemplated that SSU COBA Endowment, Inc. may be replaced as the sole member of the Borrower by another organization described in Section 501(c)(3) of the Code and if SSU COBA Endowment, Inc. is replaced as the sole member of the Borrower by another Section 501(c)(3) organization, then the term Foundation shall refer to such other Section 501(c)(3) organization. Fund or Funds means any of the funds established pursuant to the Indenture. GAAP means generally accepted accounting principles as in effect from time to time in the United States of America. General Intangibles means all general intangibles received by or on behalf of the Borrower from or in connection with the ownership, operation, or leasing of the Property located at the Locations and all rights to receive the same, including, without limitation, all choses in action, causes of action, corporate or other business records, deposit accounts, inventions, designs, patents, patent applications, trademarks, trade names, trade secrets, goodwill, copyrights, registrations, licenses, franchises, customer lists, tax refund claims, computer programs, software, all claims under guaranties, security interests or other security held by or granted to the Borrower to secure payment of any of the Accounts by an Account Debtor, all rights to indemnification, all supporting obligations, all letter of credit rights, and all other intangible property of every kind and nature (other than Accounts and Contract Documents), in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise); excluding, however, all gifts, grants, bequests, donations, and contributions that are specifically designated or restricted at the time of making thereof by the donor or maker as being for certain specified purposes inconsistent with the application thereof to the payments due under the Obligations, and the income derived therefrom to the A-5

56 extent specifically required by such designation or restriction. Governmental Authority means (a) the government of (i) the United States of America or any state or other political subdivision thereof, or (ii) any jurisdiction in which the Borrower conducts all or any part of its business, or which asserts jurisdiction over any properties of the Borrower, or (b) any entity exercising executive, legislative, judicial, regulatory, or administrative functions of, or pertaining to, any such government. Governmental Issuer means the State, any other state of the United States, any agency or instrumentality of the State, and any county, municipal corporation, or political subdivision of the State. Government Obligations means: (a) direct general obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of Treasury of the United States of America) or obligations the payment of the principal of and interest on which when due are fully and unconditionally guaranteed by the United States of America; (b) receipts or certificates that evidence an undivided ownership interest in the right to the payment of the principal of or interest on obligations described in clause (a) above, provided that such obligations are held in the custody of a bank or trust company acceptable to the Trustee, in a special account separate from the general assets of such custodian; and (c) bonds, notes, or other obligations of any Governmental Issuer the timely payment of the principal of and interest on which is fully provided for (without reinvestment) by the deposit in trust or escrow of cash or non-callable obligations described in clauses (a) or (b) above. Gross Receipts means all the right, title, and interest of the Borrower in and to amounts received by or on behalf of the Borrower from the ownership and operation of the Project, including all revenues, rents, fees, charges, or other income of any kind from any source received by the Borrower from the Project, including without limitation: (1) gross rentals received with respect to land, buildings, equipment, or other personal property owned, leased, or used by the Borrower; (2) gross revenues received from any and all leases of any lands, buildings, structures, equipment, or other personal property, or any parts thereof or therein owned, leased, or controlled by the Borrower as part of the Project including facilities related or appurtenant thereto; (3) all rents or fees payable by tenants of the Project; and (4) all proceeds of business interruption insurance and temporary condemnation awards (excluding, however, proceeds of damage, destruction, and casualty insurance and permanent condemnation awards). Ground Leases means the four Ground Leases, relating to the sites of Buildings A, B, C, and Camilla Hubert Hall, between the Regents, as lessor, and the Borrower, as lessee, as the same may be amended from time to time in accordance with the terms thereof. Ground Lessor means the Regents together with any successors or assigns. Guaranty means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing (whether by reason of being a general partner of a partnership or otherwise) any indebtedness, dividend, or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) therefor; to purchase such indebtedness or obligation or any Property constituting security (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; A-6

57 (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or thereof. (d) otherwise to assure the owner of such indebtedness or obligation against loss in respect In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. Hazardous Materials means any and all pollutants, toxic or hazardous wastes, or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited, or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation, and polychlorinated biphenyls). Holders or Bondholders means the Persons in whose names any of the Bonds are registered on the books kept and maintained by the Trustee as bond registrar. Impositions means all governmental charges and taxes (including all ad valorem, sales, use, intangible, transaction, privilege, or license or similar taxes), assessments (including all assessments for public improvements or benefits), water and sewer charges, excises, levies, fees (including license, permit, inspection, authorization, and similar fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Project (including all interest and penalties thereon), which at any time may be assessed or imposed on or in respect of or be a lien upon the Project, but excluding Permitted Encumbrances. Nothing contained in the Loan Agreement shall be construed to require the Borrower to pay any tax, assessment, levy, or charge imposed on any tenant or other Person unless the failure to pay the same could result in a lien on the Project, and in all events, the Borrower shall have the right to contest in good faith any Imposition as provided in the Loan Agreement. Income Available for Debt Service means, for any period of calculation, excess of support and revenues over expenses, including nonoperating revenue (such as interest income and capitalized interest) but excluding (i) gifts (whether restricted or unrestricted), (ii) extraordinary gains and losses, and (iii) unrealized gains and losses on investments, plus amounts deducted in arriving at such excess of support and revenues over expenses for (i) interest on Loans (including the current portion thereof), (ii) depreciation and (iii) amortization. Indebtedness with respect to any Person means, at any time, without duplication: (a) its liabilities for borrowed money; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) Capital Leases; all liabilities appearing on its balance sheet in accordance with GAAP in respect of (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money); and (f) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (e) of this definition. A-7

58 Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (e) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. Indenture means the Trust Indenture and Security Agreement, dated the as of December 1, 2010, between the Issuer and the Trustee, authorizing the issuance of the Series 2010 Bonds, as the same may be supplemented and amended from time to time in accordance with the provisions thereof. Independent, when used with respect to any specified Person, means such a Person who (i) does not have any direct financial interest in the Borrower, other than the payment to be received under the contract for services to be performed by such Person, (ii) is not an officer, employee, underwriter, partner, Affiliate, subsidiary, or person performing similar functions for the Borrower, and (iii) when used with respect to any Person other than Counsel, is not a trustee or director of the Borrower. Insurance Consultant means an Independent Person appointed by the Borrower and satisfactory to the Trustee and the Bond Insurer, qualified to survey risks and to recommend insurance coverage for university campus facilities and services of the type involved, and having a favorable reputation for skill and experience in such surveys and such recommendations and which may be a broker or agent with whom the Borrower transacts business. Insurance Requirements means all terms of any insurance policy required to be obtained under the Loan Agreement covering or applicable to the Project or any part thereof, all requirements of the issuer of any such policy, and all orders, rules, regulations, and other requirements of the national board of fire underwriters (or any other body exercising similar functions) applicable to or affecting the Project or any part thereof or any use of the Project or any part thereof. Interest Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Interest Payment Date means each June 15 and December 15, commencing June 15, 2011, in the case of Series 2010 Bonds, and the dates on which interest is scheduled to be paid, in the case of Additional Bonds. Issuance Cost Fund means the trust fund so designated, which is created pursuant to Section 508 of the Indenture. Issuer means the Savannah Economic Development Authority, a public body corporate and politic and an instrumentality of the State, and its successors and assigns. Issuer Contracts means, collectively, the Loan Agreement, the Security Deed, the Security Agreement, and the Indenture. Joint Written Request means a Written Request of the Issuer and the Borrower. Land means the land described in Exhibit A to the Loan Agreement. Letter of Representations means the Blanket Issuer Letter of Representations, dated August 27, 1997, between the Issuer and DTC. Lien means any interest in Property securing an obligation owed to, or a claim by, a person other than the owner of the Property, whether such interest is based on the common law, statute, or contract, and including, but not limited to, the security interest, security title, or lien arising from a security agreement, mortgage, deed of trust, security deed, Capital Lease, encumbrance, charge, pledge, conditional sale, or trust receipt or a lease, consignment, or bailment for security purposes. The term Lien shall include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Property. For the purpose of the Loan Agreement, the Borrower shall be deemed to be the owner of any Property that it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other person for security purposes. Loan Agreement means the Loan Agreement between the Issuer and the Borrower, as it may be A-8

59 supplemented and amended from time to time in accordance with the provisions of the Indenture. Loan Repayments means the payments of principal of, premium, if any, and interest on the Loans payable by the Borrower to the Issuer, described under the subheadings Loan Repayments related to Series 2010 Bonds and Loan Repayments related to Additional Bonds in Section 5.02 of the Loan Agreement, and evidenced by the Notes. Loans means the Series 2010 Loan and all Additional Loans (if any) from time to time made by the Issuer to the Borrower. Loan Term means the term of the Loan Agreement set forth in Section 5.01 of the Loan Agreement Locations means the Land, a legal description of which is attached to the Loan Agreement as Exhibit A (as the same may be supplemented from time to time), and, if Collateral is moved from the Land in violation of the terms of the Loan Agreement and the Security Agreement, any location to which such Collateral is moved. Maximum Annual Debt Service Requirement means the highest Debt Service Requirement for the then current or any succeeding Bond Year, as certified by the Borrower to the Trustee upon the request of the Trustee from time to time. Minimum Coverage Ratio means (1) while the Rental Agreements are in effect and contain terms and provisions not materially different from their original terms and provisions, 1.00 and (2) in all other circumstances, Moody s means Moody s Investors Service, Inc. or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Borrower and acceptable to the Bond Insurer. The notice address of Moody s shall be 99 Church Street, New York, New York Net Proceeds means, when used with respect to any insurance or condemnation award, the gross proceeds from the insurance or condemnation award with respect to which that term is used remaining after payment of all expenses (including reasonable attorney s fees, adjuster s fees, and any other expenses) incurred in the collection of such gross proceeds. Notes means the Series 2010 Note and all Additional Notes from time to time issued under the Loan Agreement. Obligations means all obligations, liabilities, covenants, agreements, and duties owing, arising, due, or payable from the Borrower to the Issuer of any kind or nature arising from or in connection with the Borrower Contracts, present or future, whether or not evidenced by any note or other instrument, whether direct or indirect (including those acquired by assignment), absolute or contingent, primary or secondary, due or to become due, now existing or hereafter acquired, together with all renewals, extensions, replacements, consolidations, and modifications thereof, in each case whether for principal, interest, fees, expenses, or any and all additional advances made by the Trustee to protect or preserve the Security or the lien, security title, and security interest created by the Security Deed and the Security Agreement in the Security, for taxes, assessments, or insurance premiums, or for the performance of any of the Borrower s obligations under the Borrower Contracts or otherwise. Officer s Certificate means a certificate in writing signed by the Authorized Borrower Representative. Ordinary Services of the Trustee and Ordinary Expenses of the Trustee mean those reasonable services rendered and those reasonable expenses incurred by the Trustee in the performance of its duties under the Indenture of the type ordinarily performed by corporate trustees under like indentures, including reasonable counsel fees, costs and expenses. Outstanding Bonds or Bonds Outstanding or Outstanding means all Bonds that have been duly authenticated and delivered by the Trustee under the Indenture, except: (a) Bonds theretofore cancelled or required to be cancelled by the Trustee, A-9

60 (b) Bonds that are deemed to have been paid in accordance with the defeasance provisions of Article VII of the Indenture, and (c) Bonds in substitution for which other Bonds have been authenticated and delivered under Section 206 of the Indenture. If the Indenture shall be discharged pursuant to the defeasance provisions of Article VII thereof, no Bonds shall be deemed to be Outstanding within the meaning of this provision. Permitted Encumbrance means, with respect to the Security and the Project, any of the following: (i) The Lien on the Security created by any Bond Document; (ii) Any Lien arising by reason of good faith deposits with the Borrower in connection with leases of real estate or tangible personal property, bids, or contracts (other than contracts for the payment of money), deposits by the Borrower to secure public or statutory obligations, or to secure, or in lieu of, surety, stay, or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges; (iii) Any Lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Borrower to maintain self-insurance or to participate in any funds established to cover any insurance risks or in connection with workers compensation, unemployment insurance, pension or profit sharing plans, or other similar social security plans, or to share in the privileges or benefits required for companies participating in such arrangements; (iv) Any judgment lien or notice of pending action against the Borrower so long as such judgment or pending action is being contested and execution thereon has been stayed or the period for responsive pleading or appeal has not lapsed, and neither the Lien of any Bond Document nor the Project will be materially impaired or subject to material loss or forfeiture; (v) (A) Rights reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license, permit, or provision of law affecting the Project, to (1) terminate such right, power, franchise, grant, license, or permit, provided that the exercise of such right would not, in the reasonable opinion of the Borrower, materially impair the use of the Project or materially and adversely affect the value thereof, or (2) purchase, condemn, appropriate, or recapture, or designate a purchaser of, the Project; (B) any Liens (or deposits to obtain the release of such Liens) on the Project for taxes, assessments, levies, fees, water and sewer charges, and other governmental and similar charges, and any Liens of mechanics, materialmen, laborers, suppliers, or vendors for work or services performed or materials furnished in connection with the Project, which in the reasonable opinion of the Borrower, are not material in amount or which are not due and payable or which are not delinquent or which, or the amount or validity of which, are being contested in good faith and execution thereon is stayed or, with respect to Liens of mechanics, materialmen, laborers, suppliers, or vendors, have been due for less than 90 days; (C) utility, access, and other easements, rights-of-way, servitudes, restrictions, and other minor defects, encumbrances, encroachments, and irregularities in the title to the Project that do not, in the reasonable opinion of the Borrower, materially impair the use of the Project or materially and adversely affect the value thereof; (D) rights reserved to or vested in any municipality or public authority to control or regulate the Project or to use the Project in any manner, which rights do not, in the reasonable opinion of the Borrower, materially impair the use of the Project or materially and adversely affect the value thereof; (E) to the extent that it affects title to the Project, any Bond Document; and (F) landlord s liens; (vi) Liens that are junior and subordinate in lien and right of payment to the liens created by the Security Deed and the Security Agreement, securing obligations to any Debt Service Reserve Credit Facility Provider, upon such terms and conditions as are satisfactory to the Trustee; and A-10

61 (vii) Rights granted under the Rental Agreements and any Liens created thereby. Permitted Investments means obligations in which the Issuer is permitted to invest moneys of the Issuer pursuant to applicable law, which have (or are collateralized by obligations which have) a Rating by any Rating Agency that is equal to or greater than the third highest long-term Rating of such Rating Agency, or which bears (or are collateralized by obligations which bear) the second highest short-term Rating of such Rating Agency, or which consist of negotiable or non-negotiable certificates of deposit issued by or interest-bearing time or demand deposits in banks, provided that any such deposits are (a) fully insured by the Federal Deposit Insurance Corporation or (b) fully secured by Government Obligations. Obligations in which the Issuer is permitted to invest proceeds of Bonds are described, as of the date of execution of the Loan Agreement, in Section of the Official Code of Georgia Annotated. Person means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a joint venture, a trust, an unincorporated organization, a governmental unit or an agency, a political subdivision or instrumentality thereof, or any other group or organization of individuals. Plans and Specifications means the detailed plans and specifications for the construction of the Project prepared by an Architect or by architects and engineers acceptable to an Architect and approved by such Architect, as amended from time to time by the Borrower or the general contractor under the Development Agreement, a copy of which is or will be on file with the Trustee. Policy means the financial guaranty insurance policy to be issued concurrently with the delivery of the Series 2010 Bonds by the Bond Insurer. Principal Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Principal Office means, when used with respect to the Trustee, the corporate trust office of the Trustee located in Atlanta, Georgia, and if the Trustee has more than one corporate trust office in Atlanta, Georgia, the principal office the office that shall be the principal office for purposes here of shall be designated by the Trustee in a written notice given to the Issuer, to Issuer s bond counsel, to the Borrower and its counsel, to the Bond Insurer and, if the Bonds are then registered to Cede & Co., to DTC. Premises is defined in GRANTING CLAUSE FIRST of the Security Deed. Project means (i) the purchase of land and its development for a sports and intramural complex to be conveyed to the Regents for use by the University as athletic fields, (ii) the construction and furnishing of three new buildings and the renovation of an existing building, to be used as student housing facilities containing 683 beds and related amenities, (iii) the demolition of an existing building to create a site for one of the new student housing buildings, and (iv) renovations and improvements to existing buildings located on the campus of Savannah State University. Project Budget means the Borrower s budget (with detail provided on a month by month basis) for the Project for the applicable Fiscal Year including, without limitation, a budget of capital expenditures for such year, an annual cash flow analysis that itemizes Gross Receipts and Expenses of Operation and Maintenance on a monthly basis, the Semi-Annual Replacement Deposit, and such other information as required by the Loan Agreement, as such budget shall be revised from time to time as provided in the Loan Agreement. Project Fund means the trust fund so designated, which is created pursuant to Section 509 of the Indenture. Property means, with respect to any Person, any and all rights, titles, and interests of such Person in and to any and all property, whether real or personal, tangible or intangible, and wherever situated. Rating means a rating in one of the categories by a Rating Agency, disregarding pluses, minuses, and numerical gradations. A-11

62 Rating Agencies or Rating Agency means Fitch, Moody s, and Standard & Poor s or any successors thereto and any other nationally recognized credit rating agency then maintaining a rating on any Bonds at the request of the Borrower. If at any time a particular Rating Agency does not have a rating outstanding with respect to the relevant Bonds, then a reference to Rating Agency or Rating Agencies shall not include such Rating Agency. Real Estate Documents means, collectively, the Ground Leases and the Rental Agreements. Rebate Amount means the rebatable arbitrage in connection with any Tax-Exempt Bonds that is payable to the United States Treasury pursuant to Section 148(f) of the Code; such term shall include any yield reduction payment to be made pursuant to Section 148(f) of the Code. Rebate Calculator means any nationally recognized bond counsel, nationally recognized firm of certified public accountants, or other firm reasonably acceptable to the Trustee, which is expert in making the calculations required by Section 148(f) of the Code, appointed by the Borrower pursuant to Section 4.06 of the Loan Agreement to make the calculations required by Section 148(f) of the Code in connection with any Tax-Exempt Bonds. Rebate Fund means the trust fund so designated, which is created pursuant to Section 504 of the Indenture. Record Date means the 1 st day of each month in which an Interest Payment Date occurs (whether or not a Business Day). Redemption Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Regents means the Board of Regents of the University System of Georgia. Regulatory Body means any federal, state, or local government, department, agency, or instrumentality and other public or private body, including accrediting organizations, having regulatory jurisdiction and authority over the Borrower or its facilities or operations. Rental Agreements means the four Rental Agreements relating to Buildings A, B. C, and Camilla Hubert Hall, respectively, between the Borrower, as landlord, and the Regents, as tenant, as the same may be amended from time to time in accordance with the terms thereof. Rents is defined in GRANTING CLAUSE SECOND of the Security Deed. Repair and Replacement Fund means the trust fund designated the Repair, Replacement and Maintenance Fund, which is created pursuant to Section 506 of the Indenture. Responsible Officer means, when used with respect to the Trustee, any vice president, senior associate or other officer of the Trustee within the Principal Office because of such person s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of the Indenture. Revenue Fund means the trust fund designated the Revenue Fund, which is created pursuant to Section 501 of the Indenture. Security means any of the property subject to the operation of the granting clauses contained in the Security Deed and the Security Agreement. Security Agreement means the Security Agreement, dated as of December 1, 2010, between the Borrower and the Issuer, executed by the Borrower as security for its obligations under the Loan Agreement, as the same may be amended from time to time in accordance with the terms thereof. Security Deed means the Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated as of December 1, 2010, executed by the Borrower as security for its obligations under the Loan Agreement, from the Borrower to the Issuer, as the same may be amended from time to time in accordance with the terms thereof. A-12

63 Semi-Annual Replacement Deposit shall mean a semi-annual payment to be made by the Regents to the Borrower pursuant to Section 4 of Exhibit B of the Rental Agreements, on the first day of each and every July and December during the term (commencing in the case of buildings A, B, and Camilla Hubert Hall on December 1, 2011 and in the case of building C on December 1, Series 2010 Bonds means the revenue bonds designated SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT), SERIES 2010, to be dated the date of issuance and delivery thereof, in the original aggregate principal amount of $36,475,000, to be issued pursuant to the Indenture. Series 2010 Disclosure Certificate means the Disclosure Certificate, dated the Closing Date of the Series 2010 Bonds, of the Borrower, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Series 2010 Loan means the loan made by the Issuer to the Borrower pursuant to Section 3.01(a) of the Loan Agreement, the repayment of which is evidenced by the Series 2010 Note. Series 2010 Note means the Series 2010 Promissory Note of the Borrower, dated the date of the Series 2010 Bonds, in the original principal amount of $36,475000, made by the Borrower and payable to the Issuer, to evidence the Borrower s obligation to pay Loan Repayments in order to repay the Series 2010 Loan, and any promissory note issued in substitution or exchange therefor, substantially in the form attached to the Loan Agreement as Exhibit B. Series 2010 Purchase Agreement means the bond purchase agreement, dated December 16, 2010, among the Underwriter, the Borrower, and the Issuer, providing for the purchase of the Series 2010 Bonds. Sinking Fund means the trust fund so designated, which is created pursuant to Section 502 of the Indenture. Site means the real estate described in Exhibit A attached to the Loan Agreement, as the same may be amended or supplemented pursuant to the Loan Agreement. Special Record Date means the date fixed by the Trustee for the payment of any Defaulted Interest pursuant to Section 202 of the Indenture. Standard and Poor s or S&P means Standard & Poor s Financial Services, LLC, a subsidiary of The McGraw-Hill Companies, Inc., or, if such S&P is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Borrower and acceptable to the Bond Insurer. The notice address of Standard & Poor s shall be 55 Water Street, New York, New York State means the State of Georgia. Surety Bonds means separate performance and labor and material payment bonds issued by a responsible surety bond company qualified to do business in the State having an A- rating or better from S&P or A.M. Best Company, Inc., which (1) contains a lender s dual obligee rider in favor of the Trustee, (2) unconditionally guarantees performance of the Development Agreement upon any default by the contractor thereunder, including payment by the contractor of all amounts due in respect thereof and the correction of defects developing within one year after substantial completion of construction under the Development Agreement, (3) has a maximum amount available of at least 100% of the price of the Development Agreement including increases caused by change orders (except that the portion available thereunder for the correction of post-completion defects may be limited to 10% of the price of the Development Agreement), (4) provides that coverage thereunder may not be reduced or cancelled except upon 30 days prior written notice to the Borrower, the Bond Insurer and the Trustee, and (5) if cancellable by the surety under any circumstances, provides for full payment to the Trustee prior to any cancellation. Surplus Fund means the trust fund so designated, which is created pursuant to Section 507 of the A-13

64 Indenture. Tax-Exempt Bonds means any Bonds the interest on which has been determined, in an unqualified opinion of Bond Counsel, to be excluded from gross income for federal income tax purposes. Trust Estate means any and all property subject to the operation of the granting clauses of the Indenture. Trustee means the trustee or the co-trustee at the time serving as such under the Indenture. The Bank of New York Mellon Trust Company, N.A., is the initial Trustee. Unassigned Rights means all of the rights of the Issuer (1) to receive reimbursements and payments pursuant to Sections 5.02(f), 10.04, and of the Loan Agreement, (2) to be held harmless and indemnified pursuant to Sections 9.04 and 9.08 of the Loan Agreement, and (3) to receive and give notices and instructions and to comply with instructions, as provided in the Loan Agreement. Underwriter means, for purposes of the Series 2010 Bonds, Wells Fargo Bank, National Association. Written Request means with reference to the Issuer, a request in writing signed by the Authorized Issuer Representative, and with reference to the Borrower, a request in writing signed by the Authorized Borrower Representative. A-14

65 Appendix B Copy of the Indenture

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67 TABLE OF CONTENTS (This Table of Contents is not a part of the Trust Indenture and Security Agreement and is only for convenience of reference.) SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee TRUST INDENTURE AND SECURITY AGREEMENT Dated as of December 1, 2010 Relating to $36,475,000 Savannah Economic Development Authority Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 Page PARTIES... 1 RECITALS... 1 GRANTING CLAUSES... 3 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION... 6 Section 101. Definitions... 6 Section 102. Construction of Certain Terms... 7 Section 103. Table of Contents; Titles and Headings... 7 Section 104. Contents of Bonds or Opinions... 7 ARTICLE II THE BONDS... 9 Section 201. Authorized Amount of Bonds... 9 Section 202. Number and Payment Provisions... 9 Section 203. Execution Section 204. Authentication Section 205. Form of Series 2010 Bonds; Validation Certificate Section 206. Mutilated, Lost, Stolen, or Destroyed Bonds Section 207. Cancellation and Destruction of Surrendered Bonds Section 208. Registration, Transfer, and Exchange Section 209. Temporary Bonds Section 210. Limited Obligations Section 211. Issuance of Series 2010 Bonds Section 212. Delivery of Series 2010 Bonds Section 213. DTC Book-Entry Section 214. Issuance of Additional Bonds Section 215. Delivery of Additional Bonds ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Optional Redemption of Series 2010 Bonds Section 302. Mandatory Sinking Fund Redemption of Series 2010 Bonds Section 303. Extraordinary Redemption of Bonds Section 304. General Provisions Regarding Optional, Extraordinary, and Mandatory Sinking Fund Redemptions Section 305. Notice of Redemption (i) Section 306. No Partial Redemption After Default Section 307. Partial Redemption Section 308. Cancellation ARTICLE IV GENERAL COVENANTS Section 401. Payment of Principal and Interest Section 402. Performance of Covenants; Authority of the Issuer Section 403. Instruments of Further Assurance Section 404. Rights Under and Possession of the Borrower Contracts Section 405. Recording and Filing Section 406. Maintenance of Existence; Compliance with Laws Section 407. Continuing Disclosure ARTICLE V REVENUES AND FUNDS; APPLICATION OF PROCEEDS Section 501. Revenue Fund Section 502. Sinking Fund Section 503. Debt Service Reserve Fund Section 504. Rebate Fund Section 505. [Reserved] Section 506. Repair and Replacement Fund Section 507. Surplus Fund Section 508. Issuance Cost Fund Section 509. Project Fund Section 510. Non-presentment of Bonds Section 511. Trustee s and Paying Agent s Fees, Charges, and Expenses Section 512. Moneys to be Held in Trust Section 513. Amounts Remaining in Funds and Accounts Section 514. Application of Series 2010 Bond Proceeds ARTICLE VI INVESTMENTS Section 601. Investment of Funds and Accounts Section 602. Allocation of Income from Investments Section 603. Trustee s Own Bond or Investment Department Section 604. Investment Records ARTICLE VII DISCHARGE OF INDENTURE Section 701. Discharge of Indenture Section 702. Defeasance of Bonds Section 703. Additional Restrictions on Investment Securities in Defeasance Escrows Page ARTICLE VIII DEFAULTS AND REMEDIES Section 801. Defaults Section 802. Acceleration Section 803. Other Remedies; Rights of Holders Section 804. Rights of Holders to Direct Proceedings Section 805. Appointment of Receivers Section 806. Application of Moneys Section 807. Remedies Vested in the Trustee Section 808. Limitations on Rights and Remedies of Holders Section 809. Termination of Proceedings Section 810. Waivers of Events of Default Section 811. Notice of Defaults; Opportunity of the Issuer and the Borrower to Cure Defaults ARTICLE IX THE TRUSTEE Section 901. Acceptance of the Trusts Section 902. Fees, Charges, and Expenses of the Trustee Section 903. Notice to Holders if Default Occurs Section 904. Intervention by the Trustee Section 905. Successor Trustee Section 906. Resignation by the Trustee Section 907. Removal of the Trustee Section 908. Appointment of Successor Trustee; Temporary Trustee Section 909. Concerning Any Successor Trustee Section 910. Trustee Required; Paying Agents, Co-Authenticating Agent, and Co-Bond Registrar Section 911. Trustee Protected in Relying Upon Resolutions Section 912. Successor Trustee as Trustee of Funds and Accounts, as Paying Agent, and as Bond Registrar Section 913. Trust Estate or Portion Thereof may Be Vested in Co-Trustee Section 914. Indemnification of Trustee Section 915. Reports ARTICLE X MEETINGS OF HOLDERS Page Section Purpose of Meetings Section Call of Meetings Section Voting Section Meetings Section Miscellaneous (ii) (iii)

68 Page ARTICLE XI SUPPLEMENTAL INDENTURES Section Supplemental Indentures Not Requiring Consent of Holders Section Supplemental Indentures Requiring Consent of Holders ARTICLE XII AMENDMENT OF OTHER BOND DOCUMENTS Section Amendments to Other Bond Documents Not Requiring Consent of Holders Section Amendments to Other Bond Documents Requiring Consent of Holders ARTICLE XIII MISCELLANEOUS Section Consents of Holders Section Limitation of Rights Section Severability Section Notices Section Payments Due on Saturdays, Sundays, and Holidays Section Counterparts Section Laws Governing Indenture and Situs and Administration of Trust Section No Personal Liability ARTICLE XIV BOND INSURER PROVISIONS Section Notices and Other Information Section Defeasance Section Trustee Section Amendments and Supplements Section The Bond Insurer as Third Party Beneficiary Section Control Rights Section Consent Rights of the Bond Insurer Section Special Reimbursement Obligations of Borrower Section Payment Procedure Under the Financial Guaranty Insurance Policy Section Restrictions on Permitted Investments Section Limitations on Additional Bonds SIGNATURES AND SEALS... 1 EXHIBIT A FORM OF SERIES 2010 BOND... A-1 TRUST INDENTURE AND SECURITY AGREEMENT THIS TRUST INDENTURE AND SECURITY AGREEMENT, made and entered into as of December 1, 2010, between the Savannah Economic Development Authority (the Issuer ), a public body corporate and politic and an instrumentality of the State of Georgia, and The Bank of New York Mellon Trust Company, N.A. (the Trustee ), a national banking association chartered and existing under the laws of the United States of America and duly authorized and empowered to accept and execute trusts of the character herein set out, as trustee; W I T N E S S E T H: WHEREAS, the Issuer was created pursuant to amendments to the Constitution of the State of Georgia contained in Ga. Laws 1951, page 854, et seq., Ga. Laws 1965, page 675, et seq., and Ga. Laws 1972, page 1569, et seq.; and those acts of the General Assembly of Georgia contained in Ga. Laws 1925, page 1451, et seq., Ga. Laws 1951, page 190, et seq., Ga. Laws 1955, page 170, et seq., Ga. Laws 1956, page 329, et seq., Ga. Laws 1958, page 2459, et seq., Ga. Laws 1967, page 2062, et seq., Ga. Laws 1972, page 1186, et seq., Ga. Laws 1975, page 3131, et seq., Ga. Laws 1977, page 184, et seq., Ga. Laws 1977, page 898, et seq., Ga. Laws 1980, Page 380, et seq., Ga. Laws 1982, page 993, et seq., and Ga. Laws 1989, page 47, et seq. (collectively, the Act ), and is authorized to issue its revenue bonds for the purpose of paying all or a part of any project (as defined in the Act) in furtherance of the public purposes for which it was created; and WHEREAS, the Issuer adopted a resolution on November 9, 2010 (the Bond Resolution ), authorizing the issuance of the hereinafter described revenue bonds for the purpose of lending the proceeds thereof to SSU Community Development I, LLC (the Borrower ), a limited liability company duly formed and existing under and by virtue of the laws of the State of Georgia, to finance the costs of the acquisition, construction (and related demolition of an existing building to provide a site for a new building), renovation, and equipping of buildings and structures to be used as student housing facilities and academic and social space, the restoration of other historic buildings on Felix Alexis Circle for residential life programming, and the acquisition of land and development of a sports and intramural complex, with appropriate road access and parking (collectively, the Project ), to be located on the campus of Savannah State University ( SSU ) in the City of Savannah, Chatham County, Georgia, a portion of which Project has been leased by the Borrower, as landlord, to the Board of Regents of the University System of Georgia (the Regents ), as tenant, pursuant to four Rental Agreements, dated as of, 2010 (the Rental Agreements ); (ii) funding capitalized interest on the bonds; (iii) funding a debt service reserve for the bonds; and (iv) paying issuance expenses for the Bonds; and WHEREAS, the Regents has leased the land on which a portion of the Project will be located (the Site ) to the Borrower pursuant to the terms of four Ground Leases between the Regents, as lessor, and the Borrower, as lessee (the Ground Leases ); and WHEREAS, in order to obtain funds to lend to the Borrower to finance all or a portion of the above described items, the Issuer will issue its revenue bonds to be designated SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY (iv) 1 DEVELOPMENT I, LLC PROJECT), SERIES 2010 in the aggregate principal amount of $36,475,000 (the Series 2010 Bonds ); and WHEREAS, to accomplish the financing as contemplated, the Issuer and the Borrower will enter into a Loan Agreement, dated as of December 1, 2010 (the Loan Agreement ), pursuant to the terms of which the Issuer will lend the proceeds of the Series 2010 Bonds to the Borrower and the Borrower will pay to the Issuer such loan repayments at such times and in such amounts as will be required to enable the Issuer to pay the principal of, premium, if any, and interest on the Series 2010 Bonds, as and when the same become due; and WHEREAS, to evidence its payment obligations under the Loan Agreement, the Borrower will execute and deliver to the Issuer a promissory note, dated the date of issuance of the Series 2010 Bonds (the Series 2010 Note ), providing for payments at such times and in such amounts as will be required to enable the Issuer to pay the principal of, premium, if any, and interest on the Series 2010 Bonds, as and when the same become due; and WHEREAS, to secure its obligations under the Loan Agreement and the Series 2010 Note and certain other obligations of the Borrower to the Issuer, the Borrower (1) will grant to the Issuer a first lien on and first security title to Borrower s leasehold interest in the Site, and will assign and pledge to the Issuer the Borrower s interest in the rents derived from the Rental Agreements, pursuant to a Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated as of December 1, 2010 (the Security Deed ), from the Borrower to the Issuer and (2) will grant to the Issuer a first priority security interest in (a) certain personal property which is included as a part of the Project, (b) certain revenues derived from the Project and (c) certain contracts to which the Borrower is a party, pursuant to a Security Agreement, dated as of December 1, 2010 (the Security Agreement ), between the Borrower and the Issuer; and WHEREAS, to secure its obligation to pay principal of, premium, if any, and interest on the Bonds (as hereinafter defined), the Issuer has agreed to (1) assign and pledge to the Trustee, and grant a first priority security interest in, all of its right, title, and interest in the Loan Agreement (except for the Unassigned Rights, as defined in the Loan Agreement), the Series 2010 Note, the Security Deed, the Security Agreement, and certain funds established and held hereunder, all pursuant to the granting clauses of this Trust Indenture and Security Agreement (hereinafter sometimes referred to as this Indenture ) and (2) endorse the Series 2010 Note without recourse or warranty to the order of the Trustee; and WHEREAS, the payment of the principal of and interest on the Series 2010 Bonds is being guaranteed pursuant to a municipal bond insurance policy issued by Assured Guaranty Municipal Corp.; and WHEREAS, the execution and delivery of this Indenture, the Loan Agreement, the Security Deed, and the Security Agreement and the endorsement without recourse of the Series 2010 Note to the order of the Trustee have been authorized by the Bond Resolution; and WHEREAS, it is anticipated that additional amounts may be necessary to improve the Project, and as a result provision should be made for the issuance of additional parity bonds of the Issuer from time to time as specified in Section 214 hereof (hereinafter sometimes referred to as the Additional Bonds and together with the Series 2010 Bonds, the Bonds ); and 2 WHEREAS, all things necessary to make the Series 2010 Bonds, when executed by the Issuer, and when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding, and legal obligations of the Issuer according to the import thereof, to constitute this Indenture a valid lien on the interests in property hereby conveyed, a valid grant of a security interest in the interests in property hereby made, and a valid assignment and pledge of the revenues and receipts hereby made to secure the payment of the principal of, premium, if any, and interest on the Series 2010 Bonds, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms have been done and performed, and the creation, execution, and delivery of this Indenture and the creation, execution, and issuance of the Series 2010 Bonds, subject to the terms hereof, have in all respects been duly authorized; NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS TRUST INDENTURE AND SECURITY AGREEMENT WITNESSETH: GRANTING CLAUSES That the Issuer, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Series 2010 Bonds and any Additional Bonds by the owners thereof, and of the sum of one dollar, lawful money of the United States of America, to it duly paid by the Trustee at or before the execution and delivery of these presents, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds according to their tenor and effect and to secure the performance and observance by the Issuer of all the covenants expressed or implied herein and in the Bonds, does hereby, subject to the terms and provisions of the Loan Agreement, grant, bargain, sell, transfer, convey, pledge, and assign, without recourse and irrevocably in trust, unto the Trustee, and unto its successors in trust, and to its assigns forever, and does hereby grant a continuing security interest in (to the extent permitted by law), for the securing of the performance of the obligations of the Issuer hereinafter set forth, the property described below (hereinafter sometimes referred collectively to as the Trust Estate ): GRANTING CLAUSE FIRST All the right, title, and interest of the Issuer in and to (1) the Loan Agreement (except for Unassigned Rights, as defined in the Loan Agreement), (2) the Series 2010 Note, (3) the Security Deed and (4) the Security Agreement, and all extensions and renewals of the term 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, provided that the assignment made by this clause shall not impair or diminish any obligation of the Issuer under the provisions of the foregoing. 3

69 GRANTING CLAUSE SECOND All the right, title, and interest of the Issuer in and to all moneys held by the Trustee under this Indenture, including the Revenue Fund, the Sinking Fund, the Project Fund, the Issuance Cost Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund and the Surplus Fund created hereunder, but excluding moneys held in the Rebate Fund. GRANTING CLAUSE THIRD All the right, title, and interest of the Issuer in and to all moneys and securities and interest earnings thereon from time to time delivered to and held by the Trustee under the terms of this Indenture, but excluding moneys, securities, and interest earning held in the Rebate Fund, and all other property rights and interests of every kind and nature and any and all other property from time to time hereafter by delivery or by writing of any kind granted, bargained, sold, alienated, demised, released, hypothecated, conveyed, pledged, assigned, or transferred as and for additional security hereunder by the Issuer or by anyone on its behalf or with its written consent to the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof. GRANTING CLAUSE FOURTH All the right, title, and interest of the Issuer in and to all proceeds (cash and noncash) of any or all of the foregoing, but excluding proceeds from amounts and securities in the Rebate Fund, including, without limiting the generality of the foregoing, all inventory, accounts, chattel paper, documents, equipment, instruments, investment property, deposit accounts, farm products, consumer goods, and general intangibles constituting proceeds acquired with cash proceeds of any or all of the foregoing. thereof by depositing with the Trustee the entire amount due or to become due thereon and if the Issuer shall well and truly keep, perform, and observe all and singular the covenants, conditions, and premises in the Bonds and in this Indenture expressed as to be kept, performed, and observed by it or on its part, and shall pay or cause to be paid to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, then these presents and the estate and rights hereby granted shall, at the option of the Issuer, cease, determine, terminate, and be void, except to the extent specifically provided pursuant to Article VII hereof, and thereupon the Trustee shall cancel and discharge the lien of this Indenture and execute and deliver to the Issuer such instruments in writing as shall be requisite to satisfy the lien hereof and reconvey to the Issuer the estate hereby conveyed and assign and deliver to the Issuer any property at the time subject to the lien of this Indenture that may then be in its possession, except amounts in the funds created hereunder required to be paid to the Borrower under Section 513 hereof and except cash held by the Trustee for the payment of interest on and retirement of the Bonds; otherwise this Indenture to be and remain in full force and effect until such time as the principal of the Bonds and the interest and premium, if any, thereon have been paid or provided for as hereinafter set out. NOW, THEREFORE, THE ISSUER AND THE TRUSTEE FURTHER AGREE, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated, and delivered and all the revenues, receipts, property, rights, and interests hereby conveyed, pledged, and assigned and that are the subject of a grant of a security interest are to be dealt with and disposed of under, upon, and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses, and purposes as herein expressed, and the Issuer has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective owners, from time to time, of the Bonds, or any part thereof, as follows: IN EACH CASE, whether now owned or hereafter acquired by the Issuer and howsoever its interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise) and whether due or to become due and whether or not earned by performance; TO HAVE AND TO HOLD all the same with all privileges and appurtenances hereby pledged, conveyed, and assigned, or agreed or intended so to be, to the Trustee and its successors in such trusts and to them and their assigns forever; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security, and protection of all present and future owners of the Bonds from time to time issued under and secured by this Indenture without privilege, priority, or distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds, except as herein otherwise expressly provided; PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly pay or cause to be paid to the owners of the Bonds the principal, interest, and premium, if any, due or to become due thereon at the times and in the manner stipulated therein and herein, according to the true intent and meaning thereof, and shall cause the payments to be made into the Sinking Fund as required hereby, or shall provide, as permitted hereby, for the payment 4 5 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions. Certain words and terms used in this Indenture shall have the meaning given them in Section 1.01 of the Loan Agreement, which by this reference is incorporated herein. In addition to the words and terms defined elsewhere herein, the following words and terms shall have the meanings set forth below. When used herein, such words and terms shall have the meanings given to them by the language employed in Section 1.01 of the Loan Agreement and in this Article I defining such words and terms, unless the context or use clearly indicates otherwise. Authorized Denomination means $5,000 or any integral multiple thereof. Beneficial Owner shall have the meaning specified in Section 213 hereof. Business Day means a day that is not (a) a Saturday, Sunday, or legal holiday on which banking institutions in the State of Georgia, the State of New York, or the state in which the Principal Office of the Trustee is located are required or authorized by law or other governmental action to close or (b) a day on which the New York Stock Exchange is closed. Closing Date means the date of the initial issuance and delivery of any series of Bonds. Defaulted Interest means any interest on any Bond that is due and payable, but which is not punctually paid or duly provided for on any Interest Payment Date. DTC means The Depository Trust Company, New York, New York or its nominee, or its successors and assigns, or any other depository performing similar functions under this Indenture. Event of Default means the events specified in Section 801 of this Indenture. Interest Payment Date means each June 15 and December 15, commencing June 15, 2011, in the case of Series 2010 Bonds, and the dates on which interest is scheduled to be paid, in the case of Additional Bonds. Joint Written Request means a Written Request of the Issuer and the Borrower. Letter of Representations means the Blanket Issuer Letter of Representations, dated August 27, 1997, between the Issuer and DTC. Principal Office means, when used with respect to the Trustee, the corporate trust office of the Trustee located in Atlanta, Georgia, and if the Trustee has more than one corporate trust office in Atlanta, Georgia, the principal office means the office that shall be the principal office for purposes hereof shall be designated by the Trustee in a written notice given to the Issuer, to Issuer s bond counsel, to the Borrower and its counsel, to the Bond Insurer and, if the Bonds are then registered to Cede & Co., to DTC. Record Date means the 1 st day of each month in which an Interest Payment Date occurs (whether or not a Business Day). Series 2010 Purchase Agreement means the bond purchase agreement, dated December, 2010, among the Underwriter, the Borrower, and the Issuer, providing for the purchase of the Series 2010 Bonds. Special Record Date means the date fixed by the Trustee for the payment of any Defaulted Interest pursuant to Section 202 of this Indenture. Written Request means with reference to the Issuer, a request in writing signed by the Authorized Issuer Representative, and with reference to the Borrower, a request in writing signed by the Authorized Borrower Representative. Section 102. Construction of Certain Terms. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction shall apply: (1) The use of the masculine, feminine, or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine, or neuter gender, as appropriate. (2) All references in this instrument to designated Articles, Sections, and other subdivisions are to the designated Articles, Sections, and other subdivisions of this instrument. The words herein, hereof, hereto, hereby, and hereunder and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, or other subdivision. (3) The terms defined in this Article include the plural as well as the singular. (4) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP. Section 103. Table of Contents; Titles and Headings. The table of contents, the titles of the articles, and the headings of the sections of this Indenture are solely for convenience of reference, are not a part of this Indenture, and shall not be deemed to affect the meaning, construction, or effect of any of its provisions. Section 104. Contents of Bonds or Opinions. Every certificate or opinion with respect to the compliance with a condition or covenant provided for in this Indenture and that is precedent to the taking of any action by the Trustee under this Indenture shall include (i) a statement that the person or persons making or giving such certificate or opinion have read such covenant or condition herein and the definitions herein relating thereto, (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based, (iii) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or 6 7

70 condition has been complied with, and (iv) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with. Any such certificate or opinion made or given by an officer of the Issuer or the Borrower may be based, insofar as it relates to legal or accounting matters, upon a certificate or an opinion of counsel or an accountant, which certificate or opinion has been given only after due inquiry of the relevant facts and circumstances, unless such officer knows that the certificate or opinion with respect to the matters upon which his certificate or opinion may be based is erroneous or in the exercise of reasonable care should have known that the same was erroneous. Any such certificate or opinion made or given by counsel or an accountant may be based (insofar as it relates to factual matters with respect to information that is in the possession of an officer of the Issuer or the Borrower or any third party) upon the certificate or opinion of or representations by an officer of the Issuer or the Borrower or any third party on whom counsel or an accountant could reasonably rely, unless such counsel or such accountant knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion may be based as aforesaid are erroneous or in the exercise of reasonable care should have known that the same were erroneous. The same officer of the Issuer or the Borrower or the same counsel or accountant, as the case may be, need not certify to or render an opinion as to all of the matters required to be certified or covered by an opinion under any provision of this Indenture, but different officers, counsel, or accountants may certify to or render an opinion as to different matters, respectively. [END OF ARTICLE I] ARTICLE II THE BONDS Section 201. Authorized Amount of Bonds. No Bonds may be issued under the provisions of this Indenture except in accordance with this Article. The total aggregate principal amount of Series 2010 Bonds that may be issued and outstanding hereunder is expressly limited to $36,475,000; provided, however, that Additional Bonds may be issued as provided in Section 214 hereof. Section 202. Number and Payment Provisions. The Bonds shall be issuable only as fully registered Bonds, without coupons, in any Authorized Denomination. Unless the Issuer shall otherwise direct in writing, the Bonds of each series shall be lettered R and shall be numbered consecutively from 1 upward. Each Bond authenticated prior to the first Interest Payment Date thereon shall bear interest from its dated date. Each Bond authenticated on or after the first Interest Payment Date thereon shall bear interest from the Interest Payment Date thereon next preceding the date of authentication thereof, unless such date of authentication shall be an Interest Payment Date to which interest on such Bond has been paid in full or duly provided for, in which case from such date of authentication; provided that if, as shown by the records of the Trustee, interest on such Bond shall be in default, such Bond shall bear interest from the date to which interest has been paid in full on such Bond or, if no interest has been paid on such Bond, its dated date. Each Bond shall bear interest on overdue principal and, to the extent permitted by law, on overdue premium, if any, and interest at the rate borne by such Bond. The principal of, premium, if any, and interest on the Bonds shall be payable in any coin or currency of the United States of America that, at the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal of and premium, if any, on any Bonds shall be payable to the Holder at the Principal Office of the Trustee, upon presentation and surrender of such Bond. Payment of the interest on each Bond shall be made by the Trustee on each Interest Payment Date to the person appearing as the registered owner thereof as of the close of business on the Record Date preceding the Interest Payment Date by check mailed to such registered owner at its address as it appears on the registration books maintained by the Trustee, or at such other address as is furnished in writing by such registered owner to the Trustee, notwithstanding the cancellation of any such Bonds upon any exchange or transfer thereof subsequent to the Record Date and prior to such Interest Payment Date. Notwithstanding anything provided above, payment of interest on the Bonds may, at the option of the owner of such Bonds in an aggregate principal amount of at least $1,000,000, be transmitted by wire transfer of immediately available funds to such owner to the bank account number on file with the Trustee, as of the relevant Record Date. Defaulted Interest with respect to any Bond shall cease to be payable to the owner of such Bond on the relevant Record Date and shall be payable to the registered owner of such Bond at the close of business of the Trustee on the Special Record Date for the payment of such 8 9 Defaulted Interest, which shall be fixed in the following manner. The Borrower shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be such as will enable the Trustee to comply with the next sentence hereof), and at the same time the Borrower shall deposit, on behalf of the Issuer, with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Holders entitled to such Defaulted Interest as provided in this Section. Following receipt of such funds, the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall be not more than fifteen nor less than ten days prior to the date of the proposed payment. The Trustee shall promptly notify the Issuer of such Special Record Date and, in the name of the Issuer and at the expense of the Borrower, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each registered owner of a Bond at the address of such owner as it appears on the registration books not less than ten days prior to such Special Record Date. Such Defaulted Interest shall be paid to the owners in whose names the Bonds on which such Defaulted Interest is to be paid are registered on such Special Record Date. Section 203. Execution. The Bonds shall be executed on behalf of the Issuer by its President or Chairman with his manual or facsimile signature and shall be attested by the manual or facsimile signature of its Secretary or Assistant Secretary, and the official seal of the Issuer shall be impressed or reproduced thereon. All such facsimile signatures shall have the same force and effect as if such officers had manually signed each of the Bonds. The reproduction of the official seal of the Issuer on the Bonds shall have the same force and effect as if the official seal of the Issuer had been impressed on the Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Bonds shall cease to be such officer after the execution but before the delivery of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, and the Bonds may be issued and delivered as if such officer had remained in office until delivery. Section 204. Authentication. Only such Bonds as shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A attached hereto and duly executed by the Trustee shall be entitled to any right, security, or benefit under this Indenture. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Trustee, and such executed certificate upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Indenture and that the owner thereof is entitled to the benefits of the trust hereby created. The certificate of authentication on any Bond shall be deemed to have been duly executed by the Trustee if (a) signed by an authorized officer, agent, or signatory of the Trustee, but it shall not be necessary that the same officer, agent, or signatory sign the certificate of authentication on all of the Bonds or on all of the Bonds of any series issued hereunder, and (b) the date of registration and authentication of the Bond is inserted in the place provided therefor on the certificate of authentication. Section 205. Form of Series 2010 Bonds; Validation Certificate. The Series 2010 Bonds shall be substantially in the form set forth in Exhibit A attached hereto with such variations, insertions, or omissions as are appropriate and not inconsistent herewith and shall 10 conform generally to the rules and regulations of any governmental authority or usage or requirement of law with respect thereto. A validation certificate of the Clerk of the Superior Court of Chatham County, Georgia, substantially in the form set forth in Exhibit A attached hereto, executed with the manual or facsimile signature of such Clerk, will be endorsed on each Bond and will be essential to its validity. Section 206. Mutilated, Lost, Stolen, or Destroyed Bonds. In the event any Bond is mutilated, lost, stolen, or destroyed, the Issuer shall execute and the Trustee shall authenticate and deliver a new Bond of like series, date, number, interest rate, maturity, and denomination as that mutilated, lost, stolen, or destroyed Bond; provided, that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Trustee, and in the case of any lost, stolen, or destroyed Bond, there shall be first furnished to the Issuer and the Trustee evidence of such loss, theft, or destruction satisfactory to the Issuer and the Trustee, together with indemnity satisfactory to them. In the event any such Bond shall have matured, or shall be about to mature or have been called for redemption, instead of issuing a duplicate Bond the Issuer may pay the same without surrender thereof, making such requirements as it deems fit for its protection, including a lost instrument bond. The Issuer and the Trustee may charge the owner of such Bond with their reasonable fees and expenses (including attorneys fees costs and expenses) in connection with actions taken under this Section and may require the owner of such Bond to pay any tax, fee, or other governmental charge that may be imposed in relation thereto as conditions precedent to the issuance of any replacement Bond. The Issuer shall cooperate with the Trustee in connection with the issuance of replacement Bonds, but nothing in this Section shall be construed in derogation of any rights that the Issuer or the Trustee may have to receive indemnification against liability, or payment or reimbursement of expenses, in connection with the issuance of a replacement Bond. Every substituted Bond issued pursuant to this Section shall constitute an original additional contractual obligation of the Issuer, whether or not the Bond alleged to have been mutilated, destroyed, lost, or stolen shall be at any time enforceable by anyone, and shall be entitled to all the rights and benefits of this Indenture equally and proportionately with any and all other Bonds Outstanding duly issued hereunder. All Bonds shall be held and owned upon the express condition that the foregoing provisions are, to the extent permitted by law, exclusive with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Bonds, and shall preclude any and all other rights or remedies. Section 207. Cancellation and Destruction of Surrendered Bonds. Whenever any Outstanding Bond shall be delivered to the Trustee for cancellation pursuant to this Indenture, upon payment of the principal amount represented thereby, or for replacement pursuant to Section 206 hereof or transfer or exchange pursuant to Section 208 hereof, such Bond shall be promptly cancelled and shall be cremated or otherwise destroyed by the Trustee. Section 208. Registration, Transfer, and Exchange. The Bonds shall be and shall have all the qualities and incidents of negotiable instruments under the laws of the State, and the Holders, in accepting any of the Bonds, shall be conclusively deemed to have agreed that the Bonds shall be and have all of such qualities and incidents of negotiable instruments. 11

71 The Issuer shall cause books for the registration of ownership of the Bonds and for the registration of transfer of the Bonds as provided in this Indenture to be kept by the Trustee, which is hereby constituted and appointed the Issuer s Bond registrar and agent for the transfer and exchange of the Bonds and as such shall maintain the books of the Issuer for the registration of ownership of each Bond as provided in this Indenture. The Trustee, for and on behalf of the Issuer, shall keep the Bond registration record, in which shall be recorded any and all transfers of ownership of Bonds. No Bonds shall be registered to bearer. The Issuer covenants that the registration records kept by the Trustee shall at all times comply with any requirements of Section 149(a) of the Code and any regulations from time to time promulgated thereunder as may be applicable to such registration records. At reasonable times and under reasonable regulations established by the Trustee (in its capacity as registrar), such registration books may be inspected and copied by the Issuer, the Borrower, or the Beneficial Owners (or a designated representative thereof) of 15% or more in aggregate principal amount of the Bonds then unpaid. Any Bond may be transferred upon the registration books upon surrender thereof at the Principal Office of the Trustee by the Holder in person or by his 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 duly executed by the Holder or his attorney-in-fact or legal representative duly authorized in writing and upon payment by such Holder of a sum sufficient to cover any governmental tax, fee, or charge required to be paid as provided in this Indenture. Upon any such registration of transfer, the Issuer shall cause to be executed and the Trustee shall authenticate and deliver in the name of the transferee a new fully registered Bond of Authorized Denominations and of the same series, maturity and interest rate and in the same aggregate principal amount, and the Trustee shall enter the transfer of ownership in the registration books. No transfer of any Bond shall be effective until entered on the registration books. Any Bond, upon surrender thereof at the Principal Office of the Trustee with a written instrument of transfer in form and with guarantee of signature satisfactory to the Trustee, duly executed by the Holder or his attorney-in-fact or legal representative duly authorized in writing, may be exchanged, at the option of the Holder, and upon payment by such Holder of a sum sufficient to cover any governmental tax, fee, or charge required to be paid as provided in this Indenture, when not prohibited by law, for an equal aggregate principal amount of a Bond of the same series, interest rate, and maturity and of any other Authorized Denominations and registered in the name of the same Holder. The Issuer shall cause to be executed and the Trustee shall authenticate and deliver the Bond that the Holder making the exchange is entitled to receive, bearing a number not then outstanding, and the Trustee, as certificate registrar, shall enter the exchange in the registration books. Except as provided herein with respect to exchanges for certain temporary Bonds, the cost of printing, lithographing, and engraving of all Bonds shall be deemed to be an Ordinary Expense of the Trustee, and there shall be no charge to any Holder for the registration, exchange, or transfer of Bonds, although in each case the Trustee may require the payment by the Holder requesting exchange or transfer of any tax, fee, or other governmental charge required to be paid with respect thereto and may require that such amount be paid before any such new Bond shall be delivered. The Issuer, the Trustee, and the Borrower may deem and treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving any payment on such Bond and for all other purposes of this Indenture and the other Bond Documents, whether such Bond shall be overdue or not, and the Issuer, the Trustee, and the Borrower shall not be affected by any notice or knowledge to the contrary. Payment of, or on account of, the principal of and interest and redemption premium, if any, on any Bond shall be made to or upon the written order of such registered owner or his attorney-in-fact or legal representative duly authorized in writing. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. The execution and attestation by the President or Chairman and Secretary or Assistant Secretary of the Issuer of any Bond of any Authorized Denomination shall constitute full and due authorization of such denomination, and the Trustee shall thereby be authorized to authenticate and deliver such Bond. New Bonds delivered upon any transfer or exchange shall be valid limited obligations of the Issuer, evidencing the same obligation as the Bonds surrendered, shall be secured by this Indenture, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The Trustee shall not be required to transfer or exchange any Bond (a) after the notice calling such Bond for redemption has been given as herein provided, (b) during a period beginning at the opening of business on the 15 th day (whether or not a Business Day) next preceding any date of selection of Bonds to be redeemed and ending at the close of business on the day on which the applicable notice of redemption is given, or (c) until the certificate of validation on such Bond shall have been properly executed by the Clerk of the Superior Court of Chatham County, Georgia. The inclusion of the foregoing provisions shall constitute (i) a continuing request from the Issuer to the Clerk of the Superior Court of Chatham County, Georgia to execute the certificate of validation on any replacement Bonds issued, and (ii) the appointment of the Trustee as agent of the Issuer to do any and all things necessary to effect any exchange or transfer. Section 209. Temporary Bonds. Until Bonds in definitive form of any series are ready for delivery, or by agreement with the purchasers of all Bonds of any series, the Issuer may execute, and upon its request in writing, the Trustee shall authenticate and deliver in lieu of definitive Bonds, subject to the provisions, limitations, and conditions set forth above, one or more printed, lithographed, typewritten, or otherwise produced Bonds in temporary form, substantially of the tenor of the Bonds in this Article II described, with appropriate omissions, variations, and insertions as may be required and in Authorized Denominations. Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the same security, lien, and benefit of this Indenture and shall have the same rights, remedies, and security hereunder as definitive Bonds to be issued and authenticated hereunder. The Issuer shall, without unreasonable delay, prepare, execute, and deliver definitive Bonds to the Trustee, and thereupon, upon the presentation and surrender of the Bond or Bonds in temporary form to the Trustee at its Principal Office, the Trustee shall cancel the same and authenticate and deliver, in exchange therefor, a Bond or Bonds of the same series, maturity, and interest rate, in definitive form in Authorized Denominations, and for the same aggregate principal amount as the Bond or Bonds in temporary form surrendered. Such exchange shall be made without making any charge therefor to any Holder. Notwithstanding the foregoing, Bonds in definitive form may be issued hereunder in typewritten form. Section 210. Limited Obligations. The Bonds shall be the special, limited obligations of the Issuer payable solely from the Trust Estate and the Issuer shall not be subject to any pecuniary liability thereon. The Bonds shall not constitute a general obligation of the Issuer, the City of Savannah, Georgia or Chatham County, Georgia, nor a debt, indebtedness, or obligation of, or a pledge of the faith and credit or taxing power of the City of Savannah, Georgia, Chatham County, Georgia, or the State or any political subdivision thereof, within the meaning of any constitutional or statutory provision whatsoever. Neither the faith and credit nor the taxing power of the City of Savannah, Georgia, Chatham County, Georgia, or the State or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Bonds or other costs incident thereto. No Holder of any Bond shall ever have the right to compel any exercise of the taxing power of the City of Savannah, Georgia or Chatham County, Georgia, nor to enforce payment thereof against any property of the City of Savannah, Georgia, Chatham County, Georgia, or of the Issuer other than the Trust Estate. The Bonds do no constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City of Savannah, Georgia or Chatham County, Georgia, or of the Issuer other than the Trust Estate. The Issuer has no taxing power. Neither the members of the Issuer nor any person executing the Bonds shall be liable personally on the Bonds by reason of the issuance thereof. Section 211. Issuance of Series 2010 Bonds. (a) The Series 2010 Bonds shall be designated SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT), SERIES The Series 2010 Bonds shall be dated as of their date of issuance. The Series 2010 Bonds shall bear interest at the rates per annum set forth below, computed on the basis of a 360- day year consisting of twelve 30-day months, payable on June 15, 2011 and December 15, 2011 and semiannually thereafter on June 15 and December 15 and of each year and shall mature on June 15, in the years and in the amounts as follows (subject to mandatory redemption as set forth in Section 302 of this Indenture), unless earlier called for redemption: June 15 of the Year Principal Amount Interest Rate June 15 of The Year Principal Amount Interest Rate 2013 $630, % 2022 $875, % 2014 $560, % 2023 $920, % 2015 $650, % 2024 $970, % 2016 $690, % 2025 $1,015, % 2017 $720, % 2026 $1,070, % 2018 $745, % 2027 $1,125, % 2019 $780, % 2028 $1,180, % 2020 $810, % 2035 $10,315, % 2021 $840, % 2041 $12,580, % Section 212. Delivery of Series 2010 Bonds. Upon the execution and delivery of this Indenture, the Issuer shall execute and deliver to the Trustee and the Trustee shall register and authenticate the Series 2010 Bonds in the aggregate principal amount of $36,475,000, and the Trustee shall deliver them as directed by the Issuer as provided in this Section. Prior to the delivery by the Trustee of any of the Series 2010 Bonds, there shall be filed with the Trustee: (a) (b) (c) (d) original executed counterparts of this Indenture, the Loan Agreement, the Security Deed, and the Security Agreement and the duly executed original Series 2010 Note, the items, including the opinion of Bond Counsel required to be furnished to the Underwriter pursuant to the Series 2010 Purchase Agreement prior to the delivery of the Series 2010 Bonds, a request and authorization to the Trustee on behalf of the Issuer, signed by the President or Chairman of the Issuer, to authenticate and deliver the Series 2010 Bonds to the purchasers therein identified upon payment to the Trustee, but for the account of the Issuer, of the purchase price therein specified, a certified copy of an order of the Superior Court of Chatham County, Georgia validating and confirming the Series 2010 Bonds and the security therefor, (e) such other documents, certificates, and instruments in connection with the transactions contemplated by this Indenture, in form and substance satisfactory to the Trustee, as the Trustee may reasonably request, and (f) a copy of the Financial Guaranty Insurance Policy issued by the Bond Insurer. Upon receipt of the foregoing and of the purchase price for the Series 2010 Bonds, the Trustee shall authenticate and register and deliver the Series 2010 Bonds to or upon the order of the purchasers thereof. Upon payment of the proceeds of the Series 2010 Bonds to the Trustee, the Trustee shall deposit the proceeds pursuant to Article V hereof. Section 213. DTC Book-Entry. (f) The Issuer hereby provides that Series 2010 Bonds may be issued in book-entry form. Notwithstanding any inconsistent provision in this Indenture to the contrary, the provisions of this Section 213 shall govern at any time that the Series 2010 Bonds are issued in book-entry form. (g) Series 2010 Bonds issued in book-entry form shall be issued in the form of one fully-registered immobilized bond for each maturity of Series 2010 Bonds Outstanding which bonds, taken together, will represent the total aggregate principal amount of the Series 2010 Bonds, which Series 2010 Bonds (except as provided in paragraph (i) below) shall be registered in the name of Cede & Co., as nominee of DTC; provided, that if DTC shall request that the Series 2010 Bonds be registered in the name of a different nominee, the paying agent shall 14 15

72 exchange all or any portion of the Series 2010 Bonds for an equal aggregate principal amount of Series 2010 Bonds registered in the name of such other nominee or nominees of DTC. The actual purchasers of the Series 2010 Bonds (the Beneficial Owners ) will not receive physical delivery of Series 2010 Bonds except as provided herein. No person other than DTC or its nominee shall be entitled to receive from the Issuer, the Trustee or the paying agent a Series 2010 Bond or any other evidence of ownership of the Series 2010 Bonds, or any right to receive any payment in respect thereof, unless DTC or its nominee shall transfer record ownership of all or any portion of the Series 2010 Bonds on the Series 2010 Bond registration books to be maintained by the Trustee, in connection with discontinuing the book-entry system as provided in paragraph (i) below or otherwise. (h) So long as the Series 2010 Bonds or any portion thereof are registered in the name of DTC or any nominee thereof, all payments of the principal, redemption price of or interest on such Series 2010 Bonds shall be made to DTC or its nominee in immediately available funds on the dates provided for such payments under this Indenture and at such times as provided in a letter of representations to be entered into among the Issuer, the Trustee and DTC or in the Letter of Representation. Each such payment to DTC or its nominee shall be valid and effective to fully discharge all liability of the Issuer, the Trustee, or the paying agent with respect to the principal, redemption price or of interest on the Series 2010 Bonds to the extent of the sum or sums so paid. In the event of the redemption of less than all of the Series 2010 Bonds Outstanding of any maturity, the Trustee shall not require surrender by DTC or its nominee of the Series 2010 Bonds so redeemed, but DTC or its nominee may retain such Series 2010 Bonds and make an appropriate notation thereon as to the amount of such partial redemption; provided, that DTC shall deliver to the Trustee, upon request, a written confirmation of such partial redemption and thereafter the records maintained by the Trustee shall be conclusive as to the amount of the Series 2010 Bonds of such maturity which have been redeemed. (i) All transfers of beneficial ownership interests in such Series 2010 Bonds issued in book-entry form shall be effected by procedures by DTC with its participants for recording and transferring the ownership of beneficial interests in each such series of Series 2010 Bonds. (j) The Issuer, the Trustee and the paying agent may treat DTC (or its nominee) as the sole and exclusive Holder of the Series 2010 Bonds registered in its name for the purposes of payment of the principal, premium, if any, or interest on the Series 2010 Bonds, selecting the Series 2010 Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Holders under this Indenture, registering the transfer of Series 2010 Bonds, obtaining any consent or other action to be taken by Holders and for all other purposes whatsoever; and the Issuer, the Trustee and the paying agent shall not be affected by any notice to the contrary. The Issuer, the Trustee and the paying agent shall not have any responsibility or obligation to any participant in DTC, any person claiming a beneficial ownership interest in the Series 2010 Bonds under or through DTC or any such participant, or any other person which is not shown on the Series 2010 Bond registration books as being a Holder, with respect to: (i) the Series 2010 Bonds, or (ii) the accuracy of any records maintained by DTC or any such participant; or (iii) the payment by DTC or any such participant of any amount in respect of the principal, redemption price of or interest on the Series 2010 Bonds; or (iv) any notice that is permitted or required to be given to Holders under this Indenture; or (v) the selection by DTC or any such participant of any person to receive payment in the event of a partial redemption of the Series 2010 Bonds; or (vi) any consent given or other action taken by DTC as Holder. (k) So long as the Series 2010 Bonds or any portion thereof are registered in the name of DTC or any nominee thereof, all notices required or permitted to be given to the Holders under this Indenture shall be given to DTC as provided in the Letter of Representations, in form and content satisfactory to DTC, the Issuer and the Trustee. (l) In connection with any notice or other communication to be provided to Holders pursuant to this Indenture by the Issuer, the Trustee or the paying agent with respect to any consent or other action to be taken by Holders, DTC shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the Issuer, the Trustee or the paying agent shall give DTC notice of any special record date not less than 15 calendar days in advance of such special record date to the extent possible. (m) Any successor Trustee, in its written acceptance of its duties under this Indenture, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (n) The book-entry system for registration of the ownership of the Series 2010 Bonds in book-entry form may be discontinued at any time if: (i) after written notice to the Issuer, the Trustee and the paying agent, DTC determines to resign as securities depository for the Series 2010 Bonds; or (ii) after notice to DTC, the Trustee and the paying agent, the Issuer determines that a continuation of the system of book-entry transfers through DTC (or through a successor securities depository) is not in the best interests of the Issuer; or (iii) after notice to the Issuer, the Trustee and the paying agent, DTC determines that the current system of book-entry transfers through DTC does not permit DTC to act as a securities depository for the Series 2010 Bonds. In each of such events (unless, in the cases described in clause (i) or (iii) above, the Borrower appoints a successor securities depository), the Series 2010 Bonds shall be delivered in registered certificate form to such persons, and by series in such maturities and principal amounts, as may be designated by DTC, but without any liability on the part of the Issuer, the Trustee or the paying agent for the accuracy of such designation. Whenever DTC requests the Issuer and the Trustee to do so, the Issuer and the Trustee shall cooperate with DTC in taking appropriate action after reasonable notice to arrange for another securities depository to maintain custody of certificates evidencing the Series 2010 Bonds. (o) The Issuer hereafter may amend this Indenture or enter into one or more amendments or supplements hereto without notice to or consent of the Holders of any of the Series 2010 Bonds in order (i) to offer to the beneficial owners of the Series 2010 Bonds the option of receiving any Series 2010 Bonds in certificated form or (ii) to require the execution and delivery of certificated Series 2010 Bonds representing a portion or all of the Series 2010 Bonds, (A) if DTC shall cease to serve as depository and no successor depository can be found to serve upon terms satisfactory to the Issuer, or (B) if the Issuer determines that it would be in their best interest or in the best interests of the beneficial owners of the Series 2010 Bonds that they obtain certificated Series 2010 Bonds; provided, that any such amendment or supplement is in form reasonably satisfactory to the Trustee Section 214. Issuance of Additional Bonds. So long as no Event of Default hereunder is then existing, the Issuer at the request of the Borrower for the purposes and in the manner specified in Section 9.05 of the Loan Agreement and to the extent permitted by law in effect at the time thereof may in its sole discretion issue Additional Bonds on a parity with the Series 2010 Bonds and any Additional Bonds theretofore or thereafter issued and payable from the Sinking Fund from time to time. Before any Additional Bonds are registered and authenticated, there shall be delivered to the Trustee the items required therefor by Section 215 hereof. 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 deposited with the Trustee for authentication and delivery. Section 215. Delivery of Additional Bonds. Upon the execution and delivery in each instance of an appropriate indenture supplemental hereto, the Issuer shall execute and deliver to the Trustee, and the Trustee shall register and authenticate Additional Bonds and deliver them to the purchaser or purchasers as may be directed by the Issuer, as hereinafter in this Section 215 provided. Prior to the delivery by the Trustee of any such Additional Bonds, there shall be filed with the Trustee and the Bond Insurer: (p) a valid and effective amendment to the Loan Agreement, pursuant to Section 9.05 thereof, providing for the inclusion within the Project, as defined in the Loan Agreement, of any real estate and interests therein and any buildings, structures, facilities, machinery, equipment, and related property to be acquired by purchase or construction from the proceeds of the Additional Bonds and providing for an increase in the loan repayment obligations of the Borrower in accordance with Section 9.05 of the Loan Agreement, which shall be evidenced by an Additional Note, and providing any other changes required by the issuance of Additional Bonds; (q) a valid and effective amendment to the Security Deed subjecting to the lien of the Security Deed any and all real estate and interests therein and any buildings, structures, facilities, and related property acquired by purchase or construction from the proceeds of such Additional Bonds and assigning and pledging to the Issuer the Borrower s interest in the leases, rents, issues, profits, revenues, income, receipts, moneys, royalties, rights, and benefits thereof and therefrom; (t) (u) (v) (w) (x) (j) the items, including the opinion of Bond Counsel, required to be furnished to the Underwriter pursuant to the purchase agreement for such Additional Bonds before the delivery of such Additional Bonds; a request and authorization to the Trustee on behalf of the Issuer, signed by the President or Chairman of the Issuer, to authenticate and deliver such Additional Bonds to the purchasers therein identified upon payment to the Trustee, but for the account of the Issuer, of the purchase price therein specified; an Officer s Certificate to the effect that no Event of Default under this Indenture or the Loan Agreement is then existing or will result from the issuance of such Additional Bonds; the items required by Section 9.05 of the Loan Agreement; a certified copy of an order of the Superior Court of Chatham County, Georgia validating and confirming such Additional Bonds and the security therefor; the written consent of the Bond Insurer (which may be withheld in the sole discretion of the Bond Insurer) to the issuance of such Additional Bonds; and (y) such other documents, certificates, and instruments in connection with the transactions contemplated by this Indenture, in form and substance satisfactory to the Trustee, as the Trustee may reasonably request. Upon receipt of the foregoing and of the purchase price for such Additional Bonds, the Trustee shall authenticate and register and deliver such Additional Bonds to or upon the order of the purchasers thereof. Upon payment of the proceeds of such Additional Bonds to the Trustee, the Trustee shall deposit the proceeds pursuant to the supplemental indenture required by paragraph (d) above. [END OF ARTICLE II] (r) (s) a valid and effective amendment to the Security Agreement, granting a security interest in the machinery, equipment, and related property acquired by purchase or construction from the proceeds of such Additional Bonds; a valid and effective supplemental indenture providing for the issuance of such new series of Additional Bonds and subjecting to the lien and security interest of this Indenture and pledging and assigning the additional loan repayments provided for in the amendment to the Loan Agreement, the Additional Note evidencing such loan repayments, and the amendments to the Loan Agreement, the Security Deed, and the Security Agreement, to the payment of the Bonds; 18 19

73 ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Optional Redemption of Series 2010 Bonds. Any Series 2010 Bonds maturing on and after June 15, 2021, shall be subject to optional redemption prior to maturity by the Issuer upon the written request of the Borrower pursuant to the Loan Agreement, from moneys on deposit in the Redemption Account, in whole or in part on any Business Day (in such order of maturities as may be specified by the Borrower and, if in part, in an Authorized Denomination) on or after June 15, 2020, at the redemption price of 100% of the principal amount of Series 2010 Bonds called for redemption plus accrued interest to the redemption date. Section 302. Mandatory Sinking Fund Redemption of Series 2010 Bonds. The Series 2010 Bonds are subject to mandatory redemption prior to maturity, in part by lot, in such manner as may be designated by the Trustee, on the following dates and in the following principal amounts at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date, (the amounts on June 15, 2035 and June 15, 2041 to be paid at maturity rather than redeemed): Series 2010 Bonds Maturing June 15, 2035 June 15 Principal June 15 Principal of the Year Amount of the Year Amount $1,250,000 $1,320,000 $1,385, $1,465, $1,545,000 $1,630,000 $1,720,000 Series 2010 Bonds Maturing June 15, 2041 June 15 Principal June 15 Principal of the Year Amount of the Year Amount $1,815,000 $1,915,000 $2,030, $2,145,000 $2,270,000 $2,405,000 Section 303. Extraordinary Redemption of Bonds. The Bonds are subject to extraordinary redemption prior to maturity (a) in the event of damage to or destruction of the Project or any part thereof or condemnation of or failure of title to the Project or any part thereof, to the same extent that the Loans are prepaid pursuant to Section of the Loan Agreement or (b) in the event that moneys are deposited in the Redemption Account pursuant to Sections 7.02, 8.01, 8.02, 11.01, 11.02, and of the Loan Agreement and Section 509(j) of this Indenture, to the extent of such moneys deposited in the Redemption Account. If called for redemption in any such event, the Bonds shall be subject to redemption by the Issuer in whole or in part (and if in part, in an Authorized Denomination) on any Business Day, ratably (to the extent practicable) among series, less than all of a single maturity to be selected by lot in such manner as may be determined by the Trustee, at the principal amount thereof plus accrued interest thereon to the redemption date and without premium. Section 304. General Provisions Regarding Optional, Extraordinary, and Mandatory Sinking Fund Redemptions. (a) No redemption of less than all of the Bonds Outstanding of any series shall be made unless the aggregate principal amount of Bonds of such series to be redeemed is equal to $5,000 or integral multiples thereof. (b) Bonds may be called for optional redemption or extraordinary optional redemption by the Trustee upon receipt by the Trustee at least 40 days prior to the redemption date of a Joint Written Request requesting such redemption. Each such Joint Written Request shall specify the principal amount of the Bonds of each series so to be called for redemption, the applicable redemption price or prices, and the provision or provisions specified in this Article III pursuant to which such Bonds are to be called for redemption. (c) No notice from the Issuer or the Borrower is required in order to redeem Bonds pursuant to a mandatory sinking fund redemption. (d) In lieu of redeeming Bonds pursuant to Article III hereof, the Trustee shall, at the written direction of the Issuer upon the written request of the Borrower pursuant to the Loan Agreement, use such funds otherwise available hereunder for redemption of Bonds to purchase Bonds of the same series in the open market on the redemption date then applicable hereunder at a price not exceeding the redemption price then applicable hereunder. Any Bonds so purchased in lieu of redemption shall be delivered to the Trustee for cancellation and shall be cancelled, all as provided in Section 207 hereof. It is understood that in the case of any optional or extraordinary redemption or purchase and cancellation of Bonds, the Issuer shall receive credit against its mandatory sinking fund redemption obligation with respect to the Bonds of the series and maturity redeemed or purchased in such order as the Borrower shall designate prior to the redemption or purchase and cancellation or, if no such election is made prior to such redemption or purchase and cancellation, in the inverse order thereof; provided, however, that following such reduction each such mandatory sinking fund redemption payment is made in an Authorized Denomination. Section 305. Notice of Redemption. (a) A copy of the notice of the call for any redemption identifying the Bonds to be redeemed shall be given by first class mail, postage prepaid, not less than 30 days and not more than 60 days prior to the date fixed for redemption, to the registered owners of Bonds to be redeemed at their addresses as shown on the registration books. Such notice shall specify the redemption date, the redemption price, the place and manner of payment, and that from the redemption date interest will cease to accrue on the Bonds that are the subject of such notice and shall include such other information as the Trustee shall deem appropriate or necessary at the time such notice is given to comply with any applicable law, regulation, or industry standard. A copy of any notice of redemption shall be sent to the Bond Insurer. (b) Failure to give notice in the manner prescribed hereunder with respect to any Bond, or any defect in such notice, shall not affect the validity of the proceedings for redemption for any Bond with respect to which notice was properly given. Upon the happening of the above 21 conditions and if sufficient moneys are on deposit with the Trustee on the applicable redemption date to redeem the Bonds to be redeemed and to pay interest due thereon and premium, if any, the Bonds thus called shall not after the applicable redemption date bear interest, be protected by this Indenture, or be deemed to be Outstanding under the provisions of this Indenture, whether or not such Bonds are presented and surrendered for payment on such date. (c) If any Bond is transferred or exchanged on the registration books maintained by the Trustee after notice has been given calling such Bond for redemption, the Trustee will attach a copy of such notice to the Bond issued in connection with such transfer or exchange. Section 306. No Partial Redemption After Default. Anything in this Indenture to the contrary notwithstanding, if there shall have occurred and be continuing an Event of Default of which the Trustee has notice as set forth in Section 901(h) hereof, there shall be no redemption of less than all of the Bonds at the time Outstanding. Section 307. Partial Redemption. If less than all of the Bonds of any series shall be called for redemption under any provision of this Indenture permitting such partial redemption, the particular Bonds or portions thereof to be redeemed shall be selected by the Trustee, in the principal amount designated to the Trustee by the Borrower or otherwise as required by this Indenture; provided, however, that (i) in the case of the redemption of less than all Bonds of the same maturities of any series, such redemption shall be by lot in such manner as the Trustee may determine among such Bonds, and (ii) subject to other applicable provisions of this Indenture, the portion of any Bond to be redeemed shall be in a principal amount equal to an Authorized Denomination. In selecting Bonds for redemption, the Trustee shall treat each Bond as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by the minimum Authorized Denomination. If it is determined that one or more, but not all, of the integral multiples of the Authorized Denomination of principal amount represented by any Bond is to be called for redemption, then, upon notice of intention to redeem such integral multiple of an Authorized Denomination, the owner of such Bond shall forthwith surrender such Bond to the Trustee for (a) payment to such owner of the redemption price of the integral multiple of the Authorized Denomination of principal amount called for redemption and (b) delivery to such owner of a new Bond or Bonds of the same series and maturity in the aggregate principal amount of the unredeemed balance of the principal amount of such Bond. New Bonds representing the unredeemed balance of the principal amount of such Bond shall be issued to the registered owner thereof without charge therefor. Section 308. Cancellation. All Bonds that have been redeemed shall not be reissued but shall be cancelled and destroyed by the Trustee, in accordance with Section 207 hereof. [END OF ARTICLE III] ARTICLE IV GENERAL COVENANTS Section 401. Payment of Principal and Interest. The Issuer covenants that it will promptly pay or cause to be paid the principal of, premium, if any, and interest on every Bond issued under this Indenture at the place, on the dates, and in the manner provided herein and in the Bonds according to the true intent and meaning thereof, but solely from the amounts pledged therefor, which are from time to time held by the Trustee in the various accounts of the Sinking Fund. The principal of, premium, if any, and interest on the Bonds are payable solely from the Trust Estate, and nothing in the Bonds or in this Indenture shall be construed as pledging any other funds or assets of the Issuer. Section 402. Performance of Covenants; Authority of the Issuer. The Issuer covenants that it shall faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Indenture, in any and every Bond executed, authenticated, and delivered hereunder, and in all proceedings pertaining thereto. The Issuer represents that it is duly authorized under the Constitution and laws of the State, including particularly the Act, to issue the Bonds authorized hereby and to execute this Indenture, to convey the Trust Estate to the Trustee, and to pledge the receipts, revenues, and collateral hereby pledged in the manner and to the extent herein set forth, that all action required on its part for the issuance of the Series 2010 Bonds and the execution and delivery of this Indenture have been duly and effectively taken, and that the Series 2010 Bonds in the hands of the owners thereof are and will be valid and enforceable obligations of the Issuer according to the import thereof. Section 403. Instruments of Further Assurance. The Issuer agrees that the Trustee may defend its rights to the payments and other amounts due under the Borrower Contracts, for the benefit of the Holders, against the claims and demands of all persons whomsoever. The Issuer covenants that it will do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and delivered such indentures supplemental hereto and such further acts, instruments, and transfers as the Trustee may reasonably require for the better assuring, transferring, conveying, pledging, assigning, and confirming unto the Trustee the Trust Estate. Any and all property hereafter acquired that is of the kind or nature provided herein to be and become subject to the lien and security interest hereof shall, without any further conveyance, assignment, or act on the part of the Issuer or the Trustee, be and become subject to the lien and security interest of this Indenture as fully and completely as though specifically described herein, but nothing in this sentence contained shall be deemed to modify or change the obligations of the Issuer under this Section 403. The Issuer covenants and agrees that, except as herein and in the Loan Agreement provided, it has not and will not sell, convey, assign, pledge, encumber, grant a security interest in, or otherwise dispose of, or create or suffer to be created any lien, encumbrance, security interest, or charge upon, any part of the Trust Estate or the income and revenues therefrom or of its rights under the Borrower Contracts, or enter into any contract or take any action by which the rights of the Trustee or the Holders may be impaired. Section 404. Rights Under and Possession of the Borrower Contracts. The Borrower Contracts, duly executed originals or counterparts of which have been filed with the Trustee, set forth the covenants and obligations of the Issuer and the Borrower, including 22 23

74 provisions that subsequent to the initial issuance of the Bonds and prior to their payment in full or provision for payment thereof in accordance with the provisions hereof, the Borrower Contracts may not be effectively amended, changed, modified, altered, or terminated (other than as provided therein) without the written consent of the Trustee, and reference is hereby made to the Borrower Contracts for a detailed statement of such covenants and obligations of the Borrower under the Borrower Contracts, and the Trustee in its own name or in the name of the Issuer may enforce all rights of the Issuer and all obligations of the Borrower under and pursuant to the Borrower Contracts and may enforce all rights of the Issuer for and on behalf of the Holders, whether or not the Issuer is in default hereunder. performance by court order, to cause the Borrower to comply with its obligations under Section 9.10 of the Loan Agreement. [END OF ARTICLE IV] So long as any of the Bonds remain Outstanding, and for such longer period when required by the Loan Agreement, the Issuer shall faithfully and punctually perform and observe all obligations and undertakings on its part to be performed and observed under the Borrower Contracts. The Issuer covenants to maintain, at all times, the validity and effectiveness of the Borrower Contracts, and (except as expressly permitted thereby) shall take no action, shall permit no action to be taken by others, and shall not omit to take any action or permit others to omit to take any action, which action or omission might release the Borrower from its liabilities or obligations under the Borrower Contracts or result in the surrender, termination, amendment, or modification of, or impair the validity of, the Borrower Contracts. The Issuer hereby authorizes the Trustee, in its sole discretion, to enforce all covenants, undertakings, and obligations of the Borrower under the Borrower Contracts and to enforce any and all of the Issuer s rights under the Borrower Contracts on behalf of the Issuer and the owners of the Bonds. Section 405. Recording and Filing. The security interest of the Trustee created by this Indenture shall be perfected by the filing of financing statements required to be filed pursuant to the Uniform Commercial Code of the State. Pursuant to Section 3.03 of the Loan Agreement, all financing or continuation statements shall be filed for the benefit of the Issuer or the Trustee by the Borrower, at the expense of the Borrower, from time to time, as is necessary to preserve the security interest of this Indenture. Section 406. Maintenance of Existence; Compliance with Laws. To the extent authorized by law, the Issuer shall at all times maintain its corporate existence or assure the assumption of its obligations under this Indenture by any other entity succeeding to its powers. The Issuer shall comply with all valid acts, rules, regulations, orders, and directions of any legislative, executive, administrative, or judicial body known to it to be applicable to this Indenture. Section 407. Continuing Disclosure. Pursuant to Section 9.10 of the Loan Agreement, the Borrower has undertaken all responsibility for compliance with continuing disclosure requirements, and the Issuer shall have no liability to the Holders or any other person with respect to such disclosure matters. Notwithstanding any other provision of this Indenture, failure of the Borrower to comply with the Series 2010 Disclosure Certificate shall not be considered an Event of Default; however, any Beneficial Owner of the Series 2010 Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific ARTICLE V REVENUES AND FUNDS; APPLICATION OF PROCEEDS Section 501. Revenue Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Revenue Fund. All Gross Receipts (excluding the Semi-Annual Replacement Deposit which shall be deposited and applied as described in Section 506 hereof), as and when received by the Trustee from the Borrower pursuant to Section 4.07 of the Loan Agreement, shall be deposited into the Revenue Fund and shall be held therein until disbursed as herein provided. The Borrower may also deposit other moneys into the Revenue Fund from time to time. The Trustee, without further direction from the Issuer or the Borrower, shall transfer moneys held in the Revenue Fund on or before the 5 th day of June and December of each year to the following Funds and accounts therein and in the following order of priority: (1) First, To the deposit into the Interest Account the amount required by Section 5.02(a)(iii) of the Loan Agreement. (2) Second, To the deposit into the Principal Account the amount required by Section 5.02(a)(iv) of the Loan Agreement. (3) Third, Simultaneously, (a) to the deposit into the Debt Service Reserve Fund the amount required by Section 5.02(d) of the Loan Agreement, and (b) to any Debt Service Reserve Credit Facility Provider the amount necessary to reinstate any Debt Service Reserve Credit Facility that has been drawn down, as certified to the Trustee by the Debt Service Reserve Credit Facility Provider. (4) Fourth, To any Debt Service Reserve Credit Facility Provider any interest or fees due the Debt Service Reserve Credit Facility Provider under such Debt Service Reserve Credit Facility, all as certified to the Trustee by the Debt Service Reserve Credit Facility Provider. (5) Fifth, To the deposit into the Rebate Fund the amount required by Section 504 hereof. (6) Sixth, To the deposit into the Surplus Fund the amount required by Section 507 hereof. Section 502. Sinking Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Sinking Fund, which shall be used as a sinking fund to pay when due the principal of, premium, if any, and interest on the Bonds. There is hereby created by the Issuer and ordered established with the Trustee four accounts within the Sinking Fund to be designated the Interest Account, the Principal Account, the Redemption Account, and the Capitalized Interest Account. (a) Interest Account. The Trustee shall promptly deposit into the Interest Account, as and when received, (i) all Loan Repayments specified in Section 5.02 of the Loan Agreement 26 corresponding to interest on the Bonds. Moneys in the Interest Account shall be used solely to pay interest on the Bonds when due. (b) [Reserved]. (c) Principal Account. The Trustee shall promptly deposit into the Principal Account, as and when received, all Loan Repayments specified in Section 5.02 of the Loan Agreement corresponding to principal of the Bonds. Moneys in the Principal Account shall be used solely (i) for the payment of principal of the Bonds as the same shall become due and payable at maturity and (ii) to redeem the Bonds in accordance with the mandatory sinking fund redemption schedule set forth in Section 302 hereof. (d) Redemption Account. In the event of (i) receipt by the Trustee of condemnation awards or insurance proceeds for purposes of redeeming Bonds or (ii) deposit with the Trustee by the Issuer or the Borrower of moneys from any other source for redeeming Bonds (other than mandatory sinking fund redemptions), such moneys shall be deposited in the Redemption Account. Moneys on deposit in the Redemption Account shall be used first to make up any deficiencies existing in the Interest Account or the Principal Account (in the order listed), and then for the purchase or redemption (other than mandatory sinking fund redemptions) of Bonds in accordance with the provisions of Article III hereof. (e) Capitalized Interest Account. Moneys in the Capitalized Interest Account shall be transferred by the Trustee to the Interest Account in the manner and in the amounts set forth in Section 5.02 of the Loan Agreement. Section 503. Debt Service Reserve Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Debt Service Reserve Fund. Upon the delivery of any series of Bonds, there shall be credited to the Debt Service Reserve Fund from moneys on hand and lawfully available for such purpose, in cash and investments or Debt Service Reserve Credit Facilities, an amount which will create a balance in the Debt Service Reserve Fund equal to the Debt Service Reserve Requirement. The Trustee shall deposit in the Debt Service Reserve Fund any moneys paid to the Trustee under the Loan Agreement or this Indenture for credit or transfer to the Debt Service Reserve Fund. Funds held in the Debt Service Reserve Fund shall be used only for payment of principal of, premium, if any, and interest on the Bonds as the same become due in the event there should be insufficient funds for such purpose in the Sinking Fund, unless provision for their payment in full has been duly made. If the Borrower has exercised its option or is obligated to prepay the Loans in whole and not in part pursuant to the terms of Section of the Loan Agreement, and has deposited to the Redemption Account the sums as provided therein, all of the moneys then held in the Debt Service Reserve Fund shall be transferred to the Redemption Account. When the amount of principal of, premium, if any, and interest on the Outstanding Bonds is equal to or less than the balance of the Sinking Fund and moneys deposited in the Debt Service Reserve Fund and if all amounts owed under the Loan Agreement and this Indenture have been paid, upon written request of the Borrower moneys held in the Debt Service Reserve Fund may be deposited in the Sinking Fund and credited against Loan Repayments required under Section 5.02 of the Loan Agreement. 27

75 The Trustee shall credit to the Debt Service Reserve Fund any Debt Service Reserve Credit Facility delivered to the Trustee pursuant to Section 5.02(d) of the Loan Agreement. Any Debt Service Reserve Credit Facility shall be governed by the provisions of Section 5.02(d) of the Loan Agreement. Section 504. Rebate Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Rebate Fund. On or before the 5 th day prior to the date any payment of Rebate is required to be paid to the United States Treasury, there shall be deposited in the Rebate Fund an amount sufficient to cause the balance held in the Rebate Fund to equal the Rebate Amount most recently calculated by the Rebate Calculator, which has not been previously paid to the United States Treasury. Amounts so deposited in the Rebate Fund shall be derived from the Revenue Fund, as provided in Section 501(a)(6) hereof, or if the deposit cannot be fully funded from the Revenue Fund, the balance required to be deposited in the Rebate Fund and Surplus Fund are not sufficient to fully fund the Rebate Fund, the balance shall be funded by a payment for such purpose made by the Borrower under the Loan Agreement. The Trustee, upon the written direction of the Borrower and the Rebate Calculator (specifying the date, amount, address, and method of payment), shall withdraw funds from the Rebate Fund for the purpose of making rebate payments (including penalties) to the United States as required by Section 148(f) of the Code. Except as otherwise specifically provided in this Section 504, moneys in the Rebate Fund may not be withdrawn from the Rebate Fund for any other purpose. If (i) all Tax-Exempt Bonds have been fully paid and retired and (ii) the Borrower shall deliver to the Trustee a certificate, signed by the Borrower and the Rebate Calculator, certifying that the Borrower has filed on behalf of the Issuer all reports required to be filed with the United States pursuant to Section 148(f) of the Code and has made all payments required to be made to the United States pursuant to Section 148(f) of the Code with respect to all Tax-Exempt Bonds, then the Trustee shall transfer to, or upon the order of, the Borrower any moneys, investments or both, remaining in the Rebate Fund, and such moneys and investments may be used by the Borrower for any lawful purpose. In no event shall the Trustee be responsible for determining rebate payments, or for making rebate payments, other than as directed to be paid from the Rebate Fund by the Borrower and the Rebate Calculator. Section 505. [Reserved]. Section 506. Repair and Replacement Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Repair, Replacement and Maintenance Fund. The Semi-Annual Replacement Deposit, as and when received by the Trustee from the Borrower pursuant to Section 4.07 of the Loan Agreement, shall be deposited into the Repair and Replacement Fund. Amounts on deposit in the Repair and Replacement Fund shall be used first to restore the Sinking Fund and the Debt Service Reserve Fund (including the reinstatement of any Debt Service Reserve Credit Facility) to the respective amounts required at that time to be held 28 therein, and then to pay, upon the Written Request of the Borrower, (1) the costs of Additions or Alterations and (2) Expenses of Operation and Maintenance payable to Persons other than Affiliates of the Borrower, but only if the Borrower first delivers to the Trustee an Officer s Certificate to the effect that no payee is an Affiliate of the Borrower. Moneys on deposit in the Repair and Replacement Fund to be used to pay the costs of Additions or Alterations shall be transferred to the Project Fund and disbursed in accordance with the requirements of Section 509 hereof. Section 507. Surplus Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Surplus Fund. All remaining moneys held in the Revenue Fund, after all of the other transfers set forth in Sections 502, 503 and 504 hereof have been made, shall be transferred on or before the 5 th day of June and the 5 th day of December to the Surplus Fund. All sums thus accumulated and retained in the Surplus Fund shall be used first to prevent default in the payment of interest and premium on or principal of the Bonds when due and then shall be applied upon the Written Request of the Borrower, to the following purposes and in the following order of priority: (1) First, To the restoration of the Sinking Fund and the Debt Service Reserve Fund (including the reinstatement of any Debt Service Reserve Credit Facility) to the respective amounts required at that time to be held therein. (2) Second, To the payment of any and all amounts that may then be due and owing to any Debt Service Reserve Credit Facility Provider. (3) Third, To the deposit into the Rebate Fund the amount required by Section 504 hereof. (4) Fourth, To the payment of such Expenses of Operation and Maintenance as the Borrower may request. (5) Fifth, To the payment of any and all Impositions against the Project or any part thereof that may then be due and owing and to the payment of any and all amounts that may then be due and owing under the Real Estate Documents. (6) Sixth, At the option of the Borrower, to the payment of costs of Additions or Alterations or to the deposit into the Repair and Replacement Fund. Moneys on deposit in the Surplus Fund to be used to pay the costs of Additions or Alterations shall be transferred to the Project Fund and disbursed in accordance with the requirements of Section 509 hereof. (7) Seventh, If requested by the Borrower, to the optional acquisition of Bonds by redemption or by purchase in the open market at a price not exceeding the callable price as provided and in accordance with the terms and conditions of this Indenture, which Bonds may be any of the Bonds, prior to their respective maturities, and when so used for such purposes the moneys shall be withdrawn from the Surplus Fund and deposited into the Redemption Account. 29 If no Event of Default has occurred that is then continuing, any moneys in the Surplus Fund in excess of $10,000 may be withdrawn from the Surplus Fund (so as to reduce the balance on deposit therein to $10,000) upon the Written Request of the Borrower and used for any lawful corporate purpose of the Borrower. Section 508. Issuance Cost Fund. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Issuance Cost Fund. Any moneys received by the Trustee from any series of Bonds for the purpose of paying the costs of issuing any Bonds shall be deposited in the Issuance Cost Fund. The moneys in the Issuance Cost Fund shall be held in trust by the Trustee and shall be applied to the payment of the costs of issuing the Bonds or transferred to the Project Fund, upon the Written Request of the Borrower. Section 509. Project Fund. (a) Creation. There is hereby created by the Issuer and ordered established with the Trustee a trust fund to be designated the Project Fund. Any moneys received by the Trustee from the Net Proceeds of insurance or condemnation awards, or from the Borrower from any other source (including, without limitation, transfers from the Repair and Replacement Fund or the Surplus Fund) for the purpose of paying the costs of acquiring, constructing, and equipping the Project shall be deposited in the Project Fund. The moneys in the Project Fund shall be held in trust by the Trustee, shall be applied to the payment of the costs of the Project, and, pending such application, shall be held as trust funds under this Indenture until paid out or transferred as provided in this Section 509. Unless the Bond Insurer otherwise directs, upon the occurrence and continuance of an Event of Default or an event which in the lapse of time would constitute an Event of Default, amounts on deposit in the Project Fund shall not be disbursed, but shall instead be applied to the payment of debt service or redemption price of the Bonds. (b) Disbursements from the Project Fund. Moneys deposited in the Project Fund shall be paid out from time to time by the Trustee on the Written Request of the Borrower pursuant to requisitions filed with the Trustee substantially in the form attached as Exhibit C to the Loan Agreement. The Trustee is entitled to disburse moneys from the Project Fund upon the receipt of a facsimile of each requisition. The Trustee shall not be required to receive original requisitions. (c) Disbursement Payees. The Trustee shall make all disbursements or any disbursement directly to the Borrower, the Developer, the Architect, or to subcontractors, laborers, materialmen, or persons furnishing labor, services, or materials used or to be used on or in the construction of the Project (including authorized extras) or to any combination of them, as may be directed by the Borrower in writing. Any such disbursement shall be deemed to have been made to the Borrower or for its account. (d) Liens. Except for Liens constituting Permitted Encumbrances, if any notice of lien shall be filed against the Project or any part thereof or if any interim title examination discloses any intervening Lien, the Trustee may, upon receiving actual knowledge of such Lien, suspend further disbursements from the Project Fund until such Lien shall have been discharged of record or proceedings to contest such Lien pursuant to Section 7.06 of the Loan Agreement shall have been instituted. (e) Excess Moneys. If after the Completion Date of the Project there shall remain any moneys in the Project Fund in excess of amounts retained or set aside to meet costs not then due and payable or that are being contested, the Trustee shall (1) deposit such moneys in the Redemption Account to be used to redeem Bonds on the first available redemption date, or (2) if the Borrower shall deliver to the Trustee an opinion of Bond Counsel to the effect that, under existing law, the application of such moneys to pay interest on the Bonds would not, by itself and without more, adversely affect the exclusion from gross income for federal income tax purposes of interest payable on any Tax-Exempt Bonds, deposit such moneys in the Capitalized Interest Account. Section 510. Non-presentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity, at the date fixed for redemption thereof, or otherwise, or if any interest check shall not be cashed, if moneys sufficient to pay such Bond or interest shall have been made available to the Trustee for the benefit of the owner thereof, all liability of the Issuer and the Borrower to the owner thereof for the payment of such Bond or such interest shall forthwith cease, terminate, and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such fund or funds, uninvested and without liability for interest thereon, for the benefit of the owner of such Bond or the payee of such interest check, as the case may be, who shall thereafter be restricted exclusively to such fund or funds for any claim of whatever nature on its part under this Indenture or on, or with respect to, such Bond or interest. Any moneys so deposited with and held by the Trustee not so applied to the payment of such Bond or such interest within five years after the date on which the same shall have become due (or such earlier date as immediately precedes the date on which such funds would be required to escheat or be payable to the State or any other governmental unit under any laws governing unclaimed funds) shall be paid by the Trustee to the Borrower, upon receipt of a Written Request of the Borrower, and thereafter Holders shall be entitled to look only to the Borrower for payment, and then only to the extent of the amount so repaid, and the Borrower shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Section 511. Trustee s and Paying Agent s Fees, Charges, and Expenses. Pursuant to the provisions of the Loan Agreement, the Borrower has agreed to pay the Trustee, until the principal of, interest, and premium, if any, on the Bonds shall have been fully paid, (i) an amount equal to the annual fee of the Trustee for the Ordinary Services of the Trustee rendered, as trustee, and its Ordinary Expenses of the Trustee incurred, as trustee, under this Indenture, as and when the same become due, (ii) the reasonable fees and charges of the Trustee, as bond registrar and paying agent, and of any paying agents and co-bond registrars for acting as paying agent or co-bond registrar pursuant to Section 910(b) hereof, and (iii) the reasonable fees and charges for the necessary Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee under this Indenture, as and when the same become due. The Borrower may, without creating a default hereunder, contest in good faith the necessity for any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any of the fees, charges, or expenses referred to herein. Section 512. Moneys to be Held in Trust. All moneys required to be deposited with or paid to the Trustee for the account of the Funds or any other trust fund or reserve under any 30 31

76 provision of this Indenture shall be held by the Trustee in trust and shall, while held by the Trustee, constitute part of the Trust Estate (except for moneys held in the Rebate Fund) and be subject to the trust created hereby and any lien or security interest granted with respect to the Trust Estate and shall be and remain entitled to the benefit and shall be subject to the security of this Indenture for the equal and proportionate benefit of the owners of all Outstanding Bonds. The Trustee hereby covenants that all moneys held in any fund under this Indenture and any collateral securing such funds are a part of the Trust Estate (except for moneys held in the Rebate Fund), and that the rights and interests of the Holders in and to such moneys and collateral are and shall be superior to the claims of the creditors and depositors of the Trustee and of any other financial institution in which such moneys are deposited or which has provided or pledged such collateral. To the extent not invested as provided in Article VI of this Indenture, all such moneys held by the Trustee in excess of the amount insured by the Federal Deposit Insurance Corporation or a successor federal agency shall be continuously secured, for the benefit of the Issuer and the owners of the Bonds, in the manner required by applicable State law. Subject to the foregoing requirements as to security, if at any time the commercial department of the Trustee is unwilling to accept such deposits or unable to secure them as provided above, the Trustee may deposit such moneys with any other depository that is authorized to receive and secure them as aforesaid and the deposits of which are insured by the Federal Deposit Insurance Corporation or a successor federal agency. All security for deposits shall be perfected in such manner as may be required or permitted under applicable law in order to grant to the Trustee a perfected lien on or security interest in such security. (4) the balance of the proceeds ($30,500,000) received from the sale of the Series 2010 Bonds shall be deposited into the Project Fund. [END OF ARTICLE V] Section 513. Amounts Remaining in Funds and Accounts. Any amounts remaining in the Funds (other than the Rebate Fund) or any other fund, account, or reserve created under this Indenture, after payment in full of the principal of, interest, and premium, if any, on the Bonds (or provision for payment thereof as provided in this Indenture), the fees, charges, and expenses of the Trustee, the Issuer, and any paying agents, and all other amounts required to be paid hereunder, shall be promptly paid to the Borrower as a refund of excess loan repayments under the Loan Agreement. Section 514. Application of Series 2010 Bond Proceeds. The Issuer shall deposit with the Trustee proceeds in the amount of $34,884, received from the sale of the Series 2010 Bonds (principal amount of $36,475,000 less Underwriter s discount of $237,087.50, net original issue discount of $858,132.50, and the premium on the Financial Guaranty Insurance Policy of $495, which shall be transferred to the Bond Insurer by the Underwriter), and the Trustee shall apply said proceeds of the sale of the Series 2010 Bonds as follows: (1) $3,099, shall be deposited into the Capitalized Interest Account; (2) $586, shall be deposited into the Issuance Cost Fund; (3) $1,271, shall be deposited into the Debt Service Reserve Fund; and ARTICLE VI INVESTMENTS Section 601. Investment of Funds and Accounts. Subject to Article VII and Section 1410 hereof, any moneys held as part of the Funds or other special trust funds created under this Indenture, or other accounts or funds held by the Trustee hereunder, to the extent permitted by law, shall be invested and reinvested by the Trustee, but only at the Written Request of and as specified by the Borrower, in accordance with the provisions of Section 4.04 of the Loan Agreement. The Trustee may conclusively rely upon the Borrower s Written Request as to both the suitability and legality of all directed investments under this Indenture. Ratings of investments shall be determined at the time of purchase of such investments and without regard to ratings subcategories. The Trustee shall have no responsibility to monitor the ratings of investments after the initial purchase of such investments. In the absence of written investment instructions from the Borrower, the Trustee shall not be responsible or liable for keeping the moneys held by it hereunder fully invested. Any such investments shall be held by or under the control of the Trustee and shall be deemed at all times a part of the Funds, other special trust fund, or other account or fund, as the case may be, and the interest accruing thereon and any profit realized from such investments shall be credited as set forth in Section 602 of this Indenture, and any loss resulting from such investments shall be charged to such fund or account. The Trustee is directed to sell and reduce to cash funds a sufficient amount of such investments whenever the cash balance in any fund or account is insufficient for the uses prescribed for moneys held in such fund or account. The Trustee may transfer investments from any fund or account to any other fund or account in lieu of cash when required or permitted by the provisions of this Indenture. In computing the assets of any fund or account, investments and accrued interest thereon shall be deemed a part thereof. Such investments shall be valued at fair market value on each Interest Payment Date. The Trustee shall not be liable for any depreciation in the value of any obligations in which moneys of funds or accounts shall be invested, as aforesaid, or for any loss arising from any investment. Such investments shall be made only as follows: (i) moneys in the Sinking Fund and all accounts of the Sinking Fund, other than the Capitalized Interest Account, only in Permitted Investments maturing or redeemable at the option of the holder not later than the next-succeeding principal payment date, mandatory redemption payment date, or Interest Payment Date of the Bonds; (ii) moneys in the Debt Service Reserve Fund, except for Permitted Investments approved by the Bond Insurer, only in Permitted Investments maturing or redeemable at the option of the holder not later than five years from the date of purchase thereof; and (iii) moneys in any other Funds or accounts, including the Capitalized Interest Account, only in Permitted Investments maturing or redeemable at the option of the holder in such amounts and on such dates as may be necessary to provide moneys to meet the payments from each such respective fund or account. The Issuer covenants that none of the moneys held under this Indenture will be used in any manner that will cause any Tax-Exempt Bonds to become arbitrage bonds within the meaning of Section 148 of the Code or to become federally guaranteed within the meaning of Section 149(b) of the Code. The Trustee s reliance upon the written investment instructions of the Authorized Borrower Representative shall fully protect the Issuer in fulfilling its covenanted obligations set forth above. Section 602. Allocation of Income from Investments. All interest accruing from investments of moneys in the Funds and other funds and accounts and any profit realized therefrom shall be allocated as follows: (a) interest and profits from the investment of moneys of each account (except the Capitalized Interest Account) held in the Sinking Fund shall be retained in the account of the Sinking Fund to which such investments relate; (b) interest and profits from the investment of moneys in the Capitalized Interest Account shall be deposited in the Project Fund; (c) interest and profits from the investment of moneys in the Project Fund shall be retained in the Project Fund; (d) interest and profits from the investment of moneys in the Debt Service Reserve Fund shall be retained in the Debt Service Reserve Fund at all times the balance is less than the Debt Service Reserve Requirement; thereafter and at all times the balance of the Debt Service Reserve Fund is equal to or greater than the Debt Service Reserve Requirement, such interest and profits shall be deposited (i) in the Capitalized Interest Account until such date on which there are no remaining moneys in the Capitalized Interest Account and (ii) thereafter in the Interest Account; (e) interest and profits from the investment of moneys in the Issuance Cost Fund shall be retained in the Issuance Cost Fund; (f) interest and profits from the investment of moneys in the Rebate Fund shall be retained in the Rebate Fund; (g) interest and profits from the investment of moneys in the Repair and Replacement Fund shall be deposited in the Revenue Fund; (h) interest and profits from the investment of moneys in the Surplus Fund shall be deposited in the Revenue Fund; (i) interest and profits from the investment of moneys in the Revenue Fund shall be retained in the Revenue Fund; and (j) interest and profits from the investment of moneys in any other funds shall, upon Written Request of the Borrower, be retained in the respective funds or deposited in the Revenue Fund

77 Nothing in this Section shall require the Trustee to allocate the interest and profits from the investment of moneys in any Funds any more frequently than semi-annually. Section 603. Trustee s Own Bond or Investment Department. The Trustee may make any and all investments permitted under Section 601 hereof through its own bond or investment department or through its broker-dealer affiliate. Section 604. Investment Records. The Trustee shall keep or cause to be kept proper and detailed books of record and account containing complete and correct entries of all transactions relating to the receipt, investment, disbursement, allocation, and application of the moneys held under this Indenture, including, without limitation, all withdrawals from the Surplus Fund by the Borrower. Such records shall specify the account or fund to which each investment (or portion thereof) is to be allocated and shall set forth (a) its purchase price, including any accrued interest paid, (b) identifying information, including face amount, coupon rate, and payment dates, (c) the amount received at maturity or its disposition price, as the case may be, including accrued interest, (d) the amounts and dates of any payments made with respect thereto, and (e) the dates of acquisition and disposition or maturity. The Trustee agrees to deliver to the Borrower, upon the written request of the Borrower, copies of all records maintained pursuant to this Section 604 and such other records as are reasonably required to allow the Borrower to comply with Section 4.06 of the Loan Agreement. Such records shall be open to inspection by any owner of Bonds at any reasonable time during regular business hours on reasonable notice. The Issuer and the Borrower agree that investment confirmations are not required to be issued by the Trustee for each month in which a monthly statement is rendered. No statement need be rendered for any fund or account if no activity occurred in such fund or account during such month. [END OF ARTICLE VI] ARTICLE VII DISCHARGE OF INDENTURE Section 701. Discharge of Indenture. If the Issuer shall pay or cause to be paid, or there shall be otherwise paid or provision for payment made, to or for the owners of the Bonds the principal, interest, and premium, if any, due or to become due thereon at the times and in the manner stipulated therein and herein and shall pay or cause to be paid all fees and expenses of the Trustee and each paying agent due or to become due under this Indenture and if the Issuer shall keep, perform, and observe all and singular the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed, and observed by it or on its part, then this Indenture and these presents and the estate, lien, interests, and rights hereby created and granted shall cease, determine, terminate, and become null and void (except as to any surviving rights of registration, transfer, or exchange of Bonds herein provided for and except for the obligations under Section 604 hereof), and thereupon the Trustee shall cancel and discharge the lien and security interest of this Indenture and execute and deliver to the Issuer such instruments in writing as shall be requested by the Issuer and requisite to discharge and satisfy the lien and security interest hereof and convey to the Issuer the estate hereby conveyed and release, assign, and deliver to the Issuer any property at the time subject to the lien and security interest of this Indenture that may then be in its possession, except funds held by the Trustee for the payment of principal of, interest, and premium, if any, on the Bonds. Section 702. Defeasance of Bonds. (a) Any Bond shall be deemed to be paid within the meaning of this Article VII and for all purposes of this Indenture when (a) payment of the principal of, premium, if any, and interest on such Bond to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided herein) shall have been (i) made or caused to be made in accordance with the terms thereof, or (ii) provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) moneys and non-callable Government Obligations maturing as to principal and interest in such amounts and at such times as will ensure, without further investment or reinvestment thereof (except in SLGs having a zero yield), in the written verification report of an independent certified public accounting firm of national reputation in form and substance satisfactory to the Trustee, the availability of sufficient moneys to make such payment, and (b) all necessary and proper fees, compensation, and expenses of the Trustee pertaining to the Bond or Bonds with respect to which such deposit is made shall have been paid or the payment thereof shall have been provided for to the satisfaction of the Trustee. At such time as a Bond shall be deemed to be paid hereunder, such Bond shall no longer be secured by or entitled to the benefits of this Indenture, except for the purposes of any such payment from such moneys or Government Obligations. Any Bond that is defeased hereunder shall be identified as defeased on the records of the Registrar and shall not be deemed to be Outstanding, (b) Notwithstanding the foregoing, no deposit under clause (a)(ii) of this Section 702 shall be deemed payment of any Bond that is to be paid by redemption prior to maturity as aforesaid until (a) proper notice of redemption of such Bond shall have been previously given in accordance with Article III of this Indenture, until the Issuer shall have given the Trustee, in form satisfactory to the Trustee, irrevocable written instructions to (i) give notice of redemption of such Bond as provided in Article III of this Indenture and (ii) notify, as soon as practicable in the same manner as a notice of redemption of such Bond as provided in Article III of this Indenture, the owner of such Bond that the deposit required by (a)(ii) above has been made with the Trustee and that such Bond is deemed to have been paid in accordance with this Section and stating the 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 Bond or (b) the maturity of such Bond. (c) Subject to the written approval of Bond Counsel, all moneys so deposited with the Trustee as provided in this Section may also be invested and reinvested, at the Written Request of the Borrower, in non-callable Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from all Government Obligations in the hands of the Trustee pursuant to this Section that is not required for the payment of the Bonds and interest and premium thereon with respect to which such moneys shall have been so deposited shall be deposited in the Interest Account as and when realized and collected for use and application as are other moneys deposited in the Interest Account. owner of the investment is the real party in interest and has the right to proceed directly and individually against the obliger and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. [END OF ARTICLE VII] (d) The Issuer hereby covenants that no deposit will be made or accepted and no use made of any such deposit that would cause any Tax-Exempt Bonds to be treated as arbitrage bonds within the meaning of Section 148 of the Code or as federally guaranteed within the meaning of Section 149(b) of the Code. (e) Notwithstanding any provision of any other article of this Indenture that may be contrary to the provisions of this Section, all moneys or Government Obligations set aside and held in trust pursuant to the provisions of this Section for the payment of any Bond or Bonds (including interest and premium, if any, thereon) shall be applied to and used solely for the payment of the particular Bond or Bonds (including the interest and premium, if any, thereon) with respect to which such moneys or Government Obligations have been so set aside in trust. (f) Anything in Article XI hereof to the contrary notwithstanding, and subject to Article XIV hereof, if moneys or Government Obligations have been deposited or set aside with the Trustee pursuant to this Section for the payment of any Bond or Bonds and such Bond or Bonds shall not have in fact been actually paid in full, no amendment to the provisions of this Section 702 shall be made without the consent of the owner of each such Bond affected thereby. Section 703. Additional Restrictions on Investment Securities in Defeasance Escrows. Notwithstanding anything in Article VI or this Article VII, any Government Obligations held in the Sinking Fund for the purpose of defeasing all or any portion of the Series 2010 Bonds must consist of one or more of the following categories of investments: (a) bank deposit accounts (fully insured by the Federal Deposit Insurance Corporation), (b) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ( U.S. Treasury Obligations ), (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (d) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (e) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the 38 39

78 ARTICLE VIII DEFAULTS AND REMEDIES Section 801. Defaults. If any of the following events occur, subject to the provisions of Sections 810 and 811 hereof, it is hereby defined as and declared to be and to constitute a default and an Event of Default : (a) default in the due and punctual payment of any interest on any Bond, (b) default in the due and punctual payment of the principal of any Bond (or premium thereon, if any), whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration, (c) any material breach by the Issuer of any representation or warranty made in this Indenture or default in the performance or observance of any other of the covenants, agreements, or conditions on the part of the Issuer in this Indenture (other than as described in (a) and (b) above) or in the Bonds contained, subject to the provisions of Section 811 of this Indenture, (d) the issuance of an order of relief by the Bankruptcy Court of the United States District Court having valid jurisdiction, granting the Issuer relief under federal bankruptcy law, or the issuance by any other court having valid jurisdiction of an order or decree under applicable federal or state law providing for the appointment of a receiver, liquidator, assignee, trustee, or sequestrator (or other similar official) of the Issuer or any substantial part of its property, affairs, or assets, and the continuance of any such decree or order is unstayed and in effect for a period of sixty consecutive days, (e) the consent by the Issuer to the institution of proceedings in bankruptcy against it, or to the institution of any proceeding against it under any federal or state insolvency laws, or to the filing of any petition, application, or complaint seeking the appointment of a receiver, liquidator, assignee, trustee, or sequestrator (or other similar official) of the Issuer or of any substantial part of its property, affairs, or assets, (f) the occurrence of an Event of Default under the Loan Agreement, or (g) termination of a Rental Agreement. Section 802. Acceleration. Upon the occurrence and continuation of any Event of Default, the Trustee (in all instances with the consent of the Bond Insurer unless the Bond Insurer has defaulted in its obligations under the Financial Guaranty Insurance Policy) may, and shall at the written request of the Beneficial Owners of not less than 25% in aggregate principal amount of Outstanding Bonds, by notice in writing delivered to the Issuer, declare the principal of all Bonds Outstanding and the interest accrued thereon to the date specified therein immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable without further action. Upon any declaration of acceleration 40 hereunder the Issuer and the Trustee may declare all installments of Loan Repayments due under Section 5.02 of the Loan Agreement to become immediately due and payable in accordance with Section of the Loan Agreement. The above provisions of Sections 801 and 802 hereof, however, are subject to the condition that if, after the principal of all Bonds then Outstanding shall have been so declared to be due and payable, all arrears of interest upon such Bonds and the principal and premium, if any, on all Bonds then Outstanding that shall have become due and payable otherwise than by acceleration, and all other sums payable under this Indenture, except the principal of and interest on the Bonds that by such declaration shall have become due and payable, shall have been paid by or on behalf of the Issuer, together with the reasonable expenses of the Trustee, the Bond Insurer and the owners of such Bonds, including reasonable attorneys fees paid or incurred, and the Loan Agreement shall be in full force and effect, then and in every such case, but if the Beneficial Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall have made the written request specified in the first paragraph of this Section 802, only upon the written approval of the owners of a majority in aggregate principal amount of the Bonds then Outstanding, the Trustee may annul such declaration of maturity and its consequences, which waiver and annulment shall be binding upon all Holders; but no such waiver, rescission, and annulment shall extend to or affect any subsequent default or impair or exhaust any right, power, or remedy consequent thereon. In the case of any such annulment, the Issuer, the Trustee, and the Holders shall be restored to their former positions and rights under this Indenture. Section 803. Other Remedies; Rights of Holders. (a) Upon the occurrence of an Event of Default, the Trustee may (in addition to the right conferred or obligation imposed upon the Trustee to accelerate the Bonds in Section 802 of this Indenture and with the consent of the Bond Insurer unless the Bond Insurer has defaulted in its obligations under the Financial Guaranty Insurance Policy) exercise any rights, powers, or remedies it may have as a secured party under the Uniform Commercial Code of the State, or other similar laws in effect, and shall have the power to proceed with any available right or remedy granted by the Bond Documents or the Constitution and laws of the State, as it may deem best, including any suit, action, mandamus, or special proceeding in equity or at law or in bankruptcy or otherwise for the collection of all amounts due and unpaid under the Bonds and the Bond Documents, for specific performance of any covenant or agreement contained herein or therein, or for the enforcement of any proper legal or equitable remedy as the Trustee shall deem most effective to protect the rights aforesaid, insofar as such may be authorized by law, and may enforce its right to the appointment of a receiver pursuant to Section 805 hereof. The Trustee, as the assignee of all of the right, title, and interest of the Issuer in and to the Borrower Contracts (except for the Unassigned Rights) shall enforce each and every right granted to the Issuer under the Borrower Contracts (except for the Unassigned Rights). Upon the occurrence of an Event of Default, the Trustee, in its own name and as trustee of an express trust, or in the name of the Issuer without the necessity of joining the Issuer, shall be entitled to institute any action or proceedings at law or in equity and may prosecute any such action or proceedings to judgment or final decree and may enforce any such judgment or final decree against any obligor thereon and collect in the manner provided by law, but limited as provided in the Bond Documents, out of the property of any obligor thereon wherever situated the moneys adjudged or decreed to be payable for the benefit of the Holders, or on behalf of the Issuer. The rights herein specified are to be 41 cumulative to all other available rights, remedies, or powers and shall not exclude any such rights, remedies, or powers. In case there shall be pending proceedings for the bankruptcy or for the reorganization of any obligor under the Borrower Contracts under federal bankruptcy law or any other applicable law, or in the case a receiver or trustee shall have been appointed for the property of any such obligor, or in the case of any other judicial proceedings relative to any obligor under the Borrower Contracts or relative to the creditors or property of any such obligor, the Trustee (irrespective of whether the principal of the Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the power vested in it by this Indenture) shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount owing and unpaid and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee, its agents, attorneys, and counsel and for reimbursement of all expenses and liabilities incurred and all advances made by the Trustee except as a result of its gross negligence or bad faith) and of the Holders allowed in any such judicial proceedings relative to the Borrower or any other obligor under the Borrower Contracts or relative to the creditors or property of the Borrower, or relative to any such other obligor, as the case may be, and to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Holders and of the Trustee on their behalf. Any receiver, assignee, or trustee in bankruptcy or reorganization is hereby authorized by each of the Holders to make payments to the Trustee and in the event that the Trustee shall consent to the making of payments directly to the Holders, to pay to the Trustee such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys, and counsel and all other expenses and liabilities incurred and all advances made by the Trustee except as a result of its gross negligence or bad faith. (b) Subject to the provisions of Section 802 hereof, if an Event of Default occurs and is continuing, and if requested so to do by the Beneficial Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding and if indemnified as provided in Section 914 hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Section 803 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Holders. (c) No lien, right, or remedy by the terms of this Indenture conferred upon or reserved or otherwise available to the Trustee or to the Holders is intended to be or shall be construed to be exclusive of any other available lien, right, or remedy, but each and every such lien, right, or remedy shall be cumulative and shall be in addition to any other lien, right, or remedy given to the Trustee or to the Holders hereunder or now or hereafter existing at law or in equity or by statute. (d) No delay or omission to exercise any right, power, or remedy accruing upon any default or Event of Default shall impair any such right, power, or remedy or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein, but every such right, power, or remedy may be exercised from time to time and as often as may be deemed expedient. 42 (e) No waiver of any default or Event of Default hereunder, whether by the Trustee or by the Holders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. The giving, taking, or enforcement of any other or additional security, collateral, or guaranty for the payment of the Bonds shall not operate to prejudice, waive, or affect the Trust Estate or any rights, powers, or remedies under this Indenture, nor shall the Trustee be required to first look to, enforce, or exhaust such other additional security, collateral, or guarantors. (f) When the Trustee incurs costs or expenses (including legal fees, costs and expenses) or renders services after the occurrence of an Event of Default, such costs and expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Section 804. Rights of Holders to Direct Proceedings. Anything in this Indenture to the contrary notwithstanding, but subject to the provisions of Sections 802 and 811 hereof and Article XIV hereof, the owners of a majority in aggregate principal amount of Bonds then Outstanding shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, provided the Trustee is indemnified pursuant to Section 914 hereof, to direct the time, method, and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture or in connection with the appointment of a receiver or in connection with any other proceedings hereunder; provided, that such direction shall not be otherwise than in accordance with the provisions of law and of this Indenture. Section 805. Appointment of Receivers. Upon the occurrence of an Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the owners of Bonds under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Trust Estate and of the revenues, earnings, income, products, and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer. Section 806. Application of Moneys. Upon an Event of Default and if moneys held by the Trustee are insufficient to pay the principal of, premium, if any, and interest on the Bonds, all moneys received and held by the Trustee pursuant to this Indenture and all moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article shall, after payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of the expenses, liabilities, and advances incurred or made by the Trustee, be applied as follows: (a) Unless the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied: FIRST - To the payment of the fees for Ordinary Services of the Trustee and Extraordinary Services of the Trustee and the Ordinary Expenses and Extraordinary Expenses of the Trustee and the costs and compensation of any advances made by the Trustee and any receiver and the reasonable attorneys fees, costs and expenses of the Trustee or any receiver; 43

79 SECOND - To make a deposit to the Rebate Fund in an amount determined by the Rebate Calculator to be sufficient to pay any unpaid Rebate Amount that would be payable based on the investment of gross proceeds of the Tax Exempt Bonds prior to the exercise of remedies on account of such Event of Default; THIRD - To the payment to the persons entitled thereto of all installments of interest then due on the Bonds, with interest on overdue installments, if lawful, at the rate per annum borne by the Bonds, in the order of the maturity of the installments of such interest 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 privilege; FOURTH - To the payment to the persons entitled thereto of the unpaid principal of and premium, if any, on any of the Bonds that shall have become due (other than Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in the order of their due dates, with interest at the same rate as the interest on such Bonds from the respective dates upon which they became due and, if the amount available shall not be sufficient to pay in full principal of, premium, if any, and interest on the Bonds due on any particular date, then to the payment ratably, according to the amount of the principal, interest, and premium, if any, due on such date, to the persons entitled thereto without any discrimination or privilege; FIFTH - To the payment of reasonable and necessary Expenses of Operation and Maintenance and for reasonable renewals, repairs, and replacements of the Project necessary to prevent impairment of the Project; SIXTH - To be held for the payment to the Holders entitled thereto as the same shall become due of the principal of, premium, if any, and interest on the Bonds that may thereafter become due either at maturity or upon call for redemption prior to maturity and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with interest and premium, if any, then due and owing thereon, payment shall be made ratably according to the amount of principal, premium, if any, and interest due on such date to the Holders entitled thereto without any discrimination or privilege; and SEVENTH To reimburse any amount due to the Bond Insurer. (b) If the principal of all the Bonds shall have become due or shall have been declared due and payable, all such moneys shall be applied first to the items described in paragraph FIRST of the preceding subsection (a), second to the items described in paragraph SECOND of the preceding subsection (a), and then to the payment to the persons entitled thereto of the principal, premium, if any, and interest then due and unpaid upon 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, premium, if any, and interest, to the persons entitled thereto without any discrimination or privilege. 44 (c) If the principal of all the Bonds shall have been declared due and payable and if such declaration shall thereafter have been rescinded and annulled under the provisions of this Article VIII, then, subject to the provisions of Section 806(b) in the event that the principal of all the Bonds shall later become due or be declared due and payable, the moneys shall be applied in accordance with the provisions of Section 806(a). Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys shall be applied at such times and from time to time as the Trustee shall determine, having due regard to the amount of such moneys available for such application and the likelihood of additional money becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made, and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, but in accordance with the provisions of Section 202 hereof, and shall not be required to make payment to the owner of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Whenever all principal of, premium, if any, and interest on all Bonds have been paid under the provisions of this Section 806 and whenever all fees, expenses, and charges of the Trustee and amounts owing to the Bond Insurer shall have been paid, any Trust Estate remaining hereunder shall be paid, transferred, and assigned to the Borrower, as provided in Section of the Loan Agreement. Section 807. Remedies Vested in the Trustee. All rights of action (including the right to file proof of claims) under this Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceedings relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any owners of the Bonds, and any recovery of judgment shall be for the equal and ratable benefit of the owners of the Outstanding Bonds, subject to the provisions of this Indenture. Section 808. Limitations on Rights and Remedies of Holders. No Holder shall have any right to institute any suit, action, or proceeding in equity or at law for the enforcement of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless: (i) a default has occurred of which the Trustee has been notified as provided in subsection (h) of Section 901, or of which by such subsection it is deemed to have notice, (ii) such default shall have become an Event of Default, (iii) the Beneficial Owners of at least 25% in aggregate principal amount of Bonds then Outstanding shall have made written request to the Trustee and provided the indemnity required by Section 914 of this Indenture and shall have offered reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit, or proceeding in its own name, and (iv) the Trustee shall thereafter fail or refuse to exercise the powers hereinbefore granted or to institute such action, suit, or proceeding in its own name. Such notification, request, and offer of opportunity and indemnity are hereby declared in every case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of this Indenture and to any action or cause of action for the enforcement of this Indenture or for the appointment of a receiver or for any other 45 remedy hereunder; it being understood and intended that no one or more owners of the Bonds shall have any right in any manner whatsoever to affect, disturb, or prejudice the lien of this Indenture by its, his, or their action or to enforce any right hereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had, and maintained in the manner herein provided and for the equal and ratable benefit of the owners of all Bonds then Outstanding. Nothing in this Indenture contained shall, however, affect or impair the right of any Holder to enforce the payment of the principal of, premium, if any, and interest on any Bond at and after the maturity thereof or the obligation of the Issuer to pay the principal of, premium, if any, and interest on each of the Bonds issued hereunder to the respective owners thereof at the time, place, from the source, and in the manner in such Bonds expressed. Section 809. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Issuer, the Trustee, and the Holders shall be restored to their former positions and rights hereunder, and all rights, remedies, and powers of the Trustee shall continue unimpaired as if no such proceedings had been taken. Section 810. Waivers of Events of Default. Subject to Section 802 hereof, the Trustee may in its discretion waive any Event of Default hereunder and rescind its consequences and shall waive any Event of Default hereunder and its consequences and rescind any declaration of acceleration of principal of or interest on the Bonds upon the written request of the owners of a majority in aggregate principal amount of all Bonds then Outstanding; provided, however, that there shall not be waived any Event of Default specified in subsection (a) or (b) of Section 801 unless prior to such waiver or rescission, all arrears of principal, premium, if any, and interest (other than principal of or interest on the Bonds that became due and payable by declaration of acceleration), 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 Event of 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 Event of 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 Holders shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to any subsequent or other Event of Default or impair any right consequent thereon. All waivers under this Indenture shall be in writing. not constitute an Event of Default if corrective action is instituted by the Borrower or the Issuer, as the case may be, within the applicable period and diligently pursued until the default is corrected in accordance with and subject to any directions or limitations of time established by the Trustee. With regard to any alleged default concerning which notice is given to the Borrower under the provisions of this Section 811, the Issuer hereby grants the Borrower full authority for the account of the Issuer to perform any covenant or obligation alleged in such notice to constitute a default, in the name and stead of the Issuer with full power to do any and all things and acts to the same extent that the Issuer could do and perform any such things and acts and with power of substitution. (b) In addition, the Trustee shall promptly give written notice of all Events of Default under this Indenture of which it has actual knowledge pursuant to Section 901(h) by registered or certified mail to the Borrower, the Bond Insurer and the Issuer, provided, however, such notice shall not be a condition precedent to the Trustee or the Holders exercising any right or remedy granted to them hereunder, except as provided in subsection (a) above. [END OF ARTICLE VIII] Section 811. Notice of Defaults; Opportunity of the Issuer and the Borrower to Cure Defaults. (a) Anything herein to the contrary notwithstanding, no default under Section 801(c) hereof shall constitute an Event of Default until actual written notice of such default by registered or certified mail shall be given by the Trustee or by the Beneficial Owners of not less than 25% of the aggregate principal amount of Bonds then Outstanding to the Borrower, the Bond Insurer and the Issuer, and the Borrower and the Issuer shall have had 30 days after receipt of such notice to correct such default or cause such default to be corrected and shall not have corrected such default or caused such default to be corrected within the applicable period; provided, however, if such default be such that it cannot with due diligence be cured within the applicable period but can be wholly cured within a period of time not materially detrimental to the rights of the Trustee and the Holders, to be determined conclusively by the Trustee, it shall 46 47

80 ARTICLE IX THE TRUSTEE Section 901. Acceptance of the Trusts. 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 such trusts, and agrees to perform such 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: (a) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations should be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, accountants, agents, receivers, employees, or other experts, and shall not be responsible for the acts of any attorneys, accountants, agents, receivers, employees, or other experts appointed by it in good faith and without gross negligence, and shall be entitled to advice of its counsel, accountant, or other expert concerning all matters of trusts hereof and the duties hereunder and may in all cases pay and be reimbursed for such reasonable compensation to all such attorneys, accountants, agents, receivers, employees, and other experts as may be reasonably employed in connection with the trusts hereof. The Trustee may act upon the opinion or advice of any attorneys, accountants, or other experts (who may be the attorneys, accountants, or other experts for the Issuer or the Borrower) approved by the Trustee in the exercise of reasonable care. The Trustee shall not be responsible for any loss or damage resulting from any action or non-action taken in good faith in reliance upon such opinion or advice. (c) The Trustee shall not be responsible for any recital other than its own 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 moneys or for the recording or re-recording or filing or re-filing of this Indenture or any financing statement or for the validity of the execution by the Issuer of this Indenture or any supplemental indentures hereto or instruments of further assurance or for the 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; except that in the event the Trustee enters into possession of a part or all of the property conveyed hereby pursuant to any provision of this Indenture, it shall use due diligence in preserving such property. The Trustee (d) (e) (f) (g) 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 the Borrower under the Borrower Contracts except as herein expressly set forth, but the Trustee may require of the Issuer or the Borrower full information and advice as to the agreements aforesaid and as to the condition of the property conveyed hereby. The Trustee shall not be accountable for the use of the proceeds from the sale of the Bonds disbursed in accordance with the provisions of 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 shall be fully protected in acting in good faith upon and may conclusively rely upon any notice, request, resolution, consent, certificate, order, affidavit, letter, telegram, or other paper or document, or oral communication or direction, reasonably believed to be genuine and to have been signed or sent or given by the proper person or persons. Any action 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 registered 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 on behalf of the Issuer by the Authorized Issuer Representative or by its President or Chairman and attested by the Secretary or Assistant Secretary of the Issuer and upon a certificate signed on behalf of the Borrower by the Authorized Borrower Representative or by the President or Vice President of its member and attested by the Secretary or Assistant Secretary of its member, as sufficient evidence of the facts therein contained and prior to the occurrence of a default of which the Trustee has been notified as provided in subsection (h) of this Section or of which by such subsection it is deemed to have notice, 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 Secretary or Assistant Secretary of the Issuer under its seal to the effect that a resolution in the form therein set forth has been adopted by its governing body 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 gross negligence or willful misconduct (h) (i) (j) (k) (l) (m) (n) The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder except (i) failure by the Issuer to cause to be made any of the payments required to be made by the Bonds or (ii) failure by the Borrower to make any of the payments to the Trustee required to be made by Section 5.02 of the Loan Agreement or the Notes, unless a Responsible Officer of the Trustee shall be specifically notified in writing of such default by the Issuer or by the Beneficial Owners of at least 25% in aggregate principal amount of all Bonds then Outstanding. All notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered in accordance with Section 1304 hereof, and in the absence of such notice so delivered the Trustee may conclusively assume there is no default except as aforesaid. At any and all reasonable times the Trustee and its duly authorized agents, attorneys, experts, engineers, accountants, and representatives shall have the right, but shall not be required, to fully to inspect any and all of the books, papers, and records of the Issuer pertaining to the Borrower Contracts and the Bonds, and to take such memoranda from and in regard thereto as may be desired. 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. 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 of this Indenture, 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 of any other action by the Trustee. All moneys 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. The Trustee and any paying agent shall not be under any liability for interest on any moneys received hereunder except such as may be separately agreed upon in writing. 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 Holders and the Issuer. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the owners of a majority in 50 (o) (p) (q) (r) (s) (t) aggregate principal amount of the Outstanding Bonds 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. No provisions of this Indenture 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. 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 related to the Project, other than for its gross negligence or willful misconduct. Prior to entering or taking possession of, or taking any other actions with respect to any property encumbered by the Security Deed and the Security Agreement, the Trustee may require assurance in the form of an opinion of counsel or otherwise that no liability under any Environmental Laws will be imposed upon it as a result of such actions. The Trustee shall have no responsibility for any information in any official statement, offering memorandum, or other disclosure material distributed with respect to the Bonds, and the Trustee shall have no responsibility for compliance with any state or federal securities laws in connection with the Bonds. In the event that the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders, each representing less than a majority in aggregate principal amount of the Bonds Outstanding, pursuant to the provisions of this Indenture, then the Trustee, in its sole discretion, may determine what action or actions, if any, shall be taken or not taken. The Trustee s reliance upon the written investment instructions of the Authorized Borrower Representative shall fully protect the Trustee as to whether the investments covered by such instructions are permitted under applicable state law. Section 902. Fees, Charges, and Expenses of the Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for Ordinary Services of the Trustee rendered hereunder, and all advances, attorneys fees, costs and expenses and other Ordinary Expenses of the Trustee reasonably made or incurred by the Trustee in connection with such Ordinary Services of the Trustee, and in the event that it should become necessary that the Trustee perform Extraordinary Services of the Trustee, it shall be entitled to reasonable extra compensation therefor and to reimbursement for reasonable Extraordinary Expenses of the Trustee in connection therewith; provided, that if such Extraordinary Services of the Trustee or Extraordinary Expenses of the Trustee are occasioned by the gross negligence or willful misconduct of the Trustee, it shall not be entitled to compensation or reimbursement therefor. The Trustee shall be entitled to payment and reimbursement for the reasonable fees and charges 51

81 of the Trustee as certificate registrar and paying agent for the Bonds as hereinabove provided. Upon an Event of Default hereunder, but only upon such an Event of Default, the Trustee shall have a right of payment prior to payment on account of principal of, or premium, if any, or interest on, any Bond for the foregoing advances, fees, costs, and expenses incurred; provided, however, that in no event shall the Trustee have any such prior right of payment or claim therefor against (a) moneys held to pay redemption price of the Bonds, (b) moneys or obligations deposited with or paid to the Trustee for the redemption or payment of Bonds that are deemed to have been paid in accordance with Article VII hereof, or (c) funds held pursuant to Section 510 hereof. The Trustee s right to compensation shall survive discharge of this Indenture, the resignation or removal of the Trustee hereunder, and payment in full of the Bonds. Section 903. Notice to Holders if Default Occurs. If a default occurs of which the Trustee is by subsection (h) of Section 901 hereof required to take notice or if notice of default is given as in such subsection (h) provided, the Trustee shall give such notice to the Borrower and the Issuer as is specified in Section 811 hereof and shall give written notice thereof by first-class, registered or certified mail, within 15 days of the Trustee s receipt of such notice (unless such default is cured or waived), to the owners of all Bonds then Outstanding shown by the registration books maintained by the Trustee pursuant to Section 208 hereof, provided that, except in the case of a default in the payment of the principal of, premium, if any, or interest on any Bond, the Trustee may withhold such notice to the Holders if and so long as the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. Section 904. Intervention by the Trustee. The Trustee may intervene on behalf of Holders in any judicial proceeding to which the Issuer or the Borrower is a party and which, in the reasonable opinion of the Trustee and its counsel, has a substantial bearing on the interests of owners of the Bonds and shall do so if requested in writing by the Beneficial Owners of at least 25% in aggregate principal amount of all Bonds then Outstanding and the indemnity required by Section 914 hereof has been provided. The rights and obligations of the Trustee under this Section are subject to the approval of a court of competent jurisdiction, if such approval is required by law as a condition to such intervention. Section 905. Successor Trustee. Any corporation or association into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell, lease, or transfer its corporate trust business and corporate trust assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation, or transfer to which it is a party, if otherwise eligible under Section 910 hereof, ipso facto, shall be and become successor trustee hereunder and vested with all of the title to the Trust Estate and all the trusts, powers, rights, obligations, duties, remedies, discretions, immunities, privileges, and all other matters as was its predecessor, without the execution or filing of any instruments or any further act, deed, or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 906. Resignation by the Trustee. The Trustee and any successor trustee may at any time resign from the trusts hereby created by executing an instrument in writing resigning such trusts and specifying the date when such resignation shall take effect (subject to the provision requiring a successor to accept appointment as a successor trustee) and filing the same with the Issuer and the Borrower not less than 45 days before the date specified in such instrument when such resignation shall take effect, and by giving notice of such resignation by first class mail, postage prepaid, not less than 20 days prior to such resignation date, to each Holder shown on the registration records maintained pursuant to Section 208 hereof; such resignation shall only take effect when a successor trustee has been appointed and qualified pursuant to the provisions of Section 908 hereof and such successor trustee has accepted such appointment. Section 907. Removal of the Trustee. The Trustee may be removed at any time by the Issuer or the Borrower, by an instrument in writing delivered to the Trustee, or by an instrument or concurrent instruments in writing delivered to the Trustee, the Issuer, and the Borrower and signed by the owners of a majority in aggregate principal amount of all Bonds then Outstanding; provided, however, that no such removal shall be effective only when a successor trustee has been appointed and qualified pursuant to the provisions of Section 908 hereof and such successor trustee has accepted such appointment. Section 908. Appointment of Successor Trustee; Temporary Trustee. In case the Trustee hereunder shall (a) resign or be removed or (b) 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 and signed by the President or Chairman and attested by the Secretary or Assistant Secretary of the Issuer under its seal and executed by the President or Vice President of the Borrower s member; provided, that if a successor trustee is not so appointed within ten days after notice of resignation is mailed or an instrument of removal is delivered as provided under Sections 906 and 907 hereof, respectively, or within ten days of the Issuer s knowledge of any of the events specified in clause (b) hereinabove, then the owners of a majority in aggregate principal amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing signed by or on behalf of such owners, delivered personally or sent by registered mail to the Issuer and the Borrower, may designate a successor trustee. Until a successor trustee shall be appointed by the Holders in the manner above provided, the Issuer, by resolution and 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 Holders. Notice of the appointment of a successor trustee shall be given in the same manner as provided by Section 906 hereof with respect to the resignation of the Trustee. In case at any time the Trustee shall give notice of its intent to 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. Section 909. Concerning Any Successor Trustee. Every successor trustee appointed hereunder shall execute, acknowledge, and deliver to its predecessor and also to the Issuer an instrument in writing accepting such appointment hereunder, and thereupon such successor, without any further act, deed, or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, remedies, immunities, privileges, duties, and obligations of its predecessor, but such predecessor shall, nevertheless, on the written request of the Issuer, or of its successor, and upon payment of all amounts due such predecessor pursuant to Section 902 hereof, execute and deliver an instrument transferring to such successor trustee all the estates, properties, obligations, duties, remedies, immunities, privileges, rights, powers, and trusts of such predecessor hereunder, and every predecessor trustee shall deliver all securities and moneys held by it as trustee hereunder to its successors, and every predecessor trustee shall deliver the registration books held by it as certificate registrar hereunder to its successors. Should any instrument in writing from the Issuer be required by a successor trustee for more fully and certainly vesting in such successor the estates, trusts, obligations, remedies, immunities, privileges, rights, powers, and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged, and delivered by the Issuer. The resignation of any trustee and the instrument or instruments removing any trustee and appointing a successor hereunder, together with all other instruments provided for in this Article, shall be filed or recorded by the successor trustee in each recording office where this Indenture or a notice hereof or a financing statement relating to this Indenture shall have been filed or recorded, if any. Any predecessor trustee shall not be liable for any action taken or omitted to be taken by a successor trustee. Section 910. Trustee Required; Paying Agents, Co-Authenticating Agent, and Co-Bond Registrar. (a) There shall at all times be a trustee hereunder, which shall be a corporation or association duly organized and existing under the laws of the United States of America or any state or territory thereof and authorized by law to perform all the duties imposed upon it by this Indenture and shall be (1) a bank or trust company, (2) a wholly-owned subsidiary of a bank or trust company, or (3) a wholly-owned subsidiary of a bank holding company the principal banking subsidiary of which is a bank or trust company, which bank or trust company, in case of (1), (2), or (3) of this subsection, is subject to examination by federal or state authority and has a reported capital and surplus of not less than $75,000,000, if there be such an institution willing, qualified, and able to accept the trusts imposed under this Indenture upon reasonable or customary terms. The foregoing shall not prohibit the appointment of an individual as a cotrustee under Section 913 hereof. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection, it shall resign immediately in the manner provided in Section 906 hereof. No resignation or removal of the Trustee and no appointment of a successor trustee shall become effective until the successor trustee has accepted its appointment under Section 909 hereof. (b) The Issuer hereby appoints and designates the Principal Office of the Trustee as the place of payment for the Bonds, and the Trustee as the paying agent for the Bonds. The Issuer shall, upon the written request from the Borrower and payment of any expenses incurred in connection therewith pursuant to Section 5.02 of the Loan Agreement, cause the necessary arrangements to be made through the Trustee for the designation of additional paying agents as specified by the Borrower for the making available of funds for the payment of such of the Bonds as shall be presented when due at the designated office of such additional paying agents. The Trustee may designate a co-authenticating agent and a co-bond registrar, which may perform the duties of authenticating agent and bond registrar on behalf of the Trustee, and all references herein to authenticating agent and bond registrar shall include any such coauthenticating agent and co-bond registrar. Section 911. Trustee Protected in Relying Upon Resolutions. The resolutions, opinions, certificates, and other instruments provided for in this Indenture may be accepted by the Trustee as conclusive evidence of the facts and conclusions stated therein and shall be full warrant, protection, and authority to the Trustee for the release of property and the withdrawal of cash or other action taken hereunder. Section 912. Successor Trustee as Trustee of Funds and Accounts, as Paying Agent, and as Bond Registrar. In the event of a change in the office of trustee, the predecessor trustee that has resigned or has been removed shall cease to be trustee of the Funds and any special trust funds hereunder created and shall cease to be paying agent for the payment of principal of and interest and premium, if any, on the Bonds and shall cease to be bond registrar, and the successor trustee as qualified under Section 908 hereof shall become such trustee, paying agent, and bond registrar. Section 913. Trust Estate may Be Vested in Separate Trustee or Co-Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as trustee in such jurisdiction. It is recognized that in case of litigation under this Indenture or the Bond Documents and in particular in case of the enforcement of either on an Event of Default, or in case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights, or remedies herein granted to the Trustee or may not hold title to the Trust Estate or any portion thereof, in trust, as herein granted, or may not take any other action that may be necessary or desirable in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate co-trustee. The following provisions of this Section 913 are adopted to these ends. In the event that the Trustee appoints an additional individual or institution as a separate co-trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, duty, obligation, interest, security interest, and lien expressed or intended by this Indenture to be exercised by or vested in or granted or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate co-trustee but only to the extent necessary to enable such separate co-trustee to exercise such powers, rights, and remedies, and every covenant and obligation necessary to the exercise thereof by such separate co-trustee shall run to and be enforceable by either of them. Should any deed, conveyance, or instrument in writing from the Issuer be required by the separate co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to him or it such properties, rights, powers, trusts, duties, and obligations, any and all such deeds, conveyances, and instruments in writing shall, on request, be executed, acknowledged, and delivered by the Issuer. In case any separate co-trustee, or a successor to either, shall die, become incapable of acting, resign, or be removed, all the estates, properties, rights, powers, trusts, duties, and obligations of such separate co-trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate co-trustee. Any co-trustee appointed by the Trustee pursuant to this Section may be removed by the Trustee, in which case all powers, rights, and remedies vested in the co-trustee shall again vest in the Trustee as if no such appointment of a co-trustee had been 54 55

82 made. The Trustee shall not be liable for any action taken or omitted to be taken by any such separate co-trustee. Section 914. Indemnification of Trustee. Before taking any action under this Indenture (other than (i) paying the principal of, premium, if any, and interest on the Bonds as the same shall become due and payable and (ii) declaring an acceleration under Section 802 of this Indenture) at the direction or request of the Holders, the Trustee may require that a satisfactory indemnity bond be furnished for reimbursement of all expenses it may incur and to protect it against all liabilities, except for liability that is adjudicated to have resulted from the negligence or willful misconduct of the Trustee by reason of any action so taken. Section 915. Reports. The Trustee shall provide to the Issuer, the Borrower, the Underwriter, or any Beneficial Owner of 15% or more in aggregate principal amount of the Bonds then Outstanding, on written request, the following items: (1) copies of all notices, documents, or reports provided to or by it under this Indenture, (2) a description of the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such), which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Bonds, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than one-half of one percent of the principal amount of the Outstanding Bonds on the date of such report, (3) a description of the property and funds, if any, physically in the possession of the Trustee as such on the date of such report, and (4) a description of any additional issue of Bonds that the Trustee has not previously reported. [END OF ARTICLE IX] ARTICLE X MEETINGS OF HOLDERS The provisions of this article shall only apply during any period that a book-entry only system of registration for the Bonds is not in effect. Section Purpose of Meetings. A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article X, to the extent relevant to the Holders, to take any action (i) authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Bonds or (ii) under any provision of this Indenture or authorized or permitted by law. Section Call of Meetings. The Trustee may call at any time a meeting of Holders to be held at any reasonable time and place as the Trustee shall determine. Notice of such meeting, setting forth the time, place, and the general subject matter thereof, shall be mailed by first class mail, postage prepaid, not less than 15 nor more than 90 days prior to the date of the meeting, to the Borrower and the Issuer and to the Holders at their addresses as they appear on the registration books of the Issuer on the 15 th day preceding the date of such mailing, which 15 th day preceding the date of such mailing shall be the record date for the meeting. If at any time the Issuer or the Borrower or the Holders of at least 25% in aggregate principal amount of the Bonds then Outstanding shall have requested the Trustee to call a meeting of Holders, by written request setting forth the purpose of the meeting, and if the Trustee shall not have mailed the notice of the meeting within 20 days after the receipt of the request, then the Issuer, the Borrower, or the owners of the Bonds in the amount above specified may determine the time and place of the meeting and may call the meeting to take any action authorized in Section 1001 hereof, by mailing notice thereof as provided above. Any meetings of Holders shall be valid without notice, if the owners of the Bonds then Outstanding that are required to be present at such meeting are present in person or by proxy, or if notice is waived before or after the meeting by the owners of the Bonds Outstanding that were required to be present at such meeting and who were not so present at the meeting, and if the Issuer, the Borrower, and the Trustee are either present by duly authorized representatives or have waived notice, before or after the meeting. Section Voting. To be entitled to vote at any meeting of Holders, a Person shall (a) be a Holder as of the record date for the meeting as determined in Section 1002 hereof, or (b) be a person appointed as a representative by proxy by an instrument or document in writing by a Holder as of the record date for the meeting. A Holder or proxy shall be entitled to one vote for each $5,000 in principal amount of the Outstanding Bonds (whether Series 2010 Bonds or Additional Bonds) held by such Holder. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots upon which shall be subscribed the signatures of the Holders or of their representative by proxy and the identifying number(s) and principal amounts of the Bonds held or represented by them Section Meetings. Notwithstanding any other provisions of this Indenture, the Trustee may make any reasonable regulations that it may deem to be advisable for meetings of Holders, with regard to: (a) proof of the ownership of Bonds and of the appointment of representatives by proxy, (b) the appointment and duties of inspectors of votes, (c) the recordation of the proceedings of the meetings, (d) the execution, submission, and examination of proxies and other evidence of the right to vote, and (e) any other matters concerning the conduct, adjournment, or reconvening of meetings that it may deem appropriate or necessary. The Trustee shall appoint a temporary chair of the meeting by an instrument or document in writing, unless the meeting shall have been called by the Issuer, the Borrower, or the Holders, as provided in Section 1002 hereof, in which case the Issuer, the Borrower, or the Holders calling the meeting, as the case may be, shall appoint a temporary chair in like manner. A permanent chair and a permanent secretary of the meeting shall be elected by vote of the owners of a majority in aggregate principal amount of the Bonds represented at the meeting and entitled to vote at such meeting. The only persons who shall be entitled to be present or to speak at any meeting of Holders shall be the persons entitled to vote at the meeting and their counsel, any representatives of the Issuer and its counsel, any representatives of the Trustee and its counsel, and any representatives of the Borrower and its counsel. Meetings shall be conducted in accordance with rules, regulations, orders, and procedures established by the chair of the meeting. Unless otherwise specifically required in this Indenture, all issues, matters, motions, or resolutions at any meeting shall be determined by the majority of votes represented at the meeting in person or by proxy. Section Miscellaneous. Nothing contained in this Article X shall be deemed or construed to authorize or permit any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Bonds by reason of any call of a meeting of Holders or by reason of any rights expressly or impliedly conferred by this Article X to call a meeting of Holders. [END OF ARTICLE X] ARTICLE XI SUPPLEMENTAL INDENTURES Section Supplemental Indentures Not Requiring Consent of Holders. (a) The Issuer and the Trustee may, without the consent of or notice to any of the Holders, but with the consent of the Borrower (unless the Borrower is in default under the Borrower Documents) and the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy), enter into an indenture or indentures supplemental to this Indenture as shall not be inconsistent with the terms and provisions hereof for any one or more of the following purposes: (1) to cure any ambiguity or formal defect or omission in, or to correct or supplement any defective provision of, this Indenture, (2) to add to the covenants and agreements of, and limitations and restrictions upon, the Issuer in this Indenture other covenants, agreements, limitations, and restrictions to be observed by the Issuer for the protection of the Holders, (3) 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, (4) to grant to or confer upon the Trustee for the benefit of the Holders any additional rights, remedies, powers, benefits, security, liabilities, duties, or authority that may lawfully be granted to or conferred or imposed upon the Holders or the Trustee or either of them, (5) to subject to the lien and security interest of this Indenture additional revenues, properties, or collateral, (6) 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 the Bonds for 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, (7) to modify, amend, or supplement this Indenture in such manner to assure the continued exclusion from gross income of the owners thereof for federal income tax purposes of interest on any Tax-Exempt Bonds, (8) to reflect a change in applicable law provided that the Trustee shall determine that such supplemental indenture does not prejudice the rights of Holders (which such determination may be based upon an opinion of Counsel)

83 (9) in connection with any other change herein that, in the judgment of the Trustee, does not prejudice or materially adversely affect the Holders or impair the Trust Estate (which such determination may be based upon an opinion of Counsel), or (10) to provide for certificated Bonds. (b) The Issuer and the Trustee shall, without the consent of or notice to any of the Holders, but with the consent of the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy), enter into an indenture or indentures supplemental to this Indenture (i) in connection with the issuance of any Additional Bonds in accordance with Section 214 hereof and the inclusion of additional collateral in 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 more precisely identify the same or to substitute 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 Trust Estate in order to conform with similar changes made in the Loan Agreement as permitted by Section 1201 hereof. Section Supplemental Indentures Requiring Consent of Holders. Exclusive of indentures supplemental hereto covered by Section 1101 hereof and subject to the terms and provisions contained in this Section and not otherwise, the owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding, with the prior written consent of the Borrower, (unless the Borrower is in default under the Borrower Documents) and the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy), 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 such indenture or indentures 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 or in any supplemental indenture; provided, however, that nothing in this Section or in Section 1101 contained 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, or (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 of this Indenture or the deprivation of any Holders of the lien created by this Indenture, without the consent of the owners of all the Bonds at the time Outstanding that would be affected by the action to be taken, or (c) a reduction in the amount, or an extension of the time of any payment, required by the mandatory sinking fund redemption provisions of this Indenture, without the consent of the owners of all the Bonds at the time Outstanding that would be affected by the action to be taken, or (d) a reduction in the aforesaid aggregate principal amount of Bonds the owners of which are required to consent to any such supplemental indenture, without the consent of the owners of all the Bonds at the time Outstanding that would be affected by the action to be taken, or (e) the modification of the trusts, powers, obligations, remedies, privileges, rights, duties, or immunities of the Trustee, without the written consent of the Trustee, or (f) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (g) the release of or 60 requirements for the release of this Indenture, without the consent of the owners of all the Bonds at the time Outstanding that would be affected by the action to be taken. If at any time the Issuer shall request the Trustee to enter into any such supplemental indenture for any of the purposes allowed by this Section, the Trustee shall, upon being reasonably indemnified with respect to expenses, cause notice of the proposed execution of such supplemental indenture to be given in substantially the manner provided in Section 305 hereof with respect to redemption of Bonds. Such notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that copies thereof are on file at the Principal Office of the Trustee for inspection by all Holders. The Trustee shall not, however, be subject to any liability to any Holder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such supplemental indenture when consented to and approved as provided in this Section. If, within 60 days or such longer period as shall be reasonably prescribed by the Issuer following the giving of such notice, the owners of the requisite principal amount of affected Bonds Outstanding at the time of the execution of any such supplemental indenture 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 or the Issuer from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such supplemental indenture as in this Section permitted and provided, this Indenture shall be and be deemed to be modified and amended in accordance therewith. The Trustee may require or request and conclusively rely upon an opinion of Counsel as conclusive evidence that execution and delivery of a supplemental indenture (i) has been effected in compliance with the provisions of this Article XI and (ii) will not adversely affect the tax-exempt status of the Bonds. [END OF ARTICLE XI] 61 ARTICLE XII AMENDMENT OF OTHER BOND DOCUMENTS Section Amendments to Other Bond Documents Not Requiring Consent of Holders. The Issuer and the Trustee shall, without the consent of or notice to the Holders, consent to any amendment, change, or modification of the Bond Documents other than this Indenture as may be required (i) by the provisions of this Indenture and the Loan Agreement, (ii) for the purpose of curing any ambiguity or formal defect or omission therein, (iii) so as to add rights acquired in accordance with the provisions of the Bond Documents, (iv) in connection with the issuance of Additional Bonds as provided in Section 214 hereof, (v) in connection with the land described in Exhibit A to the Loan Agreement and interests in land, buildings, machinery, equipment, and other real or personal property so as to identify more precisely the same or to substitute, release, or add additional land or interests in land, buildings, machinery, equipment, or other real or personal property, as permitted by the Loan Agreement, or (vi) in connection with any other change therein that, in the judgment of the Trustee (which such determination may be based upon an opinion of Counsel), does not prejudice the Trustee or materially adversely affect the owners of the Bonds. The Bond Insurer must receive written notice of any amendments, changes or modifications of the Bond Documents other than this Indenture. than the requisite principal amount of the affected Bonds Outstanding at the time of the execution of such proposed amendment, change, or modification 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. The Trustee may require or request and conclusively rely upon an opinion of Bond Counsel as conclusive evidence that execution and delivery of an amendment, change, or modification of any Bond Document other than this Indenture (i) has been effected in compliance with the provisions of this Article XII and (ii) will not adversely affect the tax-exempt status of the Bonds. [END OF ARTICLE XII] Section Amendments to Other Bond Documents Requiring Consent of Holders. Except for the amendments, changes, or modifications as provided in Section 1201 hereof, neither the Issuer nor the Trustee shall consent to any other amendment, change, or modification of the Bond Documents other than this Indenture without (i) giving notice to and obtaining the written approval or consent of the owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, given and procured as in Section 1102 hereof provided, and (ii) giving notice to and obtaining the written approval or consent of the Bond Insurer; provided, however, that nothing in this Section or Section 1201 hereof shall permit or be construed as permitting, (a) 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 every owner of Bonds affected thereby, or (b) 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 the Bonds at the time Outstanding that would be affected by the action to be taken. 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 Section 1102 hereof 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 Principal Office of the Trustee for inspection by all Holders. The Trustee shall not, however, be subject to any liability to any Holder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such amendment, change, or modification when consented to and approved as provided in this Section. If, within 60 days or such longer period as shall be reasonably prescribed by the Issuer following the giving of such notice, the owners of not less 62 63

84 ARTICLE XIII MISCELLANEOUS Section Consents of Holders. Any consent, request, direction, approval, waiver, objection, or other instrument required by this Indenture to be signed and executed by the Holders may be in any number of concurrent writings of similar tenor and may be signed or executed by such Holders in person or by agent appointed in writing. Proof of the execution of any consent, request, direction, approval, waiver, objection, or other instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Indenture and shall be conclusive in favor of the Trustee and the Issuer, with regard to any action taken under such request or other instrument, namely: (a) the fact and date of the execution by any person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer of any jurisdiction authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such instrument or writing acknowledged to him the execution thereof; where such execution is by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association, or partnership, such affidavit or certificate shall also constitute sufficient proof of his authority; (b) the fact of ownership of Bonds and the amount or amounts, numbers, other identification of such Bonds, and the date of ownership shall be proved by the registration books of the Issuer maintained by the Trustee pursuant to Section 208 hereof; (c) any request, consent, or vote of the owner of any Bond shall bind every future owner of the same Bond and the owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Issuer in pursuance of such request, consent, or vote; and (d) in determining whether the owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent, or waiver under this Indenture, Bonds that are owned by the Issuer, by the Borrower, by any other obligor under the Bond Documents or on the Bonds, or by any Affiliate of the foregoing, shall be disregarded and deemed not to be outstanding for the purpose of determining whether the Trustee shall be protected in relying on any such demand, request, direction, consent, or waiver, but only Bonds that a Responsible Officer of the Trustee actually knows to be so owned shall be disregarded; Bonds so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 1301 if the pledgee shall establish to the satisfaction of the Trustee the pledgee s right to vote such Bonds and that the pledgee is not an Affiliate of the Issuer, the Borrower, or any other obligor under the Bond Documents or on the Bonds; in case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. is intended or shall be construed to give to any Person other than the parties hereto, the Borrower, the Bond Insurer and the owners of the Bonds any legal or equitable right, remedy, or claim under or in respect to this Indenture, or any covenants, conditions, and provisions herein contained. This Indenture and all of the covenants, conditions, and provisions hereof are intended to be and are for the sole and exclusive benefit of the parties hereto, the Borrower, the Bond Insurer and the owners of the Bonds herein provided for. Section Severability. If any provision of this Indenture shall be held or be deemed to be or shall, in fact, be illegal, invalid, inoperative, or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of law or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained illegal, invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses, or sections in this Indenture contained shall not affect the remaining portions of this Indenture or any part thereof. Section Notices. All notices, certificates, requests, demands, or other communications hereunder shall be sufficiently given and shall be deemed given upon receipt, by hand delivery, mail, overnight delivery, telecopy, or other electronic means, addressed as follows: If to the Issuer: with a copy to: If to the Borrower: Savannah Economic Development Authority P. O. Box 128 Savannah, Georgia Telecopy: (912) Attention: President Gray & Pannell LLP P. O. Box 8050 Savannah, Georgia Telecopy: (912) Attention: Thomas S. Gray, Jr. SSU Community Development I, LLC 3219 College Street Box Savannah State University Savannah, Georgia Telecopy: (912) Section Limitation of Rights. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture or the Bonds with a copy to: If to the Trustee: If to the Bond Insurer: Joseph Steffen 3219 College Street, Box Savannah State University Savannah, Georgia Telecopy: (912) The Bank of New York Mellon Trust Company, N.A. Corporate Trust Services 900 Ashwood Parkway, Suite 425 Atlanta, GA Telecopy: (706) Attention: Cassandra Shedd At the address set forth in Section 1401 hereof. A duplicate copy of each notice, certificate, or other communication given hereunder shall also be given to the Trustee and the Bond Insurer. Any party named in this Section 1304 may, by notice given to all parties to this Indenture and the other Bond Documents, designate any additional or different addresses to which subsequent notices, certificates, or other communications shall be sent. For purposes of this Section, electronic means shall mean telecopy or facsimile transmission or other similar electronic means of communication that produces evidence of transmission. Section Payments Due on Saturdays, Sundays, and Holidays. In any case where the date of maturity of interest on or principal of any Bonds or the date fixed for redemption of any Bonds shall be a day other than a Business Day, then payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture, the Loan Agreement and any other document reasonably related to the Bonds sent by the Issuer or the Borrower, as the case may be, by unsecured , facsimile transmission or other similar unsecured electronic methods, provided, however, that the Issuer and the Borrower, respectively, shall provide to the Trustee an incumbency certificate listing designated persons with the authority to provide such instructions, which incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. If the Issuer or the Borrower, as applicable, elect to give the Trustee or facsimile instructions (or instructions by a similar electronic method), the Trustee s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Issuer and the Borrower, as applicable, agree to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section Counterparts. This Indenture 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. Section Laws Governing Indenture and Situs and Administration of Trust. The effect and meanings of this Indenture and the rights of all parties hereunder shall be governed by and construed according to the laws of the State, exclusive of such State s rules regarding choice of law, but it is the intention of the Issuer that the situs of the trust created by this Indenture be in the state in which is located the Principal Office of the Trustee from time to time acting under this Indenture. The word Trustee as used in the preceding sentence shall not be deemed to include any additional individual or institution appointed as a separate or co-trustee pursuant to Section 913 of this Indenture. It is the further intention of the Issuer that the Trustee administer such trust in the state in which it is located, from time to time, and that the same be, for all purposes hereunder, the situs of such trust. Section No Personal Liability. No recourse under or upon any obligation, covenant, or agreement contained in this 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 of this Indenture, shall be had against any incorporator, member, director, or officer, as such, past, present, or future, of the Issuer or the Trustee, or any incorporator, member, director, 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 Holders or otherwise, of 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, director, or officer, as such, to respond by reason of any act or omission on his part or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Trustee as trustee for the Holders 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 of this Indenture and the issuance of the Bonds. [END OF ARTICLE XIII] 66 67

85 ARTICLE XIV BOND INSURER PROVISIONS Anything in this Indenture to the contrary notwithstanding, so long as the Financial Guaranty Insurance Policy (also referred in this Article XIV as the Policy ) is in full force and effect and effect and the Bond Insurer is not in default thereunder, the following provisions shall be applicable to the Bond Documents; provided, however, that the Bond Insurer shall retain its rights of subrogations to the extent it has previously made payment of principal of or interest on the applicable Series 2010 Bonds. Section Notices and Other Information. 1. Any notice that is required to be given to Holders of the Series 2010 Bonds, nationally recognized municipal securities information repositories or state information depositories pursuant to Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission or to the Trustee pursuant to the Bond Documents shall also be provided to the Bond Insurer, simultaneously with the sending of such notices. In addition, to the extent that the Issuer and the Borrower have entered into one or more continuing disclosure agreements, undertakings or covenants with respect to the Series 2010 Bonds, all information furnished pursuant to such agreements, undertakings or covenants shall also be provided to the Bond Insurer, simultaneously with the furnishing of such information. In addition, the Issuer, the Borrower or the Trustee, as the case may be, shall provide the Bond Insurer with the following additional information: a. Notice of any draw upon the Debt Service Reserve Fund within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the Debt Service Reserve Requirement and (ii) withdrawals in connection with a refunding of Bonds; b. Notice of any default known to the Borrower or the Issuer within five Business Days after knowledge thereof; c. Prior notice of the advance refunding or redemption of any of the Series 2010 Bonds, including the principal amount, maturities and CUSIP numbers thereof; d. Notice of the commencement of any proceeding by or against the Issuer or the Borrower commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); 68 e. Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds; and f. A full original transcript of all proceedings relating to the execution of any amendment, supplement, or waiver to the Bond Documents. 2. All demands, notices and other information required to be given to the Bond Insurer under the financing documents shall be in writing and shall be mailed by registered or certified mail or personally delivered or telecopied to the recipient as follows: Assured Guaranty Municipal Corp. 31 West 52 nd Street New York, New York Attn: Risk Management Department (Re: Policy No. ) Telecopy No.: (212) Confirmation: (212) riskmanagementdept@assuredguaranty.com (In each case in which notice or other communication refers to an Event of Default, a claim on the Financial Guaranty Insurance Policy or any event with respect to which failure on the part of the Bond Insurer to the respond shall be deemed to constitute consent or acceptance, then such demand, notice or other communication shall be marked to indicate URGENT MATERIAL ENCLOSED and shall also be sent to the attention of the General Counsel at the same address and at generalcounsel@assuredguaranty.com or the following facsimile number: (212) ) 3. The Bond Insurer shall have the right to receive such additional information as it may reasonably request. 4. The Issuer and the Borrower will permit the Bond Insurer to discuss the respective affairs, finances and accounts of the Issuer and the Borrower or any information the Bond Insurer may reasonably request regarding the security for the Series 2010 Bonds with appropriate officers of the Issuer and the Borrower and will use commercially reasonable efforts to enable the Bond Insurer to have access to the facilities, books and records of the Issuer and the Borrower on any business day upon reasonable prior notice. 5. The Trustee shall notify the Bond Insurer of any failure of the Issuer and the Borrower to provide notices, certificates and other information under the Bond Documents. Section Defeasance. In the event that the principal and/or interest due on the Series 2010 Bonds shall be paid by the Bond Insurer pursuant to the Financial Guaranty 69 Insurance Policy, the Series 2010 Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the trust estate and all covenants, agreements and other Series 2010 Bonds of the Issuer to the registered owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Series 2010 Bonds. In addition, the Bond Insurer shall require the following items for a defeasance of the Series 2010 Bonds: (a) An opinion of counsel to the effect that the defeasance will not adversely impact the exclusion from gross income for federal income tax purposes of interest on the Series 2010 Bonds or refunded bonds and that the Series 2010 Bonds are no longer Outstanding under the Bond Documents. (b) If the Series 2010 Bonds are advance refunded by a net defeasance, a refunding trust or escrow agreement (the Escrow Agreement ) and an opinion of counsel regarding the validity and enforceability of the Escrow Agreement; and (c) The Escrow Agreement shall provide that: (i) Any substitution of securities shall require verification by an independent certified public accountant and the prior written consent of the Bond Insurer. (ii) There shall be no exercise any optional redemption of Series 2010 Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (i) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition of any such redemption there shall be provided to the Bond Insurer a verification of an independent certified public accountant as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following such redemption. (iii) The Issuer shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of the Bond Insurer. Section Trustee. 1. The Bond Insurer shall receive prior written notice of any name change of the Trustee or the removal or resignation of the Trustee. 2. No removal or resignation of the Trustee shall take effect until a successor, acceptable to the Bond Insurer, shall be appointed The Trustee may be removed at any time, at the request of the Bond Insurer, for any breach of its Series 2010 Bonds under the Bond Documents. 4. Notwithstanding any other provision of such Financing Document, in determining whether the rights of Bondholders will be adversely affected by any action taken pursuant to the terms and provisions thereof, the Trustee shall consider the effect on the Bondholders as if there were no Financial Guaranty Insurance Policy. Section Amendments and Supplements. With respect to amendments or supplements to the Bond Documents which do not require the consent of the Bondholders, the Bond Insurer must be given prior written notice of any such amendments or supplements. With respect to amendments or supplements to the Bond Documents which do require the consent of the Bondholders, the Bond Insurer's prior written consent is required. Copies of any amendments or supplements to such documents which are consented to by the Bond Insurer shall be sent to the rating agencies that have assigned a rating to the Series 2010 Bonds. Section The Bond Insurer as Third Party Beneficiary. The Bond Insurer is explicitly recognized as being a third party beneficiary under this Indenture and may enforce any right, remedy or claim conferred, given or granted hereunder. Section Control Rights. The Bond Insurer shall be deemed to be the Holder of all of the Series 2010 Bonds for purposes of (a) exercising all remedies and directing the Trustee to take actions or for any other purposes following an Event of Default and (b) granting any consent, waiver, direction or approval or taking any action permitted by or required under this Indenture to be granted or taken by the Holders of the Series 2010 Bonds. Section Consent Rights of the Bond Insurer. Consent of the Bond Insurer. Any provision of the Bond Documents expressly recognizing or granting rights in or to the Bond Insurer may not be amended in any manner that affects the rights of the Bond Insurer hereunder without the prior written consent of the Bond Insurer. Consent of the Bond Insurer in Addition to Bondholder Consent. Wherever the Bond Documents require the consent of all Bondholders, the Bond Insurer s prior written consent shall also be required. Consent of the Bond Insurer in the Event of Insolvency. Any reorganization or liquidation plan with respect to the Borrower must be acceptable to the Bond Insurer. In the event of any such reorganization or liquidation, the Bond Insurer shall have the right to vote on behalf of all Bondholders who hold Series 2010 Bonds guaranteed by the Bond Insurer absent a payment default by the Bond Insurer under the Financial Guaranty Insurance Policy. Consent of the Bond Insurer Upon Default. Anything in this Indenture to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders or the Trustee for the benefit of the Bondholders under this Indenture, including, without limitation, (i) the right to accelerate the principal of the Series 2010 Bonds as described 71

86 in this Indenture and (ii) the right to annul any declaration of acceleration. The Bond Insurer also shall be entitled to approve all waivers of events of default. Acceleration Rights. Upon the occurrence of an Event of Default, the Trustee may, with the prior written consent of the Bond Insurer, and shall at the direction of the Bond Insurer or the Bondholders with the prior written consent of the Bond Insurer, by written notice to the Issuer and the Bond Insurer, declare the principal of the Series 2010 Bonds to be immediately due and payable, whereupon that portion of the principal of the Series 2010 Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Indenture or the Series 2010 Bonds to the contrary notwithstanding. Section Special Reimbursement Obligations of Borrower. 1. The Borrower hereby agrees to pay or reimburse the Bond Insurer, to the extent permitted by law, any and all charges, fees, costs and expenses which the Bond Insurer may reasonably pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (i) any accounts established to facilitate payments under the Financial Guaranty Insurance Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of the Bond Documents, including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the Borrower or any affiliate thereof) relating to the Bond Documents, any party to the Bond Documents or the transaction contemplated by the Bond Documents, (iii) the foreclosure against, sale or other disposition of any collateral securing any Series 2010 Bonds under the Bond Documents, or the pursuit of any remedies under the Bond Documents, to the extent such costs and expenses are not recovered from such foreclosure, sale or other disposition, or (iv) any amendment, waiver or other action with respect to, or related to, the Bond Documents whether or not executed or completed; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees of the Bond Insurer spent in connection with the actions described in clauses (ii) - (iv) above. In addition, the Bond Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Bond Documents. The Borrower will pay interest on the amounts owed in this paragraph from the date of any payment due or paid, at the per annum rate of interest publicly announced from time to time by JP Morgan Chase Bank, National Association at its principal office in New York, New York as its prime lending rate (any change in such prime rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank, National Association) plus three percent (3%) per annum (the Reimbursement Rate ). The Reimbursement Rate shall be calculated on the basis of the actual number of days elapsed over a 360-day year. In the event JPMorgan Chase Bank ceases to announce its prime rate publicly, the prime rate shall be the publicly announced prime rate or base lending rate of such national bank, as the Bond Insurer shall specify In addition to any and all rights of reimbursement, subrogation and any other rights pursuant hereto or under law or in equity, the Borrower agrees to pay or reimburse the Bond Insurer, to the extent permitted by law, any and all charges, fees, costs, claims, losses, liabilities (including penalties), judgments, demands, damages, and expenses which the Bond Insurer or its officers, directors, shareholders, employees, agents and each Person, if any, who controls the Bond Insurer within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, may reasonably pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, of any nature in connection with, in respect of or relating to the transactions contemplated by the Bond Documents by reason of: (a) any omission or action (other than of or by the Bond Insurer) in connection with the offering, issuance, sale, remarketing or delivery of the Series 2010 Bonds; (b) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft committed by any director, officer, employee or agent of the Issuer or the Borrower in connection with any transaction arising from or relating to the Bond Documents; (c) the violation by the Issuer or the Borrower of any law, rule or regulation, or any judgment, order or decree applicable to it; (d) the breach by the Issuer or the Borrower of any representation, warranty or covenant under the Bond Documents or the occurrence, in respect of the Issuer or the Borrower, under the Bond Documents of any "event of default" or any event which, with the giving of notice or lapse of time or both, would constitute any event of default ; or (e) any untrue statement or alleged untrue statement of a material fact contained in any official statement relating to the Series 2010 Bonds, if any, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such claims arise out of or are based upon any untrue statement or omission in information included in an official statement, if any, and furnished by the Bond Insurer in writing expressly for use therein. Section Payment Procedure Under the Financial Guaranty Insurance Policy. If, on the third Business Day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Trustee, after making all transfers and deposits required under this Indenture, moneys sufficient to pay the principal of and interest on the Series 2010 Bonds due on such Payment Date, the Trustee shall give notice to the Bond Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the Series Bonds due on such Payment Date, the Trustee shall make a pro rata claim under the respective Policy and give notice to the Bond Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the applicable series of the Series 2010 Bonds and the amount required to pay principal of the applicable series of the Series 2010 Bonds, confirmed in writing to the Bond Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with each Policy. The Trustee shall designate any portion of payment of principal on Series 2010 Bonds paid by the Bond Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Series 2010 Bonds registered to the then current Holder of the Series 2010 Bond, whether DTC or its nominee or otherwise, and shall issue a replacement Series 2010 Bond to the Bond Insurer, registered in the name of Assured Guaranty Municipal Corp., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Trustee's failure to so designate any payment or issue any replacement Series 2010 Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Series 2010 Bond or the subrogation rights of the Bond Insurer. The Trustee shall keep a complete and accurate record of all funds deposited by the Bond Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal of any Series 2010 Bond. The Bond Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Trustee. Upon payment of a claim under the Policy, the Trustee shall establish a separate special purpose trust account for the benefit of Holders of the Series 2010 Bonds referred to herein as the "Policy Payments Account" and over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall receive any amount paid under the Policy in trust on behalf of Holders of the Series 2010 Bonds and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Trustee to Holders of the Series 2010 Bonds in the same manner as principal and interest payments are to be made with respect to the Series 2010 Bonds under the sections hereof regarding payment of Series 2010 Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Notwithstanding anything herein to the contrary, the Issuer agrees to direct the Borrower to pay to the Bond Insurer (i) a sum equal to the total of all amounts paid by the Bond Insurer under the Policy (the Insurer Advances ); and (ii) interest on such Insurer Advances from the date paid by the Bond Insurer until payment thereof in full, payable to the Bond Insurer at the Late Payment Rate per annum (collectively, the Insurer Reimbursement Amounts ). Late Payment Rate means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Series 2010 Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment 74 Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. The Insurer Reimbursement Amounts are secured by a lien on and pledge of the Trust Estate and payable from such Trust Estate on a parity with debt service due on the Series 2010 Bonds. Funds held in the Policy Payments Account shall not be invested by the Trustee and may not be applied to satisfy any costs, expenses or liabilities of the Trustee. Any funds remaining in the Policy Payments Account following a Series 2010 Bond payment date shall promptly be remitted to the Bond Insurer. The Bond Insurer shall, to the extent it makes any payment of principal of or interest on the Series 2010 Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Policy. Each obligation of the Issuer and the Borrower to the Bond Insurer under the Bond Documents shall survive discharge or termination of such Bond Documents. The Bond Insurer shall be entitled to pay principal or interest on the Series 2010 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Policy) and any amounts due on the Series 2010 Bonds as a result of acceleration of the maturity thereof in accordance with this Indenture, whether or not the Bond Insurer has received a Notice of Nonpayment (as such terms are defined in the Policy) or a claim upon the Policy. Section Restrictions on Permitted Investments. Notwithstanding the provisions of Section 601 of this Indenture, any moneys held as a part of any Fund may be held, or invested, to the extent authorized by law, only in the following investments, and no others, without the written consent of the Bond Insurer: 1. (a) Cash (fully insured by the Federal Deposit Insurance Corporation), (b) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ( U.S. Treasury Obligations ), (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (d) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (e) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above 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 government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. 2. Federal Housing Administration debentures. 3. The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America: (a) Federal Home Loan Mortgage Corporation (FHLMC) senior debt obligations 75

87 and Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts); (b) Farm Credit System (formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) consolidated system-wide bonds and notes; (c) Federal Home Loan Banks (FHL Banks) consolidated debt obligations; and (d) Federal National Mortgage Association (FNMA) senior debt obligations and mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts). 4. Unsecured certificates of deposit, time deposits, and bankers acceptances (having maturities of not more than 365 days) of any bank the short-term obligations of which are rated A-1+ or better by S&P and Prime-1 by Moody s. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation, in banks which have capital and surplus of at least $15 million. 6. Commercial paper (having original maturities of not more than 270 days) rated A-1+ by S&P and Prime-1 by Moody s. 7. Money market funds rated Aam or AAm-G by S&P, or better and if rated by Moody s rated Aa2 or better. 8. State Obligations, which means: (a) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated at least A3 by Moody s and at least A- by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. (b) Direct general short-term obligations of any state agency or subdivision or agency thereof described in (a) above and rated A-1+ by S&P and MIG-1 by Moody s. (c) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state or state agency described in (b) above and rated AA- or better by S&P and Aa3 or better by Moody s. 9. Pre-refunded municipal obligations rated AAA by S&P and Aaa by Moody s meeting the following requirements: (a) the municipal obligations are (1) not subject to redemption prior to maturity or 76 (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (b) the municipal obligations are secured by cash or U.S. Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; (c) the principal of and interest on the U.S. Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, it any, due and to become due on the municipal obligations (a Verification Report ); (d) the cash or U.S. Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; (e) no substitution of a U.S. Treasury Obligation shall be permitted except with another U.S. Treasury Obligation and upon delivery of a new Verification Report; and (f) the cash or U.S. Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent. 10. Repurchase agreements: with (i) any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least A- by S&P and A3 by Moody s; or (2) any broker-dealer with retail customers or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least A- by S&P and A3 by Moody s. which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated at least A- by S&P and A3 Moody s and acceptable to the Bond Insurer (each an Eligible Provider ), provided that: (a) (i) permitted collateral shall include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers), and (ii) collateral levels must be at least 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMA s and 104% of the total principal when the collateral type is FNMA and FHLMC ( Eligible Collateral ); (b) the trustee or a third party acting solely as agent therefore or for the issuer (the Custodian ) has possession of the collateral or the collateral has been transferred to the Custodian in accordance with applicable state and federal laws (other than by means of entries on the transferors books) and such 77 collateral shall be marked to market; (c) the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Trustee, the Issuer and the Bond Insurer setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral; (d) the repurchase agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of the Bond Insurer; (e) the repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; (f) the repurchase agreement shall provide that if during its term the providers rating by either Moody s or S&P is withdrawn or suspended or falls below A- by S&P or A3 by Moody s, as appropriate, the provider must, notify the Issuer, the Trustee and the Bond Insurer within five (5) days of receipt of such notice. Within ten (10) days of receipt of such notice, the provider shall either: (i) provide a written guarantee acceptable to the Bond Insurer, (ii) post Eligible Collateral, or (iii) assign the agreement to an Eligible Provider. If the provider does not perform a remedy within ten (10) business days, the provider shall, at the direction of the Trustee (who shall give such direction if so directed by the Bond Insurer) repurchase all collateral and terminate the repurchase agreement, with no penalty or premium to the issuer or the Trustee. 11. Investment agreements with a domestic or foreign bank or corporation the longterm debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least AA- by S&P and Aa3 by Moody s, and acceptable to the Bond Insurer (each an Eligible Provider ) provided that: (a) interest payments are to be made to the trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the Project Fund, construction draws) on the Series 2010 Bonds; (b) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven (7) days prior notice; the Issuer and the Trustee hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; (c) the provider shall send monthly reports to the Trustee, the Issuer and the Bond Insurer selling forth the balance the Issuer or Trustee has invested with the 78 provider and the amounts and dates of interest accrued and paid by the provider (d) the investment agreement shall state that is an unconditional and general obligation of the provider, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (e) the investment agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of the Bond Insurer; (f) the Issuer, the Trustee and the Bond Insurer shall receive an opinion of domestic counsel to the provider that such investment agreement is legal, valid, binding and enforceable against the provider in accordance with its terms; (g) the Issuer, the Trustee and the Bond Insurer shall receive an opinion of foreign counsel to the provider (if applicable) that (i) the investment agreement has been duly authorized, executed and delivered by the provider and constitutes the legal, valid and binding obligation of the provider, enforceable against the provider in accordance with its terms, (b) the choice of law of the state set forth in the investment agreement is valid under that country s laws and a court in such country would uphold such choice of law, and (c) any judgment rendered by a court in the United States would be recognized and enforceable in such country; (h) the investment agreement shall provide that if during its term: (i) the providers rating by either S&P or Moody s falls below AA- or Aa3, the provider shall, at its option, within ten (10) days of receipt of publication of such downgrade, either (i) provide a written guarantee acceptable to the Bond Insurer, (ii) post Eligible Collateral with the Issuer, the trustee or a third party acting solely as agent therefore (the Custodian ) free and clear of any third party liens or claims, or (iii) assign the agreement to an Eligible Provider, or (iv) repay the principal of and accrued but unpaid interest on the investment; (ii) the provider s rating by either S&P or Moody s is withdrawn or suspended or falls below A- or A3, the provider must, at the direction of the Issuer or the Trustee (who shall give such direction if so directed by the Bond Insurer), within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Issuer or Trustee. (i) in the event the provider is required to collateralize, permitted collateral shall 79

88 include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers) and collateral levels must be 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMA s and 104% of the total principal when the collateral type is FNMA and FHLMC ( Eligible Collateral). In addition, the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Trustee, the Issuer and the Bond Insurer setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral; (j) the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; 3. So long as any Series 2010 Bonds insured by the Bond Insurer remain Outstanding or any amounts are owed to the Bond Insurer by the Borrower, neither the Issuer nor the Borrower shall issue or incur indebtedness payable from or secured in whole or in part by the Trust Estate that (i) permits or requires the holder to tender such indebtedness for purchase prior to the stated maturity thereof or (ii) bear interest at variable rates, in either case, without the prior written consent of the Bond Insurer. 4. Notwithstanding any provision to the contrary in this Indenture, the Trustee shall use actual amortization on all Bonds then Outstanding to determine debt service for purposes of this Indenture, disregarding any provision in this Indenture allowing for assumed, hypothetical or deemed amortization. [END OF ARTICLE XIV] (k) the investment agreement must provide that if during its term: (i) the provider shall default in its payment obligations, the providers obligations under the investment agreement shall, at the direction of the Issuer or the Trustee (who shall give such direction if so directed by the Bond Insurer), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Issuer or Trustee, as appropriate, and (ii) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt. etc. ( event of insolvency ), the provider s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Issuer or Trustee, as appropriate. Section Limitations on Additional Bonds. 1. Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in the Indenture, no such issuance may occur (1) if an Event of Default (or any event which, once all notice or grace periods have passed, would constitute an Event of Default) exists unless such default shall be cured upon such issuance and (2) unless the Debt Service Reserve Fund is fully funded at the Debt Service Reserve Requirement (including the proposed issue) upon the issuance of such Additional Bonds, in either case unless otherwise permitted by the Insurer. 2. So long as any Series 2010 Bonds insured by the Bond Insurer remain Outstanding or any amounts are owed to the Bond Insurer by the Borrower, neither the Issuer nor the Borrower shall enter into any swap or any other interest rate exchange agreement, cap, collar, floor, ceiling, or other agreement or instrument involving reciprocal payment obligations between the Issuer and a counterparty based on interest rates applied to a notional amount of principal entered into by or on behalf of the Issuer and payable from or secured in whole or in part by the Trust Estate, without the prior written consent of the Bond Insurer SIGNATURES AND SEALS IN WITNESS WHEREOF, the Issuer has executed this Indenture by causing its name to be hereunto subscribed by its President and by causing the official seal of the Issuer to be impressed hereon and attested by its Assistant Secretary; and the Trustee, to evidence its acceptance of the trusts created hereunder, has executed this Indenture by causing its name to be hereunto subscribed by its Authorized Officer and by causing its corporate seal to be impressed hereon and attested by its Authorized Officer, all being done as of the day and year first above written. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as trustee By: Authorized Officer SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY (SEAL) By: President Attest: Assistant Secretary (Signature Page to Indenture) S-1 (Signature page to Indenture) S-2

89 EXHIBIT A [FORM OF SERIES 2010 BOND] Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.) ( AGM ), New York, New York, has delivered its municipal bond insurance policy (the Policy ) with respect to the scheduled payments of principal of and interest on this Series 2010 Bond to The Bank of New York Mellon Trust Company, N.A., as Paying Agent for the Series 2010 Bonds (the Paying Agent ). Said Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from AGM or the Paying Agent. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Series 2010 Bond acknowledges and consents to the subrogation rights of AGM as more fully set forth in the Policy. Unless this Bond is presented by an authorized representative of The Depository Trust Company ( DTC ), a New York corporation, to the Issuer or its agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. UNITED STATES OF AMERICA STATE OF GEORGIA SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BOND (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT), SERIES 2010 Number R- Principal Amount $ _ Interest Rate: Maturity Date: Dated: CUSIP: % June 15, Registered Owner: CEDE & CO. KNOW ALL MEN BY THESE PRESENTS that the SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY (the Issuer ), a public body corporate and politic and an instrumentality of the State of Georgia, for value received, hereby promises to pay, but only from the source as hereinafter provided, to the registered owner shown above, or registered assigns, on A-1 the maturity date specified above (unless this Series 2010 Bond shall have been called for redemption and payment of the redemption price shall have been duly made or provided for), the principal sum stated above and in like manner to pay interest on such principal sum from time to time remaining unpaid from and including the date hereof or from and including the most recent Interest Payment Date (as defined in the hereinafter defined Indenture) with respect to which interest has been paid or duly provided for, until payment of such principal sum has been made, at the rate of interest stated above per annum (computed on the basis of a 360-day year consisting of twelve 30-day months), on June 15, 2011 and December 15, 2011 and semiannually thereafter on June 15 and December 15 of each year until payment in full of such principal sum. This Series 2010 Bond shall bear interest on overdue principal and, to the extent permitted by law, on overdue premium, if any, and interest at the aforesaid rate. Principal of and premium, if any, on this Series 2010 Bond shall be payable by check or draft in lawful money of the United States of America by presentation and surrender of this Series 2010 Bond at the designated corporate trust office of The Bank of New York Mellon Trust Company, N.A., Atlanta, Georgia, as trustee and paying agent, or its successor in trust (the Trustee ) or at the duly designated office of any duly appointed alternate or successor paying agent. Payment of interest on this Series 2010 Bond shall be made to the registered owner and shall be paid in lawful money of the United States of America by check or draft mailed on the applicable Interest Payment Date to such registered owner as of the close of business on the applicable Record Date (as defined in the Indenture) at its address as it appears on the registration books of the Issuer maintained by the Trustee, as bond registrar, or at such other address as is furnished in writing by such registered owner to the Trustee. If and to the extent that there shall be a default in the payment of the interest due on any Interest Payment Date, such defaulted interest shall be paid to the owner in whose name this Series 2010 Bond is registered at the close of business on the Special Record Date (as defined in the Indenture) next preceding the date of payment of such defaulted interest. This Series 2010 Bond is one of an authorized series of bonds in the original aggregate principal amount of $36,475,000 (the Series 2010 Bonds ), authorized to be issued, pursuant to a resolution duly adopted by the Issuer and by the hereinafter described Trust Indenture and Security Agreement, for the purpose of lending the proceeds thereof to SSU Community Development I, LLC (the Borrower ), a limited liability company duly formed and validly existing under and by virtue of the laws of the State of Georgia, to finance the costs of the acquisition, construction (and related demolition of an existing building to provide a site for a new building), renovation, and equipping of buildings and structures to be used as student housing facilities and academic and social space, the restoration of other historic buildings on Felix Alexis Circle for residential life programming, and the acquisition of land and development of a sports and intramural complex, with appropriate road access and parking (collectively, the Project ), to be located on the campus of Savannah State University, in the City of Savannah, Chatham County, Georgia, to be leased by the Borrower, as landlord, to the Board of Regents of the University System of Georgia (the Regents ), as tenant. The Regents has leased the land on which a portion of the Project will be located to the Borrower pursuant to the terms of certain Ground Leases between the Regents, as lessor, and the Borrower, as lessee. The Issuer will lend the proceeds of the sale of the Series 2010 Bonds to the Borrower pursuant to a Loan Agreement, dated as of December 1, 2010 (the Loan Agreement ), between the Issuer and the Borrower. The Borrower is obligated pursuant to the Loan Agreement to pay to the Issuer loan repayments A-2 sufficient to enable the Issuer to pay the principal of, premium, if any, and interest on the Series 2010 Bonds, as the same mature and become due. The obligation of the Borrower to make periodic loan repayments under the Loan Agreement is evidenced by the Borrower s Series 2010 Promissory Note, dated the date of issuance of the Series 2010 Bonds (the Series 2010 Note ), providing for payments sufficient to enable the Issuer to pay the principal of, premium, if any, and interest on the Series 2010 Bonds, as the same mature and become due. The obligations of the Borrower under the Loan Agreement and the Series 2010 Note and certain other obligations of the Borrower to the Issuer are secured by a Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated as of December 1, 2010 (the Security Deed ), from the Borrower to the Issuer, pursuant to which the Borrower granted to the Issuer a first lien on and first security title to the Borrower s interest in the Project and pursuant to which the Borrower assigned and pledged to the Issuer its interest in certain rents and leases derived from the Project. The obligations of the Borrower under the Loan Agreement and the Series 2010 Note and certain other obligations of the Borrower to the Issuer are also secured by a Security Agreement, dated as of December 1, 2010 (the Security Agreement ), between the Borrower and the Issuer, pursuant to which the Borrower granted to the Issuer a first priority security interest in certain personal property belonging to the Borrower and constituting a part of the Project, in certain revenues derived from the Project, and in certain contracts to which the Borrower is a party. The Series 2010 Bonds are all issued under and are equally and ratably secured and entitled to the protection given by a Trust Indenture and Security Agreement, dated as of December 1, 2010 (the Indenture ), duly executed and delivered by and between the Issuer and the Trustee. Pursuant to the Indenture, as security for the payment of the principal of, premium, if any, and interest on the Series 2010 Bonds, the Issuer assigned and pledged to the Trustee, and granted a first priority security interest in, all of its right, title, and interest in the Loan Agreement (except for the Unassigned Rights, as defined in the Loan Agreement), the Series 2010 Note, the Security Deed, and the Security Agreement and in certain funds established and held under the Indenture. The Issuer also, as security for the payment of the principal of, premium, if any, and interest on the Series 2010 Bonds, endorsed the Series 2010 Note without recourse or warranty to the order of the Trustee. It is provided in the Indenture that the Issuer may hereafter issue Additional Bonds (as defined in the Loan Agreement) from time to time under certain terms and conditions contained therein, and if issued, such Additional Bonds will rank on a parity with the Series 2010 Bonds. Reference is hereby made to the Indenture and to all indentures supplemental thereto for a description of the property subject to the lien and security interest of the Indenture, the provisions, among others, with respect to the nature and extent of the security for the Series 2010 Bonds, the rights, duties, and obligations of the Issuer, the Trustee, and the owners of the Series 2010 Bonds, the issuance of Additional Bonds, the terms upon which Additional Bonds may be issued, executed, and secured, and the provisions regulating the manner in which the terms of the Indenture, the Loan Agreement, the Security Deed, the Security Agreement, and the Series 2010 Note may be modified, to all of which provisions the owner of this certificate, on behalf of itself and its successors in interest, assents by acceptance hereof. THIS SERIES 2010 BOND SHALL NEVER CONSTITUTE AN INDEBTEDNESS, DEBT, OR GENERAL OBLIGATION OF THE STATE OF GEORGIA, THE CITY OF A-3 SAVANNAH, GEORGIA, CHATHAM COUNTY, GEORGIA, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF GEORGIA, WITHIN THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY DEBT LIMITATION WHATSOEVER, NOR A PLEDGE OF THE FAITH AND CREDIT OR TAXING POWER OF ANY OF THE FOREGOING, NOR SHALL ANY OF THE FOREGOING BE SUBJECT TO ANY PECUNIARY LIABILITY HEREON. THE ISSUER HAS NO TAXING POWER. THIS SERIES 2010 BOND SHALL NOT BE PAYABLE FROM NOR A CHARGE UPON ANY FUNDS OTHER THAN THE REVENUES PLEDGED TO THE PAYMENT HEREOF AND SHALL BE A LIMITED OR SPECIAL OBLIGATION OF THE ISSUER PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR IN THE INDENTURE. NO OWNER OF THIS SERIES 2010 BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OF GEORGIA, THE CITY OF SAVANNAH, GEORGIA, CHATHAM COUNTY, GEORGIA, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF GEORGIA TO PAY THE PRINCIPAL OF THIS SERIES 2010 BOND OR THE INTEREST OR ANY PREMIUM HEREON, OR TO ENFORCE PAYMENT HEREOF AGAINST ANY PROPERTY OF THE FOREGOING, NOR SHALL THIS SERIES 2010 BOND CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY PROPERTY OF THE FOREGOING. NEITHER THE MEMBERS OF THE ISSUER NOR ANY PERSON EXECUTING THIS SERIES 2010 BOND SHALL BE LIABLE PERSONALLY ON THIS CERTIFICATE BY REASON OF THE ISSUANCE HEREOF. The Series 2010 Bonds are issuable only in the form of fully registered bonds without coupons in the denominations of $5,000 or any integral multiple thereof. The Issuer has established a book-entry system of registration for the Series 2010 Bonds. Except as specifically provided otherwise in the Indenture, an agent will hold this Series 2010 Bond on behalf of the beneficial owner hereof. By acceptance of a confirmation of purchase, delivery, or transfer, the beneficial owner of this Series 2010 Bond shall be deemed to have agreed to such arrangement. While the Series 2010 Bonds are in the book-entry system of registration, the Indenture provides special provisions relating to the Series 2010 Bonds that override certain other provisions of the Indenture. This Series 2010 Bond is transferable by the registered owner hereof in person or by its attorney duly authorized in writing at the principal corporate trust office of the Trustee but only in the manner, subject to the limitations, and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Series 2010 Bond. Upon such transfer, a new registered bond or bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same series, interest rate, and maturity or maturities will be issued to the transferee in exchange therefor. Any Series 2010 Bonds maturing on and after June 15, shall be subject to optional redemption prior to maturity by the Issuer upon the written request of the Borrower pursuant to the Loan Agreement, from moneys on deposit in the Redemption Account (as defined in the Indenture), in whole on or in part on any Business Day (and if in part, in an authorized denomination) on or after June 15, at the redemption price of 100% of the principal amount of Series 2010 Bonds called for redemption plus accrued interest to the redemption date. A-4

90 The Series 2010 Bonds are subject to mandatory redemption prior to maturity, in part by lot, in such manner as may be designated by the Trustee, on the following dates and in the following principal amounts at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date (amounts coming due on June 15, and June 15, to be paid at maturity rather than redeemed): Series 2010 Bonds Maturing June 15, June 15 Principal June 15 Principal of the Year Amount of the Year Amount Series 2010 Bonds Maturing June 15, June 15 Principal June 15 Principal of the Year Amount of the Year Amount The Series 2010 Bonds are subject to extraordinary redemption prior to maturity (a) in the event of damage to or destruction of the Project or any part thereof or condemnation of or failure of title to the Project or any part thereof, to the same extent that the Loans (as defined in the Loan Agreement) are prepaid pursuant to Section of the Loan Agreement or (b) in the event that moneys are deposited in the Redemption Account pursuant to Sections 7.02, 8.01, 8.02, 11.01, 11.02, and of the Loan Agreement and Section 509(e) of the Indenture, to the extent of such moneys deposited in the Redemption Account. If called for redemption in any such event, the Series 2010 Bonds shall be subject to redemption by the Issuer at any time in whole or in part (and if in part in an authorized denomination), and ratably (to the extent practicable) with other series of Additional Bonds, less than all of a single maturity to be selected by lot in such manner as may be determined by the Trustee, at the principal amount thereof plus accrued interest thereon to the redemption date and without premium. A copy of the notice of the call for any redemption identifying the Series 2010 Bonds to be redeemed shall be given by first class mail, postage prepaid, not less than 30 days and not more than 60 days prior to the date fixed for redemption, to the registered owners of Series 2010 Bonds to be redeemed at their addresses as shown on the registration books. This Series 2010 Bond and the series of which it forms a part, as may be outstanding from time to time, are issued pursuant to and in full conformity with resolutions duly adopted by the governing body of the Issuer under the authority of and in full conformity with the Constitution and laws of the State of Georgia relating to the Issuer (the Act ). This Series 2010 Bond and the series of which it forms a part are limited obligations of the Issuer payable solely A-5 from the revenues and receipts derived from the Project and otherwise as provided in the Indenture. Pursuant to the provisions of the Loan Agreement, loan repayments sufficient for the prompt payment when due of the principal of, premium, if any, and interest on the Series 2010 Bonds are to be paid to the Trustee for the account of the Issuer and deposited in a special account created by the Issuer and designated the Sinking Fund and have been and are hereby again duly pledged for that purpose. The obligations hereunder shall be limited as provided in the Act. The owner of this Series 2010 Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture, or to institute, appear in, or defend any suit or other proceedings with respect thereto except as provided in the Indenture. If an event of default as defined in the Indenture occurs and is continuing, the principal of all of the bonds issued under the Indenture and then outstanding may be declared due and payable before the stated maturity thereof upon the conditions and in the manner and with the effect provided in the Indenture. Modifications or amendments of the Indenture, or of any supplements thereto, may be made to the extent and in the circumstances permitted by the Indenture. IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all acts, conditions, and things required to exist, happen, and be performed precedent to and in the issuance of this Series 2010 Bond do exist, have happened, and have been performed in due time, form, and manner as required by law in order to make this Series 2010 Bond a valid and legal revenue obligation of the Issuer and that the issuance of the Series 2010 Bonds, together with all other obligations of the Issuer, does not exceed or violate any constitutional or statutory limitation applicable to the Issuer. This Series 2010 Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been duly executed by the Trustee. IN WITNESS WHEREOF, the Savannah Economic Development Authority has caused this Series 2010 Bond to be executed by its President by his manual or facsimile signature, has caused its official seal to be impressed or imprinted hereon, and has caused this Series 2010 Bond to be attested by its Assistant Secretary by her manual or facsimile signature. (SEAL) Attest: Assistant Secretary A-6 SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY By: President CERTIFICATE OF AUTHENTICATION This Series 2010 Bond is one of the bonds of the series described in the withinmentioned Indenture. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as trustee Date of Registration and Authentication: By: Authorized Signatory, 2010 VALIDATION CERTIFICATE STATE OF GEORGIA COUNTY OF CHATHAM The undersigned Clerk of the Superior Court of Chatham County, Georgia, does hereby certify that the within Series 2010 Bond and the security therefor was validated and confirmed by judgment of the Superior Court of Chatham County, Georgia, rendered on the 22 nd day of November, 2010, that no intervention or objection was filed opposing the validation of the within certificate and the security therefor, and that no appeal of such judgment of validation has been taken. IN WITNESS WHEREOF, the undersigned hereunto has executed this certificate by his manual signature and has impressed hereon the official seal of the Superior Court of Chatham County, Georgia. Clerk of Superior Court of Chatham County (SEAL) A-7 A-8

91 The following abbreviations, when used in the inscription on this bond or in the assignment below, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common and not as community property UNIF TRANS MIN ACT - Custodian (Custodian) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used although not in the above list. ASSIGNMENT AND TRANSFER FOR VALUE RECEIVED, the undersigned,, hereby sells, assigns, and transfers unto (Tax Identification or Social Security No. ) the within bond and all rights thereunder and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: (Signature Guaranteed) Notice: Signature(s) must be guaranteed by an eligible guarantor institution (such as banks, stockbrokers, savings and loan associations, and credit unions) with membership in an approved Signature Guarantee Medallion Program pursuant to S.E.C. Rule 17Ad-15. Registered Owner Notice: The signature(s) on this assignment must correspond with the name as it appears on the face of the within bond in every particular without alteration or enlargement or any change whatsoever. A-9

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93 Appendix C Copy of the Loan Agreement

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95 LOAN AGREEMENT TABLE OF CONTENTS (This Table of Contents is not a part of the Loan Agreement and is only for convenience of reference.) ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION... 2 SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY as Lender and SSU COMMUNITY DEVELOPMENT I, LLC as Borrower Section Definitions...2 Section Construction of Certain Terms...17 Section Table of Contents; Titles and Headings...17 Section Contents of Certificates or Opinions...17 ARTICLE II REPRESENTATIONS AND WARRANTIES Section Representations by the Issuer...19 Section Representations by the Borrower...21 Section Reliance by Holders...24 ARTICLE III LOAN TO BORROWER; SECURITY; TITLE LOAN AGREEMENT Dated as of December 1, 2010 Relating to $36,475,000 Savannah Economic Development Authority Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 THE RIGHTS AND INTEREST OF THE SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY IN THIS LOAN AGREEMENT AND THE REVENUES AND RECEIPTS DERIVED HEREFROM, EXCEPT FOR ITS UNASSIGNED RIGHTS, AS DEFINED HEREIN, HAVE BEEN ASSIGNED AND ARE THE SUBJECT OF A GRANT OF A SECURITY INTEREST TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS TRUSTEE, UNDER A TRUST INDENTURE AND SECURITY AGREEMENT, DATED THE DATE HEREOF. Section The Loans and the Notes...25 Section Security for the Obligations...25 Section Security for Payments Under the Certificates; Perfection...25 Section Warranty of Title...26 Section Title Insurance...26 Section Borrower s Covenants Regarding Title...26 ARTICLE IV ISSUANCE OF THE SERIES 2010 BONDS; FUNDS Section Agreement to Issue the Series 2010 Certificates; Application of Proceeds...28 Section Obligation of the Parties to Cooperate in Furnishing Documents; Trustee Reliance...28 Section Authorized Borrower and Issuer Representatives and Successors...28 Section Investment of Funds and Accounts...28 Section Special Investment Covenants...29 Section Calculation and Payment of Rebate Amount...29 Section Deposit of Gross Receipts and Hedge Receipts...29 ARTICLE V LOAN PROVISIONS Section Term of Loan Agreement...31 Section Loan Repayments and Other Amounts Payable...31 Section Places of Loan Payments...34 ARTICLE VI CONSTRUCTION AND EQUIPPING OF PROJECT...36 (i) (ii) Page Section Agreement to Acquire, Construct, and Install each Project...35 Section Establishment of Completion Date...36 Section Enforcement of Construction Contracts and Remedies Against Contractors and Subcontractors and Their Sureties and Against Manufacturers...36 Section Governmental Approvals...37 ARTICLE VII MAINTENANCE, TAXES, AND INSURANCE Section Maintenance and Modification of Project by the Borrower...38 Section Removal of Equipment...38 Section Taxes, Other Governmental Charges, and Utility Charges...39 Section Insurance...40 Section Insurance; Bond Insurer Requirements...42 Section Contest of Liens...42 Section Advances by the Trustee...42 ARTICLE VIII DAMAGE, DESTRUCTION, CONDEMNATION, AND FAILURE OF TITLE Section Damage and Destruction...43 Section Condemnation and Failure of Title...43 Section Condemnation of Borrower-Owned Property...45 ARTICLE IX ADDITIONAL COVENANTS; ADDITIONAL BONDS Section Access to Premises and Records...46 Section Borrower to Maintain its Existence...46 Section Qualification in the State...46 Section Indemnity...46 Section Additional Certificates...48 Section [Reserved]...49 Section Compliance with Applicable Laws; Existence of All Applicable Permits, Licenses, and Approvals and Franchises, Rights, and Powers...50 Section Hazardous Waste...50 Section Financial Statements and Notices...51 Section Continuing Disclosure...52 Section Project Budget...52 Section Permitted Indebtedness...52 Section Related Party Transactions...52 Section Line of Business...52 Section Tax Exempt Status of Tax-Exempt Certificates and 501(c)(3) Status of the Borrower...53 Section Separate Legal Entity...53 Section Assignment and Selling...55 Section Restrictions on Encumbrance of the Project by the Borrower...55 (iii) Page Section Installation of Borrower s Machinery and Equipment Not Financed Hereby...55 Section Reporting Requirements...55 ARTICLE X EVENTS OF DEFAULT AND REMEDIES Section Events of Default Defined...57 Section Remedies on Default...58 Section No Remedy Exclusive...59 Section Agreement to Pay Attorneys Fees, Costs and Expenses...59 Section Waiver of Events of Default...59 ARTICLE XI OPTIONS IN FAVOR OF BORROWER; LOAN PREPAYMENTS Section Release of Certain Land and Subordination...60 Section Option to Release Unimproved Land...61 Section Granting of Easements...62 Section Use of Party Walls...62 Section General Options to Terminate Loan Agreement...62 Section Option and Obligation to Prepay Loans in Certain Events...63 Section Redemption of Certificates...64 Section Prepayment of Loans...64 Section No Obligation to Prepay Loans...65 Section Option to Prepay the Loans and Redeem Related Certificates at Prior Optional Redemption Dates...65 ARTICLE XII MISCELLANEOUS Section Notices...66 Section Recording and Filing...67 Section Maintenance of Security Interests...67 Section Construction and Binding Effect...67 Section Severability...68 Section Amounts Remaining in Funds...68 Section Fees and Expenses Paid by the Borrower...68 Section Amendments, Changes, and Modifications...68 Section Execution of Counterparts...68 Section Law Governing Construction of this Loan Agreement...68 SIGNATURES AND SEALS...71 EXHIBIT A -- DESCRIPTION OF SITE... A-1 EXHIBIT B -- FORM OF PROMISSORY NOTE... B-1 EXHIBIT C -- REQUISITION FOR PAYMENT...C-1 EXHIBIT D CAPITALIZED INTEREST DRAWS...D-1

96 LOAN AGREEMENT This LOAN AGREEMENT, dated as of December 1, 2010, by and between the Savannah Economic Development Authority (the Issuer ), a public body corporate and politic and an instrumentality of the State of Georgia, and SSU Community Development I, LLC (the Borrower ), a limited liability company duly formed and existing under the laws of the State of Georgia; W I T N E S S E T H: IN CONSIDERATION OF the respective representations and agreements hereinafter contained, the parties hereto agree as follows, provided, that in the performance of the agreements of the Issuer herein contained, any obligation it may thereby incur for the payment of money shall not constitute a general obligation of the Issuer but shall be payable solely out of the revenues, receipts, and other payments derived from the Bond Documents, and the Bonds shall not constitute a general obligation of the Issuer nor constitute an indebtedness or general obligation of the City of Savannah, Georgia, Chatham County, Georgia, or the State of Georgia or any other political subdivision of the State of Georgia within the meaning of any constitutional or statutory provision whatsoever: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section Definitions. Certain words and terms used in this Loan Agreement shall have the meaning given them in Section 101 of the Indenture, which by this reference is incorporated herein. In addition to the words and terms defined elsewhere herein, the following such words and terms shall have the meanings set forth below unless the context clearly indicates otherwise. Accountant means a certified public accountant, or a firm of certified public accountants, who or which is independent as that term is defined in Rule 101 and related interpretations of the Code of Professional Ethics of the American Institute of Certified Public Accountants, of recognized standing, who or which does not devote his or its full time to the Borrower or its Affiliates (but who or which may be regularly retained by the Borrower or its Affiliates). Act shall have the meaning given such term as set forth in the Recitals of the Indenture. Additional Bonds means the additional parity Bonds, including Completion Bonds, authorized to be issued by the Issuer pursuant to the terms and conditions of Section 214 of the Indenture. Additional Loans means any loan or loans made by the Issuer to the Borrower in connection with the issuance of Additional Bonds, the repayment of which will be evidenced by the Additional Notes. Additional Notes means the additional parity promissory notes made by the Borrower and payable to the Issuer to evidence the Borrower s obligation to pay Loan Repayments in order to repay the Additional Loans, and any promissory notes issued in substitution or exchange therefor. 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, fixtures, and equipment therefor, and including the restoration, reconstruction, or replacement of buildings, equipment, or other property damaged or destroyed by fire or other casualty or taken by or under the threat of condemnation or for which title is lost. Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, (i) control when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the power to appoint and remove its directors, the ownership of voting securities, by contract, membership, or otherwise, and (ii) the terms controlling and controlled have meanings correlative to the foregoing. 2 Architect means the Person or Persons designated as such pursuant to the Development Agreement. Assignment of Contract Documents means. Authorized Borrower Representative means the person at the time designated to act on behalf of the Borrower by written certificate furnished to the Issuer and the Trustee, containing the specimen signature of such person and signed on behalf of the Borrower by the Chairman, Vice Chairman, President or the Manager of the Borrower. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. Authorized Issuer Representative means the person at the time designated to act on behalf of the Issuer by written certificate furnished to the Borrower and the Trustee, containing the specimen signature of such person and signed on behalf of the Issuer by the President or Chairman of the Issuer. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. Bond Counsel means any firm of nationally recognized bond counsel experienced in matters relating to tax-exempt financing, selected by the Borrower and reasonably acceptable to the Trustee. Bond Documents means, collectively, the Borrower Contracts, the Real Estate Documents and the Indenture. Bond Insurer shall mean Assured Guaranty Municipal Corp., a New York stock insurance company, and its successors and assigns. Bond Year means the twelve-month period beginning June 16 of each calendar year and ending on June 15 of the next succeeding calendar year. Bonds means the Series 2010 Bonds and all series of Additional Bonds from time to time authenticated and delivered under the Indenture. Borrower means SSU Community Development I, LLC a limited liability company duly formed and existing under the laws of the State of Georgia, whose sole member is the Foundation, and its successors and assigns. Borrower Contracts means, collectively, this Loan Agreement, the Notes, the Security Deed, the Security Agreement, the Assignment of Contract Documents and the Contract Documents. Capital Lease means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. Capitalized Interest Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Closing Date means the date of the initial issuance and delivery of any series of Bonds. Code means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. Completion Bonds means Bonds issued for the purpose of financing the completion of the construction or equipping of the Project for which Bonds were previously issued; provided that the term Completion Bonds shall only include that principal amount of Bonds which is necessary to (i) finance the completion of such construction or equipping to the extent necessary to provide a completed and equipped Project of substantially the type and scope contemplated at the time that such Bonds previously issued were originally issued, and in accordance with the Plans and Specifications for such Project as originally prepared with only such changes as have been made in conformance with this Loan Agreement, (ii) pay any related issuance expenses, including any underwriting discount, (iii) fund any capitalized interest relating thereto, and (iv) fund the Debt Service Reserve Requirement with respect to such Bonds. Completion Date means the date of completion of the construction and equipping of the Project, as that date shall be certified as provided in Section 6.02 hereof. Construction means, in addition to new construction, reconstruction and renovation, and constructing and construct includes references to reconstructing and renovating and reconstruct and renovate, as the case may be. Consultant means an Independent Person that is a nationally recognized professional management consultant having, in the good faith opinion of the Borrower, the skill and experience necessary to render the particular report required and that is reasonably acceptable to the Trustee and the Bond Insurer. Consultant s Report means a written report of a Consultant delivered to the Trustee and the Bond Insurer. Contract Documents means the documents so defined in the Security Deed. Counsel means an attorney duly admitted to practice law before the highest court of any state in the United States of America or the District of Columbia, or any law firm, who or which, as the case may be, is not unsatisfactory to any recipient of the opinion required to be rendered by such Counsel. Debt Service Coverage Ratio means, for any particular period of time, the ratio (stated as a percentage) determined by dividing Income Available for Debt Service for such period by the Maximum Annual Debt Service Requirement. Debt Service Requirement means the total principal and interest coming due on the Bonds, whether at maturity or upon mandatory redemption, in any specified period. The principal of and interest on Bonds shall be excluded from the determination of the Debt Service Requirement to the extent that the same were or are expected to be paid from amounts on deposit on the date of calculation (or Bond proceeds to be deposited on the date of issuance of the 3 4

97 proposed Bonds) in the Project Fund, the Capitalized Interest Account or the Debt Service Reserve Fund. The Trustee may request and conclusively rely upon a certification of the Debt Service Requirement. Debt Service Reserve Credit Facility means the letter of credit, insurance policy, or surety bond, together with any substitute or replacement therefor, if any, complying with the provisions of this Loan Agreement, thereby fulfilling all or a portion of the Debt Service Reserve Requirement. Debt Service Reserve Credit Facility Provider means any provider of a Debt Service Reserve Credit Facility. Debt Service Reserve Fund means the trust fund so designated, which is created pursuant to Section 503 of the Indenture. Debt Service Reserve Requirement means (A) with respect to the Series 2010 Bonds, the sum of $1,271, and (B) with respect to any Additional Bonds, the least of (i) 10% of the original face amount of any Additional Bonds, (ii) 125% of the average annual Debt Service on any Additional Bonds, or (iii) the Maximum Annual Debt Service on any Additional Bonds in any Bond Year (the "3 Part Test Amount") or such lesser amount as may be acceptable to the owners of any Additional Bonds, provided that such lesser amount acceptable to any owners of any Additional Bonds may not be less than 50% of the 3 Part Test Amount; provided further that the amount of principal due in any Bond Year shall be determined, in the case of Bonds subject to mandatory redemption pursuant to Section 304(c) of the Indenture and similar provisions in any supplemental indenture, by the principal amount of Bonds to be redeemed by mandatory redemption in such Bond Year. Developer means Hardin Construction Company, LLC, a limited liability company. Development Agreement means the Design Build Agreement, dated as of, between the Developer and Board of Regents of the University System of Georgia, which has been assigned to the Borrower. Environmental Laws means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements, or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to hazardous substances or wastes, air emissions, and discharges to waste or public systems. Event of Default means any one or more of those events set forth in Section hereof. Expenses of Operation and Maintenance means all expenses reasonably incurred in connection with the operation and maintenance of the Project, including salaries, wages, the cost of materials and supplies, rentals of leased property, if any, management fees, the cost of audits, Trustee s, paying agent s, and bond registrar s fees and expenses, payment of premiums for insurance required by this Loan Agreement and other insurance that the Borrower deems prudent or obligates itself in rental agreements to carry on the Project and its operations, and, generally, all expenses, exclusive of debt service on Bonds, and depreciation or amortization, which under GAAP are properly allocable to operation and maintenance; however, only such expenses as are reasonably and properly necessary or desirable for the proper operation and maintenance of the Project shall be included. Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee mean all reasonably necessary services rendered and all reasonably necessary expenses incurred by the Trustee under the Indenture, including reasonable counsel fees, costs and expenses, other than Ordinary Services of the Trustee and Ordinary Expenses of the Trustee. Fair Market Value means (i) with respect to real property, the market value for such property as established by an independent real estate appraiser who is a member of the American Institute of Real Estate Appraisers selected by the Borrower and reasonably acceptable to the Trustee and the Bond Insurer and (ii) with respect to property other than real property, the current market value of such property as established by a broker, appraiser, or other expert selected by the Borrower and reasonably acceptable to the Trustee and the Bond Insurer. Whenever the Fair Market Value of property is required to be established pursuant to this Loan Agreement, such valuation shall be made in writing and delivered to the Trustee and the Bond Insurer. Financial Guaranty Insurance Policy shall mean the insurance policy issued by the Bond Insurer guaranteeing the scheduled payment of the principal of and interest on the Series 2010 Bonds when due. Fiscal Year means the 12-month period ending on December 31 of each year, or such other 12-month period set forth in an Officer s Certificate of the Borrower filed with the Trustee as the fiscal year of the Borrower for accounting purposes. Except as otherwise provided herein, whenever reference is made in this Loan Agreement to a determination of revenues, expenses, debt coverage, or other accounting calculations to be made for, or with respect to, a Fiscal Year, such reference shall be to that Fiscal Year immediately preceding the date of such determination or calculation for which audited financial statements have been prepared and are then available. Fitch means Fitch, Inc., or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Borrower and acceptable to the Bond Insurer. The notice address of Fitch shall be One State Street Plaza, New York, New York Foundation initially means SSU COBA Endowment, Inc., a Georgia non-profit corporation, which corporation may be replaced by a non-profit corporation as the Foundation and as the sole member of the Borrower, upon receipt by the Trustee, the Issuer and Bond Counsel of a copy of (i) a determination letter from the Internal Revenue Service relating to the status of such replacement non-profit corporation as a qualified Section 501(c)(3) corporation and (ii) an opinion of Counsel that such replacement non-profit corporation (a) constitutes an organization described in Section 501(c)(3) of the Code, (b) is exempt from taxation under Section 501(a) of the Code, and (c) is not a private foundation as such term is defined under Section 509(a) of the Code. 5 6 Fund or Funds means any of the funds established pursuant to the Indenture. GAAP means generally accepted accounting principles as in effect from time to time in the United States of America. Government Obligations means: (a) direct general obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of Treasury of the United States of America) or obligations the payment of the principal of and interest on which when due are fully and unconditionally guaranteed by the United States of America; (b) receipts or certificates that evidence an undivided ownership interest in the right to the payment of the principal of or interest on obligations described in clause (a) above, provided that such obligations are held in the custody of a bank or trust company acceptable to the Trustee, in a special account separate from the general assets of such custodian; and (c) bonds, notes, or other obligations of any Governmental Issuer the timely payment of the principal of and interest on which is fully provided for (without reinvestment) by the deposit in trust or escrow of cash or non-callable obligations described in clauses (a) or (b) above. Governmental Authority means (a) the government of (i) the United States of America or any state or other political subdivision thereof, or (ii) any jurisdiction in which the Borrower conducts all or any part of its business, or which asserts jurisdiction over any properties of the Borrower, or (b) any entity exercising executive, legislative, judicial, regulatory, or administrative functions of, or pertaining to, any such government. Governmental Issuer means the State, any other state of the United States, any agency or instrumentality of the State, and any county, municipal corporation, or political subdivision of the State. Gross Receipts means all the right, title, and interest of the Borrower in and to amounts received by or on behalf of the Borrower from the ownership and operation of the Project, including all revenues, rents, fees, charges, or other income of any kind from any source received by the Borrower from the Project, including without limitation: (1) gross rentals received with respect to land, buildings, equipment, or other personal property owned, leased, or used by the Borrower; (2) gross revenues received from any and all leases of any lands, buildings, structures, equipment, or other personal property, or any parts thereof or therein owned, leased, or controlled by the Borrower as part of the Project including facilities related or appurtenant thereto; (3) all rents or fees payable by tenants of the Project; and (4) all proceeds of business interruption insurance and temporary condemnation awards (excluding, however, proceeds of damage, destruction, and casualty insurance and permanent condemnation awards). Ground Leases means the Ground Leases, dated as of, between the Board of Regents of the University System of Georgia, as lessor, and the Borrower, as lessee, as the same may be amended from time to time in accordance with the terms thereof. Guaranty means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing (whether by reason of being a general partner of a partnership or otherwise) any indebtedness, dividend, or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such indebtedness or obligation or any Property constituting security therefor; (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; (c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or (d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof. In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. Hazardous Materials means any and all pollutants, toxic or hazardous wastes, or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited, or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation, and polychlorinated biphenyls). Holders or Bondholders means the Persons in whose names any of the Bonds are registered on the books kept and maintained by the Trustee as bond registrar. Impositions means all governmental charges and taxes (including all ad valorem, sales, use, intangible, transaction, privilege, or license or similar taxes), assessments (including all assessments for public improvements or benefits), water and sewer charges, excises, levies, fees (including license, permit, inspection, authorization, and similar fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Project (including all interest and penalties thereon), which at any time may be assessed or imposed on or in respect of or be a lien upon the Project, but excluding Permitted Encumbrances. Nothing contained in this Loan Agreement shall be construed to require the Borrower to pay any tax, assessment, levy, or charge imposed on any tenant or other Person unless the failure to pay the same could result in a lien on the Project, and in all events, the Borrower shall have the right to contest in good faith any Imposition as provided in this Loan Agreement. 7 8

98 Income Available for Debt Service means, for any period of calculation, excess of support and revenues over expenses, including nonoperating revenue (such as interest income and capitalized interest) but excluding (i) gifts (whether restricted or unrestricted), (ii) extraordinary gains and losses, and (iii) unrealized gains and losses on investments, plus amounts deducted in arriving at such excess of support and revenues over expenses for (i) interest on Loans (including the current portion thereof), (ii) depreciation and (iii) amortization. Indebtedness with respect to any Person means, at any time, without duplication: (a) its liabilities for borrowed money; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capital Leases; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money); and (f) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (e) hereof. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (e) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. Indenture means the Trust Indenture and Security Agreement, dated the date hereof, between the Issuer and the Trustee, authorizing the issuance of the Series 2010 Bonds, as the same may be supplemented and amended from time to time in accordance with the provisions thereof. Independent, when used with respect to any specified Person, means such a Person who (i) does not have any direct financial interest in the Borrower, other than the payment to be received under the contract for services to be performed by such Person, (ii) is not an officer, employee, underwriter, partner, Affiliate, subsidiary, or person performing similar functions for the Borrower, and (iii) when used with respect to any Person other than Counsel, is not a trustee or director of the Borrower. Insurance Consultant means an Independent Person appointed by the Borrower and satisfactory to the Trustee and the Bond Insurer, qualified to survey risks and to recommend 9 insurance coverage for university campus facilities and services of the type involved, and having a favorable reputation for skill and experience in such surveys and such recommendations and which may be a broker or agent with whom the Borrower transacts business. Insurance Requirements means all terms of any insurance policy required to be obtained under this Loan Agreement covering or applicable to the Project or any part thereof, all requirements of the issuer of any such policy, and all orders, rules, regulations, and other requirements of the national board of fire underwriters (or any other body exercising similar functions) applicable to or affecting the Project or any part thereof or any use of the Project or any part thereof. Interest Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Issuance Cost Fund means the trust fund so designated, which is created pursuant to Section 508 of the Indenture. Issuer means the Savannah Economic Development Authority, a public body corporate and politic and an instrumentality of the State, and its successors and assigns. Issuer Contracts means, collectively, this Loan Agreement, the Security Deed, the Security Agreement, and the Indenture. Lien means any interest in Property securing an obligation owed to, or a claim by, a person other than the owner of the Property, whether such interest is based on the common law, statute, or contract, and including, but not limited to, the security interest, security title, or lien arising from a security agreement, mortgage, deed of trust, security deed, Capital Lease, encumbrance, charge, pledge, conditional sale, or trust receipt or a lease, consignment, or bailment for security purposes. The term Lien shall include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Property. For the purpose of this Loan Agreement, the Borrower shall be deemed to be the owner of any Property that it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other person for security purposes. Loan Agreement means this Loan Agreement between the Issuer and the Borrower, as it may be supplemented and amended from time to time in accordance with the provisions hereof. Loan Repayments means the payments of principal of, premium, if any, and interest on the Loans payable by the Borrower to the Issuer, described under the subheadings Loan Repayments related to Series 2010 Bonds and Loan Repayments related to Additional Bonds in Section 5.02 of this Loan Agreement, and evidenced by the Notes. Loans means the Series 2010 Loan and all Additional Loans (if any) from time to time made by the Issuer to the Borrower. Loan Term means the term of this Loan Agreement set forth in Section 5.01 hereof. 10 Maximum Annual Debt Service Requirement means the highest Debt Service Requirement for the then current or any succeeding Bond Year, as certified by the Borrower to the Trustee upon the request of the Trustee from time to time. Minimum Coverage Ratio means (1) while the Rental Agreements are in effect and contain terms and provisions not materially different from their original terms and provisions, 1.00 and (2) in all other circumstances, Moody s means Moody s Investors Service, Inc. or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Borrower and acceptable to the Bond Insurer. The notice address of Moody s shall be 99 Church Street, New York, New York Net Proceeds means, when used with respect to any insurance or condemnation award, the gross proceeds from the insurance or condemnation award with respect to which that term is used remaining after payment of all expenses (including reasonable attorney s fees, adjuster s fees, and any other expenses) incurred in the collection of such gross proceeds. Notes means the Series 2010 Note and all Additional Notes from time to time issued under this Loan Agreement. Obligations means all obligations, liabilities, covenants, agreements, and duties owing, arising, due, or payable from the Borrower to the Issuer of any kind or nature arising from or in connection with the Borrower Contracts, present or future, whether or not evidenced by any note or other instrument, whether direct or indirect (including those acquired by assignment), absolute or contingent, primary or secondary, due or to become due, now existing or hereafter acquired, together with all renewals, extensions, replacements, consolidations, and modifications thereof, in each case whether for principal, interest, fees, expenses, or any and all additional advances made by the Trustee to protect or preserve the Security or the lien, security title, and security interest created by the Security Deed and the Security Agreement in the Security, for taxes, assessments, or insurance premiums, or for the performance of any of the Borrower s obligations under the Borrower Contracts or otherwise. Officer s Certificate means a certificate in writing signed by the Authorized Borrower Representative. Ordinary Services of the Trustee and Ordinary Expenses of the Trustee mean those reasonable services rendered and those reasonable expenses incurred by the Trustee in the performance of its duties under the Indenture of the type ordinarily performed by corporate trustees under like indentures, including reasonable counsel fees, costs and expenses. Outstanding Bonds or Bonds Outstanding or Outstanding means all Bonds that have been duly authenticated and delivered by the Trustee under the Indenture, except: (a) Bonds theretofore cancelled or required to be cancelled by the Trustee, (b) Bonds that are deemed to have been paid in accordance with the defeasance provisions of Article VII of the Indenture, and (c) Bonds in substitution for which other Bonds have been authenticated and delivered under Section 206 of the Indenture. If the Indenture shall be discharged pursuant to the defeasance provisions of Article VII thereof, no Bonds shall be deemed to be Outstanding within the meaning of this provision. Permitted Encumbrance means, with respect to the Security and the Project, any of the following: (i) The Lien on the Security created by any Bond Document; (ii) Any Lien arising by reason of good faith deposits with the Borrower in connection with leases of real estate or tangible personal property, bids, or contracts (other than contracts for the payment of money), deposits by the Borrower to secure public or statutory obligations, or to secure, or in lieu of, surety, stay, or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges; (iii) Any Lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Borrower to maintain selfinsurance or to participate in any funds established to cover any insurance risks or in connection with workers compensation, unemployment insurance, pension or profit sharing plans, or other similar social security plans, or to share in the privileges or benefits required for companies participating in such arrangements; (iv) Any judgment lien or notice of pending action against the Borrower so long as such judgment or pending action is being contested and execution thereon has been stayed or the period for responsive pleading or appeal has not lapsed, and neither the Lien of any Bond Document nor the Project will be materially impaired or subject to material loss or forfeiture; (v) (A) Rights reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license, permit, or provision of law affecting the Project, to (1) terminate such right, power, franchise, grant, license, or permit, provided that the exercise of such right would not, in the reasonable opinion of the Borrower, materially impair the use of the Project or materially and adversely affect the value thereof, or (2) purchase, condemn, appropriate, or recapture, or designate a purchaser of, the Project; (B) any Liens (or deposits to obtain the release of such Liens) on the Project for taxes, assessments, levies, fees, water and sewer charges, and other governmental and similar charges, and any Liens of mechanics, materialmen, laborers, suppliers, or vendors for work or services performed or materials furnished in connection with the Project, which in 11 12

99 the reasonable opinion of the Borrower, are not material in amount or which are not due and payable or which are not delinquent or which, or the amount or validity of which, are being contested in good faith and execution thereon is stayed or, with respect to Liens of mechanics, materialmen, laborers, suppliers, or vendors, have been due for less than 90 days; (C) utility, access, and other easements, rights-of-way, servitudes, restrictions, and other minor defects, encumbrances, encroachments, and irregularities in the title to the Project that do not, in the reasonable opinion of the Borrower, materially impair the use of the Project or materially and adversely affect the value thereof; (D) rights reserved to or vested in any municipality or public authority to control or regulate the Project or to use the Project in any manner, which rights do not, in the reasonable opinion of the Borrower, materially impair the use of the Project or materially and adversely affect the value thereof; (E) to the extent that it affects title to the Project, any Bond Document; and (F) landlord s liens; (vi) Liens that are junior and subordinate in lien and right of payment to the liens created by the Security Deed and the Security Agreement, securing obligations to any Debt Service Reserve Credit Facility Provider, upon such terms and conditions as are satisfactory to the Trustee; and (vii) Rights granted under the Rental Agreements and any Liens created thereby. Permitted Investments means obligations in which the Issuer is permitted to invest moneys of the Issuer pursuant to applicable law, which have (or are collateralized by obligations which have) a Rating by any Rating Agency that is equal to or greater than the third highest long-term Rating of such Rating Agency, or which bears (or are collateralized by obligations which bear) the second highest short-term Rating of such Rating Agency, or which consist of negotiable or non-negotiable certificates of deposit issued by or interest-bearing time or demand deposits in banks, provided that any such deposits are (a) fully insured by the Federal Deposit Insurance Corporation or (b) fully secured by Government Obligations. Obligations in which the Issuer is permitted to invest proceeds of Bonds are described, as of the date of execution of this Loan Agreement, in Section of the Official Code of Georgia Annotated. Person means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a joint venture, a trust, an unincorporated organization, a governmental unit or an agency, a political subdivision or instrumentality thereof, or any other group or organization of individuals. Plans and Specifications means the detailed plans and specifications for the construction of the Project prepared by an Architect or by architects and engineers acceptable to an Architect and approved by such Architect, as amended from time to time by the Borrower or the general contractor under the Development Agreement, a copy of which is or will be on file with the Trustee. Principal Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Project shall have the meaning given such term in the Preamble to the Indenture, and, unless the context otherwise requires, includes the Site. Project Budget means the Borrower s budget (with detail provided on a month by month basis) for the Project for the applicable Fiscal Year including, without limitation, a budget of capital expenditures for such year, an annual cash flow analysis that itemizes Gross Receipts and Expenses of Operation and Maintenance on a monthly basis, the Semi-Annual Replacement Deposit, and such other information as required by this Loan Agreement, as such budget shall be revised from time to time as provided in this Loan Agreement. Project Fund means the trust fund so designated, which is created pursuant to Section 509 of the Indenture. Property means, with respect to any Person, any and all rights, titles, and interests of such Person in and to any and all property, whether real or personal, tangible or intangible, and wherever situated. Rating means a rating in one of the categories by a Rating Agency, disregarding pluses, minuses, and numerical gradations. Rating Agencies or Rating Agency means Fitch, Moody s, and Standard & Poor s or any successors thereto and any other nationally recognized credit rating agency then maintaining a rating on any Bonds at the request of the Borrower. If at any time a particular Rating Agency does not have a rating outstanding with respect to the relevant Bonds, then a reference to Rating Agency or Rating Agencies shall not include such Rating Agency. Real Estate Documents means, collectively, the Ground Leases and the Rental Agreements. Rebate Amount means the rebatable arbitrage in connection with any Tax-Exempt Bonds that is payable to the United States Treasury pursuant to Section 148(f) of the Code; such term shall include any yield reduction payment to be made pursuant to Section 148(f) of the Code. Rebate Calculator means any nationally recognized bond counsel, nationally recognized firm of certified public accountants, or other firm reasonably acceptable to the Trustee, which is expert in making the calculations required by Section 148(f) of the Code, appointed by the Borrower pursuant to Section 4.06 hereof to make the calculations required by Section 148(f) of the Code in connection with any Tax-Exempt Bonds. Rebate Fund means the trust fund so designated, which is created pursuant to Section 504 of the Indenture. Redemption Account means the separate account so designated in the Sinking Fund, which is created and established therein pursuant to Section 502 of the Indenture. Regents means the Board of Regents of the University System of Georgia Regulatory Body means any federal, state, or local government, department, agency, or instrumentality and other public or private body, including accrediting organizations, having regulatory jurisdiction and authority over the Borrower or its facilities or operations. Rental Agreements means the Rental Agreements, dated as of, between the Borrower, as landlord, and the Board of Regents of the University System of Georgia, as tenant, as the same may be amended, modified, or replaced. Repair and Replacement Fund means the trust fund designated the Repair, Replacement and Maintenance Fund, which is created pursuant to Section 506 of the Indenture. Responsible Officer means, when used with respect to the Trustee, any vice president, senior associate or other officer of the Trustee within the Principal Office because of such person s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of the Indenture. Revenue Fund means the trust fund designated the Revenue Fund, which is created pursuant to Section 501 of the Indenture. Security means any of the property subject to the operation of the granting clauses contained in the Security Deed and the Security Agreement. Security Agreement means the Security Agreement, dated the date hereof, between the Borrower and the Issuer, executed by the Borrower as security for its obligations under this Loan Agreement, as the same may be amended from time to time in accordance with the terms thereof. Security Deed means the Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated the date hereof, executed by the Borrower as security for its obligations under this Loan Agreement, from the Borrower to the Issuer, as the same may be amended from time to time in accordance with the terms thereof. Semi-Annual Replacement Deposit shall mean a semi-annual payment to be made by the Regents to the Borrower pursuant to Paragraph 4 of Exhibit B of the Rental Agreements, beginning on and thereafter on the first day of and. Series 2010 Bonds means the revenue bonds designated SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I. LLC PROJECT), SERIES 2010, to be dated the date of issuance and delivery thereof, in the original aggregate principal amount of $36,475,000, to be issued pursuant to the Indenture. Series 2010 Disclosure Certificate means the Continuing Disclosure Certificate, dated the Closing Date of the Series 2010 Bonds, of the Borrower, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Series 2010 Loan means the loan made by the Issuer to the Borrower pursuant to Section 3.01(a) hereof, the repayment of which is evidenced by the Series 2010 Note. Series 2010 Note means the Series 2010 Promissory Note of the Borrower, dated the date of the Series 2010 Bonds, in the original principal amount of $, made by the Borrower and payable to the Issuer, to evidence the Borrower s obligation to pay Loan Repayments in order to repay the Series 2010 Loan, and any promissory note issued in substitution or exchange therefor, substantially in the form attached to this Loan Agreement as Exhibit B. Sinking Fund means the trust fund so designated, which is created pursuant to Section 502 of the Indenture. Site means the real estate described in Exhibit A attached hereto, which, by this reference thereto, is incorporated herein, as the same may be amended or supplemented pursuant to this Loan Agreement. Standard and Poor s or S&P means Standard & Poor s Financial Services, LLC, a subsidiary of The McGraw-Hill Companies, Inc., or, if such S&P is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Borrower and acceptable to the Bond Insurer. The notice address of Standard & Poor s shall be 55 Water Street, New York, New York State means the State of Georgia. Surety Bonds means separate performance and labor and material payment bonds issued by a responsible surety bond company qualified to do business in the State having an A- rating or better from S&P or A.M. Best Company, Inc., which (1) contains a lender s dual obligee rider in favor of the Trustee, (2) unconditionally guarantees performance of the Development Agreement upon any default by the contractor thereunder, including payment by the contractor of all amounts due in respect thereof and the correction of defects developing within one year after substantial completion of construction under the Development Agreement, (3) has a maximum amount available of at least 100% of the price of the Development Agreement including increases caused by change orders (except that the portion available thereunder for the correction of post-completion defects may be limited to 10% of the price of the Development Agreement), (4) provides that coverage thereunder may not be reduced or cancelled except upon 30 days prior written notice to the Borrower, the Bond Insurer and the Trustee, and (5) if cancellable by the surety under any circumstances, provides for full payment to the Trustee prior to any cancellation. Surplus Fund means the trust fund so designated, which is created pursuant to Section 507 of the Indenture. Tax-Exempt Bonds means any Bonds the interest on which has been determined, in an unqualified opinion of Bond Counsel, to be excluded from gross income for federal income tax purposes. Trust Estate means any and all property subject to the operation of the granting clauses of the Indenture

100 Trustee means the trustee or the co-trustee at the time serving as such under the Indenture. The Bank of New York Mellon Trust Company, N.A., is the initial Trustee. Unassigned Rights means all of the rights of the Issuer (1) to receive reimbursements and payments pursuant to Sections 5.02(f), 10.04, and hereof, (2) to be held harmless and indemnified pursuant to Sections 9.04 and 9.08 hereof and (3) to receive and give notices and instructions and to comply with instructions, as provided herein. Underwriter means, for purposes of the Series 2010 Bonds, Wells Fargo Bank, National Association. Section Construction of Certain Terms. For all purposes of this Loan Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction shall apply: (1) The use of the masculine, feminine, or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine, or neuter gender, as appropriate. (2) All references in this instrument to designated Articles, Sections, and other subdivisions are to the designated Articles, Sections, and other subdivisions of this instrument. The words herein, hereof, and hereunder and other words of similar import refer to this Loan Agreement as a whole and not to any particular Article, Section, or other subdivision. of counsel or an accountant, which certificate or opinion has been given only after due inquiry of the relevant facts and circumstances, unless such officer knows that the certificate or opinion with respect to the matters upon which his certificate or opinion may be based is erroneous or in the exercise of reasonable care should have known that the same was erroneous. Any such certificate or opinion made or given by counsel or an accountant may be based (insofar as it relates to factual matters with respect to information that is in the possession of an officer of the Issuer or the Borrower or any third party) upon the certificate or opinion of or representations by an officer of the Issuer or the Borrower or any third party on whom counsel or an accountant could reasonably rely unless such counsel or such accountant knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion may be based as aforesaid are erroneous or in the exercise of reasonable care should have known that the same were erroneous. The same officer of the Issuer or the Borrower, or the same counsel or accountant, as the case may be, need not certify to or render an opinion as to all of the matters required to be certified or covered by an opinion under any provision of this Loan Agreement, but different officers, counsel, or accountants may certify to or render an opinion as to different matters, respectively. [END OF ARTICLE I] (3) The terms defined in this Article include the plural as well as the singular. (4) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP. Section Table of Contents; Titles and Headings. The table of contents, the titles of the articles, and the headings of the sections of this Loan Agreement are solely for convenience of reference, are not a part of this Loan Agreement, and shall not be deemed to affect the meaning, construction, or effect of any of its provisions. Section Contents of Bonds or Opinions. Every certificate or opinion with respect to the compliance with a condition or covenant provided for in this Loan Agreement shall include: (i) a statement that the person or persons making or giving such certificate or opinion have read such covenant or condition and the definitions herein relating thereto, (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based, (iii) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with, and (iv) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with. Any such certificate or opinion made or given by an officer of the Issuer or the Borrower may be based, insofar as it relates to legal or accounting matters, upon a certificate or an opinion ARTICLE II REPRESENTATIONS AND WARRANTIES Section Representations by the Issuer. The Issuer makes the following representations and findings as the basis for the undertakings on its part herein contained: (a) Creation and Authority. The Issuer is a public body corporate and politic and an instrumentality of the State, validly existing under the provisions of the Act. The Issuer has all requisite power and authority under the Act (1) to issue the Series 2010 Bonds, (2) to lend the proceeds of the sale of the Series 2010 Bonds to the Borrower to finance the costs of constructing and equipping the Project and related costs, and (3) to enter into, perform its obligations under, and exercise its rights under the Issuer Contracts and to endorse the Series 2010 Note without recourse or warranty to the order of the Trustee. The Issuer has determined that the Project constitutes a project within the meaning of the Act and furthers the public purposes of the Act. (b) Pending Litigation. There are no actions, suits, proceedings, inquiries, or investigations pending or, to the knowledge of the Issuer threatened against or affecting the Issuer in any court or by or before any governmental authority or arbitration board or tribunal, which involve the possibility of materially and adversely affecting the transactions contemplated by the Issuer Contracts or which, in any way, would adversely affect the validity or enforceability of the Series 2010 Bonds, the Issuer Contracts, or any agreement or instrument to which the Issuer is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby, nor is the Issuer aware of any facts or circumstances presently existing that would form the basis for any such actions, suits, or proceedings. (c) Issue, Sale, and Other Transactions Are Legal and Authorized. The issue and sale of the Series 2010 Bonds, the execution and delivery by the Issuer of the Issuer Contracts, and the endorsement without recourse or warranty of the Series 2010 Note by the Issuer to the order of the Trustee and the compliance by the Issuer with all of the provisions of each thereof (i) are within the purposes, powers, and authority of the Issuer, (ii) have been done in full compliance with the provisions of the Act and have been approved by the governing body of the Issuer and are legal and will not conflict with or constitute on the part of the Issuer a violation of or a breach of or a default under, or result in the creation or imposition of any lien, charge, restriction, or encumbrance (other than those created by the Bond Documents) upon any property of the Issuer under the provisions of, any charter instrument, bylaw, indenture, mortgage, security deed, pledge, note, lease, loan, or installment sale agreement, contract, or other agreement or instrument to which the Issuer is a party or by which the Issuer or its properties are otherwise subject or bound, or any license, judgment, decree, law, statute, order, writ, injunction, demand, rule, or regulation of any court or governmental agency or body having jurisdiction over the Issuer or any of its activities or properties, and (iii) have been duly authorized by all necessary corporate action on the part of the Issuer. (d) Governmental Consents. Neither the nature of the Issuer nor any of its activities or properties, nor any relationship between the Issuer and any other Person, nor any circumstance in connection with the offer, issue, sale, or delivery of the Series 2010 Bonds is such as to require the consent, approval, permission, order, license, or authorization of, or the filing, registration, or qualification with, any governmental authority on the part of the Issuer in connection with the execution, delivery, and performance of the Issuer Contracts, the endorsement without recourse or warranty of the Series 2010 Note to the order of the Trustee, the consummation of any transaction therein contemplated, or the offer, issue, sale, or delivery of the Series 2010 Bonds, except as shall have been obtained or made and as are in full force and effect, other than the filing of financing statements or instruments effective as financing statements perfecting the security interests created by the Indenture and the filing of Internal Revenue Service Form 8038 with the Internal Revenue Service. The representations expressed in this Section 2.01(d) shall not extend to or otherwise cover any approvals that may be required by any federal or state securities laws. (e) No Defaults. To the knowledge of the Issuer, after making due inquiry with respect thereto, no event has occurred and no condition exists that would constitute an Event of Default under the Issuer Contracts or that, with the lapse of time or with the giving of notice or both, would become an Event of Default under the Issuer Contracts. To the knowledge of the Issuer, after making due inquiry with respect thereto, the Issuer is not in default or violation in any material respect under the Act or under any charter instrument, bylaw, or other agreement or instrument to which it is a party or by which it may be bound, which would have a material adverse effect on the transactions contemplated by the Issuer Contracts. (f) No Prior Pledge. Neither the Issuer Contracts or the Series 2010 Note nor any of the payments or amounts to be received by the Issuer under the Issuer Contracts or the Series 2010 Note, have been or will be pledged or hypothecated in any manner or for any purpose or have been or will be the subject of a grant of a security interest by the Issuer other than as provided in the Indenture as security for the payment of the Bonds. (g) Disclosure. The representations of the Issuer contained in this Loan Agreement and any certificate, document, written statement, or other instrument furnished to the Trustee or the Underwriter by or on behalf of the Issuer in connection with the transactions contemplated hereby do not contain any untrue statement of a material fact relating to the Issuer and do not omit to state a material fact relating to the Issuer necessary in order to make the statements contained herein and therein relating to the Issuer not misleading. Nothing has come to the attention of the Issuer that would materially and adversely affect or in the future may (so far as the Issuer can now reasonably foresee) materially and adversely affect the transactions contemplated by the Bond Documents, which have not been set forth in the Official Statement relating to the Series 2010 Bonds or in the other certificates, documents, and instruments furnished to the Underwriter by or on behalf of the Issuer prior to the date of delivery of such Official Statement in connection with the transactions contemplated hereby. (h) Compliance with Conditions Precedent to the Issuance of the Series 2010 Bonds. All acts, conditions, and things required to exist, happen, and be performed precedent to and in the execution and delivery by the Issuer of the Series 2010 Bonds will have happened and will have been performed in due time, form, and manner as required by law, and the issuance of 19 20

101 the Series 2010 Bonds, together with all other obligations of the Issuer, do not exceed or violate any constitutional or statutory limitation. Section Representations by the Borrower. The Borrower makes the following representations and warranties as the basis for the undertakings on its part herein contained: (a) Formation and Power. The Borrower is a limited liability company duly formed, validly existing, and in good standing under and by virtue of the laws of the State of Georgia, without limit as to the duration of its existence, and has all requisite power and authority and all necessary licenses and permits to lease and operate its properties and to carry on its operations as they are now being conducted and as they are presently proposed to be conducted. (b) Pending Litigation and Taxes. There are no actions, suits, proceedings, inquiries, or investigations pending or, to the knowledge of the Borrower, after making due inquiry with respect thereto, threatened against or affecting the Borrower in any court or by or before any Governmental Authority or arbitration board or tribunal, which involve the possibility of materially and adversely affecting the properties, activities, prospects, revenues, operations, or condition (financial or otherwise) of the Borrower or the Real Estate Documents, or the ability of the Borrower to perform its obligations under the Borrower Contracts, the Real Estate Documents, or the transactions contemplated by the Borrower Contracts or the Real Estate Documents or which, in any way, would adversely affect the validity or enforceability of the Borrower Contracts or the Real Estate Documents or any agreement or instrument to which the Borrower is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby, nor is the Borrower aware of any facts or circumstances presently existing that would form the basis for any such actions, suits, or proceedings. The Borrower is not in default with respect to any judgment, order, writ, injunction, decree, demand, rule, or regulation of any court, Governmental Authority, or arbitration board or tribunal, which could have a material adverse effect on (i) the business, operations, affairs, financial condition, assets, or properties of the Borrower taken as a whole, or (ii) the ability of the Borrower to perform its obligations under the Borrower Contracts or the Real Estate Documents, or (iii) the validity or enforceability of the Borrower Contracts or the Real Estate Documents. All tax returns (federal, state, and local) required to be filed by or on behalf of the Borrower have been duly filed, and all taxes, assessments, and other governmental charges shown thereon to be due, including interest and penalties, except such, if any, as are being actively contested by the Borrower in good faith, have been paid or adequate reserves have been made for the payment thereof. (c) Agreements Are Legal and Authorized. The execution and delivery by the Borrower of the Borrower Contracts and the Real Estate Documents, the consummation of the transactions herein and therein contemplated, and the fulfillment of or the compliance with all of the provisions hereof and thereof (i) are within the power, legal right, and authority of the Borrower, (ii) are legal and will not conflict with or constitute on the part of the Borrower a violation of or a breach of or a default under, or result in the creation or imposition of any lien, charge, restriction, or encumbrance (other than Permitted Encumbrances) upon any Property of the Borrower under the provisions of, any organic document, indenture, mortgage, security deed, pledge, note, lease, loan, or installment sale agreement, contract, or other agreement or instrument to which the Borrower is a party or by which the Borrower or its properties are otherwise subject or bound, or any license, law, statute, rule, regulation, judgment, order, writ, 21 injunction, decree, or demand of any court or Governmental Authority having jurisdiction over the Borrower or any of its activities or properties, and (iii) have been duly authorized by all necessary and appropriate company action on the part of the Borrower. The Borrower Contracts and the Real Estate Documents are the valid, legal, binding, and enforceable obligations of the Borrower. The Real Estate Documents are in full force and effect. (d) Governmental Consents. Neither the Borrower nor any of its activities or properties, nor any relationship between the Borrower and any other Person, nor any circumstances in connection with the execution, delivery, and performance by the Borrower of its obligations under the Borrower Contracts or the Real Estate Documents, or the offer, issue, sale, or delivery by the Issuer of the Series 2010 Bonds, is such as to require the consent, approval, permission, order, license, or authorization of, or the filing, registration, or qualification with, any Governmental Authority on the part of the Borrower in connection with the execution, delivery, and performance of the Borrower Contracts or the Real Estate Documents, the consummation of any transaction therein contemplated, or the offer, issue, sale, or delivery of the Series 2010 Bonds, except as shall have been obtained or made and as are in full force and effect. To the knowledge of the Borrower, after making due inquiry with respect thereto, the Borrower will be able to obtain all such additional consents, approvals, permissions, orders, licenses, or authorizations of Governmental Authorities as may be required on or prior to the date the Borrower is legally required to obtain the same. (e) No Defaults. No event has occurred and no condition exists that would constitute an Event of Default under the Borrower Contracts or the Real Estate Documents or that, with the lapse of time or with the giving of notice or both, would become an Event of Default under the Borrower Contracts or the Real Estate Documents. To the knowledge of the Borrower, after making due inquiry with respect thereto, the Borrower is not in default or violation in any material respect under any organic document or other agreement or instrument to which it is a party or by which it may be bound (including, without limitation, the Real Estate Documents), which could have a material adverse effect on (i) the business, operations, affairs, financial condition, assets, or properties of the Borrower taken as a whole, or (ii) the ability of the Borrower to perform its obligations under the Borrower Contracts or the Real Estate Documents, or (iii) the validity or enforceability of the Borrower Contracts or the Real Estate Documents. (f) Compliance with Law. To the knowledge of the Borrower, after making due inquiry with respect thereto, the Borrower is not in violation of any laws, ordinances, or governmental rules or regulations to which it or its properties are subject and has not failed to obtain any licenses, permits, franchises, or other governmental authorizations (which are presently obtainable) necessary to the leasing of its properties or to the conduct of its activities, which violation or failure to obtain might materially and adversely affect the properties, activities, prospects, revenues, and condition (financial or otherwise) of the Borrower, and there have been no citations, notices, or orders of noncompliance issued to the Borrower under any such law, ordinance, rule, or regulation. (g) Restrictions on the Borrower. The Borrower is not a party to or bound by any contract, instrument, or agreement, or subject to any other restriction that could have a material adverse effect on (i) the business, operations, affairs, financial condition, assets, or properties of the Borrower taken as a whole, (ii) the ability of the Borrower to perform its obligations under the Borrower Contracts or the Real Estate Documents, or (iii) the validity or enforceability of the 22 Borrower Contracts or the Real Estate Documents. The Borrower is not a party to any contract or agreement that restricts the right or ability of the Borrower to incur indebtedness for borrowed money or to enter into loan agreements. (h) Disclosure. The representations of the Borrower contained in this Loan Agreement and any certificate, document, written statement, or other instrument furnished by or on behalf of the Borrower to the Issuer or the Underwriter in connection with the transactions contemplated hereby, do not contain any untrue statement of a material fact and do not omit to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact that the Borrower has not disclosed to the Issuer and the Underwriter in writing that materially and adversely affects or in the future may (so far as the Borrower can now reasonably foresee) materially and adversely affect the acquisition, construction, installation, ownership, or operation of the Project or the properties, activities, prospects, revenues, or condition (financial or otherwise) of the Borrower, or the ability of the Borrower to perform its obligations under the Borrower Contracts or the Real Estate Documents or any of the documents or transactions contemplated hereby or thereby or any other transactions contemplated by the Bond Documents that has not been set forth in the Official Statement relating to the Series 2010 Bonds or in the other certificates, documents, and instruments furnished to the Underwriter by or on behalf of the Borrower prior to the date of delivery of such Official Statement in connection with the transactions contemplated hereby. (i) Borrower s Tax Certificate. The representations and warranties of the Borrower set forth in the Borrower s Tax Certificate, dated the Closing Date of the Series 2010 Bonds, are hereby incorporated herein and made a part hereof by this reference thereto, as if fully set forth herein, and are true and correct as of the date hereof. (j) Impositions. There are no Impositions that have been levied or otherwise asserted with respect to the Project for which the Borrower is delinquent in payment thereof. (k) Project Legal Compliance. To the knowledge of the Borrower, after making due inquiry with respect thereto, the operation of the Project in the manner presently contemplated will not conflict in any material respect with any zoning, water or air pollution or other ordinance, order, law, rule, or regulation applicable to the Project, including, without limitation, Environmental Laws. The Borrower has caused the Project to be designed in accordance with all applicable federal, state, and local laws or ordinances (including rules and regulations) relating to zoning, planning, building, safety, health, and environmental quality. The Borrower will operate or will cause the Project to be operated in material compliance with the requirements of all such laws, ordinances, rules, and regulations, including, without limitation, Environmental Laws. The Borrower possesses all necessary licenses and permits, or rights thereto, to operate the Project as presently proposed to be operated, and all such licenses, permits, or other approvals required in connection with the operation of the Project have been duly obtained and are in full force and effect except for any such licenses, permits, or other approvals that are not yet required and that will be duly obtained not later than the time required or the failure to obtain which will not materially and adversely affect the operation of the Project. (m) Statutory Liens. There are no mechanics or materialmen s liens or other statutory liens on the Project, and no excavation or work of any character, kind, or description has been or will be commenced nor any material of any description for any construction in connection with the Project delivered on or near the Site prior to the recording of the Security Deed and the perfection of the security interest created by the Security Agreement, except as the Trustee shall be advised in writing, and in the event the Trustee is so advised in writing of any work or deliveries, the Borrower will provide the Trustee with waivers of all liens with respect to such work or deliveries in such form as may be satisfactory to the Trustee. (n) Utilities. All utility services and facilities necessary for the operation of the Project for their intended purposes are available at the Site. (o) Condemnation. No condemnation or eminent domain proceeding has been commenced and is currently pending or, to the knowledge of the Borrower, threatened against the Project. (p) No Pension Plans. The Borrower does not maintain and has not maintained and is not a party to and has not been a party to any employee pension or benefit plan. (q) Patents, Trademarks, Copyrights, and Licenses. The Borrower owns or possesses all the patents, trademarks, service marks, trade names, copyrights, and licenses necessary for the present and planned conduct of its business without any known conflict with the rights of others. (r) Labor Relations. The Borrower is not a party to any collective bargaining agreement, and there are no material grievances, disputes, or controversies with any union or any other organization of the Borrower s employees, or threats of strikes, work stoppages, or any asserted pending demands for collective bargaining by any union or labor organization. Section Reliance by Holders. The Issuer and the Borrower acknowledge and agree that these representations and warranties are made to induce the Holders to purchase the Bonds and the Bond Insurer to guarantee the Series 2010 Bonds, and that such representations and warranties and any other representations and warranties made by the Issuer and the Borrower in the Bond Documents are made for the benefit of the Holders and the Bond Insurer, and may be relied upon by the Holders and the Bond Insurer. [END OF ARTICLE II] (l) No Prior Pledge. The Security has not been and will not be mortgaged, pledged, or hypothecated in any manner or for any purpose and has not been and will not be the subject of any Lien other than as provided herein

102 ARTICLE III LOAN TO BORROWER; SECURITY; TITLE Section The Loans and the Notes. (a) The Issuer hereby agrees to lend to the Borrower, and the Borrower hereby agrees to borrow from the Issuer, the proceeds of the sale of the Series 2010 Bonds for the purposes of financing the costs of constructing and equipping the Project and related costs in accordance with the terms and conditions of this Loan Agreement and the Indenture. The deposit of the proceeds of the sale of the Series 2010 Bonds as provided in Section 514 of the Indenture shall constitute the loan of such proceeds from the Issuer to the Borrower. The Borrower s obligation to repay the Series 2010 Loan, together with premium, if any, and interest thereon, which is more fully described in Section 5.02 hereof under the caption Loan Repayments related to the Series 2010 Bonds, shall be evidenced by the Series 2010 Note, which the Borrower hereby agrees to execute and deliver to the Issuer. (b) The Issuer may lend to the Borrower, and the Borrower may borrow from the Issuer, the proceeds of the sale of any Additional Bonds for the purposes authorized by Section 9.05 hereof in accordance with the terms and conditions of this Loan Agreement and the Indenture. The deposit of the proceeds of the sale of Additional Bonds as provided in a supplemental indenture to the Indenture shall constitute the loan of such proceeds from the Issuer to the Borrower. Such proceeds of Additional Bonds shall be disbursed to or on behalf of the Borrower as provided in an amendment to this Loan Agreement. The Borrower s obligation to repay the Additional Loans, together with premium, if any, and interest thereon, which is more fully described in Section 5.02 hereof under the caption Loan Repayments related to Additional Bonds, shall be evidenced by the Additional Notes, which the Borrower hereby agrees to execute and deliver to the Issuer when the Additional Loans are made. Section Security for the Obligations. As security for the Obligations, the Borrower shall, prior to or contemporaneously with the execution and delivery of this Loan Agreement, execute and deliver the Security Deed and the Security Agreement. Section Security for Payments Under the Bonds; Perfection. Contemporaneously with the issuance of the Series 2010 Bonds, as security for the payment of the Bonds, the Issuer shall execute and deliver the Indenture. Contemporaneously with the issuance of the Series 2010 Bonds, as security for the payment of the Bonds, the Issuer shall also endorse without recourse or warranty the Series 2010 Note to the order of the Trustee. The Borrower hereby assents to the assignment and grant of a first priority security interest to the Trustee for the benefit of the Holders made in the Indenture and hereby agrees that its obligations to make all payments under this Loan Agreement shall be absolute and shall not be subject to any defense, except payment, or to any right of setoff, counterclaim, or recoupment arising out of any breach by the Issuer of any obligation to the Borrower, whether hereunder or otherwise, or arising out of any indebtedness or liability at any time owing to the Borrower by the Issuer. The Borrower further agrees that all payments required to be made under this Loan Agreement, except for those arising out of Unassigned Rights, shall be paid directly to the Trustee for the account of the Issuer. The Trustee shall have all rights and remedies herein accorded to the Issuer (except for Unassigned Rights), and any reference herein to the Issuer with regard to rights and remedies hereunder (except unassigned rights) shall be deemed, with the necessary changes 25 in detail, to include the Trustee, and the Trustee, the Bond Insurer and the Holders are deemed to be and are third party beneficiaries of the representations, covenants, and agreements of the Borrower herein contained. The Borrower, shall cause to be filed, refiled, recorded, or re-recorded all financing statements, continuation statements, documents, and notices or deliver possession of any instrument or cash necessary to perfect and maintain any lien or security interest created by the Security Deed, the Security Agreement, or the Indenture for the benefit of the Issuer or the Trustee as a first priority pledge, lien, encumbrance, and security interest in and to the Project and the payments and amounts to be received and held under this Loan Agreement, the Notes, the Security Deed, and the Security Agreement. The Issuer and the Trustee agree that they will cooperate fully and will take any action reasonably required to assist the Borrower in meeting the provisions of this Section Section Warranty of Title. The Borrower warrants that (a) it has acquired a valid, effective, and subsisting leasehold estate in the Site pursuant to the Ground Leases, (b) it will be the legal and equitable owner of the Project, and (c) the Project is and will be free of all adverse claims, security interests, and encumbrances, other than Permitted Encumbrances. Section Title Insurance. The Borrower shall, prior to or simultaneously with the issuance of the Series 2010 Bonds, furnish title insurance in the form of an ALTA leasehold mortgagee s title binder or policy issued by a title insurance company acceptable to the Underwriter, the Bond Insurer and the Trustee in the face amount of at least $36,475,000 and shall furnish a copy of such binder or policy to the Trustee. The Borrower shall furnish within the time limit specified in any binder an original of a mortgagee s title policy issued by such title insurance company. The mortgagee s title policy shall insure that the Trustee has a valid first lien in the Borrower s leasehold estate in the Site, subject only to Permitted Encumbrances. Such policy shall not contain the standard exceptions for discrepancies, encroachments, overlaps, conflicts in boundary lines, shortages in area, or other matters that would be disclosed by an accurate survey and inspection of the Site, for mechanics and materialmen s liens, or for rights or claims of parties in possession and easements or claims of easements not shown by the public records. Such policy shall contain the standard comprehensive lender s endorsement and the standard zoning endorsement. Any Net Proceeds payable either to the Issuer or the Borrower under such policy shall be subject to the lien of the Indenture, shall be paid to the Trustee, and shall be held by the Trustee in the Project Fund and applied as provided in Section 8.02 hereof. Section Borrower s Covenants Regarding Title. The Borrower agrees to protect, preserve, and defend its interest in the Project, to appear and defend such interest and estate in any action or proceeding affecting or purporting to affect the Project, the liens of the Security Deed and the Security Agreement thereon, or any of the rights of the Trustee thereunder, and to pay on demand all costs and expenses incurred by the Trustee in or in connection with any such action or proceeding, including reasonable attorneys fees, costs and expenses, as described in Section of this Loan Agreement, whether any such action or proceeding progresses to judgment and whether brought by or against the Trustee. The Trustee shall be reimbursed for any such costs and expenses in accordance with the provisions of Section 5.02(e) hereof. If the Borrower does not take the action contemplated herein, the Trustee may, but shall not be under any obligation to, appear or intervene in any such action or proceeding and 26 retain counsel therein and defend the same or otherwise take such action therein as it deems advisable, and may settle or compromise the same and, in that behalf and for any of such purposes, may expend and advance such sums of money as it may reasonably deem necessary, and such sums shall be an advance payable in accordance with Section 7.07 of this Loan Agreement. [END OF ARTICLE III] ARTICLE IV ISSUANCE OF THE SERIES 2010 BONDS; FUNDS Section Agreement to Issue the Series 2010 Bonds; Application of Proceeds. In order to provide funds for payment of the costs of constructing and equipping the Project and related costs, the Issuer agrees that it will sell and cause to be delivered to the Underwriter the Series 2010 Bonds in the aggregate principal amount of $ and will thereupon deposit with the Trustee for the account of the Borrower from the proceeds of the sale of the Series 2010 Bonds (i) in the Interest Account the amount specified in Section 514 of the Indenture, which shall constitute a credit on the payment of Loan Repayments related to the Series 2010 Bonds as specified in Section 5.02 hereof, (ii) in the Capitalized Interest Account the amount specified in Section 514 of the Indenture, (iii) in the Issuance Cost Fund the amount specified in Section 514 of the Indenture, (iv) in the Debt Service Reserve Fund the amount specified in Section 514 of the Indenture, and (v) in the Project Fund the remaining proceeds of the sale of the Series 2010 Bonds. Section Obligation of the Parties to Cooperate in Furnishing Documents; Trustee Reliance. Upon payment of any expenses of the Issuer incurred in connection therewith pursuant to Section 5.02 hereof, the Issuer agrees to cooperate with the Borrower in furnishing to the Trustee the documents that are required to effect payments out of any Fund, and the Issuer agrees to cause such orders to be directed to the Trustee as may be necessary to effect payments out of any Fund in accordance with the Indenture. Such obligation of the Issuer is subject to any provisions of the Indenture requiring additional documentation with respect to payments and shall not extend beyond the moneys in the relevant Fund available for payment under the terms of the Indenture. In making any such payment from any Fund, the Trustee may conclusively rely on any such orders and certifications delivered to it pursuant to the Indenture. The Borrower acknowledges having read Section 509 of the Indenture and agrees to perform all duties imposed upon it by such Section. Insofar as such Section imposes duties and responsibilities upon the Borrower, it is specifically incorporated herein by reference. Section Authorized Borrower and Issuer Representatives and Successors. The Borrower and the Issuer, respectively, shall designate, in the manner prescribed in Section 1.01 hereof, the Authorized Borrower Representative and the Authorized Issuer Representative. In the event that any person so designated and his alternate or alternates, if any, should become unavailable or unable to take any action or make any certificate provided for or required in this Loan Agreement, a successor shall be appointed in the same manner. Section Investment of Funds and Accounts. Subject to Article VI of the Indenture and Section 4.05 hereof, any moneys held as a part of any Fund shall be invested or reinvested by the Trustee at the written direction of the Authorized Borrower Representative in such Permitted Investments as may be designated by the Borrower. The Trustee may make any and all such investments through its own bond or investment department or through its brokerdealer affiliate

103 The investments so purchased shall be held by the Trustee and shall be deemed at all times a part of the relevant Fund and the accounts therein, as the case may be, and the interest accruing thereon and any profit realized therefrom shall be credited as provided in Section 602 of the Indenture, and any losses resulting from such investments shall be charged to such fund or account therein and paid by the Borrower. Section Special Investment Covenants. The Issuer and the Borrower each covenant that it will not directly or indirectly use or permit the use of any proceeds (as defined in the Code) of any Tax-Exempt Bonds or any other funds of the Issuer or the Borrower, or take or omit to take any action, or direct the Trustee to invest any funds held by it, in such manner as will, or allow any related party (as defined in Section (b) of the Treasury Regulations) to enter into any arrangement, formal or informal, as will, cause any Tax-Exempt Bonds to be federally guaranteed, as such term is used and defined in Section 149(b) of the Code, or to be arbitrage bonds within the meaning of Section 148 of the Code. To that end, the Issuer and the Borrower shall comply with all requirements of Section 149(b) and Section 148 of the Code to the extent applicable to any Tax-Exempt Bonds. In the event that at any time the Issuer or the Borrower is of the opinion that for purposes of this Section 4.05 it is necessary to dispose of any investment or to restrict or limit the yield on any investment held under the Bond Documents or otherwise, the Issuer or the Borrower, as the case may be, shall so instruct the Trustee in writing. deposited, into the Revenue Fund and the Repair and Replacement Fund in accordance with Sections 501 and 506 of the Indenture, respectively, all Gross Receipts when and as received. The Borrower acknowledges that under the Indenture the moneys held from time to time in the Revenue Fund and the Repair and Replacement Fund will be applied by the Trustee, without further direction from the Issuer or the Borrower, unless otherwise provided therein, in the manner, at the times, and in the order of priority indicated in Sections 501 and 506 of the Indenture. [END OF ARTICLE IV] Section Calculation and Payment of Rebate Amount. The Borrower shall appoint and pay a Rebate Calculator to calculate and determine the Rebate Amount, if any, as required by Section 148(f) of the Code and to prepare Internal Revenue Service Form 8038-T or other applicable form required to be submitted in connection with the payment of the Rebate Amount. All calculations and determinations made by a Rebate Calculator shall be accompanied by the opinion of the Rebate Calculator that such calculations and determinations have been made in accordance with the requirements of Section 148(f) of the Code. The Borrower agrees to pay to the United States Treasury for and on behalf of the Issuer the amount determined by the Rebate Calculator to be due to the United States Treasury before the due date specified by the Rebate Calculator, from amounts on deposit in the Rebate Fund or from other legally available funds. The Borrower agrees to hold the Issuer and the Trustee harmless against and to indemnify the Issuer and the Trustee against all liability they may incur in connection with their obligations under Section 504 of the Indenture. The Borrower acknowledges having read Section 504 of the Indenture and agrees to perform all duties imposed upon it or the Issuer by such Section. Insofar as such Section imposes duties and responsibilities upon the Borrower, it is specifically incorporated herein by reference. The obligations created by this Section 4.06 shall survive the termination of the Loan Term or the earlier resignation or removal of the Trustee and shall inure to the benefit of the Trustee s successors and assigns. The Issuer hereby delegates to the Borrower the authority and responsibility for compliance with Section 148(f) of the Code. Notwithstanding the foregoing, at the written request of the Borrower or of the Rebate Calculator, the Issuer, by an authorized official, shall promptly execute and return to the Borrower or to the Rebate Calculator for filing Internal Revenue Service Form 8038-T or other applicable form required to be submitted in connection with the payment of the Rebate Amount. Section Deposit of Gross Receipts. The Borrower acknowledges that the Issuer has established the Revenue Fund and the Repair and Replacement Fund with the Trustee pursuant to the Indenture. In order to secure the Obligations, the Borrower agrees to collect or cause to be collected with all due dispatch, all Gross Receipts and to deposit, or cause to be ARTICLE V LOAN PROVISIONS Section Term of Loan Agreement. This Loan Agreement shall become effective upon its delivery and shall be in full force and effect until midnight, June 15, 2041, subject to the provisions of this Loan Agreement permitting earlier termination (including particularly Article XI hereof), or if all the Loan Repayments and other amounts payable pursuant to Section 5.02 hereof have not been paid or retired (or provision for such payment has not been made as provided in the Indenture), until such date as such payment or provision shall have been made; provided, however, that the covenants and obligations expressed herein to so survive shall survive the termination of this Loan Agreement. Upon termination of the Loan Term as provided above, the Issuer and the Trustee shall deliver, or cause to be delivered, to the Borrower the cancelled Notes. Section Loan Repayments and Other Amounts Payable. (a) Loan Repayments related to Series 2010 Bonds: Until the principal of, premium, if any, and interest on the Series 2010 Bonds shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Indenture, funds shall be transferred from the Capitalized Interest Account to the Interest Account as described below, and the Borrower shall repay the Series 2010 Loan in installments payable to the Trustee for the account of the Issuer as repayments of the Series 2010 Loan, as follows: (i) on or before June 5, 2011 and December 5, 2011, the Trustee shall transfer from the Capitalized Interest Account to the Interest Account sums equal to the amounts payable on June 15, 2011 and December 15, 2011 respectively, as interest on the Series 2010 Bonds; (ii) on or before June 5, 2012, December 5, 2012 and June 5, 2013 the Trustee shall transfer moneys in the Capitalized Interest Account to the Interest Account in the amounts shown on Exhibit E, and on or before June 5, 2012, December 5, 2012 and June 5, 2013, the Borrower shall pay to the Trustee, for deposit to the Interest Account, a sum equal to the remaining amount required to be on deposit in the Interest Account in order to pay the interest coming due on the Series 2010 Bonds on June 15, 2012, December 15, 2012 and June 15, 2013; (iii) on or before December 5, 2013 and on or before each June 5 and December 5 thereafter, a sum equal to the amount payable on the next succeeding June 15 or December 15, respectively, as interest on the Series 2010 Bonds, as provided in the Indenture; and (iv) on or before December 5, 2012 and June 5, 2013, a sum equal to one-half of the principal due on June 15, 2013, and on or before each December 5 and June 5 thereafter, to and including June 5, 2041, a sum equal to one-half of the principal due on the maturity dates of the Series 2010 Bonds, or a sum equal to one-half of the amount required to retire Series 2010 Bonds under the mandatory sinking fund redemption requirements of Section 302 of the Indenture on the next succeeding June 15, as principal of the Series 2010 Bonds. (b) Loan Repayments related to Additional Bonds: Until the principal of, premium, if any, and interest on Additional Bonds shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Indenture, the Borrower shall repay Additional Loans and shall pay to the Trustee for the account of the Issuer as repayments of Additional Loans the amounts set forth in amendments to this Loan Agreement as required by Section 9.05 hereof. (c) Loan Repayment General Provisions: Each Loan Repayment due on the 5 th day of June or December preceding an interest or principal payment date or redemption date until the Bonds are fully paid or payment is provided therefor in accordance with the Indenture shall in all events be sufficient, after giving credit for funds held in the Sinking Fund available for such purpose, to pay the total amount of interest, principal, redemption requirement, and premium, if any, payable on the Bonds on the next succeeding principal or interest payment date or on the next succeeding redemption date for Bonds. Any Loan Repayment shall be reduced and need not be made to the extent that there are moneys on deposit in the Sinking Fund in excess of 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 when Bonds have not been presented for payment. Further, if the amount held by the Trustee in the Sinking Fund should be sufficient to pay at the times required the principal of, premium, if any, and interest on the Bonds then remaining unpaid, the Borrower shall not be obligated to make any further Loan Repayments under the provisions of this Section. There shall also be a credit against remaining Loan Repayments for Bonds purchased, redeemed, or cancelled, as provided in Article III of the Indenture. Any Loan Repayment not received by the Trustee when due shall continue as an obligation of the Borrower until paid and shall bear interest at the rate of interest on the Bonds to which such Loan Repayment relates. (d) Reserve Loan Payments: The Debt Service Reserve Fund shall be funded in an amount equal to the Debt Service Reserve Requirement from proceeds of the sale of the Series 2010 Bonds, for the purpose of paying principal of, premium, if any, and interest on the Bonds, as the same become due, in the event there should be insufficient funds for such purpose in the Sinking Fund, unless provision for their payment in full has been duly made, and for payment of fees, charges, and expenses of the Trustee upon the occurrence of an Event of Default under the Indenture. In the event any funds from the Debt Service Reserve Fund shall be withdrawn or if any losses result from the investment of amounts held in the Debt Service Reserve Fund, the Borrower shall, on the 5 th day of the June or December following such withdrawal or notice of such diminution in value or losses, and on the 5 th day of the following June or December, as the case may be, in addition to any other loan payments that may be due, pay to the Trustee for deposit in the Debt Service Reserve Fund, two consecutive loan payments as Reserve Loan Payments, each equal to one-half of the amount of such withdrawals, diminution in value, or losses, subject to a credit for earnings retained in or other deposits made to the Debt Service Reserve Fund during such period, until the balance of the Debt Service Reserve Fund reaches the Debt Service Reserve Requirement, at which point the obligation to make Reserve Loan Payments shall be suspended

104 The Borrower may elect, with the prior written consent of the Bond Insurer, to satisfy in whole or in part the Debt Service Reserve Requirement by means of a Debt Service Reserve Credit Facility, subject to the following requirements: (A) the Debt Service Reserve Credit Facility Provider must have a credit rating issued by a Rating Agency not less than its second highest Rating; (B) the Borrower (and not the Issuer) shall be responsible for repaying the Debt Service Reserve Credit Facility Provider for any draw-down on the Debt Service Reserve Credit Facility and any interest or fees due the Debt Service Reserve Credit Facility Provider under such Debt Service Reserve Credit Facility, and the Borrower shall not secure any obligation to the Debt Service Reserve Credit Facility Provider by a lien equal to or superior to the lien granted to the Issuer in the Security; (C) each Debt Service Reserve Credit Facility shall have a term of at least one year (or, if less, the remaining term of the Bonds) and shall entitle the Trustee to draw upon or demand payment and receive the amount so requested in immediately available funds on the date of such draw or demand; (D) the Debt Service Reserve Credit Facility shall permit a drawing by the Trustee for the full stated amount in the event (i) the Debt Service Reserve Credit Facility expires or terminates for any reason prior to the final maturity of the Bonds, and (ii) the Borrower fails to satisfy the Debt Service Reserve Requirement by the deposit to the Debt Service Reserve Fund of cash, securities, a substitute Debt Service Reserve Credit Facility, or any combination thereof, on or before the date of such expiration or termination; (E) if the Rating issued by the Rating Agency to the Debt Service Reserve Credit Facility Provider is withdrawn or reduced below its second highest Rating, the Borrower shall provide a substitute Debt Service Reserve Credit Facility within 60 days after such rating change, and, if no substitute Debt Service Reserve Credit Facility is obtained by such date, shall fund the Debt Service Reserve Requirement in not more than twelve equal consecutive monthly loan payments as Reserve Loan Payments, commencing not later than the 5 th day of the month immediately succeeding the date representing the end of such 60-day period; and (F) if the Debt Service Reserve Credit Facility Provider commences any insolvency proceedings or is determined to be insolvent or fails to make payments when due on its obligations, the Borrower shall provide a substitute Debt Service Reserve Credit Facility within 60 days thereafter, and, if no substitute Debt Service Reserve Credit Facility is obtained by such date, shall fund the Debt Service Reserve Requirement in not more than twelve equal consecutive monthly loan payments as Reserve Loan Payments, commencing not later than the 5 th day of the month immediately succeeding the date representing the end of such 60-day period. If the events described in either clauses (E) or (F) above occur, the Trustee shall not relinquish the Debt Service Reserve Credit Facility at issue until after the Debt Service Reserve Requirement is fully satisfied by the provision of cash, securities, or a substitute Debt Service Reserve Credit Facility or any combination thereof. Any amount received from the Debt Service Reserve Credit Facility shall be deposited directly into the Interest Account or the Principal Account, and such deposit shall constitute the application of amounts in the Debt Service Reserve Fund. Repayment of any draw-down on the Debt Service Reserve Credit Facility and any interest or fees due the Debt Service Reserve Credit Facility Provider under such Debt Service Reserve Credit Facility may be secured by a lien on the Security subordinate in lien and right of payment to the Obligations. (e) Additional Loan Payments: The Borrower agrees to pay to the Trustee until the principal of, premium, if any, and interest on the Bonds shall have been fully paid (i) an amount equal to the annual fee of the Trustee for the Ordinary Services of the Trustee rendered and the Ordinary Expenses of the Trustee incurred under the Indenture, as and when the same become due, (ii) reasonable fees and charges of the Trustee, as bond registrar and paying agent, and of any other paying agents on the Bonds for acting as paying agents as provided in the Indenture, as and when the same become due, (iii) the reasonable fees and charges of the Trustee for the necessary Extraordinary Services of the Trustee rendered by it and Extraordinary Expenses of the Trustee incurred by it under the Indenture, as and when the same become due, and (iv) any amount due and owing to the Bond Insurer under the Indenture or hereunder (collectively, the Additional Loan Payments ); provided, that the Borrower may, without creating a default hereunder, contest in good faith the necessity for any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any such fees, charges, or expenses. The Additional Loan Payments shall be billed to the Borrower by the Trustee or the Bond Insurer from time to time, together with a statement certifying that the amount billed has been incurred or paid by the Trustee or the Bond Insurer 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. (f) Issuer s Administrative Fee: The Borrower shall pay the annual administrative fee of the Issuer directly to the Issuer on January 1 of each year, beginning January 1, 2011, which administrative fee shall be equal to 1/8 of 1% of the first $10,000,000 of the principal amount of Series 2010 Bonds Outstanding on each such January 1, 1/16 of 1% of the next $10,000,000 of the principal amount of the Series 2010 Bonds Outstanding on each such January 1, 1/32 nd of 1% of the next $10,000,000 of the principal amount of the Series 2010 Bonds Outstanding on each such January 1, and 1/64 th of 1% of the principal amount of the Series 2010 Bonds Outstanding above $30,000,000 on each such January 1. (g) In the event 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 such obligation shall survive the termination of this Loan Agreement. Section Places of Loan Payments. The Loan Repayments provided for in Section 5.02 hereof shall be paid directly to the Trustee for the account of the Issuer and shall be deposited in (1) the Principal Account of the Sinking Fund, in the case of Loan Repayments relating to principal of the Bonds payable upon maturity or mandatory sinking fund redemption, (2) the Interest Account of the Sinking Fund, in the case of Loan Repayments relating to interest on the Bonds, and (3) the Redemption Account of the Sinking Fund, in the case of Loan Repayments relating to the redemption price of Bonds being redeemed on other than a mandatory sinking fund redemption date. The Reserve Loan Payments provided for in Section 5.02 hereof shall be paid in lawful money of the United States of America directly to the Trustee for the account of the Issuer and shall be deposited in the Debt Service Reserve Fund. The payments of Additional Loan Payments to be made to the Trustee under Section 5.02 hereof shall be paid directly to the Trustee for its own use or for disbursement to the paying agents or the Bond Insurer, as the case may be. The payment of the annual administrative fee of the Issuer pursuant to Section 5.02 hereof shall be paid directly to the Issuer for its own use. All payments provided for in Section 5.02 hereof shall be paid in lawful money of the United States of America. [END OF ARTICLE V] ARTICLE VI CONSTRUCTION AND EQUIPPING OF PROJECT Section Agreement to Construct and Equip the Project. (a) The Borrower shall enter into the Development Agreement prior to the commencement of construction with respect to the Project, which shall provide for a fixed cost or guaranteed maximum price (the GMP ) for the Project and for a commercially reasonable retainage to be held until completion of construction of the Project. Prior to the commencement of construction of the Project, the Borrower shall file with the Trustee a copy of the Development Agreement. (b) The Borrower, as principal, and not as agent for the Issuer, shall be responsible for the construction and contracting for the construction of the Project. The Borrower covenants to cause the Project to be constructed without material deviation from the Plans and Specifications and the Development Agreement and warrants that all real and personal property provided for therein will be necessary or appropriate in connection with the Project. The Borrower agrees to complete the construction and equipping of the Project as promptly as practicable and with all reasonable dispatch pursuant to the Development Agreement. The Borrower shall issue or enter into all necessary purchase orders, work orders, and agreements needed to undertake and complete the Project. (c) The Borrower shall not permit any mechanics or materialmen s or other liens to be perfected or remain against the Project for labor or materials furnished in connection with the construction of the Project, provided that it shall not constitute an Event of Default hereunder if such a lien is filed if the Borrower notifies the Trustee of the existence of such lien and if the Borrower in good faith promptly contests such lien in accordance with the provisions of Section 7.06 of this Loan Agreement. (d) The Borrower may in its discretion make changes to the Project, to the Development Agreement, or to any estimate, schedule, or Plans and Specifications for the Project, including any change orders under the Development Agreement; provided that prior to any such change becoming effective such change must be: (i) in writing, (ii) approved by the Architect, which approval shall include a statement that all approvals of any Regulatory Body required in connection with the change, if any, have been obtained, (iii) approved by an Officer s Certificate, and (iv) filed with the Trustee. No changes causing costs under the Development Agreement to exceed the fixed cost or guaranteed maximum price for the Project shall be made unless there shall have previously been filed with the Trustee satisfactory evidence of coverage of the increase in the price under the related Surety Bond and an Officer s Certificate, approved by the Architect, that the total cost of the Project including the change can be paid from moneys available in the Project Fund (including, if necessary, additional deposits to the Project Fund by the Borrower). (e) Prior to the Completion Date with respect to the Project, the Borrower shall prepare and deliver to the Trustee a monthly status or progress report with respect to the Project setting forth such information as shall reasonably inform the Bondholders of the status of the acquisition, construction, and equipping of the Project, including, without limitation, the then total estimated cost of construction as measured against the original budget therefore, which report shall be approved by the Architect. (f) Moneys deposited in the Project Fund shall be disbursed and applied in accordance with the provisions of Section 509 of the Indenture. (g) The Trustee shall have no duty to review or analyze the Development Agreement or any progress reports delivered to it hereunder and shall hold such Development Agreement and progress reports solely as a repository for the benefit of the Bondholders; the Trustee shall not be deemed to have notice of any information contained therein or event of default which may be disclosed therein in any manner. Section Establishment of Completion Date. The Completion Date shall be evidenced to the Trustee (with a copy to the Bond Insurer) by a certificate of substantial completion listing the items to be completed or corrected, if any, and the amounts to be withheld therefor, signed by the Authorized Borrower Representative stating that, except for amounts retained by the Trustee for costs of the Project not then due and payable, (i) construction of the Project has been completed without material deviation from the Plans and Specifications and all labor, services, materials, and supplies used in such construction have been paid or provided for, (ii) all other facilities necessary in connection with the construction of the Project have been constructed, acquired, and installed without material deviation from the Plans and Specifications and all costs and expenses incurred in connection therewith have been paid or provided for, (iii) according to the as built survey of the Site or a certificate of the surveyor, the buildings and improvements comprising the Project do not encroach on any other property or violate any setback or sideline requirements applicable to the Site, and (iv) a certificate of occupancy for the buildings comprising the Project has been issued by appropriate local governmental authorities. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties that exist at the date of such certificate or that may subsequently come into being. It shall be the duty of the Borrower to cause the certificate contemplated by this Section to be furnished as soon as the construction of the Project shall have been substantially completed. Section Enforcement of the Development Agreement and Remedies Against Contractors and Subcontractors and Their Sureties and Against Manufacturers. The Borrower shall enforce the Development Agreement diligently and shall not do or refrain from doing any act whereby the surety on any related Surety Bond may be released in whole or in part from any obligation assumed by such surety or from any agreement to be performed by such surety. In the event of any default on the part of the Developer or other contractor or any subcontractor, equipment manufacturer or dealer, or supplier under any contract made by it in connection with the Project or in the event of a breach of warranty with respect to any materials, workmanship, equipment, or performance guaranty, the Borrower will promptly notify the Trustee and the Bond Insurer in writing and will proceed, either separately or in conjunction with others, to pursue such remedies against the Developer, contractor, subcontractor, equipment manufacturer or dealer, or supplier so in default and against each surety on any related Surety Bond for the performance of such contract as it may deem advisable. The Borrower shall advise the Trustee and the Bond Insurer in writing of the steps it intends to take in connection with any such default

105 The Borrower covenants that it will take such action and institute such proceedings as shall be necessary to cause and require the Developer and all contractors and subcontractors and material suppliers to complete their contracts diligently in accordance with the terms of such contracts, including, without limitation, the correction of any defective work. All amounts recovered by way of penalties, damages, whether liquidated or actual, refunds, adjustments, or otherwise in connection with the foregoing, less any unreimbursed legal expenses incurred to collect the same, shall be paid into the Project Fund. The Borrower covenants that it will take such action and institute such proceedings as shall be necessary to cause and require any manufacturers of the equipment included in the Project and any dealer to fulfill their warranties and contractual responsibilities diligently in accordance with the terms of any purchase and installation contracts, including, without limitation, the correction of any defective parts or workmanship. Section Governmental Approvals. The Borrower covenants that it will obtain in due course all necessary approvals, permits, and licenses from any and all Regulatory Bodies requisite to the construction and equipping of the Project. The Borrower shall not do or permit others under its control to do any work related to the Project unless the Borrower shall have first procured and paid for all requisite municipal and other governmental permits and authorizations. All such work shall be done in a good and workmanlike manner and in compliance with all applicable building, zoning, and other laws, ordinances, governmental regulations, and requirements and in accordance with the Insurance Requirements. [END OF ARTICLE VI] ARTICLE VII MAINTENANCE, TAXES, AND INSURANCE Section Maintenance and Modification of Project by the Borrower. The Borrower agrees that during the Loan Term it shall at its own expense (i) keep the Project in as reasonably safe condition as its operations shall permit, (ii) keep the buildings 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 provisions of Section 6.02 hereof, all necessary and proper repairs thereto and renewals and replacements thereof, including external and structural repairs, renewals, and replacements, and (iii) use the equipment constituting any part of the Project in the regular course of its business only, within the normal capacity of such equipment, without abuse, and in a manner contemplated by the manufacturer thereof, and cause such equipment to be maintained in accordance with the manufacturer s then currently published standard maintenance contract and recommendations. The Borrower may, also at its own expense, from time to time make any Additions or Alterations it may deem desirable for its business purposes that do not, in the opinion of an Architect filed with the Trustee and the Bond Insurer, adversely affect the operation or value of the Project. Additions or Alterations so made by the Borrower shall be on the Site, shall become a part of the Project, and shall become subject to the liens of the Security Deed and the Security Agreement. Section Removal of Equipment. The Borrower shall not be under any obligation to renew, repair, or replace any inadequate, obsolete, worn out, unsuitable, undesirable, or unnecessary equipment owned by it and constituting any part of the Project. If no Event of Default shall have happened and be continuing, in any instance where the Borrower in its discretion determines that any items of such equipment or parts thereof have become inadequate, obsolete, worn out, unsuitable, undesirable, or unnecessary, the Borrower may remove such items of equipment or parts thereof from the Site and sell, trade in, exchange, or otherwise dispose of them (as a whole or in part) without any responsibility or accountability to the Issuer therefor, provided that the Borrower shall: (a) substitute (by direct payment of the cost thereof) and install anywhere in the Project or on the Site items of replacement equipment or related property having equal or greater utility (but not necessarily having the same function) in the operation of the Project for the purpose for which they are 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 (other than Permitted Encumbrances) and shall become the property of the Borrower, shall become subject to the security interest of the Security Agreement, and shall be held by the Borrower on the same terms and conditions as the Project, or (b) 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 subject to the security interest of the Security Agreement, or (iii) any other disposition thereof, the Borrower 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 Account. In the case of the sale, trade-in, or other disposition of any such equipment to the Borrower or an Affiliate, the Borrower 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 for deposit into the Redemption Account. The removal from the Project of any portion of the equipment pursuant to the provisions of this Section shall not entitle the Borrower to any abatement or diminution of the amounts payable under Section 5.02 hereof. In the event that prior to such removal and disposition of items of equipment from the Project, the Borrower has acquired and installed machinery, furnishings, equipment, or related property with its own funds, which become part of the Project and subject to the security interest of the Security Agreement and which have equal or greater utility, but not necessarily the same functions, as the equipment to be removed, the Borrower may take credit to the extent of the amount so spent by it against the requirement that it either substitute and install other machinery and equipment having equal or greater utility or that it make payment to the Trustee for deposit into the Redemption Account. The Borrower shall promptly report to the Trustee in writing each such removal, substitution, sale, or other disposition and shall pay to the Trustee such amounts as are required by the provisions of the preceding subsection (b) of this Section to be paid into the Redemption Account promptly 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 Account on account of all such sales, trade-ins, or other dispositions not previously reported in the aggregate in any Fiscal Year has a value of at least $25,000. The Borrower shall not remove, or permit the removal of, any of its equipment from the Project or the Site except in accordance with the provisions of this Section Upon compliance with this Section, the Issuer agrees to deliver any releases in form and substance acceptable to the Trustee and that are deemed necessary by the Borrower with respect to the release of such equipment from the security interest of the Security Agreement. The Borrower shall execute and deliver to the Issuer and the Trustee such documents as they may from time to time require to confirm the security interest of the Security Agreement with respect to any items of equipment and other personal property that under the provisions of this Section are to become a part of the Project and shall pay all costs (including reasonable attorneys fees, costs and expenses) incurred in connection therewith. Section Taxes, Other Governmental Charges, and Utility Charges. The Borrower shall duly pay and discharge, as the same become due and payable, (i) all taxes, governmental charges, and other Impositions of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Project, including, without limiting the generality of the foregoing, any taxes levied upon or with respect to the revenues and receipts of the Borrower from the Project that, if not paid, will become a Lien on the Project prior to or on a parity with the liens of the Security Deed and the Security Agreement or a charge on the revenues and receipts therefrom prior to or on a parity with the charge and security interest thereon and the pledge or assignment thereof to be created and made in the Security Deed and the Security Agreement and including all ad valorem taxes or payments in lieu of such taxes lawfully assessed upon the Borrower s rights in and to the Project, (ii) all utility and other charges incurred in the ownership, operation, maintenance, use, occupancy, and upkeep of the Project, and (iii) all assessments and charges lawfully made by any governmental body for public 39 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 Borrower shall be obligated to pay only such installments as are required to be paid during the Loan Term. If the Borrower shall first notify the Trustee in writing of its intention so to do, the Borrower may, at its own expense and in its own name and behalf and in good faith, contest any such taxes, assessments, Impositions, and other charges in accordance with the provisions of Section 7.06 hereof and, in the event of any such contest, may permit the taxes, assessments, Impositions, or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom. The Borrower shall also file all federal, state, and local tax returns and other reports the Borrower is required by law to file and maintain adequate reserves for the payment of all taxes, assessments, governmental charges, Impositions, and levies imposed upon it, its income, or its revenues, or upon the Project. The Borrower covenants and agrees that it will, at its own cost and expense, obtain exemption from all taxes and other charges referred to in this Section to the extent permitted under applicable law. Section Insurance. (a) Throughout the Loan Term, the Borrower shall keep the Project and its operations or cause the same to be kept continuously insured as required by the terms of the Rental Agreements and Section 7.05 of this Loan Agreement. The Borrower will provide to the Issuer, the Bond Insurer and the Trustee copies of the Rental Agreements and any amendments or modifications thereto. (b) The Borrower shall deliver or cause to be delivered to the Trustee and the Bond Insurer (i) on or prior to each Closing Date, a certificate of an Insurance Consultant to the effect that the insurance policies maintained by the Borrower comply with the requirements of this Section 7.04, (ii) not less than 45 days prior to the expiration date of any of the insurance policies required to be maintained under this Loan Agreement, evidence that such insurance policies will be renewed or replaced, and (iii) prior to the expiration date of such insurance policies, among other things, an original of the certificate of insurance and evidence of payment of the applicable premium for such renewal or replacement. Certified copies of such replacement insurance policies or a certificate of the insurer that the same has been issued and is in full force and effect shall be delivered to the Trustee and the Bond Insurer promptly after the Borrower s receipt thereof but in any case within 30 days after receipt thereof by the Borrower. The Borrower shall have the right to carry the insurance provided for in this Section 7.04 or any portion thereof under allocated value blanket policies approved by the Insurance Consultant, but certificates evidencing that the above-described insurance policies are in full force and effect, together with copies of the blanket policies, shall be supplied to the Trustee. (c) The Borrower shall comply or cause compliance with all Insurance Requirements before the expiration of any applicable extension or grace period and shall not bring or knowingly keep or permit to be brought or kept any article upon the Project or knowingly cause 40

106 or permit any condition to exist thereon that would be prohibited by any Insurance Requirement, or would invalidate insurance coverage required hereunder to be maintained by the Borrower on or with respect to any part of the Project. (d) The Net Proceeds of the property insurance carried pursuant to the provisions of the Rental Agreements shall be deposited in a separate account of the Project Fund, and the Net Proceeds of worker s compensation and general liability insurance carried pursuant to the provisions of the Rental Agreements shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid. (e) All insurance required by this Section 7.04 shall provide for payment to the Borrower, the Issuer, and the Trustee, as their respective interests may appear, the general liability policy shall name the Trustee as an additional insured, and the property insurance policy shall name the Trustee as mortgagee and loss payee under the Standard New York Mortgage Endorsement providing that no act or omission by the named insured shall in any way prejudice the rights of the Trustee under the policy and shall require that all Net Proceeds of insurance for loss or damage covered thereby be paid to the Trustee for deposit in a separate account of the Project Fund; provided, however, that all claims regardless of amount may be adjusted by the Borrower with the insurers, subject to prior written approval of the Trustee, which approval shall not be unreasonably withheld. All such policies shall provide that such insurance may not be modified adversely to the interests of the Borrower, the Issuer, or the Trustee or cancelled by the issuer thereof without at least 30 days written notice to the Borrower, the Issuer, the Bond Insurer and the Trustee. (f) The Trustee shall have no duty to review or analyze any insurance policies delivered to it hereunder and shall hold such insurance policies solely as a repository for the benefit of the Bondholders; the Trustee shall not be deemed to have notice of any information contained therein or event of default which may be disclosed therein in any manner. Section Insurance; Bond Insurer Requirements. The Borrower shall continuously maintain, or cause to be maintained, insurance on its properties and against such risks (including casualty, accident and worker's compensation) in such amounts and with such deductibles, as are consistent with customary coverage, as from time to time in effect, in connection with the operation of properties of type and size comparable to properties as maintained by entities similar to the Borrower; provided, that property and casualty coverage shall at all times be maintained in an amount at least equal to the outstanding principal amount of the Series 2010 Bonds and include rental interruption insurance for rents of up to 24 months. All commercial insurers must be rated at least A- by A.M. Best Company, Inc. or S&P. Prior to expiration of any such policy, the Borrower shall furnish to the Bond Insurer satisfactory evidence that such policy has been renewed or replaced or is no longer required by the Borrower Contracts. All policies evidencing such required insurance shall provide thirty (30) days prior written notice to the Issuer, the Trustee and the Bond Insurer of any cancellation, reduction in amount or material change in coverage. The Borrower shall cause an Insurance Consultant, acceptable to the Bond Insurer, to biennially review and make recommendations as to the insurance coverage for the Project, and the Borrower shall comply with such recommendations. The Borrower shall not self-insure without the consent of the Bond Insurer. Section Contest of Liens. In the event the Borrower in good faith contests Liens pursuant to Sections 6.01(c) or 7.03 of this Loan Agreement, 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 equal to at least the amount so contested and an opinion of Independent Counsel reasonably acceptable to the Trustee stating that by nonpayment of such items the liens of the Security Deed and the Security Agreement as to any material part of the Project will not be materially and imminently endangered and neither the Project nor any material part thereof will be subject to imminent loss or forfeiture. If the Borrower is unable or otherwise fails to obtain such a bond and an opinion of Independent Counsel, the Borrower shall promptly cause to be satisfied and discharged all such unpaid items by payment thereof, by causing the lien to be transferred from the Project to other security as permitted by State law, or by payment of the amount so contested into a reserve held by the Trustee. Such reserve may be used by the Trustee to satisfy the items if action is taken to enforce the lien and such action is not stayed. Such reserve will be returned to the Borrower if the items are successfully contested. In the event the Borrower shall fail to pay any of the foregoing items required by this Section to be paid by the Borrower, the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Trustee shall become an advance repayable in accordance with Section 7.07 of this Loan Agreement. The Issuer shall, at the expense of the Borrower, cooperate fully with the Borrower in any such contest. Section Advances by the Trustee. If the Borrower shall fail to maintain the insurance coverages required by this Loan Agreement or shall fail to pay the taxes, Impositions, and other charges required to be paid by this Loan Agreement or shall fail to keep the Project in as reasonably safe condition as its operation will permit or shall fail to keep the Project in good repair and good operating condition, the Trustee may (but shall be under no obligation to), after notifying the Borrower in writing of its intention to do so, take out the required policies of insurance and pay the premiums on the same or pay the taxes, Impositions, or other charges or make the required repairs, renewals, and replacements. In addition, if the Borrower should fail to make any payment or to perform or comply with any of the agreements, covenants, or obligations of the Borrower under the Borrower Contracts, then the Trustee, after notifying the Borrower in writing of its intention to do so, may make such payment or perform such agreement, covenant, or obligation for the account and at the expense of the Borrower, but shall not be obligated to do so. Any and all payments and expenses incurred or paid in so doing shall become an additional obligation of the Borrower to the one making the advancement, which amounts, together with interest thereon from the date of payment at the floating rate charged prime corporate borrowers from time to time plus two percent per annum on demand loans by the commercial lending department of the Trustee or its affiliated bank, the Borrower agrees to pay promptly on demand. Any remedy herein vested in the Issuer or the Trustee for the collection of amounts due under Section 5.02 hereof shall also be available to the Trustee for the collection of all such amounts so advanced. The Trustee shall be under no obligation to make any such payment unless it is required to do so by the Bond Insurer or the owners of at least 25% in the aggregate principal amount of all Bonds then Outstanding and is provided with adequate funds paid in cash to the Trustee (from a source or sources approved by the Trustee) for the purpose of such payment. [END OF ARTICLE VII] ARTICLE VIII DAMAGE, DESTRUCTION, CONDEMNATION, AND FAILURE OF TITLE Section Damage and Destruction. (a) If prior to full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture), the Project is destroyed or are damaged (in whole or in part) by fire or other casualty, the Borrower shall promptly give written notice thereof to the Trustee and the Bond Insurer. All Net Proceeds recovered under the property insurance policy required to be carried pursuant to this Loan Agreement and the Rental Agreements shall be deposited in (i) the Project Fund if such Net Proceeds exceed $250,000, and (ii) the Repair and Replacement Fund if such Net Proceeds do not exceed $250,000, whereupon the Borrower shall proceed promptly, but only after the requirements of Section 8.01(b) hereof are met, to repair, rebuild, restore, or re-equip the Project to substantially the same condition thereof as existed prior to the event causing such damage or destruction with such changes, alterations, and modifications (including the substitution and addition of other property) as may be desired by the Borrower and as will not impair the nature of the Project. (b) Before the Trustee applies any Net Proceeds of insurance deposited in the Project Fund to pay the costs of repairing, rebuilding, restoring, or re-equipping the Project, the Borrower shall furnish to the Trustee and the Bond Insurer a certificate of an architect to the effect that the Project can be reasonably restored within a period of two years to substantially the condition thereof immediately preceding such damage or destruction. (c) Any balance of such Net Proceeds of insurance remaining after application pursuant to subsection (a) of this Section 8.01 or remaining because of the failure of the Borrower to furnish to the Trustee the items required by subsection (b) of this Section 8.01 shall be deposited into the Redemption Account and used to redeem Outstanding Bonds. Section Condemnation and Failure of Title. Unless the Borrower shall be obligated to prepay, or shall elect to exercise its option to prepay, the Loans pursuant to the provisions of Section 11.06(b) hereof upon the failure of title to the Project or upon the taking of title to or the temporary use of the Project in any condemnation proceeding, in the event that title to the Project fails or title to or the temporary use of the Project or any part thereof is taken under the exercise of the power of eminent domain by any governmental body or by any Person acting under Governmental Authority, except for Net Proceeds received by the Borrower pursuant to Section 8.03 hereof, the Issuer, the Borrower, and the Trustee shall cause the Net Proceeds received by them or any of them from any title insurance policy or any award made in such eminent domain proceedings to be deposited in an account of the Project Fund, to be applied in one or more of the following ways as shall be directed in writing by the Borrower: (a) If the requirements of Section 8.02(d) hereof are met, to the restoration of the Project to substantially the same condition thereof as existed prior to the failure of title or the exercise of the power of eminent domain. (b) If the requirements of Section 8.02(d) hereof are met, to the acquisition of other suitable land and the acquisition, by construction or otherwise, in the name of the Borrower, to 43 the extent permitted by applicable law, of improvements consisting of a building or buildings, facilities, furnishings, machinery, equipment, or other properties suitable for the Borrower s operations at the Project as conducted prior to such failure of title or taking (which improvements shall be deemed a part of the Project without the payment of any loan payments other than as herein provided to the same extent as if such improvements were specifically described herein and financed pursuant to this Loan Agreement); provided, that such improvements and properties shall be acquired by the Borrower, in the name of the Borrower, subject to no Liens other than Permitted Encumbrances. The Borrower and the Issuer shall enter into amendments to this Loan Agreement to identify such improvements and properties as part of the Project and shall enter into amendments to the Security Deed and the Security Agreement to subject such improvements and properties to the lien and the security interest created by the Security Deed and the Security Agreement, and the Issuer shall enter into a supplemental indenture assigning and pledging, and granting a security interest in, the foregoing amendments to the Trustee. (c) To the redemption of the principal of any of the Outstanding Bonds together with accrued interest thereon to the date of redemption, which shall be not more than 180 days after such event; provided, that no part of any such title insurance proceeds or condemnation award may be applied to such redemption unless (i) all of the Outstanding Bonds are to be redeemed in accordance with the Indenture and the requirements of Section 11.06(b) hereof have been met or (ii) in the event that less than all of the Outstanding Bonds are to be redeemed and the requirements of Section 11.06(b) hereof are not met, the Borrower shall furnish to the Trustee and the Bond Insurer a certificate of an architect stating (A) that the property forming a part of the Project that was lost or that was taken by such condemnation proceedings is not essential to the Borrower s use or occupancy of the Project or (B) that the Project have been restored to a condition substantially equivalent to their condition prior to the failure of title or the taking by such condemnation proceedings or (C) that improvements have been acquired that are suitable for the Borrower s operations at the Project as contemplated by the foregoing subsection (b) of this Section. (d) Before the Trustee applies any Net Proceeds of any title insurance policy or condemnation award pursuant to Section 8.02(a) or (b) hereof to pay the costs of restoring or replacing the Project, the Borrower shall furnish to the Trustee and the Bond Insurer (i) a certificate of an architect to the effect that the Project can be reasonably restored or replaced within a period of two years to substantially the condition thereof immediately preceding such failure of title or condemnation, and (ii) a Consultant s Report to the effect that the forecasted Income Available for Debt Service (including any proceeds of business interruption insurance) until such restoration and replacement is expected to be completed shall be sufficient to pay the Debt Service Requirement until such restoration and replacement is expected to be completed. (e) Any balance of the Net Proceeds of the title insurance policy or the award in such eminent domain proceedings remaining after application pursuant to subsections (a), (b), and (c) of this Section 8.02 or remaining because of the failure of the Borrower to furnish to the Trustee the items required by subsection (d) of this Section 8.02 shall be deposited into the Redemption Account and used to redeem Outstanding Bonds. Unless the Borrower shall be obligated to prepay, or shall have elected to exercise its option to prepay, the Loans pursuant to the provisions of Section 11.06(b) hereof within 60 days from the 44

107 date of failure of title or the date of entry of a final order in any eminent domain proceedings granting condemnation, the Borrower shall direct the Trustee in writing as to which of the ways specified in this Section the Borrower elects to have the title insurance proceeds or condemnation award applied. Section Condemnation of Borrower-Owned Property. The Borrower shall be entitled to the Net Proceeds of any condemnation award or portion thereof made for damages to or for taking of its own property not part of the Project. [END OF ARTICLE VIII] ARTICLE IX ADDITIONAL COVENANTS; ADDITIONAL BONDS Section Access to Premises and Records. The Borrower agrees that the Trustee and the Bond Insurer and their duly authorized representatives and agents shall have the right, upon reasonable prior notice, to enter the Project at all reasonable times during the Loan Term for the purpose of (i) examining and inspecting the same, including any construction or reconstruction thereof, (ii) performing such work in and about the Project made necessary by reason of an Event of Default, and (iii) upon an Event of Default, exhibiting the Project to prospective purchasers, lessees, or mortgagees. The Borrower shall keep accurate and complete records and books of account with respect to its activities in which proper entries are made in accordance with GAAP reflecting all of its financial transactions. The Trustee shall also have the right at all reasonable times, after advance written notice to the Borrower, to examine and make extracts from the books and records of the Borrower, insofar as such books and records relate to the Project or insofar as necessary to ascertain compliance with the Borrower Contracts or the Real Estate Documents, and to discuss with the Borrower s officers, employees and accountants, the Borrower s affairs, finances, accounts, activities, assets, liabilities, financial condition, results of operations, and financial prospects. Section Consolidation, Merger or Sale. The Borrower agrees that while this Loan Agreement is in effect it shall maintain its existence as a limited liability company and shall not dissolve or dispose of all or substantially all of its assets, or consolidate with or merge into another entity or entities, or permit one or more other entities to consolidate with or merge into it, except that it may consolidate with or merge into one or more other entities or permit one or more other entities to consolidate with or merge into it, or transfer all or substantially all of its assets to one or more other entities (and thereafter dissolve or not dissolve as it may elect), if (a) the surviving, resulting or transferee entity or entities each is a corporation having the status and powers set forth in the Borrower Contracts and Real Estate Documents, (b) the transaction does not result in a conflict, breach or default of the Borrower's representation as to its corporate organization, authorization and powers referred to in the Borrower Contracts and Real Estate Documents, and (c) the surviving, resulting or transferee entity or entities each (i) assumes by written agreement with the Issuer and the Trustee all the obligations of the Borrower under the Borrower Contracts and Real Estate Documents, (ii) notifies the Issuer, the Trustee and the Bond Insurer]of any change in the name of the Borrower, (iii) executes, delivers, registers, records and files such other instruments as the Issuer or the Trustee may reasonably require to confirm, perfect or maintain the security granted under the Borrower Contracts, and (iv) the Borrower delivers to the Trustee the written consent of the Bond Insurer. Section Qualification in the State. The Borrower warrants that it is and while this Loan Agreement is in effect it will continue to be duly qualified to do business in the State. Section Indemnity. (a) The Borrower shall and agrees to indemnify and save the Issuer, the Trustee, and their directors, officers, members, and employees harmless against and from all claims by or on behalf of any Person arising from the conduct or management of or from any work or thing done on the Project and against and from all claims arising from (i) any condition of or operation of the Project, (ii) any breach or default on the part of the Borrower in the performance of any of its obligations under the Borrower Contracts, (iii) any act or negligence of the Borrower or of any of its agents, contractors, servants, employees, or licensees, or (iv) any act or negligence of any lessee of the Borrower or of any agents, contractors, servants, employees, or licensees of any lessee of the Borrower, provided, however, this indemnity shall not apply to any acts of gross negligence or willful or intentional misconduct of the Issuer or the Trustee or their directors, officers, members, agents, or employees. The Borrower shall indemnify and save the Issuer and the Trustee harmless from and against all costs and expenses incurred in or in connection with any such claim arising as aforesaid from (i), (ii), (iii), or (iv), supra, or in connection with any action or proceeding brought thereon, including reasonable attorneys fees, costs and expenses as provided in Section hereof, and upon notice from the Issuer or the Trustee, the Borrower shall defend them or either of them in any such action or proceeding. (b) The Borrower agrees that it will indemnify and hold the Trustee harmless from any and all liability, cost, or expense incurred without gross negligence or bad faith in the course of its duties, including any act, omission, delay, or refusal of the Trustee in reliance upon any signature, certificate, order, demand, instruction, request, notice, or other instrument or document believed by it to be valid, genuine, and sufficient. (c) If the Issuer, the Trustee, or their directors, officers, members, and employees incur pecuniary liability by reason of the terms of the Bond Documents or the undertakings required of the Issuer under the Issuer Contracts or the Trustee under the Bond Documents, by reason of (i) the issuance of the Bonds, (ii) the execution of the Bond Documents, (iii) the performance of any act required by the Bond Documents, (iv) the performance of any act requested by the Borrower, or (v) any other costs, fees, or expenses incurred by the Issuer or the Trustee with respect to the Project or the financing thereof, including all claims, liabilities, or losses arising in connection with the violation of any statutes or regulations pertaining to the foregoing, the Borrower shall indemnify and hold harmless the Issuer and the Trustee and their directors, officers, members and employees against all claims by or on behalf of any Person arising out of the same and all costs and expenses incurred in connection with any such claim or in connection with any action or proceeding brought thereon, including reasonable attorneys fees as provided in Section hereof, and upon notice from the Issuer or the Trustee, the Borrower shall defend the Issuer and the Trustee in any such action or proceeding. The indemnity contained in this Section 9.04(c) shall not apply to any acts of gross negligence or willful or intentional misconduct of the Issuer or the Trustee. (d) Nothing contained in this Section 9.04 shall require the Borrower to indemnify the Issuer or the Trustee or their officers, directors, members, or employees for any claim or liability that the Borrower was not given any opportunity to contest or for any settlement of any such action effected without the Borrower s consent. The indemnity of the Issuer and the Trustee and their officers, directors, members, and employees contained in this Section 9.04 shall survive the termination of this Loan Agreement or the earlier resignation or removal of the Trustee and shall inure to the benefit of the Trustee s successors or assigns. (e) The Borrower acknowledges and agrees to the reimbursement and indemnity obligations to the Bond Insurer as set forth in the Indenture, which is incorporated herein by reference and made a part hereof. Section Additional Bonds. (a) Additional Bonds may be issued by the Issuer to provide funds to pay any one or more of the following: (i) the costs of acquiring, constructing, and installing the Project as the Borrower may deem necessary or desirable and as will not impair the nature of the Project and as will be located on the Site, (ii) to refund any Bonds, and (iii) the costs of the issuance and sale of the Bonds, the cost of funding the Debt Service Reserve Requirement with respect to such 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. (b) If the Borrower is not in default hereunder, the Issuer may, on request of the Borrower, from time to time in its sole discretion, with the consent of the Bond Insurer, issue the amount of Additional Bonds specified by the Borrower; provided that the sale of any Additional Bonds shall be the sole responsibility of the Borrower, and provided further that the Borrower and the Issuer shall have entered into an amendment to this Loan Agreement to provide for additional Loan Repayments in an amount at least sufficient to pay principal of and interest on the Additional Bonds when due and to provide for any additional terms or changes to this Loan Agreement required because of such Additional Bonds, and provided further that the Issuer shall have otherwise complied with the provisions of Section 215 of the Indenture with respect to the issuance of such Additional Bonds. (c) Prior to the issuance of any Additional Bonds to finance the cost of completion of the Project, the Borrower shall cause to be prepared and filed with the Trustee and the Bond Insurer: (1) (A) a written report or opinion of an Accountant to the effect that for each of the two Fiscal Years next preceding the issuance of the proposed Additional Bonds the Debt Service Coverage Ratio, as determined from the audited statement of support, revenues, and expenses of the Borrower furnished to the Trustee pursuant to Section 9.09 hereof, was greater than or equal to the Minimum Coverage Ratio and (B) a Consultant s Report, based upon the Rental Agreements then in effect (and assuming the renewal thereof throughout the three year period referred to below), to the effect that: (i) the forecasted Debt Service Coverage Ratio for each of the three Fiscal Years immediately following the expected Completion Date of such Project will be not less than the Minimum Coverage Ratio and (ii) the forecasted Income Available for Debt Service for each Fiscal Year until the expected Completion Date of the Project plus any funded interest shall be sufficient to pay the Debt Service Requirement for each Fiscal Year until the expected Completion Date of the Project; or (2) a written report or opinion of an Accountant to the effect that for each of the three prior Fiscal Years immediately preceding the issuance of the proposed Additional Bonds, the Debt Service Coverage Ratio, determined by the application of pro forma adjustments to the audited statement of support, revenues, and expenses of the Borrower furnished to the Trustee pursuant to Section 9.09 hereof that include the Maximum Annual Debt Service Requirement on the proposed Additional Bonds in the historical Debt Service Requirement for each such Fiscal Year, was greater than or equal to the Minimum Coverage Ratio

108 (d) Prior to the issuance of any Additional Bonds to refund any Bonds that results in the refunding of less than all of the then outstanding Bonds, there shall be furnished to the Trustee and the Bond Insurer: (1) a written report or opinion of an Accountant to the effect that the Debt Service Requirement (assuming no more Bonds are issued after the proposed refunding) for any Fiscal Year subsequent to the refunding, to and including the Fiscal Year of the final maturity of Bonds Outstanding prior to the refunding, will not, as a result of such refunding, exceed the Debt Service Requirement for any such Fiscal Year had such refunding not occurred; or (2) (A) a written report or opinion of an Accountant to the effect that for each of the two Fiscal Years next preceding the issuance of the proposed Additional Bonds the Debt Service Coverage Ratio, as determined from the audited statement of support, revenues, and expenses of the Borrower furnished to the Trustee pursuant to Section 9.09 hereof, was greater than or equal to the Minimum Coverage Ratio and (B) a Consultant s Report, based upon the Rental Agreements then in effect, to the effect that the forecasted Debt Service Coverage Ratio for each of the three Fiscal Years immediately following such refunding will not be less than the Minimum Coverage Ratio; or (3) a written report or opinion of an Accountant to the effect that for each of the three Fiscal Years next preceding the issuance of the proposed Additional Bonds the Debt Service Coverage Ratio, determined by the application of pro forma adjustments to the Debt Service Requirement, as determined from the audited statement of support, revenues, and expenses of the Borrower furnished to the Trustee pursuant to Section 9.09 hereof, which substitute the Maximum Annual Debt Service Requirement on the proposed Additional Bonds for the actual Debt Service Requirement on the Bonds proposed to be refunded for each such Fiscal Year, was greater than or equal to the Minimum Coverage Ratio. (e) The Borrower shall cause to be deposited in the Debt Service Reserve Fund on or before the Closing Date of any Additional Bonds an amount sufficient to cause the balance therein to equal the Debt Service Reserve Requirement, taking into account the proposed Additional Bonds. (f) Any Additional Bonds shall be secured by the Security and the Trust Estate, and the liens and security interests created by the Indenture, the Security Deed, and the Security Agreement shall be equal, without preference or priority, to the liens and security interests provided for the Series 2010 Bonds. (g) Completion Bonds in an amount not to exceed 10% of the original aggregate principal amount of any Bonds previously issued to finance the Project may be issued to provide funds to complete the construction of the Project without regard to the requirements of paragraph (c) of this Section Section [Reserved]. 49 Section Compliance with Applicable Laws; Existence of All Applicable Permits, Licenses, and Approvals and Franchises, Rights, and Powers. The Borrower covenants and agrees to comply in all material respects with, or use its reasonable efforts to cause other Persons whose obligation it is to so comply by contract or pursuant to law to comply in all material respects with, and materially conform to, all present and future laws, statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations, and requirements applicable to the Project, and irrespective of the nature of the work to be done, of every applicable governmental authority, including Environmental Laws applicable to the Project, and all covenants, restrictions, and conditions now or hereafter of record that may be applicable to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair, or reconstruction of the Project, including building and zoning codes and ordinances (collectively, the Legal Requirements ), provided that the Borrower shall not be in default hereunder so long as the Borrower, promptly after receiving an actual written notice of any noncompliance, files a copy thereof with the Trustee and the Bond Insurer, and the Borrower commences and uses its diligent efforts to cause compliance with such Legal Requirements, and as long as the failure to comply does not subject the Project to any material danger of being forfeited or lost as a result thereof or materially and adversely affect the ability of the Borrower to comply with the Ground Leases or the Rental Agreements. The Borrower hereby agrees to maintain and obtain in the future all necessary licenses and permits, or rights thereto, to operate the Project. The Borrower covenants and agrees to do all things necessary to preserve and keep in full force and effect its franchises, rights, powers, and privileges as the same relate to the Project. Section Hazardous Waste. (a) In addition to and without limitation of all other representations, warranties, and covenants made by the Borrower under this Loan Agreement, the Borrower further represents, warrants, and covenants that the Borrower has not and, to the best of its knowledge, any contractors with respect to the Project have not, used Hazardous Materials on, from, or affecting the Project in any manner that violates any Environmental Laws, and that, to the best of the Borrower s knowledge, after due investigation (which consisted of obtaining the Phase I Environmental Site Assessment and GEPA Evaluation, dated September 20, 2010, by Arrowwood Environmental Group, Inc., no prior owner of the Project or any tenant, subtenant, prior tenant, or prior subtenant have used Hazardous Materials on, from, or affecting the Project in any manner that violates Environmental Laws. The Borrower shall keep or cause the Project to be kept free of Hazardous Materials except as otherwise provided in this Section (b) Without limiting the generality of the foregoing, the Borrower shall not cause or permit the Project or any part thereof to be used to generate, manufacture, refine, transport, treat, store, handle, dispose of, transfer, produce, or process Hazardous Materials, except in compliance with all applicable Environmental Laws, nor shall the Borrower cause or permit, as a result of any intentional or unintentional act or omission on the part of the Borrower or any tenant or subtenant, a release of Hazardous Materials onto the Project or onto any other property. The Borrower shall comply with and ensure compliance by all tenants and subtenants with all applicable Environmental Laws, whenever and by whomever invoked, and shall obtain and comply with, and ensure that all tenants and subtenants obtain and comply with, any and all approvals, registrations, or permits required thereunder. The Borrower shall (i) conduct and complete all investigations, studies, samplings, and testing and all remedial, removal, and other 50 actions necessary to clean up and remove all Hazardous Materials on, from, or affecting the Project (A) in accordance with all applicable Environmental Laws, and (B) in accordance with the directives of all federal, state, and local governmental authorities, and (ii) defend, indemnify, and hold harmless the Issuer, the Bond Insurer and the Trustee from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses of whatever kind or nature, known or unknown, contingent or otherwise arising out of or in any way related to (x) the presence, disposal, release, or threatened release of any Hazardous Materials that are on, from, or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise of the Project, or (y) any violation of Environmental Laws or any policies or requirements of the Issuer or the Trustee, which are based upon or in any way related to such Hazardous Materials including, without limitation, reasonable attorneys fees, investigation and laboratory fees, court costs, and litigation expenses. In the event of any foreclosure under the Security Deed, or the delivery of a deed in lieu of foreclosure thereunder, or the termination of this Loan Agreement, the Borrower shall deliver the Project free of any and all Hazardous Materials so that the condition of the Project shall conform with all applicable Environmental Laws affecting the Project. (c) The provisions of this Section 9.08 shall be in addition to any and all other obligations and liabilities the Borrower may have to the Issuer, the Bond Insurer and the Trustee at common law and shall survive the termination of this Loan Agreement. The indemnifications and protections set forth in this Section 9.08 shall be extended, with respect to the Issuer, the Bond Insurer and the Trustee, to their respective members, directors, officers, employees, agents, and persons under their respective control or supervision. Section Financial Statements and Notices. The Borrower shall provide the Trustee and the Bond Insurer (1) annually, within 120 days after the end of each Fiscal Year, the basic financial statements of the Borrower, including the balance sheet, statement of support, revenues, and expenses and changes in fund balance, and statement of cash flows, for the year then ended, in comparative form with the preceding Fiscal Year, which basic financial statements shall be accompanied by an audit report resulting from an audit conducted by accountants in conformity with generally accepted auditing standards, (2) promptly upon receipt thereof, a copy of each other report submitted to the Borrower by its accountants in connection with any annual, interim, or special audit made by them of the books of the Borrower (including, without limitation, any management report prepared in connection with such accountants annual audit of the Borrower), (3) promptly upon obtaining knowledge of an Event of Default, a certificate specifying the nature and period of existence thereof and what action the Borrower proposes to take with respect thereto, (4) promptly after (i) the occurrence thereof, notice of the institution by any Person of any action, suit, or proceeding or any governmental investigation or any arbitration, before any court or arbitrator or any governmental or administrative body, agency, or official, against the Borrower or the Project, which could reasonably be expected to have a material adverse effect upon, or a material adverse change in, any of the business, results of operations, properties, prospects, or condition (financial or other) of the Borrower or the ability of the Borrower to perform its obligations under the Borrower Contracts or the Real Estate Documents or (ii) the receipt of actual knowledge thereof, notice of the threat of any such action, suit, proceeding, investigation, or arbitration, each such notice under this subsection to specify, if known, the amount of damages being claimed or other relief being sought, the nature of the claim, the Person instituting the action, suit, proceeding, investigation, or arbitration, and any other significant features of the claim, and (5) with reasonable promptness, such other information relating to the operations, management, business, properties, or condition (financial or other) of the Borrower as the Trustee may reasonably request in writing from time to time. The audited financial statements to be furnished to the Trustee and the Bond Insurer annually pursuant to this Section 9.09 shall be prepared in accordance with GAAP applied on a consistent basis and shall be accompanied by (a) a certificate of the Borrower to the effect that the Borrower is not in default under any provisions of the Borrower Contracts or the Real Estate Documents and has fully complied with all of the provisions thereof, or if the Borrower is in default or has failed to so comply, setting forth the nature of the default or failure to comply and (b) a certificate of an Accountant reporting on the Borrower s financial statements stating the Debt Service Coverage Ratio for the Fiscal Year. The Trustee shall have no duty to review or analyze any financial statements delivered to it pursuant to this Agreement (including but not limited to the Project Budget in Section 9.11 below) and shall hold such financial statements solely as a repository for the benefit of the Bondholders; the Trustee shall not be deemed to have notice of any information contained therein or event of default which may be disclosed therein in any manner Section Continuing Disclosure. The Borrower hereby covenants and agrees that it will comply with and carry out all of the provisions of the Series 2010 Disclosure Certificate. Notwithstanding any other provision of this Loan Agreement, failure of the Borrower to comply with the Series 2010 Disclosure Certificate shall not be considered an Event of Default; however, any Beneficial Owner of the Series 2010 Bonds may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Borrower to comply with its obligations under this Section Section Project Budget. On or before the date that is 30 days prior to each July 1, commencing with July 1, 2010, the Borrower shall prepare or cause to be prepared an annual Project Budget and shall file a copy of such Project Budget with the Trustee and the Bond Insurer. As and when determined necessary or appropriate by the Borrower, the Project Budget shall be revised and a copy of each revision shall be promptly filed with the Trustee and the Bond Insurer. Section Permitted Indebtedness. The Borrower covenants and agrees that it shall not directly or indirectly, incur, assume, or guarantee any Indebtedness without the written consent of the Bond Insurer, whether secured or unsecured. Section Related Party Transactions. The Borrower shall not enter into or be a party to or permit to exist directly or indirectly any transaction or material group of related transactions (including without limitation the purchase, lease, sale, or exchange of properties of any kind or the rendering of any service) with any Affiliate, except in the ordinary course and pursuant to the reasonable requirements of the Borrower s business and upon fair and reasonable terms no less favorable to the Borrower than would be obtainable in a comparable arm s-length transaction with a Person not an Affiliate and except for distributions from the Surplus Fund. Section Line of Business. The Borrower will not engage to any substantial extent in any business other than the ownership and operation of the Project and businesses reasonably related thereto or in furtherance thereof

109 Section 9.15 Tax Exempt Status of Tax-Exempt Bonds and 501(c)(3) Status of the Borrower. The Borrower recognizes that the purchasers and owners of the Tax-Exempt Bonds will have accepted the Tax-Exempt Bonds on, and paid for the Tax-Exempt Bonds a price that reflects, the understanding that interest on the Tax-Exempt Bonds is excluded from the gross income of the owners for federal income tax purposes under laws in force at the time the Tax- Exempt Bonds shall have been delivered. The Borrower covenants that it will not take or omit to take any action nor permit any action to be taken or omitted that would cause the interest on any Tax-Exempt Bonds to become includable in the gross income of any owner thereof. The Borrower covenants that, while any Tax-Exempt Bonds are unpaid, the Project will be owned, for federal income tax purposes, by an organization described in Section 501(c)(3) of the Code and exempt from tax under Section 501(a) of the Code. The Borrower covenants that it will not enter into any leases, subleases, management agreements, or other arrangements with any Person, other than (i) a governmental unit or (ii) an organization described in Section 501(c)(3) of the Code and exempt from tax under Section 501(a) of the Code, with respect to such 501(c)(3) organization s activities that do not constitute unrelated trades or businesses, determined by applying Section 513(a) of the Code, without furnishing to the Trustee an opinion of Bond Counsel or a ruling of the Internal Revenue Service to the effect that such arrangement will not cause the interest on any Tax-Exempt Bonds to become includable in the gross income of the owners thereof for federal income tax purposes. In addition, the Borrower covenants that (i) the Foundation is an organization described in Section 501(c)(3) of the Code, (ii) the Borrower is treated as a disregarded entity for federal income tax purposes, (iii) the Borrower shall not take any action that would cause, or omit to take any action the omission of which would cause, the Foundation to cease being an organization described in Section 501(c)(3) of the Code, and exempt from tax under Section 501(a) of the Code, and (iv) it shall not carry on or permit to be carried on in the Project or permit the Project to be used in or for any activities that constitute unrelated trades or businesses, determined by applying Section 513(a) of the Code, of the Foundation. The Borrower further covenants and agrees that it shall comply with the representations and certifications it made in its Borrower s Tax Certificate dated the Closing Date of the Series 2010 Bonds and that it shall take no action nor omit to take any action that would cause such representations and certifications to be untrue. The Borrower agrees to furnish the Issuer or the Trustee any items (including, without limitation, certificates of the Borrower and opinions of Bond Counsel) reasonably requested by either of them to evidence compliance with the covenants contained in this Section Section Separate Legal Entity. The Borrower shall be operated in such a manner that it would not be substantively consolidated in the trust estate of any Person in the event of a bankruptcy or insolvency of such Person and in such regard, the Borrower shall: (a) not become involved in the day-to-day management of any other Person; (b) conduct all business correspondence of the Borrower and other communication in the Borrower s own name, in its own stationery, invoices, and checks, through a separately listed telephone number, and through its own authorized officers or agents; (c) not commingle any of its assets with the assets of any other entity and maintain its own deposit account or accounts, separate from those of any Affiliate, with commercial banking institutions, except to the extent, if any, permitted by any of the Bond Documents; (d) maintain its company records and books of account and its financial and accounting books and records separate from those of any other entity; (e) pay from its assets all obligations, liabilities, and indebtedness of any kind incurred by the Borrower, and not pay, assume, or guarantee from its assets any obligations, liabilities, or indebtedness of any other entity or hold itself or its credit out as being available to satisfy the obligations of any other entity, provided that the Borrower may reimburse its member for the Borrower s fair and reasonable allocable portion of shared expenses with its member in furtherance of the stated purposes of the Borrower, provided further, that the Borrower may enter into an employment-sharing agreement with its member whereby the Borrower may jointly employ any officer or employee of its member and the Borrower and its member will pay its fair and reasonable allocable portion of the salaries of and the expenses related to providing benefits to such officers and other employees for such joint employment, provided further, that the Borrower may pay for its obligations, liabilities, or indebtedness solely from funds available to the Borrower that are not otherwise needed to be applied to the payment of any amounts by the Borrower pursuant to any of the Bond Documents; (f) not engage in transactions with any other person except as expressly set forth herein and matters necessarily incident thereto, shall observe all necessary, appropriate, and customary company formalities and shall maintain accurate and separate books and accounts; (g) at all times maintain and conduct its business from an office or offices separate and apart from those of its member, provided that to the extent that such office or offices are located within the office or offices of its member, the Borrower shall pay fair market rent and its fair share of any overhead costs with respect to such office or offices; (h) prepare separate tax returns, if applicable, and financial statements; (i) transact all business with Affiliates on an arm s length basis and pursuant to enforceable agreements; (j) maintain a sufficient number of employees in light of its contemplated business operations (which employees need not be full-time employees); (k) not acquire obligations or securities of its member or pledge its assets for the benefit of any other entity; (l) correct any known misunderstanding regarding its separate identity; and (m) maintain adequate capital in light of its contemplated business operations Section Assignment and Selling. The rights and obligations of the Borrower under this Loan Agreement may not be assigned or delegated, and the Project may not be sold, as a whole or in part, except as expressly provided herein. Section Restrictions on Encumbrance of the Project by the Borrower. The Borrower agrees that it shall not permit any part of the Project, or the Gross Receipts to become subject to any mortgage, lien, claim of title, encumbrance, security interest, conditional sale contract, title retention arrangement, finance lease, servitude, easement, license, restriction, reservation, defect in or cloud on title, or other charge or lien of any kind, except for Permitted Encumbrances or except as otherwise permitted under this Loan Agreement. The Borrower agrees that it shall not assign, transfer, or hypothecate (other than to the Issuer pursuant to the Security Deed and the Security Agreement) any rent (or analogous payment) then due or to accrue in the future under any lease of the Project, except for Permitted Encumbrances or except as otherwise permitted under this Loan Agreement. (e) such other reports, financial information and operating data and statistics (including but not limited to, matriculation and enrollment statistics) shall be provided, as the Bond Insurer shall reasonably request from time to time. [END OF ARTICLE IX] Section Installation of Borrower s Machinery and Equipment Not Financed Hereby. The Borrower may from time to time, in its sole discretion and at its own expense, install machinery, equipment, furnishings, and other personal property in the Project or on the Site, which may be attached or affixed to the Project or the Site and which are not financed by Loans. All such machinery, equipment, furnishings, and other personal property shall become subject to the provisions of this Loan Agreement, and the Borrower may not remove the same from the Project or the Site unless the removal is accomplished in accordance with Section 7.02 hereof. The Borrower may not create any Lien on any such machinery, equipment, furnishings, and other personal property, except for Permitted Encumbrances. Such machinery, equipment, furnishings, or other personal property shall also become part of the Project and shall be subject to the lien and security interest of the Security Agreement. Section Reporting Requirements. In addition to the items specified in the Indenture, the Borrower will furnish, or cause to be furnished, the following to the Bond Insurer: (a) copies of each of the financial statements, certificates, annual budgets and other information to be filed by the Borrower with the Trustee as described in this Loan Agreement; (b) prior to issuing additional parity debt any disclosure document pertaining to such additional debt, which disclosure document shall include, without limitation, the applicable maturity schedule, interest rate or rates, redemption and security provisions pertaining to any such additional debt; (c) notice of any material adverse change in the financial condition of the Borrower or the Project, including notice of any litigation or investigation that may have a material adverse affect on the financial position of the Borrower or the Project, within thirty (30) days following notice of such litigation or investigation; (d) immediate notice of any non-renewal of a Rental Agreement by the Regents; and 55 56

110 ARTICLE X EVENTS OF DEFAULT AND REMEDIES Section Events of Default Defined. The following shall be Events of Default under this Loan Agreement, and the term Event of Default shall mean, whenever it is used in this Loan Agreement, any one or more of the following events: (a) Failure by the Borrower to pay any of the Obligations (whether principal, interest, fees, or other amounts) when and as the same become due and payable (whether at maturity, on demand, or otherwise). (b) The Borrower s breach in any material respect of any representation or warranty contained in the Borrower Contracts or the Borrower s failure in any material respect to observe, perform, or comply with any covenant, condition, or agreement in the Borrower Contracts on the part of the Borrower to be observed or performed, other than as referred to in subsections (a) or (f) of this Section and in Section 9.10 hereof, for a period of 30 days after written notice specifying such breach or failure and requesting that it be remedied, given to the Borrower by the Issuer, the Bond Insurer or the Trustee, unless the Trustee shall agree (with the consent of the Bond Insurer unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy) in writing to an extension of such time prior to its expiration. In the case of any such breach or default that cannot with due diligence be cured within such 30 day period but can be wholly cured within a period of time not materially detrimental to the rights of the Issuer, the Trustee, the Bond Insurer and the Holders, to be determined conclusively by the Trustee, it shall not constitute an Event of Default if corrective action is instituted by the Borrower within the applicable period and diligently pursued until the breach or default is corrected in accordance with and subject to any directions or limitations of time established by the Trustee. (c) The Borrower 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 promptly lift, release, vacate, stay, or fully bond-off any execution, garnishment, or attachment of such consequence as will have a material adverse effect upon, or a material adverse change in, any of the business, results of operations, properties, prospects, or condition (financial or other) of the Borrower or the ability of the Borrower to perform its obligations under the Borrower Contracts or the Real Estate Documents, (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. (d) 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 Borrower or of all or any substantial part of the assets of it or of the Project, or (iii) similar relief in respect of the Borrower 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 60 days, whether consecutive or not. (e) The occurrence of an Event of Default under any of the Bond Documents or the Real Estate Documents (as defined in such Bond Documents or the Real Estate Documents). (f) Failure by the Borrower to deliver the Gross Receipts to the Trustee as required by Section 4.07 hereof, within five days of receipt by the Borrower. Section Remedies on Default. (a) Whenever any Event of Default referred to in Section hereof shall have happened and be continuing, the Issuer, at the direction of the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy) may exercise any one or more of the following remedies: (1) The Issuer, with the prior written consent of the Trustee, or the Trustee, as provided in the Indenture, may at its option declare all unpaid installments of Loan Repayments and other amounts payable under Section 5.02 hereof for the remainder of the Loan Term to be immediately due and payable whereupon the same shall become immediately due and payable. Upon a declaration by the Trustee under Section 802 of the Indenture, all unpaid installments of Loan Repayments and other amounts payable hereunder may be declared immediately due and payable by the Trustee at the direction of the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy); provided, however, that if acceleration of the Bonds has been rescinded and annulled pursuant to Section 802 of the Indenture, acceleration of the Loan Repayments and other amounts payable under Section 5.02 hereof required by this Section 10.02(a)(1) shall similarly be rescinded and annulled and the Event of Default occasioning such acceleration shall be waived, but no such waiver, rescission, and annulment shall extend to or affect any subsequent default or impair or exhaust any right, power, or remedy consequent thereon. (2) The Issuer or the Trustee at the written direction of the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy) may from time to time take whatever action at law or in equity or under the terms of the Borrower Contracts may appear necessary or desirable to collect the Obligations then due or thereafter to become due, or to enforce performance and observance of any obligation, agreement, or covenant of the Borrower under the Borrower Contracts. (a) Any amounts collected pursuant to action taken under this Section shall be paid to the Trustee and applied in accordance with the provisions of the Indenture (b) No action taken pursuant to this Section shall relieve the Borrower from the Obligations that remain unpaid, all of which shall survive any such action, and the Issuer at the written direction of the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy) may take whatever action at law or in equity as may appear necessary and desirable to collect the Obligations then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement, or covenant of the Borrower under the Borrower Contracts. Section No Remedy Exclusive. No remedy herein conferred upon or reserved to the Issuer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Loan Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. Such rights and remedies as are given the Issuer hereunder shall also extend to the Trustee, and the Trustee and the owners of the Bonds shall be deemed third party beneficiaries of all covenants and agreements herein contained. Section Agreement to Pay Attorneys Fees, Costs and Expenses. In the event the Borrower should default under any of the provisions of this Loan Agreement and the Issuer or the Trustee should employ attorneys, accountants, or other experts or incur other expenses for the collection of amounts due hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Borrower herein contained or contained in the Borrower Contracts, the Borrower agrees that it shall promptly on demand therefor pay to the Issuer or the Trustee the reasonable fees, costs and expenses of such attorneys, accountants, or other experts and such other costs and expenses so incurred by the Issuer or the Trustee. Any attorneys fees required to be paid by the Borrower under this Loan Agreement shall include attorneys and paralegals fees through all proceedings, including, but not limited to, negotiations, administrative hearings, trials, and appeals. Section Waiver of Events of Default. The Issuer, with the consent of the Bond Insurer (unless the Bond Insurer is in default under the Financial Guaranty Insurance Policy), may waive any Event of Default hereunder and its consequences or rescind any declaration of acceleration of payments of the Loan Repayments and other amounts due hereunder. In case of any such waiver or rescission, or in case any proceeding taken by the Issuer or the Trustee on account of any such Event of Default shall be discontinued or abandoned or determined adversely to the Issuer or the Trustee, then and in every such case the Issuer and the Borrower shall be restored to their former position and rights hereunder, but no such waiver or rescission shall extend to or affect any subsequent or other Event of Default or impair or exhaust any right, power, or remedy consequent thereon. [END OF ARTICLE X] ARTICLE XI OPTIONS IN FAVOR OF BORROWER; LOAN PREPAYMENTS Section Release of Certain Land and Subordination. In addition to the rights granted by Section hereof, the Borrower reserves the right at any time and from time to time to amend this Loan Agreement and the Security Deed, subject to the written consent of the Regents, as landlord under the Ground Leases, for the purpose of effecting the release and removal from this Loan Agreement and the lien of the Security Deed of any part (or interest in such part) of the Site with respect to which the Borrower proposes to lease to a public utility or public body in order that utility services or public services may be provided to the Project, or for the purpose of effecting the subordination of the lien of the Security Deed to rights granted to a public utility or public body in order that utility services or public services may be provided to the Project; provided the Borrower shall deliver to the Trustee and the Bond Insurer the following: (a) a copy of the amendments as duly executed by the parties thereto, (b) an Officer s Certificate giving an adequate legal description of that portion (together with the interest in such portion) of the Site to be released or subordinated and stating the purpose for which the Borrower desires the release or subordination and stating that the Borrower is not in default under any of the provisions of this Loan Agreement and that the Project is not located on any portion of the Site with respect to which the release or subordination is to be granted, accompanied by a plat of survey of the Site certified by a registered surveyor of the State depicting (i) the boundaries of the portion of the Site with respect to which the release or subordination is to be granted, (ii) all improvements located on the property surveyed and the relation of the improvements by distances to the boundaries of the portion of such property with respect to which the release or subordination is to be granted, and (iii) all easements and rights of way with recording data and instruments establishing the same, (c) copy of the instrument leasing to, or subordinating the lien of the Security Deed in favor of, a public utility or public body or conveying to the ground lessor under a Ground Lease or Ground Leases, and (d) certificate of an architect, dated not more than 60 days prior to the date of the release or subordination and stating that, in the opinion of the person signing such certificate, (i) the portion of the Site so proposed to be released or with respect to which the subordination is proposed is necessary or desirable in order to obtain utility services or public services to benefit the Project and (ii) the release or subordination so proposed to be made will not impair the usefulness of the Project and will not destroy the means of ingress thereto and egress therefrom. If such release or subordination relates to a part of the Site on which transportation or utility facilities are located, the Borrower shall retain an easement to use such transportation or utility facilities to the extent necessary for the efficient operation of the Project. Any money consideration received in connection with the release of any portion of the Site or the subordination of the lien of the Security Deed pursuant to this Section shall be deposited in the Redemption Account and used to redeem Bonds

111 If all of the conditions of this Section are met, the Trustee shall be authorized to release any such property from the lien of the Security Deed. Section Option to Release Unimproved Land. If no Event of Default shall have happened and then be continuing, the Borrower shall have, and is hereby granted, subject to the written consent of the Regents, as landlord under the Ground Leases, the option to release from the lien of the Security Deed any part of the Site on which none of the Project is situated (although transportation or utility facilities may be located thereon), at any time and from time to time, at and for a release price equal to the Fair Market Value thereof, provided that the Borrower furnishes the Issuer and the Bond Insurer with the following: (a) notice in writing containing (i) an adequate legal description of that portion of the Site with respect to which such option is to be exercised, (ii) a statement that the Borrower intends to exercise its option to release such portion of the Site on a date stated, which shall not be less than 45 days nor more than 120 days from the date of such notice, and (iii) a statement that the use to which the Borrower intends to devote such portion of the Site will promote the purposes for which the Borrower was formed, (b) certificate of an architect, dated not more than 90 days prior to the date of the release, stating that in the opinion of the person signing such certificate (i) the portion of the Site with respect to which the option is to be exercised is not needed for the operation of the Project and (ii) the release will not impair the usefulness of the Project and will not destroy the means of ingress thereto and egress therefrom, (c) a certificate of an independent appraiser acceptable to the Trustee, dated not more than 90 days prior to the date of the release, stating that release from the lien of the Security Deed of that portion of the Site with respect to which the option is to be exercised will not materially impair the Fair Market Value of the Project, (d) an Officer s Certificate to the effect that no portion of the Project is located on the portion of the Site with respect to which the option is to be exercised, accompanied by a plat of survey of the Site certified by a registered surveyor of the State, depicting (i) the boundaries of the portion of the Site with respect to which the option is to be exercised, (ii) all improvements located on the property surveyed and the relation of the improvements by distances to the boundaries of the portion of such property with respect to which the option is to be exercised, and (iii) all easements and rights of way with recording data and instruments establishing the same, and (e) an amount of money equal to the release price computed as provided in this Section. The Issuer agrees that upon receipt of the notice, certificates, and money required in this Section to be furnished to it by the Borrower, the Issuer shall promptly deliver such money to the Trustee for deposit in the Redemption Account to be used to redeem Outstanding Bonds and secure from the Trustee a release from the lien of the Security Deed regarding such portion of the Site with respect to which the Borrower shall have exercised the option granted to it in this Section. In the event the Borrower shall exercise the option granted to it under this Section, if such option relates to part of the Site on which transportation or utility facilities are located, the 61 Borrower shall retain an easement to use such transportation or utility facilities to the extent necessary for the efficient operation of the Project. The Borrower hereby covenants that it will not construct or permit to be constructed on any such unimproved land any facility that would substitute for the Project. Section Granting of Easements. If no Event of Default shall then be continuing, and subject to the written consent of the Regents as landlord under the Ground Leases, the Borrower may at any time or times grant easements, licenses, rights of way (including the dedication of public highways), and other rights or privileges in the nature of easements with respect to any portion of the Site, free from the lien of the Security Deed, or the Borrower may release existing easements, licenses, rights of way, and other rights or privileges with or without consideration, and the Issuer agrees that it shall direct the Trustee to execute and deliver any instrument necessary or appropriate to confirm and grant or release any such easement, license, right of way, or other right or privilege upon receipt of (i) a copy of the instrument of grant or release, (ii) a written application signed by the Authorized Borrower Representative requesting such instrument, and (iii) a certificate of an architect, dated not more than 60 days prior to the date of such grant or release, stating (A) that such grant or release is not detrimental to the proper conduct of the activities of the Borrower and (B) that such grant or release will not impair the effective use or interfere with the operation of the Project and will not weaken, diminish, or impair the security intended to be given by or under the Security Deed. Any money consideration received in connection with the granting or release of an easement pursuant to this Section shall be deposited in the Redemption Account and used to redeem Outstanding Bonds. Any other consideration received shall be subject to the lien of the Indenture. Copies of any easements and related documents hereunder shall be sent to the Bond Insurer. Section Use of Party Walls. If the Borrower releases any unimproved part of, or interest in the Site, pursuant to the provisions of Section of this Loan Agreement, or otherwise acquires or leases other real property adjacent to the Site, the Borrower and the Issuer agree that all walls presently standing or hereafter erected by the Borrower as a part of the Project on or contiguous to the boundary line of the portion of or interest in the Site so released or other real property so purchased, acquired, or leased shall be party walls, and a 10-foot easement may be granted adjacent to any such party wall for the purpose of inspection, maintenance, repair, and replacement thereof and the tying-in of new construction. If the Borrower utilizes any party wall for the purpose of tying in new construction that will be utilized under common control with the Project, the Borrower may also tie into the utility facilities on the Site for the purpose of serving the new construction and may remove any non-loadbearing wall panels in the party wall; provided, however, that if the property so owned, purchased, acquired, or leased by the Borrower ceases to be operated under common control with the Project, the Borrower covenants that it shall install non-loadbearing wall panels similar in quality to those that have been removed and shall provide separate utility services for the new construction. Section General Options to Terminate Loan Agreement. The Borrower shall have, and is hereby granted, the following options to terminate the Loan Term: (a) at any time prior to full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture), the Borrower may terminate the Loan Term by (i) paying to the Trustee an amount which, when added to the amount on deposit in the Sinking Fund and the Debt Service Reserve Fund, will be sufficient to 62 pay, retire, and redeem all of the Outstanding Bonds in accordance with the provisions of the Indenture (including, without limiting the generality of the foregoing, principal, redemption premium, interest to maturity or the applicable redemption date, as the case may be, premium, if any, expenses of redemption, and Trustee s and paying agents fees and expenses), (ii) in the case of redemption, making arrangements satisfactory to the Trustee for the giving of the required notice of redemption, (iii) paying to the Issuer any and all sums then due to the Issuer under this Loan Agreement, and (iv) otherwise complying with the provisions of Article VII of the Indenture, and (b) upon full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture) and of any and all sums then due to the Issuer, the Bond Insurer and the Trustee under this Loan Agreement prior to the end of the Loan Term, the Borrower may terminate the Loan Term by giving the Issuer notice in writing of such termination, which shall forthwith become effective. Section Option and Obligation to Prepay Loans in Certain Events. The Borrower shall have, and is hereby granted, the option to prepay the Loans in whole or in part prior to the full payment of all of the Bonds (or provision for payment thereof having been made in accordance with provisions of the Indenture), if any of the following shall have occurred: (a) the Project shall have been damaged or destroyed by fire or other casualty to such extent that, in the opinion of an architect expressed in a certificate filed with the Issuer, the Bond Insurer and the Trustee, (i) the Project cannot be reasonably restored within a period of six (6) consecutive months to substantially the condition thereof immediately preceding such damage or destruction or (ii) the Project is unfit for use for a period of six (6) consecutive months or (iii) the cost of reconstruction would exceed the total amount of Net Proceeds of insurance carried thereon by more than $250,000; or (b) title to a substantial portion of the Project shall fail or title to, or the temporary use of, a substantial portion of the Project shall have been taken under the exercise of the power of eminent domain by any governmental authority or person, firm, or corporation acting under governmental authority and such a failure of title or taking or takings result, in the opinion of an architect expressed in a certificate filed with the Issuer, the Bond Insurer and the Trustee, in the Project being unfit for occupancy for a period of six (6) consecutive months. Notwithstanding the foregoing, the Borrower shall have the obligation to prepay the Loans in whole or in part prior to the full payment of all of the Bonds (or provision for payment thereof having been made in accordance with provisions of the Indenture), if the events stated in subsection (a) or (b) of this Section shall have occurred, in the event the Borrower shall fail to furnish to the Trustee the items required by Section 8.01(b) hereof or Section 8.02(d) hereof, whichever is applicable. In the case of any of the above events stated in subsection (a) or (b) of this Section, the Borrower, if it is obligated to prepay the Loans or if it exercises its option to prepay the Loans, must prepay the Loans within 180 days after such event. If the Borrower is obligated to prepay the Loans or exercises its option to prepay the Loans pursuant to subsection (a) or (b) of this Section, any Net Proceeds of insurance or of any condemnation award shall be paid into the Redemption Account. To exercise such option, the Borrower shall, within 60 days following the event authorizing the exercise of such option, give written notice of the exercise of such option to the Issuer and the Trustee, and shall specify therein the date of tender of such prepayment price, which date shall not be less than 45 nor more than 120 days from the date such notice is mailed, and shall make arrangements satisfactory to the Trustee for the giving of the required notice of redemption of Outstanding Bonds. The prepayment price payable by the Borrower in the event the Net Proceeds are sufficient to enable the Loans to be prepaid in whole shall be the sum of the following: (1) an amount of money that, when added to the amount then on deposit and available in the Sinking Fund and the Debt Service Reserve Fund, will be sufficient to retire and redeem all the then Outstanding Bonds on the applicable redemption date provided by the Indenture, including without limitation, principal, all interest to accrue to the redemption date, and redemption expense, but without premium, plus (2) an amount of money equal to the Trustee s and paying agents fees and expenses under the Indenture accrued and to accrue until such final payment and redemption of the Bonds, plus (3) an amount of money equal to the Issuer s expenses under this Loan Agreement accrued and to accrue until such final payment and redemption of the Bonds, plus (4) an amount of money equal to any amounts owed to the Bond Insurer. Section Redemption of Bonds. The Issuer, at the written request of the Borrower at any time and if the Bonds are then callable or available for purchase, and if there are funds available therefor, shall forthwith take all steps that may be necessary under the applicable redemption or purchase provisions of the Indenture to effect redemption or purchase of all or part of the then unpaid Bonds, as may be specified by the Borrower, on the earliest date on which such redemption or purchase may be made under such applicable provisions. Without the prior written consent of the Bond Insurer, no Series 2010 Bonds shall be purchased by the Issuer or the Borrower, or any of their respective affiliates, in lieu of redemption unless the Series 2010 Bonds are defeased or terminated. Section Prepayment of Loans. There is expressly reserved to the Borrower the right, and the Borrower is authorized and permitted, at any time it may choose, to prepay all or any part of the Loan Repayments and other amounts payable under Section 5.02 hereof, and the Issuer agrees that the Trustee may accept such prepayments of Loan Repayments and other amounts when the same are tendered by the Borrower. All Loan Repayments and other amounts so prepaid shall at the written direction of the Borrower be credited toward the Loan Repayments and other amounts specified in Section 5.02 hereof, in the order of their due dates, or applied to the retirement of Bonds prior to maturity (either by redemption or purchase) in accordance with the Indenture. The Borrower shall also have the right to surrender Bonds acquired by it in any manner whatsoever to the Trustee for cancellation, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired and shall be allocated as credits to Loan Repayments as provided in the Indenture

112 Section No Obligation to Prepay Loans. The Borrower shall be under no obligation to prepay the Loans except as herein expressly required or provided. Section Option to Prepay the Loans and Redeem Related Bonds at Prior Optional Redemption Dates. The Borrower shall also have the option to prepay Loan Repayments related to specified Bonds and other amounts payable under this Loan Agreement in such manner and amounts as will enable the Issuer to redeem the related Bonds prior to maturity, as provided in Article III of the Indenture. Bonds redeemed pursuant to this Section shall be redeemed in accordance with the procedures set forth in Article III of the Indenture. The Loan Repayments and other amounts payable by the Borrower in the event of its exercise of the option granted under this Section shall be (i), in the case of partial redemption, the amount necessary to pay principal, all interest to accrue to the redemption date, the applicable redemption premium, as provided in Article III of the Indenture, and any redemption expense, and (ii) in the case of a total redemption, the amounts set forth in Article VII of the Indenture and the applicable redemption premium, as provided in Article III of the Indenture. [END OF ARTICLE XI] ARTICLE XII MISCELLANEOUS Section Notices. All notices, certificates, requests, demands, or other communications hereunder shall be sufficiently given and shall be deemed given upon receipt, by hand delivery, mail, overnight delivery, telecopy, or other electronic means, addressed as follows: If to the Issuer: Savannah Economic Development Authority P. O. Box 128 Savannah, Georgia Telecopy: (912) Attention: President with a copy to: Gray & Pannell LLP P. O. Box 8050 Savannah, Georgia Telecopy: (912) Attention: Thomas S. Gray, Jr. If to the Borrower: with a copy to: If to the Trustee: SSU Community Development I, LLC 3219 College Street Box Savannah State University Savannah, Georgia Telecopy: (912) Attention: Chair Joseph Steffen 3219 College Street Box Savannah State University Savannah, Georgia Telecopy: (912) The Bank of New York Mellon Trust Company, N.A. Corporate Trust Services 900 Ashwood Parkway, Suite 425 Atlanta, GA Telecopy: (706) Attention: Cassandra Shedd If to the Bond Insurer: Assured Guaranty Municipal Corp. 31 West 52 nd Street New York, New York Telecopy: (212) Attention: General Counsel A duplicate copy of each notice, certificate, or other communication given hereunder shall also be given to the Trustee and the Bond Insurer. Any party named in this Section may, by notice given to each of the others, designate any additional or different addresses to which subsequent notices, certificates, or other communications shall be sent. For purposes of this Section, electronic means shall mean telecopy or facsimile transmission or other similar electronic means of communication that produces evidence of transmission. Section Recording and Filing. The Security Deed, the Indenture, or appropriate notices thereof shall be recorded in all offices as may at the time be provided by law as the proper place for recordation thereof. The security interest of the Issuer created by the Security Agreement and the security interest of the Trustee created by the Indenture shall be perfected by the filing of financing statements or instruments by the Borrower as provided in Section 3.03 effective as financing statements, which fully comply with the State Uniform Commercial Code or by the taking of possession of appropriate collateral. The parties further agree that all necessary continuation statements shall be filed by the Borrower within the time prescribed by the State Uniform Commercial Code and the appropriate parties shall maintain possession of appropriate collateral in order to continue the security interests identified in this Section 12.02, to the end that the rights of the Issuer in the Security and the Trustee in the Trust Estate shall be fully preserved as against third party creditors of, or purchasers for value in good faith from, the Issuer or the Borrower. Section Maintenance of Security Interests. Annually, within 30 days after the end of each Fiscal Year, the Borrower shall file with the Trustee and the Bond Insurer a certificate describing, as of the last day of the immediately preceding Fiscal Year, each item of tangible personal property not described in a previous similar certificate, which has been added to the Project, whether as a substitution, replacement, or addition, and whether or not, when added, it became real property, if the aggregate cost of such items in the preceding Fiscal Year exceeds $250,000. In addition, if during the preceding Fiscal Year any such personal property was added to the Project, the Borrower shall furnish to the Trustee and the Bond Insurer evidence to the effect that all steps requisite to perfection of the security interests of the Trustee in and to such property have been duly taken. The Borrower shall execute all instruments, including financing statements, and shall timely deliver to the Trustee and the Bond Insurer possession of all instruments or cash necessary for perfection of and continuance of the perfection of the security interests as aforesaid. The Issuer shall execute all instruments, including financing statements, required of it by the Borrower, and the Borrower shall file all such instruments executed by the Borrower or the Issuer, or cause them to be filed, and the Borrower shall continue the security interests of all such instruments by appropriate refilings, or cause them to be so continued. successors and assigns. The Bond Insurer is explicitly recognized as being a third party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. Section Severability. In the event any provision of this Loan Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section Amounts Remaining in Funds. It is agreed by the parties hereto that any amounts remaining in the Funds upon expiration or sooner termination of the Loan Term, as provided in this Loan Agreement, after payment in full of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture), the fees, charges, and expenses of the Trustee and paying agents in accordance with the Indenture, and all sums due and owing to the Issuer and the Bond Insurer hereunder, shall belong to and be paid to the Borrower by the Trustee as overpayment of loan payments. Section Fees and Expenses Paid by the Borrower. The Borrower shall pay all fees and expenses relating to the Borrower Contracts and the Loans, including but not limited to, reasonable attorneys fees. Section Amendments, Changes, and Modifications. This Loan Agreement may not be amended, changed, modified, altered, or terminated, except as provided in the Indenture and in each instance only with the prior written consent of the Trustee and the Bond Insurer. Section Execution of Counterparts. This Loan 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. Section Law Governing Construction of this Loan Agreement. This Loan Agreement is prepared and entered into with the intention that the law of the State of Georgia, exclusive of such state s rules governing choice of law, shall govern its construction. Section Bond Insurer Provisions. Anything in this Loan Agreement to the contrary notwithstanding, the Issuer and the Borrower agree that so long as the Financial Guaranty Insurance Policy is in full force and effect and the Bond Insurer is not in default thereunder, (a) the Borrower shall give written notice to the Bond Insurer of any amendment to the Ground Leases and the Rental Agreements, including a copy of each such amendment, and (b) the Borrower will not encumber the Project, except for Permitted Encumbrances, without the written approval of the Bond Insurer. [END OF ARTICLE XII] Section Construction and Binding Effect. This Loan Agreement constitutes the entire agreement of the parties and supersedes any prior agreements. This Loan Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Borrower, and their respective 67 68

113 SIGNATURES AND SEALS IN WITNESS WHEREOF, the Issuer has executed this Loan Agreement by causing its name to be hereunto subscribed by its President and by causing the official seal of the Issuer to be impressed hereon and attested by its Assistant Secretary; and the Borrower has executed this Loan Agreement by causing its name to be hereunto subscribed by the President of its sole member and by causing the corporate seal of its sole member to be impressed hereon and attested by such member s Secretary; all being done as of the day and year first above written. EXHIBIT A DESCRIPTION OF SITE SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY (SEAL) By: President Attest: Assistant Secretary SSU COMMUNITY DEVELOPMENT I, LLC By: (SEAL) By: Attest: 69 A-1 EXHIBIT B FORM OF PROMISSORY NOTE THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF THE TRANSFERABILITY HEREOF IS RESTRICTED BY THE INDENTURE IDENTIFIED IN THE ASSIGNMENT ENDORSED HEREON. SERIES 2010 PROMISSORY NOTE, 2010 $36,475,000 FOR VALUE RECEIVED, the undersigned, SSU COMMUNITY DEVELOPMENT I, LLC (the Borrower, which term shall be construed to include the successors and assigns of the Borrower), a limited liability company duly formed and existing under and by virtue of the laws of the State of Georgia, hereby promises to pay to the order of the Savannah Economic Development Authority (the Issuer ), a public corporation created and existing under the laws of the State of Georgia, and its successors and assigns, the principal sum of $36,475,000, payable as provided herein. This Series 2010 Note shall bear interest from the date hereof at the rates per annum and shall mature on the dates and in the principal installments set forth in the following table. Interest is computed on the basis of a 360-day year consisting of twelve 30-day months and is payable in advance on June 5, 2011 and December 5, 2011, in an amount equal to the amount payable as interest on this Series 2010 Note on June 15, 2011 and December 15, 2011, respectively. Thereafter, interest is payable semi-annually in advance on June 5 and December 5 of each year in an amount equal to the amount payable on the next succeeding June 15 or December 15, respectively. Principal is payable in advance on or before December 5, 2012 and June 5, 2013 and on or before each December 5 and June 5 thereafter in an amount equal to onehalf of the amount payable on the next succeeding June 15, as principal on this Series 2010 Note, unless earlier subject to prepayment. The principal coming due annually (whether at maturity or upon mandatory sinking fund redemption) on this Series 2010 Note and the annual rate of interest payable thereon is as follows: (Remainder of Page Intentionally Left Blank) June 15 of the Year Principal Amount Interest Rate June 15 of The Year Principal Amount Interest Rate 2013 $630, % 2027 $1,125, % 2014 $560, % 2028 $1,180, % 2015 $650, % 2029 $1,250, % 2016 $690, % 2030 $1,320, % 2017 $720, % 2031 $1,385, % 2018 $745, % 2032 $1,465, % 2019 $780, % 2033 $1,545, % 2020 $810, % 2034 $1,630, % 2021 $840, % 2035 $1,720, % 2022 $875, % 2036 $1,815, % 2023 $920, % 2037 $1,915, % 2024 $970, % 2038 $2,030, % 2025 $1,015, % 2039 $2,145, % 2026 $1,070, % 2040 $2,270, % 2041 $2,405, % The principal of, premium, if any, and interest on this Series 2010 Note are payable in lawful money of the United States of America at the designated corporate trust office of The Bank of New York Mellon Trust Company, N.A. (the Trustee ), in Atlanta, Georgia, or its successor or successors, as trustee under a Trust Indenture and Security Agreement, dated as of December 1, 2010 (the Indenture ), between the Issuer, as grantor, and the Trustee, when due and payable, whether at maturity or by acceleration, for deposit in the Principal Account, the Interest Account, and the Redemption Account of the Sinking Fund, as hereinafter defined, for the account of the Issuer. This Series 2010 Note shall bear interest on overdue principal and, to the extent permitted by law, on overdue premium, if any, and interest at the aforesaid rates. This Series 2010 Note constitutes the Series 2010 Note issued under and pursuant to and is entitled to the benefits and subject to the conditions of a Loan Agreement, dated as of December 1, 2010 (the Loan Agreement ), between the Borrower and the Issuer, to which Loan Agreement reference is hereby made for a description of the circumstances under which there shall be credits allowed against the installments of principal and interest on this Series 2010 Note and for a description of the terms and conditions upon which this Series 2010 Note may be subject to optional or mandatory prepayment, in whole or in part, or may be accelerated. Reference is hereby made to the Loan Agreement for a description of the security for this Series 2010 Note and the options and obligations of the Borrower and the Issuer hereunder. Upon an Event of Default (as defined in the Loan Agreement), the entire principal of and interest on this Series 2010 Note may be declared or may become immediately due and payable as provided in the Loan Agreement. This Series 2010 Note is given for value received and in consideration of the issuance by the Issuer of $36,475,000 in original aggregate principal amount of its revenue bonds designated SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT), SERIES 2010 (the Series 2010 Bonds ), dated as of the date B-1 B-2

114 hereof, issued by the Issuer under the terms of resolutions adopted by the Issuer and under the terms of the Indenture. IN WITNESS WHEREOF, the undersigned has executed this Series 2010 Note on behalf of the Borrower as of the date set forth above. Each payment under this Series 2010 Note immediately preceding the semi-annual interest payment dates on the Series 2010 Bonds and immediately preceding the annual principal payment (or mandatory sinking fund redemption) dates on the Series 2010 Bonds, of each year until the Series 2010 Bonds are fully paid or payment is provided therefor in accordance with the Indenture, shall in all events be sufficient to pay the total amount of interest, principal, redemption requirement, and premium, if any, payable on the Series 2010 Bonds on the next succeeding principal or interest payment date or on the next succeeding mandatory sinking fund redemption date for Series 2010 Bonds retired in accordance with Section 302 of the Indenture. Until the entire principal of and interest and premium (if any) on the Series 2010 Bonds have been paid or duly provided for as allowed by the Indenture, if at any such payment date on the Series 2010 Bonds the balance in the Principal Account, Interest Account, and Redemption Account of the hereinafter defined Sinking Fund available for the payment of the principal of and premium (if any) and interest on the Series 2010 Bonds is insufficient to make such required payments on such date, the Borrower shall forthwith pay any such deficiency to the Trustee, for the account of the Issuer, for deposit in the Principal Account, Interest Account, and Redemption Account of the Sinking Fund. Any amount at any time held by the Trustee in the Principal Account, Interest Account, and Redemption Account of the Sinking Fund created under the Indenture (the Sinking Fund ) shall, in the manner prescribed in and to the extent permitted by the Loan Agreement, be credited against the next succeeding payment under this Series 2010 Note and shall reduce the payment to be made by the Borrower hereunder. If the amount held by the Trustee in the Principal Account, Interest Account, and Redemption Account of the Sinking Fund shall be sufficient to pay at the times required the principal of and interest on the Series 2010 Bonds then remaining unpaid, as provided in the Indenture, the Borrower shall not be obligated to make any further payments under this Series 2010 Note. There shall also be a credit against payments under this Series 2010 Note for Series 2010 Bonds purchased, redeemed, or cancelled, as provided in Article III of the Indenture. If at any time all principal and interest and any premium payments on the Series 2010 Bonds have been paid within the meaning of the Indenture, the Borrower shall not be obligated to make any further principal or interest or premium payments hereunder, and the Issuer or the Trustee shall surrender this Series 2010 Note to the Borrower for cancellation, provided, however, that the obligations of the Borrower under the Loan Agreement shall survive cancellation of this Series 2010 Note. This Series 2010 Note is issued with the intent that the laws of the State of Georgia shall govern its construction. The Borrower hereby waives presentment, demand, protest, and notice of demand, protest, and non-payment and assents to the addition or release of any other party or person primarily or secondarily liable under this Series 2010 Note. Upon a default hereunder, the Borrower agrees to pay attorneys fees and expenses as provided by Section of the Loan Agreement. No waiver by the Issuer or its assigns of any default under this Series 2010 Note shall be effective unless in writing, and no such waiver shall be a waiver of any other default. This Series 2010 Note shall bind the successors and assigns of the Borrower. (SEAL) SSU COMMUNITY DEVELOPMENT I, LLC BY: Name: Title: By: Name: Title: B-3 B-4 ENDORSEMENT ACKNOWLEDGMENT OF ASSIGNMENT FOR VALUE RECEIVED, the Savannah Economic Development Authority (the Issuer ), hereby irrevocably assigns and transfers the foregoing Series 2010 Note, without recourse or warranty, except warranty that the Issuer has not assigned the foregoing Series 2010 Note to a person other than the hereinafter defined Trustee and that the principal sum of $36,475,000 remains unpaid under the foregoing Series 2010 Note, to the order of The Bank of New York Mellon Trust Company, N.A. (the Trustee ), Atlanta, Georgia, trustee under a Trust Indenture and Security Agreement, dated as of December 1, 2010, between the Issuer and the Trustee. The Issuer hereby directs the maker of the Series 2010 Note, SSU Community Development I, LLC to make all payments with respect to principal of, premium, if any, and interest on the Series 2010 Note and all other payments required thereby directly to the order of the Trustee for the account of the Issuer at the Trustee s principal corporate trust office in Atlanta, Georgia, or such other place as the Trustee, or its successor in trust, may designate in writing. Dated as of, SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY The undersigned hereby acknowledges and agrees to the aforesaid assignment of the Series 2010 Note by the Savannah Economic Development Authority to The Bank of New York Mellon Trust Company, N.A., as trustee. Dated this day of, (SEAL) Attest: Name: Title: SSU COMMUNITY DEVELOPMENT I, LLC BY: By: Name: Title: By: President (SEAL) Attest: Assistant Secretary B-5 B-6

115 TO: EXHIBIT C REQUISITION FOR PAYMENT (PROJECT FUND) The Bank of New York Mellon Trust Company, N.A., as Trustee (the Trustee ) Custodian of the Project Fund relating to the SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT), SERIES 2010 This Requisition for Payment is for payment against the Project Fund and is delivered to the Trustee in accordance with Section 509 of the Trust Indenture and Security Agreement (the Indenture ) dated as of December 1, 2010 between the Savannah Economic Development Authority (the Authority ) and the Trustee. Capitalized terms used herein and not otherwise defined shall have the meaning given such terms in the Indenture. work was actually performed, or such materials, supplies or equipment were actually installed in or about the construction or delivered at the site of the work for that purpose. Dated this day of, SSU COMMUNITY DEVELOPMENT I, LLC By: Authorized Borrower Representative The undersigned hereby states the following: 1. Request is hereby made for disbursement of the amount set forth in paragraph 3 below from the Project Fund; 2. This is disbursement request number ; 3. Costs of the Project in the amount of $ have been made or incurred as supported by the attachments hereto, and were necessary for the Project and were made or incurred in accordance with the construction documents and, Plans and Specifications for the Project; 4. In connection herewith, the undersigned hereby certifies as follows: a. That an obligation in the stated amount has been incurred by the Borrower and the same is a proper charge and has not been the subject of a previous requisition, and the bill, invoice or statement of account for such obligation, or a copy thereof is on file in the office of the Borrower; b. That no notice of any vendors, mechanic s or other Liens or rights to Liens, chattel mortgages, conditional sales contracts or any security interest, which should be satisfied or discharged before such payment is made; c. That this requisition contains no item representing payment on account or any retained percentages which the Company is, at the date of such certificate, entitled to retain; and d. That insofar as such obligation was incurred for work, materials, supplies or equipment in connection with the undertaking, such C-1 C-2 EXHIBIT D CAPITALIZED INTEREST DRAWS June 5, $ December 5, $ June 5, all remaining funds in Capitalized Interest Account D-1

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117 Appendix D Copy of the Security Deed

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119 TABLE OF CONTENTS (This Table of Contents is not a part of this Leasehold Deed to Secure Debt and Assignment of Rents and Leases but is for convenience of reference only) Space Above This Line for Recorder s Use Page RECITALS... 1 GRANTING CLAUSES... 2 SSU COMMUNITY DEVELOPMENT I, LLC as Grantor to SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY as Grantee LEASEHOLD DEED TO SECURE DEBT AND ASSIGNMENT OF RENTS AND LEASES Dated as of December 1, 2010 THE RIGHTS AND INTEREST OF THE SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY IN THIS LEASEHOLD DEED TO SECURE DEBT AND ASSIGNMENT OF RENTS AND LEASES HAVE BEEN ASSIGNED AND ARE THE SUBJECT OF A GRANT OF A SECURITY INTEREST TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS TRUSTEE, UNDER A TRUST INDENTURE AND SECURITY AGREEMENT, DATED THE DATE HEREOF. THIS INSTRUMENT IS A CONSTRUCTION MORTGAGE WITHIN THE MEANING OF SUCH TERM IN SECTION 11-2A-309(1)(d) AND SECTION (h) OF THE OFFICIAL CODE OF GEORGIA ANNOTATED. THIS LEASEHOLD DEED TO SECURE DEBT AND ASSIGNMENT OF RENTS AND LEASES CONSTITUTES A SECURITY AGREEMENT UNDER THE GEORGIA UNIFORM COMMERCIAL CODE. THIS INSTRUMENT IS ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF BONDS BY THE SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY, A PUBLIC AUTHORITY EXISTING UNDER THE LAWS OF THE STATE OF GEORGIA, THEREFORE, THIS INSTRUMENT IS NOT SUBJECT TO THE INTANGIBLE RECORDING TAX. SEE RULE (a) OF THE RULES AND REGULATIONS OF THE GEORGIA DEPARTMENT OF REVENUE. ARTICLE I -- DEFINITIONS AND INTERPRETATIONS... 4 Section 101. Definitions... 4 Section 102. Interpretations... 7 ARTICLE II -- SECURITY AGREEMENT... 8 Section 201. Security Agreement... 8 Section 202. Grant of Security Interest... 8 ARTICLE III -- GENERAL COVENANTS AND PROVISIONS... 9 Section 301. Instruments of Further Assurance; Recording... 9 Section 302. Warranties of Title... 9 Section 303. General... 9 Section 304. Releases of Collateral... 9 Section 305. Subrogation Section 306. Non-Residential Status of Premises Section 307. Covenants Regarding Ground Lease Section 308. Ground Lease Bankruptcy Provisions Section 309. Subordination of Rental Agreement ARTICLE IV -- REMEDIES UPON EVENT OF DEFAULT Section 401. Remedies Upon Event of Default Section 402. Appointment of Receivers Section 403. Application of Proceeds Section 404. Non-Exclusivity and Waiver of Remedies Section 405. Abandonment of Sale; Termination of Proceedings Section 406. Non-Extinguishment of Lien, Security Interest, and Security Title Section 407. Waivers ARTICLE V -- RENTS AND LEASES Section 501. Covenants Relating to Leases and Rents; Liability of the Issuer Section 502. Collections Section 503. Execution of Leases Section 504. Not Additional Security (i) ARTICLE VI -- MISCELLANEOUS Section 601. Tenants at Will Section 602. Notice Section 603. Severability Section 604. Governing Law Section 605. Amendments Section 606. Assignment and Binding Effect Section 607. Addresses Section 608. Controlling Provisions Section 609. Commercial Transaction Section 610. Extension, Rearrangement, or Renewal of Obligations Section 611. Time is of the Essence SIGNATURES AND SEALS EXHIBIT A - DESCRIPTION OF LAND... A-1 EXHIBIT B - CONTRACT DOCUMENTS... B-1 Page STATE OF GEORGIA ) ) COUNTY OF CHATHAM ) LEASEHOLD DEED TO SECURE DEBT AND ASSIGNMENT OF RENTS AND LEASES THIS LEASEHOLD DEED TO SECURE DEBT AND ASSIGNMENT OF RENTS AND LEASES (this Security Deed ), dated as of December 1, 2010, from SSU COMMUNITY DEVELOPMENT I, LLC (the Borrower ), a limited liability company formed and existing under the laws of the State of Georgia, to SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY (the Issuer ), a public body corporate and politic and an instrumentality of the State of Georgia, which has assigned its rights and benefits hereunder to THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as trustee (the Trustee ), under a Trust Indenture and Security Agreement (the Indenture ), dated the date hereof, between the Issuer and the Trustee, and under a Transfer and Assignment to be recorded contemporaneously herewith; W I T N E S S E T H: WHEREAS, pursuant to a resolution adopted by the Issuer (the Bond Resolution ), and a Trust Indenture and Security Agreement, dated the date hereof (the Indenture ), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee ), the Issuer has authorized the issuance of $36,475,000 in aggregate principal amount of its Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 (the Series 2010 Bonds ), the Series 2010 Bonds to be dated the date of issuance and delivery thereof, and to have a final stated maturity of June 15, 2041, and has authorized the execution and delivery of a Loan Agreement (the Loan Agreement ) with the Borrower, dated the date hereof, under the terms of which the Issuer agreed to lend the proceeds from the sale of the Series 2010 Bonds to the Borrower to finance, inter alia, the costs of constructing and equipping student housing facilities (the Project ) to be located on the campus of Savannah State University located in the City of Savannah, Chatham County, Georgia, to be leased by the Borrower, as landlord, to the Board of Regents of the University System of Georgia (the Regents ), as tenant, pursuant to certain Rental Agreements, dated (collectively, the Rental Agreement ); and WHEREAS, the Regents has leased the land (the Land ) on which the Project will be located to the Borrower pursuant to the terms of certain Ground Leases (collectively, the Ground Lease ) between the Regents, as lessor, and the Borrower, as lessee; and WHEREAS, in order to evidence its payment obligations under the Loan Agreement, the Borrower has agreed to execute and deliver to the Issuer its promissory note (the Series 2010 Note ) in the original principal amount of $36,475,000 dated as of the date of issuance and delivery of the Bonds, and to have a final stated maturity of June 15, 2041, providing for loan repayments sufficient in time and amount to enable the Issuer to pay the principal of, premium, if any, and interest on the Series 2010 Bonds; and (ii) WHEREAS, the Borrower has agreed under the terms of the Loan Agreement to grant to the Issuer a first lien on and first security title to its leasehold interest in the Land, created pursuant to the Ground Lease, and its ownership interest in the remainder of the Project and to

120 assign and pledge to the Issuer the Borrower s interest in certain rents and leases derived from the Project as security for its obligations under the Loan Agreement, including the Series 2010 Note, and certain other obligations of the Borrower to the Issuer; and WHEREAS, to secure its obligation to pay principal of, premium, if any, and interest on the Series 2010 Bonds, the Issuer has agreed under the terms of the Loan Agreement to assign and pledge, and grant a first priority security interest in, all of its right, title, and interest in, among other things, this Security Deed to the Trustee pursuant to the Indenture; NOW, THEREFORE: The Borrower, in consideration of the foregoing premises, the obligations hereinafter mentioned, the sum of Ten Dollars ($10.00) in hand paid, and other good and valuable consideration, all of which the Borrower acknowledges receiving as legally sufficient consideration at or prior to the execution and delivery of this Security Deed, in order to secure the payment and performance of the Obligations (as hereinafter defined), does hereby grant, bargain, convey, transfer, assign, and sell unto the Issuer the following property, rights, titles, interests, and estates: GRANTING CLAUSE FIRST The leasehold estate and all other estates, rights, title, and interest of the Borrower in, to and under all those tracts or parcels of land situated in Chatham County, Georgia, described in Exhibit A attached hereto (as the same may be supplemented from time to time) and incorporated herein by reference (the Land ), (1) together with the leasehold estate in all buildings, structures, additions, and other improvements of every kind and description now or hereafter located on the Land or on any part or parcel thereof, and all extensions, betterments, and replacements thereof, with all and singular the tenements, hereditaments, servitudes, appurtenances, rights, powers, benefits, options, privileges and immunities now or hereafter belonging or in anywise appertaining to the Land, and (2) together with all and singular the easements and riparian and littoral rights now or hereafter thereunto belonging or in anywise appertaining, and including all rights of ingress and egress to and from adjoining property (whether such rights now exist or subsequently arise), it being the intention of the parties hereto that, so far as may be permitted by law, all property of the character hereinabove described shall be and remain or become and constitute a portion of the Collateral (as hereinafter defined) encumbered by and subject to the security title of this Security Deed (the property described in this GRANTING CLAUSE FIRST is hereinafter sometimes referred to as the Premises ). GRANTING CLAUSE SECOND (a) Any and all leases, usufructs, tenant contracts, license agreements, rental agreements, undertakings to lease, contracts to rent, and other agreements for use, occupancy, or possession now or hereafter affecting the Premises and any and all franchise agreements, agreements for the operation of or management of the Premises, construction contracts, concessions, and other agreements, contracts, licenses, permits, and arrangements now or hereafter affecting or granting a possessory interest in the Premises or any part thereof, together with all security therefor and any and all renewals, extensions, and modifications thereof and any guarantees of the obligations thereunder, whether written or oral and whether now existing or hereafter made, executed, or delivered (the property described in this subdivision (a) of GRANTING CLAUSE SECOND is hereinafter sometimes referred to as the Leases ), and 2 (b) all of the rents, issues, profits, revenues, income, receipts, moneys, royalties, rights, and benefits now or hereafter accruing from the Premises and from and in connection with the Borrower s ownership, occupancy, use, or enjoyment of the Premises, including, without limiting the generality of the foregoing, all rents, issues, profits, revenues, income, receipts, moneys, royalties, rights, and benefits now or hereafter accruing from and under any and all Leases, and all security deposits, damage deposits, and other funds paid to the Borrower by any lessee, tenant, licensee, permittee, or other obligee under any of the Leases, whether paid in a lump sum or installments, and proceeds of the conversion, whether voluntary or involuntary, of the Premises into cash or liquidated claims, including without limitation proceeds of casualty and title insurance, condemnation awards, judgments, settlements, and performance, labor, and material payment bonds relating to the Premises (the property described in this subdivision (b) of this GRANTING CLAUSE SECOND is hereinafter sometimes referred to as the Rents ). GRANTING CLAUSE THIRD All of the right, title, interest, powers, privileges, benefits, and options of the Borrower in, to and under the Ground Lease, together with the leasehold estate created under and by virtue of the Ground Lease, including all renewals and extensions of the term of the Ground Lease (the property described in this GRANTING CLAUSE THIRD is hereinafter sometimes referred to as the Leasehold Estate ). IN EACH CASE, whether now owned or hereafter acquired by the Borrower and howsoever its interest therein may arise or appear (whether by ownership, lien, security interest, claim, or otherwise) and whether due or to become due and whether or not earned by performance; TO HAVE AND TO HOLD the Premises, the Rents, the Leases and the Leasehold Estate to the only proper use, benefit, and behoof of the Issuer and its successors and assigns, forever, in fee simple. SUBJECT ONLY to Permitted Encumbrances (as hereinafter defined). The Borrower warrants that it has a valid, effective, and subsisting leasehold estate in the Premises, and that it has the right to convey and assign the Collateral, and that the Collateral is free and clear of every mortgage, lien, encumbrance, or charge, other than Permitted Encumbrances. The Borrower has acquired or will lawfully acquire and own the Collateral and, subject to the provisions of this Security Deed concerning release of property, will forever warrant and defend the title to the Collateral unto the Issuer against the claims and demands of all persons whomsoever, except those claiming under Permitted Encumbrances. THIS INSTRUMENT IS A DEED passing legal title pursuant to the laws of the State of Georgia governing deeds to secure debt and is not a mortgage. This Security Deed is made and intended to secure the payment and performance of the Obligations, the final payment on which is due (if not sooner paid) on June 15, ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 101. Definitions. The following words and terms shall have the meanings set forth below, unless the context clearly indicates otherwise. Account Debtor means any Person who is or may become obligated under or on account of an Account. Accounts means all accounts, contract rights, chattel paper, instruments, and documents (excluding Contract Documents) received by or on behalf of the Borrower from or in connection with the ownership, operation, or leasing of any Property located at the Locations and all rights to receive the same, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise); excluding, however, all gifts, grants, bequests, donations, and contributions that are specifically designated or restricted at the time of making thereof by the donor or maker as being for certain specified purposes inconsistent with the application thereof to the payments due under the Obligations, and the income derived therefrom to the extent specifically required by such designation or restriction. Borrower means the party named as such on the first page of this Security Deed, its legal representatives, successors, and assigns. Borrower Contracts means, collectively, the Loan Agreement, the notes issued under the Loan Agreement, this Security Deed and the Security Agreement. Bond Resolution is defined in the recitals of this Security Deed. Collateral means, collectively, the Premises, the Rents, the Leases, the Leasehold Estate and the Property that is the subject of a grant of a security interest in Section 202 hereof. Contract Documents means any and all tenant contracts, license agreements, rental agreements, franchise agreements, management contracts, construction contracts, renovation agreements, development agreements, project management agreements, architect s agreements, plans and specifications and other contracts, licenses, and permits now or hereafter affecting any Property located at the Locations, including, without limitation, the contracts described in Exhibit B hereto (as the same may be supplemented from time to time), together with all rights and privileges of any nature thereunder accruing, together with any changes, renewals, supplements, addenda, amendments, consolidations, extensions, revisions, modifications, or guarantees of performance of obligations to the Borrower under the foregoing contracts, all of the Borrower s rights and title to modify, alter, or amend the foregoing contracts, to terminate the foregoing contracts, and to waive or release the performance or observance of any obligation or condition of the foregoing contracts, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise). Equipment means all machinery, apparatus, equipment, fittings, furniture, furnishings, fixtures (whether actually or constructively attached or affixed to the land located at the Locations or to any buildings, structures, or other improvements located thereon and including all trade, domestic, and ornamental fixtures), and other articles of tangible personal property of 4 every kind, description, and nature whatsoever now or hereafter located at, in, upon, or under the Locations or the buildings, structures, or other improvements at the Locations or used or usable in connection with any present or future operations conducted or to be conducted at the Locations or the buildings, structures, or other improvements at the Locations, and all parts, accessories, and special tools and all increases, additions, and accessions thereto and substitutions and replacements therefor, including, without limiting the generality of the foregoing, all building materials, supplies, goods, machinery, fixtures, and equipment now or hereafter delivered to the Locations and placed on the land located at the Locations for the purpose of being affixed to or installed or incorporated or otherwise used in the buildings, structures, or other improvements now or hereafter located at the Locations or on any part or parcel of the land located at the Locations, including but not limited to, lumber, plaster, cement, shingles, roofing, plumbing, pipe, lath, wallboard, cabinets, nails, sinks, toilets, furnaces, heaters, brick, tile, water heaters, screens, window frames, glass, doors, flooring, paint, lighting fixtures and unattached refrigerating, and cooking, heating, and ventilating appliances and equipment, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise). Event of Default is defined in the Loan Agreement. General Intangibles means all general intangibles received by or on behalf of the Borrower from or in connection with the ownership, operation, or leasing of the Property located at the Locations and all rights to receive the same, including, without limitation, all choses in action, causes of action, corporate or other business records, deposit accounts, inventions, designs, patents, patent applications, trademarks, trade names, trade secrets, goodwill, copyrights, registrations, licenses, franchises, customer lists, tax refund claims, computer programs, software, all claims under guaranties, security interests or other security held by or granted to the Borrower to secure payment of any of the Accounts by an Account Debtor, all rights to indemnification, all supporting obligations, all letter of credit rights, and all other intangible property of every kind and nature (other than Accounts and Contract Documents), in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise); excluding, however, all gifts, grants, bequests, donations, and contributions that are specifically designated or restricted at the time of making thereof by the donor or maker as being for certain specified purposes inconsistent with the application thereof to the payments due under the Obligations, and the income derived therefrom to the extent specifically required by such designation or restriction. Gross Receipts means all the right, title and interest of the Borrower in and to amounts received by or on behalf of the Borrower from the ownership and operation of the Project, including all revenues, rents, fees, charges or other income of any kind from any source received by the Borrower from the Project, including without limitation: (1) gross rentals received with respect to land, buildings, equipment, or other personal property owned, leased, or used by the Borrower; (2) gross revenues received from any and all leases of any lands, buildings, structures, equipment, or other personal property, or any parts thereof or therein owned, leased, or controlled by the Borrower as part of the Project including facilities related or appurtenant thereto; (3) all rents or fees payable by tenants of the Project; and (4) all proceeds of business interruption insurance and temporary condemnation awards (excluding, however, proceeds of damage, destruction and casualty insurance and permanent condemnation awards). 5

121 Ground Lease means the Ground Lease defined in the recitals of this Security Deed, as amended, modified or replaced. Ground Lessor means the Regents together with any successors or assigns. Indenture means the Indenture defined in the recitals of this Security Deed, as amended, modified, or replaced. Issuer means the party named as such on the first page of this Security Deed together with any successors or assigns, including, without limitation, the Trustee as provided in Section 606 hereof. Land is defined in GRANTING CLAUSE FIRST of this Security Deed. Leasehold Estate is defined in GRANTING CLAUSE THIRD of this Security Deed. Leases is defined in GRANTING CLAUSE SECOND of this Security Deed. Lien means any interest in Property securing an obligation owed to, or a claim by, a person other than the owner of the Property, whether such interest is based on the common law, statute, or contract, and including, but not limited to, the security interest, security title, or lien arising from a security agreement, mortgage, deed of trust, security deed, Capital Lease, encumbrance, charge, pledge, conditional sale, or trust receipt or a lease, consignment, or bailment for security purposes. The term Lien shall include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Property. For the purpose of this Security Deed, the Borrower shall be deemed to be the owner of any Property that it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other person for security purposes. Loan Agreement means the Loan Agreement defined in the recitals of this Security Deed, as amended, modified, or replaced. Locations means the Land, a legal description of which is attached hereto as Exhibit A (as the same may be supplemented from time to time), and, if Collateral is moved from the Land in violation of the terms of the Loan Agreement and the Security Agreement, any location to which such Collateral is moved. Obligations means all obligations, liabilities, covenants, agreements, and duties owing, arising, due, or payable from the Borrower to the Issuer of any kind or nature arising from or in connection with the Borrower Contracts, present or future, whether or not evidenced by any note or other instrument, whether direct or indirect (including those acquired by assignment), absolute or contingent, primary or secondary, due or to become due, now existing or hereafter acquired, together with all renewals, extensions, replacements, consolidations, and modifications thereof, in each case whether for principal, interest, fees, expenses, or any and all additional advances made by the Issuer to protect or preserve the Collateral or the lien, security title, and security interest created by this Security Deed and the Security Agreement in the Collateral, for taxes, assessments, or insurance premiums, or for the performance of any of the Borrower s obligations under the Borrower Contracts or otherwise. Permitted Encumbrance is defined in the Loan Agreement. 6 Person means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a joint venture, a trust, an unincorporated organization, a governmental unit or an agency, a political subdivision or instrumentality thereof, or any other group or organization of individuals. Premises is defined in GRANTING CLAUSE FIRST of this Security Deed. Project is defined in the recitals of this Security Deed. Property means, with respect to any Person, any and all rights, titles, and interests of such Person in and to any and all property, whether real or personal, tangible or intangible, and wherever situated. Regents is defined in the recitals of this Security Deed. Rental Agreement means the Rental Agreement, dated as of November 26, 2008, between the Borrower, as landlord, and the Regents, as tenant, as the same may be amended, modified, or replaced. Rents is defined in GRANTING CLAUSE SECOND of this Security Deed. Security Agreement means the Security Agreement, dated the date hereof, between the Borrower and the Issuer, as the same may be modified, amended or replaced from time to time. Security Deed means this and Leasehold Deed to Secure Debt and Assignment of Rents and Leases, as the same may be modified, amended or supplemented from time to time. Series 2010 Bonds is defined in the recitals of this Security Deed. Trustee means the trustee or the co-trustee at the time serving as such under the Indenture. The Bank of New York Mellon Trust Company, N.A., is the initial Trustee. Section 102. Interpretations. Except as otherwise defined herein, terms used in this Security Deed shall have the meaning assigned to such terms in the Loan Agreement. The table of contents and article and section headings of this Security Deed are for reference purposes only and shall not affect its interpretation in any respect. The use of the masculine, feminine, or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine, or neuter gender, as appropriate. [END OF ARTICLE I] 7 ARTICLE II SECURITY AGREEMENT Section 201. Security Agreement. This Security Deed is hereby made and declared to be a security agreement granting a security interest in the property described in Section 202 hereof pursuant to Article 9 of the Uniform Commercial Code as enacted in the State of Georgia, in order to allow the Issuer to proceed as to both (1) the Premises, the Rents, the Leases and the Leasehold Estate and (2) the property encumbered in Section 202 below in accordance with its rights and remedies in respect of the Premises, the Rents, the Leases and the Leasehold Estate, as allowed by Section (a) of the Official Code of Georgia Annotated, as amended. Reference is hereby made to the Security Agreement for the provisions setting forth and governing the Borrower s and the Issuer s rights and obligations in connection with the property encumbered in Section 202 hereof. The remedies upon an Event of Default in the security agreement contained in this Security Deed shall be (1) as prescribed in Article IV hereof, (2) as prescribed by general law, (3) as prescribed in the Security Agreement, and (4) as prescribed by the specific statutory consequences now or hereafter enacted and specified in Article 9 of the Uniform Commercial Code as enacted in the State of Georgia, all in the Issuer s sole discretion. Section 202. Grant of Security Interest. To secure the prompt payment and performance of the Obligations, the Borrower hereby grants to the Issuer a continuing security interest in and Lien upon the following Collateral and interests in Collateral of the Borrower: (a) Equipment, (b) Accounts, (c) General Intangibles, (d) Contract Documents, (e) Gross Receipts, (f) all accessions to, substitutions and replacements for, and products and cash and noncash proceeds of any or all of the foregoing Collateral described in (a), (b), (c), (d), or (e) above, including, without limitation, all payments of insurance (whether or not the Issuer is the loss payee thereof) and any indemnity, condemnation award, performance, labor, and material payment bond, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to, any of the Collateral described in (a), (b), (c), (d), or (e) above, and (g) all books and records (including, without limitation, customer lists, credit files, computer programs, print-outs, and other computer materials and records) of the Borrower pertaining to any of the Collateral described in (a), (b), (c), (d), (e), or (f) above. The security interest granted hereby is subject to Permitted Encumbrances. [END OF ARTICLE II] 8 ARTICLE III GENERAL COVENANTS AND PROVISIONS Section 301. Instruments of Further Assurance; Recording. (a) The Borrower covenants that it will do, make, execute and deliver, or cause to be done, made, executed and delivered, such amendments or supplements hereto and such further acts, assurances, documents, instruments, certificates, agreements, letters, representations and transfers as the Issuer may reasonably require to cure any defect in the Obligations or any other writings secured hereby or executed in connection herewith, in the execution hereof or thereof, or in the description of the Collateral or to better grant, bargain, convey, transfer, assign, and sell unto the Issuer the Premises, Rents, Leases and Leasehold Estate granted, bargained, conveyed, transferred, assigned, and sold hereunder, or intended so to be, or to properly evidence or give notice of the Obligations or of each lien securing payment of the Obligations or to perfect and protect the lien, security interest and security title created by this Security Deed. (b) The Borrower covenants that (i) upon the execution and delivery of this Security Deed and thereafter, from time to time, it shall cause this Security Deed and each amendment and supplement hereto (or a memorandum with respect hereto or to such amendment or supplement) to be filed, registered and recorded and to be refiled, reregistered, and rerecorded in such manner and in such places as may be required by any present or future law or by the Issuer in order to publish notice of and to fully protect the lien, security interest, and security title of this Security Deed upon the Collateral and (ii) it shall perform or cause to be performed from time to time any other act as required by law, and it shall execute or cause to be executed any and all instruments of further assurance that may be necessary for such publication and protection. Section 302. Warranties of Title. The Borrower will proceed with reasonable diligence to correct any defect in title to the Collateral should any such defect be found to exist after the execution and delivery of this instrument, and in this connection, should it be found after the execution and delivery of this instrument that there exists upon the Collateral any lien or encumbrance, other than a Permitted Encumbrance, equal or superior or subordinate in rank or priority to the lien, security interest, and security title created by this Security Deed, or should any such lien or encumbrance hereafter arise, then, unless the Issuer or the Trustee is the only holder of such other lien or encumbrance, or the Issuer shall have given specific prior written consent to the creation or continuation thereof, the Borrower will promptly discharge and remove any such lien or encumbrance from the Collateral. Section 303. General. For the purpose of better securing payment of the Obligations, the Borrower covenants and agrees with the Issuer that it shall notify the Issuer in writing promptly after learning of any event that may materially and adversely affect any of the Collateral or the Issuer s lien, security interest or security title on any of the Collateral and shall take such action as may be necessary to preserve the Issuer s rights affected thereby. Section 304. Releases of Collateral. Notwithstanding the existence at any time of junior liens or encumbrances on the Collateral, the Issuer, without notice to anyone and without regard to the consideration, if any, paid therefor, may release any part of the Collateral or any person liable for any part of the Obligations, without in any way affecting the priority of this Security Deed upon any part of the Collateral not expressly released. In addition, the Issuer may agree with any party directly or indirectly obligated with respect to any part of the Obligations or 9

122 having any interest in the Collateral to extend the time for payment of any part or all of the Obligations, and such agreement by the Issuer shall not in any way release or impair the priority of this Security Deed against the right, title, or interest of all parties having any interest in the Collateral junior and inferior to this Security Deed. Section 305. Subrogation. The Issuer shall be subrogated to all right, title, equity, liens and claims of all persons to whom the Issuer has paid or pays moneys, in settlement of claims, liens or charges or in acquisition of right or title for the Borrower s benefit under this Security Deed or for the benefit and account of the Borrower. Section 306. Non-Residential Status of Premises. The Borrower represents and warrants to the Issuer that neither all of the Premises nor any part thereof is to be used as a dwelling place by the Borrower at the time this Security Deed is entered into and, accordingly, the notice requirement of Sections and of the Official Code of Georgia Annotated shall not be applicable to any exercise of the power of sale contained in this Security Deed. Section 307. Covenants Regarding Ground Lease. The Borrower covenants and agrees as follows with respect to the Ground Lease: (a) Without the prior written consent of the Issuer, the Borrower shall not terminate, modify, alter, amend, abrogate or otherwise change the Ground Lease, and the Borrower shall not permit or suffer or acquiesce in any termination of the Ground Lease. (b) The Borrower shall not consent to any subordination of the Leasehold Estate to any mortgage conveying or encumbering any part or all of the Premises. For purposes of this paragraph, the term mortgage shall mean and shall include deeds to secure debt, security agreements, mortgages and other liens or encumbrances on real or personal property that secure any obligation or debt. (c) The Borrower shall pay all rent, additional rent, and other sums payable by the lessee under the Ground Lease as and when the same shall become due and payable and shall fully and completely perform, observe, satisfy and comply with all of the terms, covenants, conditions, agreements, requirements, restrictions and provisions of the Ground Lease within the periods (exclusive of grace or cure periods) provided in the Ground Lease, and the Borrower shall immediately notify the Issuer in writing of any failure by the Borrower to do so. The Borrower shall do all things necessary to preserve, maintain and prevent any impairment of the Ground Lease and the Leasehold Estate. (d) The Borrower shall immediately notify the Issuer in writing of, and transmit to the Issuer a copy of, any notice received from the Ground Lessor, including but not limited to any notice claiming or asserting any default or event of default by the Borrower under the Ground Lease, or asserting any grounds for termination of the Ground Lease. (e) Within a reasonable period of time after the Issuer requests, the Borrower shall exercise its best efforts to obtain from the Ground Lessor and deliver to the Issuer a certificate executed by the Ground Lessor to the effect: (i) that the Ground Lease is in full force and effect and have not been modified, or, if modified, that copies of all modifications are attached to the certificate, (ii) that no notice of any default or event of default under, or of any grounds for termination under, the Ground Lease has been given, or, if any such notice has been given, that 10 copies are attached to the certificate, (iii) that all rent, additional rent, and other sums payable by the lessee under the Ground Lease have been paid through the date of the certificate or, if not, that the amounts which have not been paid are specified in detail in the certificate, and (iv) that no default or event of default by the lessee exists under the Ground Lease to the knowledge of the Ground Lessor or, if a default or an event of default does exist to the knowledge of the Ground Lessor, that the same is described in detail in the certificate. (f) Immediately upon request by the Issuer, the Borrower shall execute and deliver to the Issuer such documents, instruments, letters and other items as the Issuer may deem necessary or desirable to permit the cure of any default or event of default under the Ground Lease, to permit the elimination of any grounds for termination under the Ground Lease, or to permit the Issuer to take such other action as the Issuer shall deem necessary, desirable, or proper under the Ground Lease. (g) The Leasehold Estate conveyed by this Security Deed is not intended to, and shall not, merge into the fee simple estate in the Land. The Leasehold Estate shall be kept and remain separate and distinct, regardless of whether the Borrower acquires the fee simple estate in the Land or any part of the Land; provided, however, that, if the Borrower shall become the owner of fee simple title to the Property, or any part or portion thereof, then such fee simple title will immediately be and become subject to this Security Deed so long as the Obligations, or any portion thereof, remain unpaid, and the Borrower shall execute and deliver such further documents and instruments as the Issuer may deem necessary or desirable to subject such fee simple title to this Security Deed. (h) Any default or event of default under the Ground Lease, any failure by the Borrower to pay all rent, additional rent, and other sums payable by the lessee under the Ground Lease as and when the same shall become due and payable, or any other failure by the Borrower fully and completely to perform, observe, satisfy or comply with, or any breach by the Borrower in any respect of, any of the terms, covenants, conditions, agreements, requirements, restrictions or provisions of the Ground Lease (whether or not such failure constitutes a default or an event of default under the Ground Lease), shall constitute a breach of the covenants contained in this Security Deed. The Issuer shall determine, in the Issuer s judgment, whether any such default, event of default, failure, or breach exists under the Ground Lease at any time. In the event the Issuer determines that such a default, event of default, failure, or breach exists under the Ground Lease, the Issuer may, at the Issuer s election at any time thereafter, take any such action, advance or pay any money, or perform any act that the Issuer considers necessary or appropriate to cure or to eliminate the same, and all money so advanced or paid and all expenses incurred by the Issuer in connection with any such action or performance shall become part of the Obligations and shall be secured by this Security Deed. Section 308. Ground Lease Bankruptcy Provisions. (a) In the event that any proceeding shall be commenced by or against the Ground Lessor, or any successor in title to all or any portion of the Premises or the interest of the Ground Lessor under the Ground Lease, under the Federal Bankruptcy Code, 11 U.S.C. 101 et seq., hereinafter called the Bankruptcy Code, the Borrower covenants and agrees as follows: (1) The lien, security interest and security title of this Security Deed shall specifically cover all of the Borrower s rights and remedies at any time arising under or pursuant to Section 365(h) of the Bankruptcy Code, including, without limitation, all rights of the Borrower under Section 365(h)(1)(A)(i) to treat the Ground Lease as terminated, or all rights of 11 the Borrower to remain in possession of the Premises under Section 365(h)(1)(A)(ii). The Borrower shall not, without the prior written consent of the Issuer, elect to treat the Ground Lease as terminated under Section 365(h)(1)(A)(i) of the Bankruptcy Code. Any such election made without the prior written consent of the Issuer shall be null and void. (2) The Borrower hereby unconditionally transfers, assigns, conveys and sets over unto the Issuer all of the Borrower s claims and rights to the payment of damages arising from any rejection by the Ground Lessor of the Ground Lease under the Bankruptcy Code. The Issuer shall have the right to proceed in its own name or in the name of the Borrower in respect of any claim, demand, action, cause of action, suit, or proceeding relating to the rejection of the Ground Lease, including, without limitation, the right, to the exclusion of the Borrower, to file, prosecute, and cast votes on account of any proofs of claim, complaints, motions, applications, notices, and other documents, in any proceeding with respect to the Ground Lessor under the Bankruptcy Code. This assignment constitutes a present, irrevocable, and unconditional assignment of the foregoing claims, rights, and remedies, and shall continue in full force and effect until the Obligations shall be paid and satisfied in full. Any amounts received by the Issuer as damages arising out of the rejection of the Ground Lease as aforesaid shall be applied first to all costs and expenses incurred by the Issuer in connection with the exercise of any of its rights or remedies under this paragraph (2), including attorneys fees, and the remainder shall be applied to the payment of the Obligations. (3) Without the prior written consent of the Issuer, the Borrower shall not exercise any right pursuant to Section 365(h)(1)(B) of the Bankruptcy Code to offset against the rent reserved under the Ground Lease the amount of any damages caused by the nonperformance by the Ground Lessor of its duties and obligations under the Ground Lease after the rejection by the Ground Lessor of the Ground Lease under the Bankruptcy Code. The Borrower shall indemnify and hold the Issuer harmless from and against any and all claims, demands, actions, causes of action, suits, proceedings, liabilities, damages, losses, costs, and expenses of every kind or nature whatsoever, including, without limitation, attorneys fees, arising out of, by reason of, or in connection with any offset by the Borrower against the rent reserved under the Ground Lease, as aforesaid. (4) The Issuer shall have the option, to the exclusion of the Borrower, to conduct and control, with counsel of the Issuer s choice, any litigation pending in any proceeding with respect to the Ground Lessor under the Bankruptcy Code. The Issuer may proceed in its own name or in the name of the Borrower in connection with any such proceeding, and the Borrower shall execute any and all powers, authorizations, consents, or other documents and instruments required by the Issuer in connection therewith. The Borrower shall not commence any action, suit, proceeding, or case, or file any application or make any motion, with respect to the Ground Lease in any proceeding under the Bankruptcy Code without the prior written consent of the Issuer. (5) The Borrower shall notify the Issuer orally of the commencement of any proceeding by or against the Ground Lessor under the Bankruptcy Code, promptly upon the Borrower s receiving notice thereof. The Borrower shall thereafter immediately give written notice thereof to the Issuer, setting forth any information available to the Borrower as to the date of the filing, the court in which such proceeding is pending, and the relief sought therein. The Borrower shall deliver to the Issuer, immediately upon receipt thereof by the Borrower, copies of any and all notices, summonses, pleadings, applications, and other documents received by the Borrower in connection with any such proceeding. 12 (b) If there shall be commenced by or against the Borrower any proceeding under the Bankruptcy Code and the Borrower, as lessee under the Ground Lease, shall determine to reject the Ground Lease pursuant to Section 365(a) of the Bankruptcy Code, the Borrower shall give the Issuer not less than ten (10) days prior written notice of the date upon which the Borrower shall apply to the Bankruptcy Court for authority to reject the Ground Lease. The Issuer shall have the right, but not the obligation, within such ten (10) day period, to give the Borrower written notice stating that (i) the Issuer demands that the Borrower assume and assign the Ground Lease to the Issuer pursuant to Section 365 of the Bankruptcy Code, and (ii) the Issuer covenants to cure or provide adequate assurance of prompt cure of all defaults, and provide adequate assurance of future performance, under the Ground Lease. If the Issuer gives the Borrower the notice described in the preceding sentence, the Borrower shall not seek to reject the Ground Lease, and shall assume the Ground Lease and assign the Ground Lease to the Issuer within thirty (30) days after the date of the Issuer s notice. Effective upon the entry of an order for relief in respect of the Borrower in any proceeding under Chapter 7 of the Bankruptcy Code, the Borrower hereby assigns and transfers to the Issuer a non-exclusive right to apply to the Bankruptcy Court under Section 365(d)(1) of the Bankruptcy Code for an order extending the period during which the Ground Lease may be rejected or assumed. Section 309. Subordination of Rental Agreement. Paragraph 24 of Exhibit A to the Rental Agreement provides that the Rental Agreement shall be subject and subordinate to all existing liens and encumbrances against the Premises (as such term is defined in the Rental Agreement) 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 Regents is not in default under the Rental Agreement, to the continuing possession of such Premises by the Regents under the same financial provisions and substantive terms and conditions set forth in the Rental Agreement. In order to confirm that the Rental Agreement is subordinate to this Security Deed, the Issuer agrees, so long as the Regents, as tenant under the Rental Agreement, is not in default thereunder, to the continuing possession of the Premises (as defined in the Rental Agreement) by the Regents, under the same financial provisions and substantive terms and conditions set forth in the Rental Agreement. [END OF ARTICLE III] 13

123 ARTICLE IV REMEDIES UPON EVENT OF DEFAULT Section 401. Remedies Upon Event of Default. If an Event of Default shall occur and is continuing, the Issuer shall have the right and option to exercise any or all of the following remedies, or any or all other remedies then provided by law or in equity: (a) The Issuer may proceed to protect and enforce its rights under this Security Deed by suit in equity, action at law, or other appropriate proceedings, including actions for the specific performance of any covenant or agreement contained in this Security Deed or in aid of the exercise of any power granted in this Security Deed, or may proceed in any other manner to enforce the payment of the Obligations and any other legal or equitable right of the Issuer. (b) The Issuer may, as provided in and subject to the terms of the Loan Agreement, declare all or any portion of the Obligations to be immediately due and payable, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by the Borrower. (c) The Borrower, upon the demand of the Issuer, shall forthwith surrender the actual possession of, and it shall be lawful for the Issuer, by such officer or agent as it may appoint, with or without force or process of law, to enter and take possession of, and exclude the Borrower and its agents and servants wholly from, all or any part of the Premises together with the books, papers, and accounts of the Borrower pertaining thereto, without the appointment of a receiver, or an application therefor, and to hold, operate, store, use, control, and manage the same and conduct the business thereof and from time to time make all necessary and appropriate repairs, maintenance, renewals, restorations, replacements, and improvements and procure all necessary and appropriate insurance as desired by the Issuer; and the Issuer may lease the Collateral or any part thereof in the name and for the account of the Borrower and collect, receive, and sequester the rents, revenues, issues, earnings, income, products, and profits therefrom and, out of the same and any moneys received from any receiver of any part thereof, pay, or set up proper reserves for the payment of, all proper costs and expenses of so taking, holding, and managing the same, including reasonable compensation to the Issuer and its agents and counsel and for any charges of the Issuer hereunder, any taxes and assessments and other charges prior to the lien, security interest, and security title of this Security Deed, and all expenses of such maintenance, repairs, and improvements of the Collateral and apply the remainder of the moneys so received in accordance with the provisions of Section 403 hereof. The Issuer may complete the construction of any improvements that have been undertaken but not completed, and the Issuer for such purpose may use all available materials and equipment at the Premises and may acquire all other necessary materials and equipment and employ contractors and other employees. The authority and agency conferred hereby upon the Issuer shall be deemed to create a power coupled with an interest and shall be irrevocable. (d) The Issuer may sell the Collateral, or any part thereof or any interest therein separately, at the Issuer s discretion, with or without taking possession thereof, at public sale before the courthouse door of the county in which the Premises, or a part thereof, is located, to the highest bidder for cash, after first giving notice of the time, place, and terms of such sale by advertisement published once a week for four weeks (without regard for the number of days) in a newspaper in which advertisements of sheriff s sales are published in such county. The advertisement so published shall be notice to the Borrower, and the Borrower hereby waives all 14 other notices. The Issuer may bid and purchase at any such sale, and credit upon all or any part of the Obligations shall be deemed cash paid for the purposes of this Article. The Issuer may execute and deliver to the purchaser or purchasers at any such sale a sufficient conveyance of the Collateral or any part thereof or interest therein sold. The Issuer s conveyance may contain recitals as to the occurrence of an Event of Default under this Security Deed, which recitals shall be presumptive evidence that all preliminary acts prerequisite to such sale and conveyance were duly complied with in all respects. The recitals made by the Issuer shall be binding and conclusive upon the Borrower, and the sale and conveyance made by the Issuer shall completely divest the Borrower of all right, title, interest, claim, demand, or equity that the Borrower may have had in, to, and under the Collateral, or the part thereof or interest therein sold, and shall vest the same in the purchaser or purchasers at such sale. The Issuer may hold one or more sales hereunder until the Obligations have been satisfied in full. The Collateral or any part thereof may be sold in such parcels, manner, or order as the Issuer desires, and one or more exercises of the power of sale herein granted shall not extinguish or exhaust the power of sale unless the entire Collateral is sold or the Obligations are paid or performed in full. The purchaser, upon paying the purchase money to the Issuer and receiving its receipt therefor, need not inquire into the authorization, necessity, expediency, or regularity of the sale and need not see to or in any way be responsible for the application by the Issuer of any part of the purchase money. The Borrower hereby irrevocably constitutes and appoints the Issuer as the Borrower s agent and attorney-in-fact to make such sale, to execute and deliver such conveyance, and to make such recitals, and the Borrower hereby ratifies and confirms all of the acts and doings of the Issuer as the Borrower s agent and attorney-in-fact hereunder. The Issuer s agency and power as attorneyin-fact hereunder are coupled with an interest, cannot be revoked by death, incompetence, bankruptcy, dissolution, reorganization, insolvency, or otherwise, and shall not be exhausted until the Obligations have been satisfied in full. In the event of any sale pursuant to the agency and power herein granted, the Borrower shall be and become a tenant holding over and shall deliver possession of the Premises, or the part thereof or interest therein sold, to the purchaser or purchasers at the sale or be summarily dispossessed in accordance with the provisions of law applicable to tenants holding over. (e) Instead of exercising the power of sale granted in paragraph (d) above, the Issuer shall have the right to foreclose the lien and security title created by this Security Deed by proceedings in equity as provided by law. (f) With respect to the Rents and Leases, the Issuer may, personally or through an agent selected by the Issuer, take possession and control of the Premises and the Leases, or any part thereof, and serve notice of the assignment of any Leases, and demand, sue for, receive, collect, and give full acquittance for all Rents theretofore accrued and all thereafter accruing therefrom. The Issuer or the Issuer s agent may use against the Borrower or any other person such lawful or peaceable means as the person acting may see fit to enforce the collection of any such Rents and to secure possession of the Premises and the Leases, or any part thereof, and may settle or compromise, on any terms as the Issuer or the Issuer s agent sees fit, the liability of any person or persons for any such Rents. Particularly, the Issuer or the Issuer s agent (i) may institute and prosecute to final conclusion actions of forcible entry and detainer, or actions of trespass to try title, or actions for damages, or any other appropriate actions, in the name of the Issuer or in the name of the Borrower, and may settle, compromise, or abandon any such actions as the Issuer or the Issuer s agent may see fit, (ii) may contest, litigate, and compromise any claim for rebate, setoff, loss, demand, abatement, or reduction in connection with the Rents or the Leases, or (iii) lease or rent any of the Premises and employ and pay rental agents or brokers commissions to facilitate such leasing or renting, such commissions to be added to the Obligations. The 15 Borrower binds itself and all persons and concerns claiming by, through, or under the Borrower to take whatever lawful or peaceful steps the Issuer or the Issuer s agent may ask the Borrower or any such person or concern so claiming to take for such purposes, including the institution and prosecution of actions of the character above stated; provided, however, that the Issuer shall not be required to collect any Rents or be liable or chargeable for failure so to do. (g) The Issuer may pay any sum or sums deemed necessary or appropriate by the Issuer to protect or preserve the Collateral or the Issuer s interest therein. (h) The Issuer may exercise any or all rights and remedies contained in any other instrument, document, agreement, or other writing heretofore, concurrently herewith, or in the future executed by or binding upon the Borrower in connection with any transaction that resulted in any part of the Obligations, including but not limited to the Loan Agreement and the Security Agreement. (i) With respect to the portion of the Collateral constituting personal property or fixtures (the Personalty ) in which a security interest is herein granted, the Issuer shall have the right to foreclose the liens and security interests created under this Security Deed by any available judicial procedure or without judicial process; to enter any premises where any of the Personalty may be located for the purpose of taking possession of or removing the same; to sell, assign, lease, or otherwise dispose of the Personalty, or any part thereof, either at public or private sale, in lots or in bulk, for cash or credit or otherwise, with or without representations or warranties, and upon such terms as shall be acceptable to the Issuer, all at the Issuer s sole option and as the Issuer, in its sole discretion, may deem advisable, and the Issuer may bid or become a purchaser at any such sale, free from any right of redemption, which is hereby expressly waived by the Borrower, and the Issuer shall have the right at its option to apply or credit the amount of all or any part of the Obligations against the purchase price bid by the Issuer at any such sale. If notification to the Borrower of intended disposition by the Issuer of any of the Personalty is required by law, such notification shall be deemed to have been reasonably and properly given if personally delivered to the Borrower or deposited in the United States mail with postage prepaid, duly addressed to the Borrower at the address specified for notices to the Borrower in this Security Deed, at least ten (10) business days prior to such disposition. The Borrower shall be liable to the Issuer and shall pay to the Issuer on demand any deficiency that may remain after such sale, disposition, collection, or liquidation of the Personalty, and the Issuer in turn agrees to remit to the Borrower any surplus remaining after the Obligations have been paid in full. If any of the Personalty shall require repairing, maintenance, preparation, or the like, or is in process or other unfinished state, the Issuer shall have the right, but shall not be obligated, to do such repairing, maintenance, preparation, processing, or completion of manufacturing for the purpose of putting the same in such saleable form as the Issuer shall deem appropriate, but the Issuer shall have the right to sell or dispose of such Personalty without such processing. The Borrower shall, at the Issuer s request, assemble all the Personalty and make it available to the Issuer at places within any county in which the Collateral, or a part thereof, is located, whether at the Premises or elsewhere, and shall make available to the Issuer all premises and facilities of the Borrower for the purpose of the Issuer s taking possession of the Personalty or of removing or putting the Personalty in saleable form. To facilitate the exercise by the Issuer of the rights and remedies set forth in this paragraph, the Borrower hereby constitutes the Issuer or its agents, or any other person whom the Issuer may designate, attorney-in-fact for the Borrower, at the Borrower s cost and expense, to exercise all or any of the following powers, which appointment, being coupled with an interest, shall be irrevocable, shall continue until the Obligations have been paid and satisfied in full, and shall be in addition to any other rights and remedies that the 16 Issuer may have: (i) to remove from any premises where the same shall be located any and all documents, instruments, files, and records, and any receptacles and cabinets containing the same, relating to the Personalty, and the Issuer may, at the Borrower s cost and expense, use such of the personnel, supplies, and space of the Borrower at the Borrower s place of business as may be necessary to properly administer and control the Personalty and realizations thereon; and (ii) to take or bring in the Issuer s name or the name of the Borrower all steps, actions, suits, or proceedings deemed by the Issuer necessary and desirable to realize upon the Personalty. THE BORROWER HEREBY WAIVES ANY AND ALL RIGHTS THE BORROWER MAY HAVE TO NOTICE OR HEARING PRIOR TO SEIZURE BY THE ISSUER OF THE PERSONALTY, WHETHER BY WRIT OF POSSESSION OR OTHERWISE. Nothing herein shall limit the Issuer from exercising any and all other remedies available to it at law or in equity. Section 402. Appointment of Receivers. (a) If an Event of Default occurs and is continuing, a receivership may be necessary to protect the Collateral, whether before or after maturity of the Obligations, or at the time of or after the institution of suit to collect the principal of, premium (if any), or interest on the Obligations, or to enforce this Security Deed; accordingly, the Issuer shall, as a matter of strict right and regardless of the value of the Collateral or of the solvency of any party bound for the payment of the Obligations, have the right to the appointment on ex parte application and without notice to the Borrower, by any court having jurisdiction, of a receiver to take charge of, manage, preserve, protect, and operate the Collateral and any business or businesses located thereon, to collect the revenues, rents, issues, profits, products, and income thereof, to make all necessary and needed repairs, to complete the construction of any improvements that have been undertaken but not completed, to pay all taxes and assessments against the Collateral and insurance premiums for insurance thereon, and after the payment of the expenses of the receivership, including reasonable attorneys fees to the Issuer s attorney, and after compensation for management of the Collateral, to apply the net proceeds to pay the Obligations or in such manner as the court shall direct. All such expenses shall become Obligations. (b) The receiver or its agents shall be entitled to enter upon and take possession of any part and all of the Collateral, together with any and all businesses conducted and all business assets used therewith or thereon, or any part or parts thereof, and to operate and conduct the business or businesses, or complete construction of improvements, to the same extent and in the same manner as the Borrower might lawfully do. The receiver, personally or through its agents or attorneys, may exclude the Borrower and its subsidiaries, agents, servants, and employees wholly from the Collateral and may have, hold, use, operate, manage, and control the same and each and every part thereof, and in the name of the Borrower, its subsidiaries or agents, may exercise all of their rights and powers and use all of the then existing items of security and Collateral, materials, current supplies, stores, and assets and, at the expense of Collateral, may maintain, restore, complete construction, insure, and keep insured the properties, equipment, and apparatus provided or required for use in connection with such business or businesses, and may make all necessary and proper repairs, renewals, and replacements and all such useful alterations, additions, betterments, and improvements as the receiver may deem judicious. (c) Such receivership shall, at the option of the Issuer, continue until full payment of the Obligations, title to and interest in the Collateral having passed by sale under the powers granted in this Security Deed, or the Event of Default having been cured. 17

124 Section 403. Application of Proceeds. The Issuer shall pay, distribute, and apply the proceeds of any disposition of the Collateral as provided in Section 806 of the Indenture. Section 404. Non-Exclusivity and Waiver of Remedies. No lien, right, or remedy herein conferred upon or otherwise available to the Issuer is intended to be or shall be construed to be exclusive of any other available lien, right, or remedy, but each and every such lien, right, or remedy shall be cumulative and shall be in addition to every other lien, right, or remedy given hereunder or now or hereafter existing at law or in equity or by statute, including, without limitation, the right of the Issuer to take legal action to collect the Obligations without taking action with respect to the Collateral. No delay or omission to exercise any right, power, or remedy accruing upon any default or Event of Default shall impair any such right, power, or remedy or shall be construed to be a waiver of any such default or Event of Default, or an acquiescence therein, but every such right, power, or remedy may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default hereunder shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. The giving, taking, or enforcement of any other or additional security or guaranty for the payment of the Obligations shall not operate to prejudice, waive, or affect the security of this Security Deed or any rights, powers, or remedies hereunder, nor shall the Issuer be required to first look to, enforce, or exhaust such other additional security or guarantees. The Issuer may, at the Issuer s election and at the Issuer s discretion, exercise each and every right, power, and remedy hereunder concurrently or separately or in any combination. Section 405. Abandonment of Sale; Termination of Proceedings. (a) If enforcement of the power of sale granted in Section 401(d) hereof should be commenced by the Issuer, the Issuer may at any time before the sale abandon the sale, and may at any time or times thereafter again commence enforcement of the power of sale granted in Section 401(d) hereof; or, irrespective of whether such enforcement is commenced by the Issuer, the Issuer may at any time after an Event of Default institute suit for collection of all or any part of the Obligations or enforcement of the lien, security interest, and security title of this Security Deed or both. If the Issuer should institute suit for collection of the Obligations and enforcement of the lien, security interest, and security title of this Security Deed, the Issuer may at any time before the entry of final judgment dismiss the same and sell the Collateral in accordance with the provisions of this Security Deed. (b) In case the Issuer shall have proceeded to enforce any right under this Security Deed by the appointment of a receiver, by entry, or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Issuer, then and in every such case the Borrower and the Issuer shall be restored to their former positions and rights hereunder, and all rights, remedies, and powers of the Issuer shall continue unimpaired as if no such proceedings had been taken. Section 406. Non-Extinguishment of Lien, Security Interest, and Security Title. No single sale or series of sales by the Issuer under this instrument and no judicial foreclosure shall extinguish, impair, or affect the lien, security interest, or security title or exhaust the power of sale under this Security Deed except with respect to the items of property sold, but such lien, security interest, and security title and power shall exist for so long as, and may be exercised in any manner by law or in this instrument provided as often as, the circumstances require to give the Issuer full relief hereunder. 18 Section 407. Waivers. (a) All rights of marshalling of assets or sale in inverse order of alienation in the event of foreclosure of any lien or security title at any time securing the Obligations or any part thereof (including, but not limited to, the lien and security title hereby created) are hereby waived. (b) The Borrower agrees, to the full extent permitted by law, that in case of an Event of Default hereunder, neither the Borrower nor anyone claiming through or under it shall set up, claim, or seek to take advantage of any appraisement, valuation, stay, extension, homestead, dower, elective share, exemption, or redemption laws, statutory or otherwise, now or hereafter in force, in order to prevent or hinder the enforcement or foreclosure of this Security Deed, or the absolute sale of the Collateral, or the delivery of possession thereof immediately after such sale to the purchaser at such sale, and the Borrower, for itself and all who may at any time claim through or under it, hereby waives to the full extent that it may lawfully do so, the benefit of all such laws. (c) To the extent allowed by applicable law, the Borrower shall not at any time insist upon or plead or in any manner whatever claim or take the benefit or advantage of any stay or extension law or any law exempting the Collateral from attachment, levy, or sale on execution now or at any time hereafter in force in any locality where the Collateral or any part thereof may or shall be situated, and the Borrower hereby expressly waives all benefit and advantage of any such law or laws and covenants that the Borrower will not hinder, obstruct, delay, or impede the execution of any power herein granted and delegated to the Issuer, but that the Borrower will suffer and permit the execution of every such power as though no such law or laws had been made or enacted. (d) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE UNDER THE CONSTITUTION OF THE STATE OF GEORGIA OR THE CONSTITUTION OF THE UNITED STATES OF AMERICA TO NOTICE OR TO A JUDICIAL HEARING PRIOR TO THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED TO THE ISSUER BY THIS SECURITY DEED, AND THE BORROWER WAIVES THE BORROWER S RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE UNDER POWER DULY CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECURITY DEED ON THE GROUND (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT PRIOR NOTICE OR A PRIOR JUDICIAL HEARING. THE WAIVERS MADE BY THE BORROWER IN THIS PARAGRAPH AND ELSEWHERE IN THIS SECURITY DEED HAVE BEEN MADE VOLUNTARILY, INTELLIGENTLY, AND KNOWINGLY ON BEHALF OF THE BORROWER BY ITS DULY AUTHORIZED REPRESENTATIVES AFTER THEY HAVE READ AND UNDERSTOOD THIS SECURITY DEED AND HAVE BEEN AFFORDED AN OPPORTUNITY TO BE INFORMED BY COUNSEL OF THE BORROWER S POSSIBLE ALTERNATIVE RIGHTS, AND BY EXECUTING THIS SECURITY DEED THE DULY AUTHORIZED REPRESENTATIVES OF THE BORROWER ACKNOWLEDGE SO MAKING SUCH WAIVERS ON BEHALF OF THE BORROWER. [END OF ARTICLE IV] 19 ARTICLE V RENTS AND LEASES Section 501. Covenants Relating to Leases and Rents; Liability of the Issuer. (a) The Borrower covenants that: (1) The Borrower shall fully and faithfully perform all of its duties, covenants, and obligations as lessor, landlord, or owner of the Premises under the Leases and observe, satisfy, and comply with all of the terms, covenants, conditions, agreements, requirements, restrictions, and provisions of the Leases, and do all acts otherwise necessary to maintain and preserve the Rents, to prevent the termination of any of the Leases, except in the event of a default by the lessee or the tenant, and to prevent any diminishment or impairment of the value of the Leases or the Rents or the interest of the Borrower or the Issuer therein or thereunder, it being expressly understood and agreed that the Issuer neither undertakes nor assumes any of the Borrower s liabilities, responsibilities, duties, or obligations in connection with the Leases or the Rents. (2) The Borrower shall enforce the full and faithful performance of all of the duties and obligations of each of the tenants and lessees under the Leases, and the observance, satisfaction, and compliance with all of the terms, covenants, conditions, agreements, requirements, restrictions, and provisions of the Leases required to be observed, satisfied, or complied with by the tenants and lessees thereunder. (3) The Borrower shall appear in and prosecute and defend, as shall be necessary, any action or proceeding arising under, out of, with respect to, or in connection with any of the Leases, and, upon request by the Issuer, do so in the name of and on behalf of the Issuer, and pay all costs and expenses, including attorneys fees, incurred by the Issuer in connection therewith. (4) The Borrower shall not further assign the Leases or the Rents or terminate, cancel, alter, modify, or amend in any respect, or permit the termination, cancellation, alteration, modification, or amendment of, or accept the surrender of, any of the Leases without the prior written consent of the Issuer, except for Permitted Encumbrances. (5) The Borrower shall be the lessor or landlord under all of the Leases; provided, however, that the Borrower may appoint a leasing agent to act on its behalf upon prior written notice to the Issuer of the identity and mailing address of such leasing agent. (6) The Borrower shall not collect Rents for more than sixty (60) days in advance. (7) The Borrower shall fully and completely satisfy and comply with the provisions of Article 2 of Chapter 7 of Title 44 of the Official Code of Georgia Annotated, relating to security deposits, if applicable. (b) The Issuer shall not be liable to the Borrower for a failure to collect any part or all of the Rents, and the Issuer may be required to account for only such sums as the Issuer actually collects. 20 Section 502. Collections. (a) The Borrower hereby authorizes and empowers the Issuer, and hereby irrevocably and duly constitutes and appoints the Issuer, as the Borrower s attorney-in-fact, to receive any and all of the Rents, to collect any or all of the Rents, by such means and taking such action as the Issuer shall deem necessary, and to act in all other ways with respect to the Rents and the Leases for the Borrower and in the Borrower s place and stead. The Issuer shall have the right, as the Borrower s attorney-in-fact, but not the obligation, to take any action hereby authorized in the Borrower s name and to exercise any and all of the Borrower s rights and remedies, whether available at law or in equity or otherwise, with respect to the Rents or the Leases. The foregoing appointment of the Issuer as the Borrower s attorney-in-fact is coupled with an interest, cannot be revoked by death, incompetence, bankruptcy, insolvency, reorganization, dissolution, or otherwise and shall not terminate until the Obligations have been paid and satisfied in full. (b) The Borrower hereby directs, instructs, and demands each and every person, partnership, corporation, association, and other entity or organization now or hereafter owing any of the Rents to the Borrower to pay the Rents promptly and directly to the Issuer upon demand therefor by the Issuer. All payments so made shall have the same effect in satisfaction of the Rents as if made directly to the Borrower, and the Borrower shall not question or otherwise contest any such payment authorized hereby. By accepting the Borrower s delivery of this Security Deed, however, the Issuer agrees that the Rents shall be payable to and collected by the Borrower until such time as the Issuer may demand payment thereof directly to the Issuer and that the Issuer shall not demand such payment until the occurrence of an Event of Default; provided, however, that the Borrower s privilege to continue collecting the Rents shall automatically terminate if (i) the Borrower collects any installment of rent or any other payment (by cash, note, or otherwise) that is part of the Rents more than sixty (60) days in advance of the date such rent or other payment is due, except for advance payments required under any Lease for security deposits, brokerage commissions, or other economic reasons in the normal course of business or (ii) any security deposit, damage deposit, or other sum under or with respect to any of the Leases may be applied to rent by the terms of such Lease and is not delivered to the Issuer to hold upon demand by the Issuer. Section 503. Execution of Leases. The Borrower shall deliver to the Issuer originals or copies of all Leases. Unless the Issuer shall otherwise consent, the Borrower shall not enter into any Lease without each such instrument containing a provision that the rights of the parties thereunder are expressly subordinate to all of the rights and title of the Issuer under this Security Deed, subject to the tenant s or lessee s right of possession as long as it is not in default under such instrument. Section 504. Not Additional Security. The assignment of the Rents and the Leases made in this Security Deed shall not be deemed or construed to be merely additional security for the Obligations but rather primary and unconditional security. The Issuer may exercise all rights granted hereunder without regard to the existence, value, or adequacy of any other security for the Obligations held by the Issuer. All security for the Obligations is primary and unconditional security. The Borrower hereby authorizes, directs, and instructs any trustee or receiver in bankruptcy having possession of the Leases or the Rents or any of them to deliver the same to the Issuer upon the occurrence and continuation of an Event of Default and the exercise by the Issuer of its rights hereunder. [END OF ARTICLE V] 21

125 ARTICLE VI MISCELLANEOUS Section 601. Tenants at Will. Subject to Permitted Encumbrances, the Borrower agrees for itself and any and all persons or concerns claiming by, through, or under the Borrower, that if the Borrower shall hold possession of the Premises or any part thereof subsequent to the sale hereunder, the Borrower, or the parties so holding possession, shall become and be considered as tenants at will of the purchaser or purchasers at such sale; and any such tenant failing or refusing to surrender possession upon demand shall be guilty of forcible detainer and shall be liable to such purchaser or purchasers for reasonable rental on the Premises, and shall be subject to eviction and removal, forcible or otherwise, with or without process of law, all damages that may be sustained by any such tenant as a result thereof being hereby expressly waived. Section 602. Notice. Except where other notice is required by applicable law, all notices, requests, demands, directions, and other communications hereunder shall be in writing and shall be deemed to be sufficiently given or made when delivered personally to any party who is to receive the same or when sent by the method described in Section of the Loan Agreement, addressed as provided in Section 607 of this Security Deed. Section 603. Severability. In the event any item, term, or provision contained in this Security Deed is in conflict, or may hereafter be held to be in conflict, with the laws of the State of Georgia or of the United States of America, this Security Deed shall be affected only as to such particular item, term, or provision, and shall in all other respects remain in full force and effect. In the event that any part of the Obligations cannot lawfully be secured hereby, or in the event that the lien, security interest, or security title hereof cannot be lawfully enforced to pay any part of the Obligations, or in the event that the lien, security interest, or security title created by this Security Deed shall be invalid or unenforceable as to any part of the Obligations, then, and in any such event, all payments on the Obligations shall be deemed to have been first applied to the complete payment and liquidation of that part of the Obligations that is not secured by this Security Deed, and the unsecured portion of the Obligations shall be completely paid and liquidated prior to the payment and liquidation of the remaining and secured portion of the Obligations. Section 604. Governing Law. This Security Deed shall be governed, in all respects including validity, interpretation, and effect by, and shall be enforceable in accordance with, the laws of the State of Georgia and of the United States of America. Section 605. Amendments. No amendment or waiver of any provision of this Security Deed, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same is in writing and signed by the Borrower and the Issuer and is accomplished in accordance with the Indenture, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Section 606. Assignment and Binding Effect. This Security Deed shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of the Issuer the Trustee, the Bond Insurer and their respective successors, transferees, and assigns, and no person other than the Issuer the Trustee, the Bond Issuer and their assigns shall under any circumstances be deemed to be a beneficiary of any provision of this Security Deed. Without limiting the 22 generality of the foregoing, the Issuer may assign, grant a security interest in, or otherwise transfer this Security Deed to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to the Issuer herein or otherwise. As provided in the Loan Agreement, it is understood and agreed that the Issuer, contemporaneously with the execution and delivery of this Security Deed, will assign and grant a security interest in its rights under this Security Deed to the Trustee, together with its rights under other instruments, pursuant to the Indenture as authorized under the Bond Resolution, and the Borrower hereby consents to the assignment and grant of the security interest and hereby agrees that any notice to the Issuer herein required shall in addition be given to the Trustee at the address provided for in the Loan Agreement and that any consent of the Issuer shall not be deemed to have been given unless such consent is obtained in writing from the Trustee. Upon execution and delivery of the Indenture to the Trustee, all appointments, designations, representations, warranties, covenants, assurances, remedies, title, interest, privileges, directions, permits, licenses, and rights of every kind whatsoever herein conferred upon the Issuer shall be deemed to be conferred also upon the Trustee, as if the Trustee, rather than the Issuer, had originally entered into this Security Deed. The Borrower agrees that the assignments made of this Security Deed shall not subject the Issuer to or transfer or pass or in any way affect or modify any obligation of the Borrower under the Obligations, it being understood and agreed that all such obligations of the Borrower shall be and remain enforceable only against the Borrower. Section 607. Addresses. The addresses of the Borrower, the Issuer, and the Trustee are as follows: If to the Issuer: If to the Borrower: If to the Trustee: Savannah Economic Development Authority P. O. Box 128 Savannah, Georgia Telecopy: (912) Attention: President SSU Community Development I, LLC 3219 College Street, Box Savannah State University Savannah, Georgia Telecopy: (912) Attention: Manager The Bank of New York Mellon Trust Company, N.A. Corporate Trust and Services 900 Ashwood Parkway, Suite 425 Atlanta, GA Telecopy: (707) Attention: Cassandra Shedd The addresses set forth above may be changed as provided in Section of the Loan Agreement. Section 608. Controlling Provisions. The provisions of the Loan Agreement and the Security Agreement are not intended to conflict with this Security Deed in any respect. 23 SIGNATURES AND SEALS Section 609. Commercial Transaction. The interest of the Issuer hereunder and the obligations of the Borrower for the Obligations arise from a commercial transaction within the meaning of Section (1) of the Official Code of Georgia Annotated. Accordingly, pursuant to Section of the Official Code of Georgia Annotated, the Borrower waives any and all rights that the Borrower may have to notice prior to seizure by the Issuer of any interest in personal property of the Borrower that constitutes part of the Collateral, whether such seizure is by writ of possession or otherwise. Section 610. Extension, Rearrangement, or Renewal of Obligations. It is expressly agreed that any of the Obligations at any time secured hereby may be from time to time extended for any period, rearranged, or renewed, and that any part of the security herein described, or any other security for the Obligations, may be waived or released without in anywise altering, varying, or diminishing the force, effect, or lien of this Security Deed as to unaffected property; and the lien, security interest, and security title granted by this Security Deed shall continue as a prior lien, security interest, and security title on all of the Collateral not expressly so released, until all sums with interest and charges hereby secured are fully paid; and no other security now existing or hereafter taken to secure the payment of the Obligations or any part thereof or the performance of any obligation or liability whatever shall in any manner impair or affect the security given by this Security Deed; and all security for the payment of the Obligations or any part thereof and the performance of any obligation or liability shall be taken, considered, and held as cumulative. IN WITNESS WHEREOF, the Borrower has executed this Security Deed by causing its name to be hereunto subscribed by the Chairman or Vice Chairman of its sole member and by causing the corporate seal of its sole member to be impressed hereon and attested by such member s Secretary or Assistant Secretary; and the Issuer has evidenced its acceptance of this Security Deed by causing its name to be hereunto subscribed by its President and by causing the official seal of the Issuer to be impressed hereon and attested by its Assistant Secretary; all being done as of the day and year first above written. SSU COMMUNITY DEVELOPMENT I, LLC BY:, its sole member By: (SEAL) Attest: Section 611. Time is of the Essence. Time is and shall be the essence of this Security Deed. [END OF ARTICLE VI] Signed, sealed, and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: (NOTARIAL SEAL) (date) [Signatures and Seals Continued on Next Page] 24 25

126 [Signatures and Seals Continued from Preceding Page] EXHIBIT A DESCRIPTION OF LAND SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY By: President (SEAL) Attest: Assistant Secretary Signed, sealed, and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: (NOTARIAL SEAL) (date) 26 A-1 EXHIBIT B CONTRACT DOCUMENTS B-1

127 Appendix E

128 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

129 SECURITY AGREEMENT THIS SECURITY AGREEMENT, dated as of December 1, 2010, by and between SSU COMMUNITY DEVELOPMENT I, LLC (the Borrower ), a limited liability company formed and existing under the laws of the State of Georgia, and SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY (the Issuer ), a public body corporate and politic and an instrumentality of the State of Georgia; W I T N E S S E T H: WHEREAS, pursuant to a resolution adopted by the Issuer (the Bond Resolution ), and a Trust Indenture and Security Agreement, dated the date hereof (the Indenture ), between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee ), the Issuer has authorized the issuance of $36,475,000 in aggregate principal amount of its Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 (the Series 2010 Bonds ), the Series 2010 Bonds to be dated the date of issuance and delivery thereof, and to have a final stated maturity of June 15, 2041, and has authorized the execution and delivery of a Loan Agreement (the Loan Agreement ) with the Borrower, dated the date hereof, under the terms of which the Issuer agreed to lend the proceeds from the sale of the Series 2010 Bonds to the Borrower to finance, inter alia, the costs of constructing and equipping student housing facilities (the Project ) on the campus of Savannah State University located in the City of Savannah, Chatham County, Georgia, to be leased by the Borrower, as landlord, to the Board of Regents of the University System of Georgia (the Regents ), as tenant pursuant to certain Rental Agreements (collectively the Rental Agreement ); and WHEREAS, the Regents has leased the land on which the Project will be located to the Borrower pursuant to the terms of certain Ground Leases (collectively the Ground Lease ), between the Regents, as lessor, and the Borrower, as lessee; and WHEREAS, in order to evidence its payment obligations under the Loan Agreement, the Borrower has agreed to execute and deliver to the Issuer a promissory note (the Series 2010 Note ) in the original principal amount of $36,475,000, to be dated as of the date of issuance and delivery of the Series 2010 Bonds, and to have a final stated maturity of June 15, 2041, providing for loan repayments sufficient in time and amount to enable the Issuer to pay the principal of, premium, if any, and interest on the Series 2010 Bonds; and THE RIGHTS AND INTEREST OF THE SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY IN THIS SECURITY AGREEMENT HAVE BEEN ASSIGNED AND ARE THE SUBJECT OF A GRANT OF A SECURITY INTEREST TO THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., AS TRUSTEE, UNDER A TRUST INDENTURE AND SECURITY AGREEMENT, DATED THE DATE HEREOF. WHEREAS, the Borrower has agreed under the terms of the Loan Agreement to grant the Issuer a security interest in certain personal property constituting a portion of the Project, in certain revenues derived from the Borrower s ownership, operation and leasing of the Project, and in certain contracts to which the Borrower is a party, as security for its obligations under the Loan Agreement, including those evidenced by the Series 2010 Note, and certain other obligations of the Borrower to the Issuer; and WHEREAS, to secure its obligation to pay principal of, premium, if any, and interest on the Series 2010 Bonds, the Issuer has agreed under the terms of the Loan Agreement to assign and pledge and grant a first priority security interest in, all of its right, title, and interest in this Security Agreement, among other things, to the Trustee pursuant to the Indenture. NOW, THEREFORE, for and in consideration of the foregoing premises, the agreements contained herein, the sum of Ten Dollars ($10.00) paid by each party to the other, and other good and valuable consideration, all of which the Borrower and the Issuer acknowledge receiving as legally sufficient consideration at or prior to the execution of this Security Agreement, the Borrower and the Issuer agree as follows: Section 1. General Definitions. (a) The following words and terms shall have the meanings set forth below, unless the context clearly indicates otherwise. Account Debtor means any Person who is or may become obligated under or on account of an Account. Accounts means all accounts, contract rights, chattel paper, instruments, and documents (excluding Contract Documents) received by or on behalf of the Borrower from or in connection with the ownership, operation, or leasing of any property of the Borrower located at the Locations and all rights to receive the same, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise); excluding, however, all gifts, grants, bequests, donations, and contributions that are specifically designated or restricted at the time of making thereof by the donor or maker as being for certain specified purposes inconsistent with the application thereof to the payments due under the Obligations, and the income derived therefrom to the extent specifically required by such designation or restriction. Borrower means the party named as such on the first page of this Security Agreement, its legal representatives, successors, and assigns. Borrower Contracts means, collectively, the Loan Agreement, the note issued under the Loan Agreement, the Security Deed and this Security Agreement. Collateral means all of the property of the Borrower and interests in property of the Borrower described in Section 2 hereof. Contract Documents means any and all tenant contracts, license agreements, rental agreements, franchise agreements, management contracts, construction contracts, renovation agreements, development agreements, project management agreements, -2- architect s agreements, plans and specifications and other contracts, licenses, and permits now or hereafter affecting any property of the Borrower located at the Locations, including, without limitation, the contracts described in Exhibit B hereto (as the same may be supplemented from time to time), together with all rights and privileges of any nature thereunder accruing, together with any changes, renewals, supplements, addenda, amendments, consolidations, extensions, revisions, modifications, or guarantees of performance of obligations to the Borrower under the foregoing contracts, all of the Borrower s rights and title to modify, alter, or amend the foregoing contracts, to terminate the foregoing contracts, and to waive or release the performance or observance of any obligation or condition of the foregoing contracts, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise). Equipment means all machinery, apparatus, equipment, fittings, furniture, furnishings, fixtures of the Borrower (whether actually or constructively attached or affixed to the land located at the Locations or to any buildings, structures, or other improvements located thereon and including all trade, domestic, and ornamental fixtures), and other articles of tangible personal property of every kind, description, and nature whatsoever now or hereafter located at, in, upon, or under the Locations or the buildings, structures, or other improvements at the Locations or used or usable in connection with any present or future operations conducted or to be conducted at the Locations or the buildings, structures, or other improvements at the Locations, and all parts, accessories, and special tools and all increases, additions, and accessions thereto and substitutions and replacements therefor, including, without limiting the generality of the foregoing, all building materials, supplies, goods, machinery, fixtures, and equipment now or hereafter delivered to the Locations and placed on the land located at the Locations for the purpose of being affixed to or installed or incorporated or otherwise used in the buildings, structures, or other improvements now or hereafter located at the Locations or on any part or parcel of the land located at the Locations, including but not limited to, lumber, plaster, cement, shingles, roofing, plumbing, pipe, lath, wallboard, cabinets, nails, sinks, toilets, furnaces, heaters, brick, tile, water heaters, screens, window frames, glass, doors, flooring, paint, lighting fixtures and unattached refrigerating, and cooking, heating, and ventilating appliances and equipment, in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise). Event of Default means an Event of Default, as defined in the Loan Agreement. General Intangibles means all general intangibles received by or on behalf of the Borrower from or in connection with the ownership, operation, or leasing of the property of the Borrower located at the Locations and all rights to receive the same, including, without limitation, all choses in action, causes of action, corporate or other business records, deposit accounts, inventions, designs, patents, patent applications, trademarks, trade names, trade secrets, goodwill, copyrights, registrations, licenses, franchises, customer lists, tax refund claims, computer programs, software, all claims under guaranties, security interests or other security held by or granted to the Borrower to secure payment of any of the Accounts by an Account Debtor, all rights to indemnification, all supporting obligations, all letter of credit rights, and all other intangible property of every kind and nature (other than Accounts and Contract Documents), in each case, whether now owned or existing or hereafter acquired, created, or arising and howsoever the Borrower s interest therein may arise or appear (whether by ownership, security interest, claim, or otherwise); excluding, however, all gifts, grants, bequests, donations, and contributions that are specifically designated or restricted at the time of making thereof by the donor or maker as being for certain specified purposes inconsistent with the application thereof to the payments due under the Obligations, and the income derived therefrom to the extent specifically required by such designation or restriction. Issuer means the party named as such on the first page of this Security Agreement together with any successors or assigns, including, without limitation, the Trustee as provided in Section 15 hereof. Loan Agreement means the Loan Agreement defined in the recitals of this Security Agreement, as amended, modified, or replaced. Locations means the Primary Location and, if Collateral is moved from the Primary Location in violation of the terms of the Loan Agreement and this Security Agreement, any location to which such Collateral is moved. Primary Location means the location of the real property described on Exhibit A attached hereto (as the same may be supplemented from time to time). Security Agreement means this Security Agreement, as the same may be modified or amended from time to time. (b) Except as otherwise defined in subsection (a), terms used in this Security Agreement shall have the meaning assigned to such terms in the Loan Agreement. Unless otherwise defined herein or in the Loan Agreement, terms used in Article 9 of the Uniform Commercial Code ( UCC ) in effect in the State of Georgia are used herein as defined therein. (c) The terms herein, hereof, and hereunder and other words of similar import refer to this Security Agreement as a whole and not to any particular section, paragraph, or subdivision. Any pronoun used shall be deemed to cover all genders. The section titles appear as a matter of convenience only and shall not affect the interpretation of this Security Agreement. Section 2. Grant of Security Interest.To secure the prompt payment and performance of the Obligations, the Borrower hereby grants to the Issuer a continuing security interest in and Lien upon the following Collateral of the Borrower and interests in Collateral of the Borrower: (a) Equipment, (b) Accounts,

130 (c) General Intangibles, (d) Contract Documents, (e) Gross Receipts, (f) all accessions to, substitutions and replacements for, and products and cash and noncash proceeds of any or all of the foregoing Collateral described in (a), (b), (c), (d), or (e) above, including, without limitation, all payments of insurance (whether or not the Issuer is the loss payee thereof) and any indemnity, condemnation award, performance, labor, and material payment bond, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to, any of the Collateral described in (a), (b), (c), (d), or (e) above, and (g) all books and records (including, without limitation, customer lists, credit files, computer programs, print-outs, and other computer materials and records) of the Borrower pertaining to any of the Collateral described in (a), (b), (c), (d), (e), or (f) above. The security interest granted hereby is subject to Permitted Encumbrances. The security interest granted hereby is only upon Property of the Borrower and is not upon Property of the Regents. Section 3. Delivery of the Collateral.All instruments or cash constituting Collateral from time to time shall be delivered to the Issuer upon demand by the Issuer for such delivery promptly upon the receipt thereof by or on behalf of the Borrower. All such instruments or cash shall be held by or on behalf of the Issuer pursuant hereto and shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or endorsement or assignment in blank, all in form and substance satisfactory to the Issuer. Section 4. Representations and Warranties.The Borrower hereby represents and warrants as follows: (a) The Borrower is or will be the sole legal and beneficial owner of the Collateral free and clear of any Lien or transfer restriction, except for the security interest created by this Security Agreement and any Permitted Encumbrance. No other Person has or will have any right, title, interest, claim, or Lien in, on, or to the Collateral, other than a Permitted Encumbrance. No effective financing statement, assignment, or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office, except (i) such as may have been filed in favor of the Issuer relating to this Security Agreement, (ii) such as may have been filed to perfect any Permitted Encumbrance, and (iii) such as may be consented to in writing by the Issuer. (b) This Security Agreement creates valid security interests in favor of the Issuer in the Collateral, and the filing of the financing statements to be filed pursuant to Section of the Loan Agreement with respect to the Collateral and the taking of possession by the Issuer of all instruments and cash constituting Collateral from time to time will perfect and establish the priority of such security interests, securing payment of the Obligations. Upon such filing or possession, as the case may be, all filing, possession, and other actions necessary or desirable to perfect and protect such security interests will have been duly taken. (c) During the preceding seven years, the Borrower has not been known as or used any corporate, fictitious, or trade names, except for SSU Community Development I, LLC. (d) The Borrower has the full and unencumbered right to collect the Accounts, the Gross Receipts and the General Intangibles. (e) There is no other assignment of any of the Borrower s rights under the Contract Documents to any other person. (f) There is no default under the terms of the existing Contract Documents to the knowledge of the Borrower, and all Contract Documents remain in full force and effect, and there is no default thereunder or any state of facts that would, with the passage of time or the giving of notice, or both, constitute a default on the part of the Borrower under any of the Contract Documents. (g) The Borrower is the sole owner of the Borrower s interest under the Contract Documents and has the full and complete right, title, and authority to sell, assign, transfer, and set over its interest in the Contract Documents and to grant and confer upon the Issuer the rights, interests, security interests, power and authorities herein granted and conferred. (h) Neither the execution and delivery of this Security Agreement nor the performance of each and every covenant of the Borrower under this Security Agreement or the Contract Documents conflicts with or constitutes a breach or default under the Contract Documents. (i) The Contract Documents are valid, enforceable and in full force and effect and have not been modified or amended. All representations and warranties of the Borrower contained in this Security Agreement shall survive the execution and delivery of this Security Agreement. Section 5. Further Assurances.(a) The Borrower agrees that from time to time, at its own expense, it will promptly execute and deliver all further instruments and documents and take all further action that may be necessary or desirable, or that the Issuer may request, in order to perfect, continue, protect, and preserve any security interest granted or purported to be granted hereby, to enable the Issuer to exercise and enforce any of its rights and remedies hereunder with respect to any Collateral, or to otherwise effect the purposes of this Security Agreement. Without limiting the generality of the foregoing, the Borrower will execute and file such other and further security agreements, financing or continuation statements or amendments thereto, instruments of further assurance, certificates, and such other instruments or notices and will deliver possession of any instruments or cash as may be necessary or desirable, or as the Issuer may request, in order to perfect, continue, protect, and preserve the security interests granted or purported to be granted hereby. (b) The Borrower hereby authorizes the Issuer to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral, without the signature of the Borrower, where permitted by law (c) The Borrower will furnish to the Issuer from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Issuer may reasonably request, all in reasonable detail, and will keep adequate records concerning the Collateral and will permit the Issuer or its agents or representatives at any reasonable time and from time to time to examine and make copies of and abstracts from such records. (d) The Borrower warrants that (i) its name is SSU Community Development I, LLC, (ii) its mailing address and the office where it keeps its records concerning the Collateral is 3219 College Street, Box 20419, Savannah State College, Savannah, Georgia 31404, (iii) it is a limited liability company duly formed, validly existing, and in good standing under and by virtue of the laws of the State of Georgia and has been operating under its current name, identity, and organizational structure without change since July 16, 2010, and (iv) its chief executive office and principal place of business is in Savannah, Georgia. The Borrower covenants and agrees that it will furnish the Issuer with notice of any change in the matters addressed by clauses (i), (ii), and (iv) above, of any change in the location of records with respect to Accounts, and of any change in its identity or organizational structure at least 30 days prior to the effective date of any such change, and the Borrower will promptly execute any financing statements or other instruments deemed necessary by the Issuer to prevent any filed financing statement from becoming misleading or losing its perfected status. The Borrower shall not use any corporate name (other than its own) or any fictitious name, tradestyle, or d/b/a. (e) The Borrower will notify the Issuer in writing promptly after learning of any event that may materially and adversely affect any of the Collateral or the Issuer s Lien on any of the Collateral. (f) The Borrower will, at its expense, defend the Issuer s right, title, and special property and security interest in and to the Collateral against any and all claims. (g) The Borrower will not make or consent to any amendment or other modification or waiver with respect to any Collateral or enter into any agreement or permit to exist any restriction with respect to any Collateral other than pursuant hereto. (h) The Borrower will not take any action that would in any manner impair the value or enforceability of the Issuer s security interest in the Collateral and will not fail to take any action, the failure of which would in any manner impair the value or enforceability of the Issuer s security interest in the Collateral. (i) The Borrower shall provide the Issuer with copies of all agreements between the Borrower and any landlord or warehouseman that owns any premises at which any Equipment may, from time to time, be kept or stored. (j) All Collateral is and will at all times be kept by the Borrower at the Primary Location and shall not, without the prior written approval of the Issuer, be moved therefrom. Section 6. Accounts. (a) Upon the request of the Issuer, the Borrower shall (1) make and execute notations and stampings upon its ledger sheets reflecting that the Accounts are assigned and pledged to the Issuer, any such notations or stampings to be in such form and contain such information as the Issuer shall request, and (2) place a statement on all bills, invoices, and statements of the Borrower issued in connection with the Accounts to the effect that the Accounts have been assigned and pledged to the Issuer and that the debt arising from such Accounts is due and payable to the Issuer at the Issuer s address. (b) If any of the Accounts arises out of a contract with the United States of America or any department, agency, subdivision, or instrumentality thereof, the Borrower shall promptly notify the Issuer in writing and shall execute instruments and take any other action required or requested by the Issuer to comply with the provisions of the Federal Assignment of Claims Act. Section 7. Contract Documents. (a) The Borrower shall: (1) (A) fulfill, perform, and observe each and every condition and covenant of the Borrower contained in the Contract Documents, (B) give prompt notice to the Issuer of any claim of default under the Contract Documents given to the Borrower or given by the Borrower, together with a complete copy of any such claim, (C) at the sole cost and expense of the Borrower, enforce the performance and observance of each and every covenant and condition of the Contract Documents to be performed or observed, and (D) appear in and defend any action growing out of, or in any manner connected with, the Contract Documents or the obligations or liabilities of the Borrower or any guarantor thereunder or any other party to the Contract Documents, (2) not without the prior written consent of the Issuer or its assignee (A) modify, alter, or amend the terms of the Contract Documents (unless required so to do by the terms of the Contract Documents), (B) waive or release any person from the performance of any obligation to be performed under the terms of the Contract Documents or from liability on account of any warranty given by them, (C) terminate, permit the termination, or accept the termination of the Contract Documents, (D) give any consent to any assignment by the other parties to the Contract Documents, or (E) assign its interest in the Contract Documents to any person or entity other than the Issuer, and (3) immediately upon receipt, forward to the Issuer duplicate copies of any and all reports, notices, or other communications received by the Borrower from the other parties to the Contract Documents or given to the other parties to the Contract Documents by the Borrower relating to the Contract Documents. (b) The Borrower does hereby specifically and unconditionally authorize and instruct the other parties to the Contract Documents to obey all instructions from the Issuer pursuant to this Security Agreement and the Contract Documents. (c) In order to secure the Obligations, the Borrower hereby unconditionally grants, bargains, sells, conveys, sets over, transfers, pledges, and assigns to the Issuer all of the right, title, interest, and remedies of the Borrower in and to the Contract Documents. (d) The Borrower expressly acknowledges and agrees that it shall remain liable under the Contract Documents to observe and perform all of the conditions and obligations therein contained to be observed and performed by it and that neither this Security Agreement nor any action taken pursuant hereto shall cause the Issuer to be under any obligation or liability in any

131 respect whatsoever to any party to the Contract Documents for the observance or performance of any of the representations, warranties, conditions, agreements, or terms therein contained. Section 8. Transfers and Other Liens. The Borrower shall not, except as expressly permitted hereunder and under the Loan Agreement: (a) sell, transfer, assign (by operation of law or otherwise), exchange or otherwise dispose of any of the Collateral or any interest therein, or (b) create or permit to exist any Lien upon or with respect to any of the Collateral, except for Permitted Encumbrances. Section 9. Issuer Appointed Attorney-in-Fact. The Borrower hereby irrevocably makes, constitutes, and appoints the Issuer (and all Persons designated by the Issuer) the Borrower s true and lawful agent and attorney-in-fact, with full authority in the place and stead of the Borrower and in the name of the Borrower or otherwise, from time to time in the Issuer s discretion, to take any action and to execute any instrument that the Issuer may deem necessary or advisable to accomplish the purposes of this Security Agreement, including, without limitation: (a) the authority to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipt for moneys due and to become due under or in respect of any of the Collateral, (b) the authority to receive, endorse and collect any drafts or other instruments, documents, or chattel paper representing any distribution in respect of the Collateral or any part thereof and to give full discharge for the same, (c) the authority to endorse the Borrower s name on any checks, notes, acceptances, drafts, money orders, or any other evidence of payment or proceeds of the Collateral that come into the possession of the Issuer or under the Issuer s control, (d) the authority to file any claims or take any action or institute and maintain any suits and proceedings that the Issuer may deem necessary or desirable for the collection of any of the Collateral: (i) to prevent any impairment of the Collateral by any acts that may be unlawful or would constitute a breach of the terms of this Security Agreement, (ii) to preserve or protect its interest in the Collateral, (iii) to restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule, or order would impair the Collateral or be prejudicial to the interest of the Issuer, or (iv) otherwise to enforce the rights of the Issuer with respect to any of the Collateral, (e) the authority to make, execute, record, file and refile any security agreements, financing or continuation statements or amendments thereto, instruments of further assurance, certificates, or other instruments or notices that the Borrower is obligated hereunder to make, execute, file, and refile upon the failure of the Borrower to do so, and (f) the authority to (i) notify the Person or Persons liable for any of the Accounts that the Accounts have been assigned and pledged by the Borrower to the Issuer and to direct such Persons to make direct payments of the Accounts to the Issuer, (ii) demand payment of the Accounts from the Account Debtors, enforce payment of the Accounts by legal proceedings or otherwise, and generally exercise all of the Borrower s rights and remedies with respect to the collection of the Accounts, (iii) settle, adjust, compromise, discharge, or release any of the Accounts or other Collateral or any legal proceedings brought to collect any of the Accounts or other Collateral, (iv) sell or assign any of the Accounts and other Collateral upon such terms, for such amounts, and at such time or times as the Issuer deems advisable, (v) take control, in any manner, of any item of payment or proceeds relating to any Collateral, (vi) prepare, file, and sign the Borrower s name to a proof of claim in bankruptcy or similar document against any Account Debtor or to any notice of lien, assignment, or satisfaction of lien or similar document in connection with any of the Collateral, (vii) receive, open, and dispose of all mail addressed to the Borrower and to notify postal service authorities to change the address for delivery thereof to such address as the Issuer may designate, (viii) endorse the name of the Borrower upon any of the items of payment or proceeds relating to any Collateral and deposit the same to the account of the Issuer on account of the Obligations, (ix) endorse the name of the Borrower upon any chattel paper, document, instrument, invoice, freight bill, bill of lading, or similar document or agreement relating to the Accounts and any other Collateral, (x) use the Borrower s stationery and sign the name of the Borrower to verifications of the Accounts and notices thereof to Account Debtors, (xi) use the information recorded on or contained in any data processing equipment and computer hardware and software relating to the Accounts and any other Collateral and to which the Borrower has access, (xii) make and adjust claims under policies of insurance, and (xiii) do all other acts and things necessary, in the Issuer s determination, to fulfill the Borrower s obligations under this Security Agreement. The appointment of the Issuer as attorney-in-fact is and shall be deemed to be coupled with an interest. Section 10. Issuer may Perform. (a) Should the Borrower fail to perform or observe any covenant or comply with any condition contained in the Contract Documents, then the Issuer, but without obligation so to do and without notice to or demand on the Borrower or without releasing the Borrower from its obligation so to do, may perform such covenant or condition and may appear in and defend any action affecting the Contract Documents. To the extent that the Issuer shall incur any costs or pay any monies in connection therewith, including any costs or expenses of litigation, and reasonable attorneys fees (whether incurred in litigation or otherwise) incurred through all proceedings, including, but not limited to, negotiations, administrative hearings, trials, and appeals, then such charges shall be payable by the Borrower as an Obligation. (b) The Issuer shall not be obligated to perform or discharge any obligation of the Borrower under the Contract Documents, and the Borrower agrees to indemnify and hold the Issuer harmless against any and all liability, loss, or damage that the Issuer may incur under the Contract Documents and from all claims and demands whatsoever that may be asserted against the Issuer by reason of an act of the Issuer under the Contract Documents. Should the Issuer incur any such liability, loss, or damage under any Contract Document, or in defense against any such claims or demands, the amount thereof, including costs, expenses, and reasonable attorneys fees through all proceedings, including, but not limited to, negotiations, administrative hearings, trials, and appeals, shall be payable by the Borrower as an Obligation. Section 11. The Issuer s Duties. The powers conferred on the Issuer hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. The Issuer shall have no duty or liability as to any Collateral or to take any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Section 12. Remedies Upon Default. If any Event of Default occurs and is continuing: (a) The Issuer may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all rights and remedies permitted under the Loan Agreement or otherwise permitted at law or in equity and all of the rights and remedies of a secured party under the applicable UCC (whether or not the UCC applies to the affected Collateral). (b) The Issuer may also take immediate possession of the Collateral and (i) require the Borrower to, and the Borrower hereby agrees that it will at its own expense and upon the request of the Issuer forthwith, gather or assemble all or part of the Collateral not in the possession of the Issuer as directed by the Issuer and make it available to the Issuer at a place to be designated by the Issuer, which is reasonably convenient to both parties and (ii) enter any of the premises of the Borrower or wherever any of the Collateral shall be located and keep and store the same on such premises until sold (and if such premises are Property of the Borrower, the Borrower agrees not to charge the Issuer for storage thereof). (c) The Issuer may, with such notice as may be required by law, sell or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale or sales, at any of the Issuer s offices or elsewhere, in lots or in bulk for cash, or credit, or for future delivery, and at such price or prices and upon such other terms as the Issuer, in its sole discretion, may deem commercially reasonable. The Borrower agrees that, to the extent written notice of sale shall be required by law, ten days written notice to the Borrower of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Issuer shall not be obligated to make any sale of any Collateral, regardless of notice of sale having been given. The Issuer may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The Issuer shall have the right to sell, lease, or otherwise dispose of such Collateral, or any part thereof, for cash, credit, or any combination thereof, and the Issuer may purchase all or any part of such Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of such purchase price, may set off the amount of such price against the Obligations. (d) The Issuer is hereby granted a license or other right to use, without charge, the Borrower s labels, patents, copyrights, rights of use of any name, trade secrets, tradenames, trademarks, and advertising matter, or any Property of a similar nature, as it pertains to the Collateral, in advertising for sale and selling any Collateral, and the Borrower s rights under all licenses and all franchise agreements shall inure to the Issuer s benefit. (e) The Issuer may, to the extent permitted by law, impound books and records evidencing the Accounts and General Intangibles and other similar claims for the payment of money and take possession of all notes and other documents that evidence the Accounts and General Intangibles and such claims for money and give notice to obligors thereunder of its interest therein and make direct collections of the Accounts and General Intangibles and such claims for money. If requested by the Issuer, the Borrower shall make arrangements for the Account Debtors to pay directly to the Issuer all amounts constituting Accounts that are owed by the Account Debtors to the Borrower, subject to any restrictions imposed under applicable law or contractual arrangements between the Borrower and the Account Debtors. The Issuer shall have the full right to enter upon, take possession of, use, and operate all or any portion of the Property located at the Locations that the Issuer, in its sole discretion, deems desirable to effectuate any or all of its remedies hereunder. (f) The Issuer may proceed to perform any and all obligations of the Borrower contained in any of the Contract Documents and exercise any and all rights of the Borrower therein as fully as the Borrower itself could, without regard to the adequacy of security for the Obligations and with or without the bringing of any legal action, including, without limiting the generality of the foregoing, enforcing, modifying, extending, or terminating the Contract Documents, and, to the extent the Issuer shall incur any costs or expenses in connection with the performance of any obligations of the Borrower, including costs of litigation, then all such costs shall be payable by the Borrower as an Obligation. The Issuer may also assign the Borrower s rights under the Contract Documents to any purchaser of any portion of the Project. (g) The Borrower does hereby specifically and irrevocably authorize and empower the Issuer, in the Borrower s name or in the Issuer s name, to assert and sue for any rights, privileges, or claims the Borrower may from time to time have under the Contract Documents as the Issuer may deem proper and to collect and receive any and all moneys, damages, awards, issues, and profits from the Contract Documents, including those past due and unpaid, and apply the same as provided in the Indenture. Neither entry upon and taking possession of the Property located at the Locations nor the collection of the moneys, damages, awards, issues, and profits from the Contract Documents shall in any way operate to cure or waive any default under any other instrument given by the Borrower to the Issuer, or prohibit the taking of any other action by the Issuer under any such instrument, or at law or in equity, to enforce payment of the obligations secured by the Contract Documents or to realize on any other security. (h) Any cash held by the Issuer as Collateral and all cash proceeds received by the Issuer in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied as provided in Section 806 of the Indenture. Section 13. Amendments; No Remedy Exclusive; Severability. (a) No amendment or waiver of any provision of this Security Agreement, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same is in writing and signed by the Borrower and the Issuer and is accomplished in accordance with the Indenture, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given

132 (b) Each of the rights and remedies of the Issuer under this Security Agreement, the Loan Agreement, the Notes, and each and every other document or instrument now or hereafter evidencing or securing the Obligations is separate and distinct from and cumulative and in addition to all other rights and remedies herein and therein granted and all other rights that the Issuer may have in law or equity, and no such right shall be in exclusion of any other. No failure on the part of the Issuer to exercise, and no delay in exercising, any right, Lien, power, or remedy hereunder or otherwise afforded by law shall operate as a waiver thereof or preclude the exercise thereof upon the occurrence of an Event of Default, nor shall any single or partial exercise of any such right, Lien, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, Lien, power, or remedy. No failure by the Issuer to insist upon the strict performance by the Borrower of each and every agreement of the Borrower under the Borrower Contracts shall waive, affect, or diminish any right of the Issuer thereafter to demand strict compliance and performance therewith. No suspension or waiver by the Issuer of an Event of Default shall suspend, waive, or affect any other Event of Default, whether prior or subsequent thereto and whether of the same or a different type. No withdrawal or abandonment by the Issuer of any exercise of the power of sale herein granted or of any of its rights under such power shall be construed as a waiver of any power or right of the Issuer hereunder. In case the Issuer shall proceed to enforce any right, power, or remedy hereunder and such proceeding is withdrawn, discontinued, or abandoned for any reason, or is determined adversely to the Issuer, then in every such case (i) the Borrower and the Issuer shall be restored to their former positions and rights, (ii) all rights, powers, and remedies of the Issuer shall continue as if no such proceedings had been taken, (iii) each and every Event of Default declared or occurring prior or subsequent to such withdrawal, discontinuance, or abandonment shall and shall be deemed to be a continuing default, and (iv) neither this Security Agreement nor the Obligations shall or shall be deemed to be reinstated or otherwise affected by such withdrawal, discontinuance, or abandonment, and the Borrower hereby expressly waives the benefit of any statute or rule of law now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the above. (c) Any provision of this Security Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or invalidity without invalidating the remaining portions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction. Without limiting the generality of the foregoing, in the event that any of the Obligations are unenforceable in whole or in part in any jurisdiction, then, as to such jurisdiction, the security interest created hereby in the Collateral shall secure the remaining Obligations with the same effect as if such unenforceable Obligations were never secured by such security interests, and the provisions of this Security Agreement shall be interpreted accordingly. Section 14. Notices. All notices and other communications provided for hereunder shall be given in accordance with the Loan Agreement. Section 15. Continuing Security Interest; Transfer; Termination. (a) This Security Agreement shall create a continuing security interest in the Collateral and shall (1) remain in full force and effect until payment in full of the Obligations, (2) be binding upon the Borrower and its successors and assigns, and (3) inure to the benefit of the Issuer and its respective successors, transferees and assigns, and no person other than the Issuer and its assigns shall under any circumstances be deemed to be a beneficiary of any provision of this Security Agreement. (b) Without limiting the generality of the foregoing clause (3) of paragraph (a), the Issuer may assign, grant a security interest in, or otherwise transfer this Security Agreement to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to the Issuer herein or otherwise. As provided in the Loan Agreement, it is understood and agreed that the Issuer, contemporaneously with the execution and delivery of this Security Agreement, will assign and grant a security interest in its rights under this Security Agreement to the Trustee, together with its rights under other instruments, pursuant to the Indenture as authorized under the Bond Resolution, and the Borrower hereby consents to the assignment and grant of the security interest and hereby agrees that any notice to the Issuer herein required shall in addition be given to the Trustee at the address provided for in the Indenture and that any consent of the Issuer shall not be deemed to have been given unless such consent is obtained in writing from the Trustee. Upon execution and delivery of the Indenture to the Trustee, all appointments, designations, representations, warranties, covenants, assurances, remedies, title, interest, privileges, directions, permits, licenses, and rights of every kind whatsoever herein conferred upon the Issuer shall be deemed to be conferred also upon the Trustee, as if the Trustee, rather than the Issuer, had originally entered into this Security Agreement. (c) Neither the other parties to the Contract Documents nor any other person shall have standing to bring any action against the Issuer or its assigns as the result of this Security Agreement or to assume that the Issuer or its assigns will exercise any remedies provided herein. (d) Upon the satisfaction in full of the Obligations, this Security Agreement and the security interests granted hereby shall terminate, and all rights to the Collateral shall revert to the Borrower. Upon any such termination, the Issuer will execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. Section 16. Governing Law. This Security Agreement shall be governed by and construed in accordance with the laws of the State of Georgia, except as required by mandatory provisions of law and except to the extent that the validity or perfection of the security interests created hereby, or the remedies granted hereunder, in respect of any particular Collateral, are governed by the laws of a jurisdiction other than the State of Georgia. Section 17. Issuer s Consent. Whenever the Issuer s consent is required to be obtained under this Security Agreement as a condition to any action, inaction, condition, or event, the Issuer shall be authorized to give or withhold such consent in its sole and absolute discretion and to condition its consent upon the giving of additional collateral security for the Obligations, the payment of money, or any other matter. Section 18. WAIVERS. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS SECURITY AGREEMENT, THE BORROWER WAIVES (i) PRESENTMENT, DEMAND, AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION, OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER, AND GUARANTIES AT ANY TIME HELD BY THE ISSUER ON WHICH THE BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER THE ISSUER MAY DO IN THIS REGARD, (ii) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY THAT MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING THE ISSUER TO EXERCISE ANY OF THE ISSUER S REMEDIES, INCLUDING THE ISSUANCE OF AN IMMEDIATE WRIT OF POSSESSION, (iii) THE BENEFIT OF ALL VALUATION, APPRAISEMENT, AND EXEMPTION LAWS, AND (iv) ANY RIGHT THE BORROWER MAY HAVE UPON PAYMENT IN FULL OF THE OBLIGATIONS TO REQUIRE THE ISSUER TO TERMINATE ITS SECURITY INTEREST IN THE COLLATERAL UNTIL TERMINATION OF THIS SECURITY AGREEMENT IN ACCORDANCE WITH ITS TERMS AND THE EXECUTION BY THE BORROWER, AND BY ANY PERSON WHOSE LOANS TO THE BORROWER ARE USED IN WHOLE OR IN PART TO SATISFY THE OBLIGATIONS, OF AN AGREEMENT INDEMNIFYING THE ISSUER FROM ANY LOSS OR DAMAGE THE ISSUER MAY INCUR AS THE RESULT OF DISHONORED CHECKS OR OTHER ITEMS OF PAYMENT RECEIVED BY THE ISSUER FROM THE BORROWER OR ANY ACCOUNT DEBTOR AND APPLIED TO THE OBLIGATIONS. SIGNATURES AND SEALS IN WITNESS WHEREOF, the Borrower has executed this Security Agreement by causing its name to be hereunto subscribed by the Chairman or Vice Chairman of its sole member and by causing the corporate seal of its sole member to be impressed hereon and attested by such member s Secretary or Assistant Secretary; and the Issuer has executed this Security Agreement by causing its name to be hereunto subscribed by its President and by causing the official seal of the Issuer to be impressed hereon and attested by its Assistant Secretary; all being done as of the day and year first above written. (SEAL) Attest: SSU COMMUNITY DEVELOPMENT I, LLC BY:, its sole member By: Section 19. Demand Obligations. Nothing in this Security Agreement shall affect or abrogate the demand nature of any portion of the Obligations expressly made payable on demand by the Loan Agreement or by any other agreement or instrument evidencing or securing the Obligations, and the occurrence of an Event of Default shall not be a prerequisite for the Issuer s requiring payment of such Obligations. [Signatures and Seals to Follow]

133 EXHIBIT A SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY DESCRIPTION OF REAL PROPERTY FOR PURPOSES OF FIXTURE FILING By: President (SEAL) Attest: Assistant Secretary -17- A-1 EXHIBIT B CONTRACT DOCUMENTS B-1

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135 Appendix F Financial Statements of the University for Fiscal Year Ended June 30, 2010

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173 Appendix G Form of Bond Counsel

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175 SSU Community Development I, LLC Project [Date] Page 1 [Date of Closing] Wells Fargo Bank, National Association Charlotte, North Carolina The Bank of New York Mellon Trust Company, N.A. Atlanta, Georgia Savannah Economic Development Authority Savannah, Georgia Re: SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC), SERIES 2010 To the Addressees: We have acted as Bond Counsel in connection with the issuance by Savannah Economic Development Authority, a body corporate and politic and an instrumentality of the State of Georgia, created and existing under the constitution and laws of the State of Georgia (the Issuer ), of $36,475,000 in aggregate principal amount of SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC), SERIES 2010 (the Bonds ). We have examined the law and such certified proceedings, including a certified copy of the transcript of the validation proceedings relating to the Bonds concluded in the Superior Court of Chatham County, Georgia, and other documents as deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon (a) representations of the Issuer and SSU Community Development I, LLC, a Georgia limited liability company (the Company ), whose sole member is SSU COBA Endowment, Inc., a Georgia non-profit corporation (the Foundation ), (b) certified proceedings and other certifications of public officials furnished to us, and (c) certifications by officials of the Issuer and the Company (including certifications as to the use and investment of Bond proceeds)without undertaking to verify the same by independent investigation. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. The Bonds are being issued pursuant to a resolution of the Issuer and a Trust Indenture and Security Agreement, dated as of December 1, 2010 (the Indenture ), between the Issuer and The Bank of New York Mellon Trust Company, N.A., a banking association chartered under the laws of the United G-1

176 SSU Community Development I, LLC Project [Date] Page 2 States of America, as trustee (the Trustee ). The proceeds of the Bonds will be used for the purpose of financing, in whole or in part, the acquisition, construction (and related demolition of an existing building to provide a site for a new building), renovation, and equipping of buildings and structures to be used as student housing facilities and academic and social space, the restoration of other historic buildings on Felix Alexis Circle for residential life programming, and the acquisition of land and development of a sports and intramural complex, with appropriate road access and parking (collectively, the Project ), to be located on the campus of Savannah State University ( SSU ) in the City of Savannah, Chatham County, Georgia, a portion of which Project has been leased by the Company, as landlord, to the Board of Regents of the University System of Georgia (the Regents ), as tenant, pursuant to four Rental Agreements; (ii) funding capitalized interest on the bonds; (iii) funding a debt service reserve for the bonds; and (iv) paying issuance expenses for the Bonds. The Regents has leased the land on which a portion of the Project will be located to the Company pursuant to the terms of four Ground Leases between the Regents, as lessor, and the Company, as lessee. The Issuer will lend the proceeds of the Bonds to the Company pursuant to a Loan Agreement (the Loan Agreement ), dated as of December 1, 2010, between the Issuer and the Company. In order to evidence its payment obligations under the Loan Agreement, the Company will execute and deliver to the Issuer a promissory note, dated the date of issuance of the Bonds (the Note ), providing for payments at such times and in such amounts as will be required to enable the Issuer to pay the principal of, premium, if any, and interest on the Bonds, as and when the same become due. In order to secure its obligations under the Loan Agreement and the Note and certain other obligations of the Company to the Issuer, the Company (1) will grant to the Issuer a first lien on and first security title to Company s interest in a portion of the Project, and will assign and pledge to the Issuer the Company s interest in the rents derived from the Project, pursuant to a Leasehold Deed to Secure Debt and Assignment of Rents and Leases, dated as of December 1, 2010 (the Security Deed ), from the Company to the Issuer, and (2) will grant to the Issuer a first priority security interest in (a) certain personal property of the Company which is included as a part of the Project, (b) certain revenues derived from the Project and (c) certain contracts to which the Company is a party, pursuant to a Security Agreement, dated as of December 1, 2010 (the Security Agreement ), between the Company and the Issuer. The Issuer has assigned to the Trustee under the Indenture and pledged to the payment of the Bonds, all right, title and interest of the Issuer in the Trust Estate described in the Indenture. Reference is made to an opinion of even date of Epstein, Becker & Green, P.C., Atlanta, Georgia, with respect to the Foundation's status as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the "Code") which is exempt from taxation under Section 501(a) of the Code, and to the opinion of Peck, Shaffer & Williams LLP, Atlanta, Georgia, with respect, among other matters, to the organization of the Company and the Foundation, the power of the Company to enter into and perform its obligations under the documents to which the Company is a party, the due authorization, execution and delivery of such documents and the validity and enforceability thereof against the Company, as to which we express no opinion. Based upon the foregoing, we are of the opinion, as of the date hereof and under existing law, as follows: (1) The Issuer is a duly created and validly existing body corporate and politic and an instrumentality of the State of Georgia with the corporate power to enter into and perform G-2

177 SSU Community Development I, LLC Project [Date] Page 3 its obligations under the Loan Agreement, the Security Deed, the Security Agreement and the Indenture and to issue the Bonds. (2) The Loan Agreement, the Security Deed, the Security Agreement and the Indenture have been duly authorized, executed and delivered by the Issuer and each such document is the valid and binding obligation of the Issuer enforceable upon the Issuer. The Indenture creates a valid lien on the Trust Estate described in the Indenture. (3) The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and binding limited obligations of the Issuer, payable solely from the payments and revenues to be received by the Issuer under the Loan Agreement, the Note, the Security Deed and the Security Agreement and certain other moneys pledged to the payment thereof. (4) The interest payable on the Bonds is excludable from gross income for federal income tax purposes and will not be included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations. We express no opinion regarding other federal tax consequences arising with respect to the Bonds and the receipt or accrual of interest thereon. In rendering the opinions set forth above, we have assumed the continued compliance by the Issuer and the Company with their respective covenants regarding certain requirements of the Code that must be met subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Bonds to be included in gross income retroactively to the date of issuance of the Bonds. (5) The interest payable on the Bonds is exempt from all present Georgia income taxes. It is to be understood that the rights of the holders of the Bonds and the enforceability of the Bonds, the Loan Agreement the Note, the Security Deed, the Security Agreement and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, GRAY & PANNELL LLP BY: A Partner G-3

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179 Appendix H Form of Disclosure Certificate

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181 CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the Disclosure Certificate ), dated for purposes of reference as of December 1, 2010, is executed and delivered SSU Community Development I, LLC (the Borrower ) in connection with the issuance of the $36,475,000 Savannah Economic Development Authority Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 (the Series 2010 Bonds ). The Borrower hereby covenants and agrees, as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Borrower for the benefit of the Beneficial Owners (as herein defined) of the Series 2010 Bonds and in order to assist the Participating Underwriter (as herein defined) in complying with the Rule (as herein defined). SECTION 2. Definitions. In addition to the definitions set forth in the Indenture (as herein defined), which apply to any capitalized terms used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: Annual Report shall mean any Annual Report provided by the Borrower pursuant to the Rule and this Disclosure Certificate. Beneficial Owner shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2010 Bonds (including persons holding Series 2010 Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of any Series 2010 Bonds for federal income tax purposes. Dissemination Agent shall mean any Dissemination Agent designated in writing by the Borrower and which has filed with the Borrower a written acceptance of such designation. EMMA shall mean MSRB s Electronic Municipal Market Access System. Fiscal Year shall mean, with respect to the Borrower or the University, any period of twelve consecutive months adopted by the Borrower or the University, as the case may be, as its fiscal year for financial reporting purposes and shall initially mean the period beginning on July 1 of each calendar year and ending on June 30 of the next calendar year with respect to the Borrower and the University. Indenture shall mean the Trust Indenture, dated as of December 1, 2010, between the Issuer and Wells Fargo Bank, National Association, as trustee, and any supplements thereto. Issuer shall mean the Savannah Economic Development Authority, its successors and assigns. Listed Events shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. Loan Agreement shall mean the Loan Agreement, dated as of December 1, 2010, between the Issuer and the Borrower, and any supplements thereto. MSRB shall mean the Municipal Securities Rulemaking Board, or any successor thereto. Official Statement shall mean the Official Statement of the Issuer relating to the Series 2010 Bonds. Participating Underwriter shall mean Wells Fargo Bank, National Association, or any successor thereto. Rule shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. State shall mean the State of Georgia. H-1

182 University shall mean Savannah State University a unit of the University System of Georgia. SECTION 3. Provision of Annual Reports. (a) Not later than 180 days after the end of the Borrower s Fiscal Year, commencing with Fiscal Year 2011, the Borrower shall submit to the MSRB in an electronic format as prescribed by the MSRB (which as of the date hereof is EMMA) an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate. Notwithstanding the foregoing, the audited financial statements of the Borrower or the University may be submitted separately from the balance of the Annual Report when such audited financial statements are available. In the event that the audited financial statements of the Borrower or the University are not included with the Annual Report and will be submitted at a later date, the Borrower shall include unaudited financial statements in the Annual Report and shall indicate in the Annual Report the date on which the audited financial statements will be submitted. The audited financial statements when available will be submitted. (b) The Borrower shall also: (i) determine each year prior to the date for providing the Annual Report the appropriate electronic format prescribed by the MSRB (which as of the date hereof is EMMA) for filing with the MSRB and the proper form of such filing; and (ii) if the Annual Report (or the audited financial statements which were to be separately submitted) is not filed in accordance with subsection (a), send in a timely manner a notice to the MSRB in an electronic format as prescribed by the MSRB (which as of the date hereof is EMMA) in substantially the form attached as Exhibit A. SECTION 4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the following: (a) Financial statements of the Borrower and the University for the preceding Fiscal Year, which must be prepared in accordance with generally accepted accounting principles as in effect from time to time. If audited financial statements of the Borrower or the University are not yet available, the unaudited financial statements of the Borrower or the University, as applicable, and when audited financial statements of the Borrower or the University, as the case may be, are available, the audited financial statements of the Borrower or the University. Each set of such audited financial statements shall be accompanied by an audit report resulting from an audit conducted by an independent certified public accountant or firm of independent public accountants in conformity with generally accepted auditing standards. (b) If the generally accepted accounting principles changed from the previous Fiscal Year and if such changes are material, a narrative explanation describing the impact of the changes. (c) If the fiscal year has changed, a statement indicating the new Fiscal Year. (d) The information for the preceding Fiscal Year set forth in the Official Statement under the headings THE UNIVERSITY Enrollment, Admissions and Tuition, Fees and Charges and THE REGENTS Analysis of State General Fund Receipts and Summary of Appropriation Allotments to Regents. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues with respect to which the Borrower is an obligated person (as defined by the Rule), which are available to the public on the MSRB s Internet Website or filed with the Securities and Exchange Commission. The Borrower shall clearly identify each such other document so incorporated by reference. H-2

183 SECTION 5. Reporting of Significant Events. (a) In a timely manner not in excess of ten (10) business days of the occurrence of any of the following Listed Events, the Borrower shall file a notice of such occurrence: (i) (ii) (iii) (iv) (v) Principal and interest payment delinquencies. Non-payment related defaults, if material. Unscheduled draws on debt service reserves reflecting financial difficulties. Unscheduled draws on credit enhancements reflecting financial difficulties. Substitution of credit or liquidity providers, or their failure to perform. (vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, or a Notice of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Series 2010 Bonds, or other events affecting the tax status of the Series 2010 Bonds. (vii) (viii) (ix) (x) material. (xi) (xii) Modification to rights of the holders of the Series 2010 Bonds, if material. Bond calls, if material, and tender offers. Defeasances. Release, substitution or sale of property securing repayment of the Series 2010 Bonds, if Rating changes. Bankruptcy, insolvency, receivership, or a similar proceeding by an obligated person. (xiii) Consummation of a merger, consolidation, acquisition involving an obligated person, or sale of all or substantially all of the assets of an obligated person, 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. (xiv) material. Appointment of a successor or additional trustee or the change in name of a trustee, if (b) The content of any notice of the occurrence of a Listed Event shall be determined by the Borrower and shall be in substantially the form attached as Exhibit B. SECTION 6. Termination of Reporting Obligation. The Borrower s obligations under this Disclosure Certificate shall terminate upon the defeasance (within the meaning of the Rule), prior redemption or payment in full of all of the Series 2010 Bonds. The Borrower shall notify the MSRB in an electronic format prescribed by the MSRB (which as of the date hereof is EMMA) that the Borrower s obligations under this Disclosure Certificate have terminated. If the Borrower s obligations are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Certificate in the same manner as if it were the Borrower. SECTION 7. Dissemination Agent. The Borrower may, from time to time, appoint a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and the Borrower may, from time to time, discharge the Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not a designated Dissemination Agent, the Borrower shall be the Dissemination Agent. H-3

184 SECTION 8. Amendment. This Disclosure Certificate may not be amended unless: (a) The amendment 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 obligated person, or type of business conducted; (b) This Disclosure Certificate, as amended, and the undertakings provided herein, would have complied with the requirements of the Rule at the time the Series 2010 Bonds were issued, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment does not materially impair the interests of the bondholders, as determined by the Borrower, or the holders of a majority in aggregate principal amount of the Outstanding Series 2010 Bonds approve the amendment. In the event that this Disclosure Certificate is amended or any provision of this Disclosure Certificate is waived, the notice of a Listed Event pursuant to Section 5(a)(vii) hereof shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of operating data or financial information being provided in the Annual Report. If an amendment or waiver is made in this Disclosure Certificate which allows for a change in the accounting principles to be used in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and impact of the change in the accounting principles on the presentation of the financial information. A notice of the change in the accounting principles shall be deemed to be material and shall be sent to the MSRB in an electronic format prescribed by the MSRB (which as of the date hereof is EMMA). SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Borrower from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Borrower chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Certificate, the Borrower shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Borrower to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any Beneficial Owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Borrower to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed a default or an event of default under the Indenture or the Loan Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of any party to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Borrower agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent may consult with counsel (who may, but need not, be counsel for the Borrower), 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 with the opinion of such Counsel. The obligations of the Borrower under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Series 2010 Bonds. H-4

185 SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Borrower, the Participating Underwriter, and Beneficial Owners from time to time of the Series 2010 Bonds, and shall create no rights in any other person or entity. SECTION 13. Counterparts. This Disclosure Certificate 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. SECTION 14. Governing Law. This Disclosure Certificate shall be governed by and construed in accordance with the laws of the State. SECTION 15. Severability. In case any one or more of the provisions of this Disclosure Certificate shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Disclosure Certificate, but this Disclosure Certificate shall be construed and enforced as if such illegal or invalid provision had not been contained herein. SSU COMMUNITY DEVELOPMENT I, LLC By: Manager By: Manager H-5

186 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Savannah Economic Development Authority Name of Bond Issue: $36,475,000 Savannah Economic Development Authority Revenue Bonds (SSU Community Development I, LLC Project), Series 2010 CUSIP Number: Date of Issuance: December, 2010 NOTICE IS HEREBY GIVEN that SSU Community Development I, LLC (the Borrower ) has not provided an Annual Report due with respect to the above-named Series 2010 Bonds as required by its Disclosure Certificate, dated dated for purposes of reference as of December 1, The Borrower anticipates that the Annual Report will be filed by. This notice is based on the best information available at the time of dissemination. Any questions regarding this notice should be directed to. Dated: SSU COMMUNITY DEVELOPMENT I, LLC By: Manager By: Manager H-6

187 EXHIBIT B NOTICE OF THE OCCURRENCE OF [INSERT THE LISTED EVENT] Relating to $36,475,000 SAVANNAH ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT) SERIES 2010 CUSIP NUMBER Notice is hereby given that [insert the Listed Event] has occurred. [Describe circumstances leading up to the event, action being taken and anticipated impact.] This notice is based on the best information available at the time of dissemination and is not guaranteed as to accuracy or completeness. Any questions regarding this notice should be directed to [insert instructions for presenting securities, if applicable]. [Notice of the Listed Events described in Section 5(a)(ix) shall include the following: SSU Community Development I, LLC (the Borrower ) hereby expressly reserves the right to redeem such refunded or defeased bonds prior to their stated maturity date in accordance with the optional/extraordinary redemption provisions of said defeased bonds. OR The Borrower hereby covenants not to exercise any optional or extraordinary redemption provisions under the Indenture; however, the sinking fund provision will survive the defeasance. AND The Series 2010 Bonds have been defeased to [maturity/the first call date, which is ]. This notice does not constitute a notice of redemption and no bonds should be delivered to the Borrower or the Trustee as a result of this mailing. A Notice of Redemption instructing you where to submit your bonds for payment will be mailed to days prior to the redemption date.] Dated: SSU COMMUNITY DEVELOPMENT I, LLC By: Manager By: Manager H-7

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189 Appendix I Form of Rental Agreement for Building A

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191 Counterpart No. of Two Original Executed Counterparts. Counterpart of the STATE OF GEORGIA COUNTY OF CHATHAM RENTAL AGREEMENT (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT) (BUILDING A) THIS RENTAL AGREEMENT (hereinafter Agreement ), made and entered into this day of December 2010, by and between SSU COMMUNITY DEVELOPMENT I, LLC whose address is 3219 College Street Savannah, Georgia 31404, 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 SAVANNAH STATE UNIVERSITY, 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 in Chatham County, Georgia, and more particularly described in Exhibit C, which is attached hereto and incorporated herein by this reference, containing a Student Housing project consisting of approximately 106 beds of student housing in one building, 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 ). Tenant does hereby rent and take from Landlord, upon the terms and conditions herein stated, for the use of educational functions and facilities, the Premises. 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 consecutive years (each year is hereinafter referred to as a Renewal Term ) and ending on June 30, 2041 which is the 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 for Business and Finance of Savannah 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) 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 first day of the first month following the issuance of a certificate of occupancy, ( hereinafter referred to as the Commencement Date ) but the Commencement Date shall be no earlier than August 1, 2011 and ending at 11:59 o'clock P.M. on June 30, 2012, (hereinafter referred to as the Expiration Date ) unless terminated earlier as hereinafter provided (hereinafter referred to as the Initial Term ). Rev Standard Form 2009 Page 1 of 22 Landlord Tenant Rev Standard Form 2009 Page 2 of 22 Landlord Tenant 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. SSU COMMUNITY DEVELOPMENT I, LLC EXHIBIT A STIPULATIONS, PROVISIONS, COVENANTS, AGREEMENTS, TERMS AND CONDITIONS OF AGREEMENT 1. COVENANTS OF TITLE AND QUIET ENJOYMENT Signed as to Landlord, In the presence of: Unofficial Witness Notary Public Signed as to the Board of Regents of the University System of Georgia In the presence of: Unofficial Witness Notary Public Approval of Institution: By: Dr. Earl G. Yarbrough, President By: (L.S.) Attest: (L.S.) BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA By: Vice Chancellor for Facilities Attest: Associate Vice Chancellor for Facilities (SEAL) 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 s option is to withhold payment of rents (without interest) until final adjudication or other settlement of such dispute or litigation. This Agreement shall be terminated or the abatement of rent shall commence upon the date of Tenant s notice to Landlord. 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) Name and address of authorized agent; (ii) Name and address of insured; (iii) Name of insurance company(ies); (iv) Description of policies; (v) Policy number(s); (vi) Policy period(s); (vii) Limits of liability; (viii) Name and address of Landlord as certificate holders; (ix) Lease number, Name of Facility and Address of Premises; (x) Signature of authorized agent; (xi) Telephone of authorized agent; and (xii) Mandatory forty-five (45) days notice of cancellation-renewal. Rev Standard Form 2009 Page 3 of 22 Landlord Tenant Rev Standard Form 2009 Page 4 of 22 Landlord Tenant

192 (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 shall not exceed $50,000. (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. (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. 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. (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 can not 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. Rev Standard Form 2009 Page 5 of 22 Landlord Tenant Rev Standard Form 2009 Page 6 of 22 Landlord 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. 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 tenancy-at-will and Tenant shall continue Tenant s occupancy at the same rental rate and under 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 nondefaulting 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 (a) In the event the Premises, either prior to the Commencement Date of this Agreement or during the Term, are damaged, 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 dispatch, this Agreement may be terminated at the option of the Tenant by giving the Landlord notice, and all obligations of Tenant hereunder, including the payment of rent, shall automatically terminate as of the date of the damage. (b) In the event the Premises, either prior to the Commencement Date of this Agreement or during the Term, are partially destroyed, by any cause whatever, but not rendered unfit for occupancy by Tenant, then the Landlord shall, at the Landlord's expense and with reasonable promptness and dispatch, repair and restore the Premises to substantially the same condition as before Rev Standard Form 2009 Page 7 of 22 Landlord Tenant Rev Standard Form 2009 Page 8 of 22 Landlord Tenant

193 the damage. In the event of a partial destruction of the Premises there shall be an abatement in the rent payable during the time such repairs or rebuilding are being made. Such proportionate deduction of rent shall be based upon the extent to which the damage and the repairs or rebuilding interfere with the business carried on by the Tenant in Premises. Full rental shall commence after: (i) completion of the repairs and restoration of the Premises by the Landlord; and (ii) Tenant, after making a reasonable assessment of damages, determines that the Premises are fit for occupancy by the Tenant. 18. CONDEMNATION (a) In the event, during the Term of this Agreement, the whole 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 have the right to terminate this Agreement upon notice to the Landlord and the rent shall be paid only to the time when the Tenant surrenders possession of the Premises. (b) When only a portion of the Premises are acquired for public or quasi-public use through the exercise of or under the threat of eminent domain or condemnation proceedings, the Rent shall be reduced by an amount determined by the ratio of the fair market value of the portion of the Premises thus acquired to the fair market value of the total Premises immediately preceding such acquisition. Fair market value shall be determined in both the case of the condemned property and the total Premises by a member of the American Institute of Real Estate Appraisers who is reasonably acceptable to Landlord and Tenant. (c) In the event that only a portion of the Premises are so acquired, the Landlord agrees to promptly make all necessary alterations and repairs which shall be required because of such partial acquisition. 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 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. 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. (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 Rev Standard Form 2009 Page 9 of 22 Landlord Tenant Rev Standard Form 2009 Page 10 of 22 Landlord Tenant 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, 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 (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 to be used to construct, renovate, or rehabilitate 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 All notices, statements, demands, requests, consents, approvals and authorizations hereunder given by either party to the other shall be in writing and sent by registered or certified mail, postage prepaid and addressed. To Tenant, the same shall be addressed to the President of the Institution, the Vice President for Business and Finance and to the Vice Chancellor for Facilities, Board of Regents of the University System of Georgia as stated in the preamble. To Landlord, the same shall be sent to the address stated in the preamble or at such other address as Landlord may from time to time designate by notice to Tenant. 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 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. 28. TIME OF ESSENCE Time is of the essence in this Agreement. 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. Rev Standard Form 2009 Page 11 of 22 Landlord Tenant Rev Standard Form 2009 Page 12 of 22 Landlord Tenant

194 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 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; such responsibility shall be paid by special rent assessment. 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 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) Notwithstanding any other provision of this Agreement, Tenant shall pay Landlord as additional rent an amount equal to the costs incurred by Landlord pursuant to Exhibit A, Stipulations 7, 8, and 21(a) and (b) of this Agreement, to the extent insufficient funds are on deposit in Landlord s Repair, Replacement and Maintenance Fund to pay such costs. With respect to Stipulations 7 and 8, Tenant will notify Landlord of expenses incurred to construct or acquire replacements of fixtures or personal property that have become worn out or otherwise obsolete or for making any other capital improvements or capital expenditures, and Landlord agrees to requisition such amounts from its Repair, Replacement and Maintenance Fund (as defined in Stipulation 4(b) below) and to use such proceeds to pay such costs to the extent funds are available therefor. Tenant s payment of any additional rent pursuant to this Stipulation 4 shall be within thirty (30) days of Tenant s receipt of supporting documentation evidencing the necessity for the related expenditures. (b) Landlord agrees to establish and maintain an account to be used for the repair, replacement and maintenance of the Premises (the Repair, Replacement and Maintenance Fund ). In order to fund the Repair, Replacement and Maintenance Fund, Tenant shall pay Landlord the amounts shown on Exhibit E of this Agreement as additional rent each month, payable on the first day of each and every calendar month during the term. On or before July 1 of every five-year period commencing July 1, 2011 (with the first such report being due by June 30, 2016), Landlord shall provide to Tenant an engineering report on the physical and mechanical condition of the Premises, performed by an engineer reasonably acceptable to Tenant. Such report shall include a capital asset replacement analysis, an evaluation of the adequacy of the monthly additional rent to fund the Repair, Replacement and Maintenance Fund, and a recommendation as to any required adjustment of the foregoing. The parties hereto shall implement any recommendations contained in the engineer s report, commencing with the next renewal term, if this Agreement is renewed. Rev Standard Form 2009 Page 13 of 22 Landlord Tenant Rev Standard Form 2009 Page 14 of 22 Landlord Tenant 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 (and with respect to Stipulation 4 above, to the extent not covered by amounts held in Landlord s Repair, Replacement and Maintenance Fund), collectively shall not exceed the moneys budgeted by Savannah 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, 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. END OF EXHIBIT B EXHIBIT C LEASE LIMITS BUILDING A LEASE AREA ALL THAT CERTAIN TRACT OF LAND LOCATED IN THE 5 TH G. M. DISTRICT, TOWN OF THUNDERBOLT, CHATHAM COUNTY, GEORGIA. BEING KNOWN AS SAVANNAH STATE UNIVERSITY FRESHMEN HOUSING, BUILDING A LEASE AREA. BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT A MAGNETIC NAIL (MAG NAIL) IN THE INTERSECTION OF THE CENTERLINES OF FALLIGANT AVENUE AND B. J. JAMES DRIVE, SAID MAG NAIL HAVING COORDINATES OF N 738,209.95, E 1,000,487.97; THENCE S W A DISTANCE OF TO A POINT, BEING THE NORTHEAST CORNER OF THE SAVANNAH STATE UNIVERSITY FRESHMEN HOUSING, BUILDING A LEASE AREA, LOCATED INSIDE THE PROPERTY OF THE UNIVERSITY SYSTEM OF GEORGIA, SAID POINT HAVING COORDINATES OF N 738,005.62, E 1,000,183.56, AND BEING THE POINT OF BEGINNING; THENCE ALONG A LINE WITHIN THE PROPERTY OF THE UNIVERSITY SYSTEM OF GEORGIA THE FOLLOWING COURSES AND DISTANCES: S W A DISTANCE OF TO A POINT, N W A DISTANCE OF TO A POINT, S W A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF 8.00 TO A POINT, S W A DISTANCE OF TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF TO A POINT, N W A DISTANCE OF 8.00 TO A POINT, S W A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF TO A POINT, S E A DISTANCE OF 4.67 TO A POINT, N E A DISTANCE OF TO A POINT, S E A DISTANCE OF TO A POINT, N E A DISTANCE OF 5.00 TO A POINT, S E A DISTANCE OF TO A POINT, S W A DISTANCE OF 5.00 TO A POINT, S E A DISTANCE OF TO THE POINT OF BEGINNING; AND CONTAINING ACRE, OR 14,673 SQUARE FEET. COORDINATES, BEARINGS, AND DISTANCES IN THE ABOVE DESCRIPTION ARE BASED ON THE STATE PLANE COORDINATE SYSTEM OF GEORGIA, EAST ZONE, USING THE NORTH AMERICAN DATUM OF 1983 (NAD83). END OF EXHIBIT C Rev Standard Form 2009 Page 15 of 22 Landlord Tenant Rev Standard Form 2009 Page 16 of 22 Landlord Tenant

195 [INTENTIONALLY LEFT BLANK] EXHIBIT D REQUIRED INSURANCE COVERAGES Insurance Coverages. The Landlord agrees to secure and have an authorized agent state on the Insurance Certificate that the following types of insurance coverages, not inconsistent with the policies and requirements of O.C.G.A , have been purchased or caused to be purchased by the Landlord, during the term of this Agreement. The minimum required coverages and liability limits are as follows: (i) Workers Compensation Insurance. In the event Landlord has employees, the Landlord 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 of authority from the Insurance Commissioner approving the group insurance plan. A self-insurer must submit a certificate from the Georgia Board of Workers Compensation stating the Tenant qualifies to pay its own workers compensation claims. The Landlord shall require all subcontractors performing work or occupying the Premises to obtain an insurance certificate showing proof of Workers Compensation and shall submit a certificate on the letterhead of the Landlord in the following language prior to the commencement of the Construction Term (as defined in the Ground Lease): This is to certify that all contractors and subcontractors performing work or occupying the Premises are covered by their own workers compensation insurance or are covered by the Landlord s workers compensation insurance. (ii) Employers Liability Insurance. In the event Landlord has employees, the Landlord shall also maintain Employers Liability Insurance Coverage with limits of at least: (1) bodily injury by accident - $1,000,000 each accident; and (2) bodily injury by disease - $1,000,000 each employee. The Landlord shall require all contractors and subcontractors performing work or occupying the Premises to obtain an insurance certificate showing proof of Employers Liability Insurance Coverage and shall submit a certificate on the letterhead of the Landlord 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 Landlord s employers liability insurance. (iii) Commercial General Liability Insurance. The Landlord shall provide Commercial General Liability Insurance (2004 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 liability, and contractual liability. The Commercial General Liability Insurance shall provide at minimum the following limits: Rev Standard Form 2009 Page 17 of 22 Landlord Tenant Rev Standard Form 2009 Page 18 of 22 Landlord Tenant Coverage Limit 1. Premises and Operations $1,000,000 per Occurrence 2. Products and Completed Operations $1,000,000 per Occurrence 3. Personal Injury $1,000,000 per Occurrence 4. Contractual $1,000,000 per Occurrence 5. Fire Legal $1,000,000 per Occurrence 6. Blasting and Explosion $1,000,000 per Occurrence 7. Collapse of Structures $1,000,000 per Occurrence* 8. Underground Damage $1,000,000 per Occurrence* 9. General Aggregate $2,000,000 per Project Additional Requirements for Commercial General Liability Insurance: (1) The policy shall name as additional insureds the officers, members, and employees of the Landlord, the Tenant and the State of Georgia, but only with respect to claims that arise out of the occupancy under this Agreement 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 project/location. (iv) Commercial Business Automobile Liability Insurance. The Landlord shall provide Commercial Business Automobile Liability Insurance which shall include coverage for bodily injury and property damage arising from the operation of any owned, non-owned or hired automobiles. The Commercial Business Automobile Liability Insurance policy shall provide not less than $1,000,000 Combined Single Limits for each occurrence. Additional requirements for Commercial Business Automobile Liability Insurance: (1) The policy shall name as additional insureds the officers, members and employees of the Landlord, the Tenant and the State of Georgia, but only with respect to claims arising out of the occupancy under this Agreement 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. (v) Commercial Umbrella Liability Insurance. The Landlord shall provide a Commercial Umbrella Insurance Policy to provide excess coverage above the Commercial General Liability, the Commercial Business Automobile Liability and Employers Liability to satisfy the minimum limits set forth herein. The minimum amount of Umbrella limits required above the coverage s and minimum limits stated in subparagraphs (i), (ii), (iii) and (iv) above shall be: $2,000,000 per Occurrence; and $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 Landlord, the Tenant and the State of Georgia, but only with respect to claims arising out of work or occupancy of the Premises under this Agreement 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. Required only during the term of any construction. (vi) Builders Risk Insurance. During any period of construction only, the Landlord shall provide a Builder s Risk Insurance Policy to be payable to the Tenant and the Landlord as their interest may appear. The policy amount shall be equal to 100% of the improvements construction contract sum, Rev Standard Form 2009 Page 19 of 22 Landlord Tenant Rev Standard Form 2009 Page 20 of 22 Landlord Tenant

196 written on a 2002 Causes of loss - Special Form, or its equivalent. All deductibles shall be the sole responsibility of the Landlord or the contractor. 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: EXHIBIT E RENT SCHEDULE (1) Furniture and equipment may be delivered to the insured premises and installed in place ready for use; (2) Partial or complete occupancy by the Tenant or Landlord; and (3) Performance of work in connection with construction operations insured by the Landlord or Tenant, by agents or subtenants other contractors of Landlord or Tenant, or by contractors of the Landlord or Tenant. (vii) Property Insurance. During the term of the Rental Agreement, Landlord shall provide a Fire and Hazard Property Insurance Policy to be made payable to the Tenant and Landlord as their interests may appear. The policy amount should be equal to 100% of the replacement value of the improvements, written on 2002 Causes of Loss - Special Form, or its equivalent. All deductibles shall be the sole responsibility of the Landlord. (viii) Rental Interruption Insurance. During the term of the Rental Agreement, Landlord shall provide a Rental Interruption Insurance Policy. Such policy shall provide coverage for full or partial interruption of rents for up to 24 months as a result of any abatement of rents (in whole or in part). END OF EXHIBIT D Rev Standard Form 2009 Page 21 of 22 Landlord Tenant Rev Standard Form 2009 Page 22 of 22 Landlord Tenant

197 Appendix J Form of Ground Lease for Building A

198 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

199 STATE OF GEORGIA No. of Two Executed Original Counterparts. COUNTERPART OF. 1. USE OF PROPERTY COUNTY OF CHATHAM GROUND LEASE (SSU COMMUNITY DEVELOPMENT I, LLC PROJECT) (BUILDING A) THIS GROUND LEASE (hereinafter referred to as the Ground Lease or the Lease ) is made and entered this day of December 2010, 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 SSU COMMUNITY DEVELOPMENT I, LLC whose address for purposes of this Lease is 3219 College Street, Savannah, Georgia 31404, Party of the Second Part (hereinafter referred to as Lessee ), for the use of certain real property located on the campus of SAVANNAH 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.337 acres 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 November 10, 2010, Lessor determined the Premises to no longer be advantageously useful to the Institution or other units of the University System, but only for the purpose of constructing, owning, operating and maintaining a facility consisting of approximately 106 beds of student housing and related amenities; 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 constructing, owning, operating and maintaining student housing facilities containing approximately 106 beds and related amenities 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. 1.1 The Premises shall be used by Lessee for the purpose of constructing, owning, operating and maintaining student housing facilities containing approximately 106 beds and related amenities (hereinafter the Improvements ). The Improvements shall be constructed pursuant to the program, plans and specifications identified in Exhibit C attached hereto approved by Lessor. Upon completion of construction of the Improvements, the Premises may be modified as set forth in Section Without limitation of the foregoing, Lessee shall not: (a) use the Premises or Improvements 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 and Improvements, 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 construction, 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 Construction Term, 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. 4. TERM AND TERMINATION 4.1 Unless sooner terminated as hereinafter provided, the Construction Term shall begin upon the execution of this Lease and shall end at 11:59 o clock P.M. prevailing legal time in Atlanta, Georgia, on the last day preceding the Commencement Date of the Primary Term, as set forth in Section 4.2; provided, however that, unless an extension of the Construction Term is agreed to by Lessor, the Construction Term shall terminate automatically, if construction is not completed, or is suspended without REVISED 2/16/10 1 Lessor Lessee REVISED 2/16/10 2 Lessor Lessee the consent of the Lessor for period in excess of six (6) months) without further action by either party, at midnight on the day before the second anniversary of the commencement of the Construction Term. 4.2 The Primary Term of this Lease shall begin upon the first day of the first month after issuance of a certificate of occupancy for the Improvements (the Commencement Date ) but in no event shall the Commencement Date be prior to August 1, The Primary Term shall end at 11:59 o clock P.M. prevailing legal time in Atlanta, Georgia, on June 30, 2041, unless sooner terminated as hereinafter provided. Lessee may terminate this Lease during the Primary Term only upon thirty (30) days written notice to Lessor and, subject to Lessor s rights under Section 9.3, conveyance to Lessor of all 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 to all improvements then existing on the Premises. 4.3 The termination date of the Primary Term shall be extended, upon the request of Lessee, for one extension period of up to five (5) years, and such request must be made to Lessor at least ninety (90) days, but no more than 180 days, prior to the termination date. Any outstanding obligation of the Lessee to pay an amount secured directly or indirectly by any leasehold security deed permitted under this Lease is sufficient grounds that Lessor shall grant an extension provided that 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 and 4.4, 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 and the Improvements shall wholly cease and title to the Premises and the Improvements, 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 or the Improvements in unsound or unsafe 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 the Improvements 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. RULE AGAINST PERPETUITIES If the Rule Against Perpetuities or any rule of law with respect to restriction on the alienation of property or remoteness of vesting of property interests, including, without limitation, O.C.G.A , as amended, shall limit the time within which the vesting of title to the Improvements for which provision is made in Section 9 must occur, then such vesting of title shall occur not later than twenty (20) years after the death of the last survivor of the Board of Regents of the University System of Georgia in office on the date of execution of this Lease. In the event such vesting should occur due to the provisions of this section and prior to the expiration or termination of this Lease, this Lease shall continue in full force and effect, except the term Premises shall be automatically modified to include the Improvements. 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 AND TITLE Lessee hereby acknowledges that it has fully inspected the Premises and that the Premises and title to 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. 9. IMPROVEMENTS 9.1 Lessee shall construct during the Construction Term, at its sole cost and expense, the Improvements specified and described in the program, plans and specifications identified in Exhibit C attached hereto, including such temporary or permanent improvements, erections, additions and alterations as are necessary to adapt the Premises and Improvements for use as a student housing facility containing approximately 106 beds and related amenities. After obtaining permission for demolition from Lessor Lessee shall, at its sole cost and expense, demolish any necessary existing improvements or structures on the Premises to facilitate a portion of the construction contemplated herein, including the clearing, grubbing and preparation of the Premises for construction of a portion of the Improvements. All Improvements and facilities shall be constructed wholly within the boundary lines of the Premises and each shall be a self-contained, complete unit and shall not be tied into or have any physical connection with any structure located on any other property of Lessor. REVISED 2/16/10 3 Lessor Lessee REVISED 2/16/10 4 Lessor Lessee

200 9.2 Title to the Improvements shall vest in Lessee until the end of the Primary Term, unless sooner terminated pursuant to the terms of this Lease. Lessee covenants and agrees to convey all of Lessee s right, title and interests, free and clear of all liens and security interests, and subject to Section 4.4, surrender possession of the Premises and Improvements, at the expiration of the Primary Term, or at such date of earlier termination pursuant to the provisions of this Lease. Any and all temporary improvements, erections or additions constructed on the Premises by Lessee, which are not a part of the Improvements as specified in Section 9.1, 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 and the Improvements 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 improvements. Lessee shall not begin the removal or demolition of any improvements prior to the expiration or earlier termination date: provided that all improvements shall be removed 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 improvements. 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 and Improvements to the extent of its leasehold interest only. Lessor hereby consents to the encumbrance of the Premises during the Construction Term for the purpose of construction and during the Primary Term for permanent financing of the Improvements to the Premises contemplated by this Section 9. 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) 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. 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 Improvements, 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. 9.7 Upon completion of construction of the Improvements, but not later than ninety (90) days after termination of the Construction Term, Lessee shall provide, at its sole cost and expense, as built drawings and plats of the Premises and the Improvements. Should the Premises as described on Exhibit A not be fully utilized by the Improvements, then Lessee covenants and agrees to resurvey the portion of the Premises used by the Improvements and to then convey the unused portion of the Premises back to Lessor, at which time this Lease shall be modified so that the Premises subject to the Primary Term is the as built property utilized by the Improvements. 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 Board of Regents of the University System of Georgia, 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 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. 9.6 Lessor has not and will not participate in the structuring, offering or issuance of bonds or other financing to be used to construct, renovate, or rehabilitate the Improvements and Lessor shall have no obligation with respect to the bonds or the financing of the Improvements. REVISED 2/16/10 5 Lessor Lessee REVISED 2/16/10 6 Lessor Lessee 11. INSURANCE 11.1 Insurance Certificates. Unless waived in writing, or otherwise provided by the Lessor the Lessee shall, prior to the commencement of work, 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. (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 self-insurer 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 the Construction Term: 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 - $1,000,000 each accident; and (ii) Bodily Injury by Disease - $1,000,000 each employee. 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 (2004 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 $1,000,000 per Occurrence 2. Products and Completed Operations $1,000,000 per Occurrence 3. Personal Injury and Advertising $1,000,000 per Occurrence 4. Contractual $1,000,000 per Occurrence 5. Fire Legal $1,000,000 per Occurrence 6. Blasting and Explosion $1,000,000 per Occurrence* 7. Collapse of Structures $1,000,000 per Occurrence* 8. Underground Damage $1,000,000 per Occurrence* 9. General Aggregate $2,000,000 this lease only * Required during any construction period. Additional Requirements for Commercial General Liability Insurance: REVISED 2/16/10 7 Lessor Lessee REVISED 2/16/10 8 Lessor Lessee

201 (1) The policy shall name as additional insureds the officers, members, agents and employees of the Lessor, 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 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 project/location. (d) Commercial Business Automobile Liability Insurance. The Lessee shall provide Commercial Business Automobile Liability Insurance which shall include coverage for bodily injury and property damage arising from the operation of any owned, non-owned or hired automobile. The Commercial Business Automobile Liability Insurance Policy shall provide not less than $1,000,000 Combined Single Limits for each occurrence. Additional Requirements for Commercial Business Automobile Liability Insurance: (1) The policy shall name as additional insureds the officers, members, agents and employees of the Lessor, 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. (e) Commercial Umbrella Liability Insurance. The Lessee shall provide a Commercial Umbrella Liability Insurance Policy to provide excess coverage above the Commercial General Liability, the Commercial Business Automobile Liability, 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), (c) and (d) 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. (f) Builders Risk Insurance. During any construction period only, Lessee shall provide a Builder s Risk Insurance Policy to be made payable to the Lessor, Institution and Lessee as their interests may appear. The policy amount should be equal to 100% of the Improvements 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, for any All Risk policy except for Catastrophic Perils including Flood, Earthquake and Windstorm which shall not exceed $50, 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. (g) Property Insurance. During the Primary Term, Lessee shall provide a Fire and Hazard Property Insurance Policy to be made payable to the Lessor, Institution and Lessee as their interests may appear. The policy amount should be equal to 100% of the replacement value of the Improvements, 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, except for Catastrophic Perils including Flood, Earthquake and Windstorm which shall not exceed $50, 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 the Construction Period or any subsequent 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 REVISED 2/16/10 9 Lessor Lessee REVISED 2/16/10 10 Lessor Lessee 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. 14. DESTRUCTION OF OR DAMAGE TO PROPERTY If the Improvements and/or any other building(s) on 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, Improvements 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 and the Improvements. 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 built 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 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 and improvements, 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 and improvements thereon, 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 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. REVISED 2/16/10 11 Lessor Lessee REVISED 2/16/10 12 Lessor Lessee

202 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. 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 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. NO 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 their respective successors and assigns, any right or interest whatsoever. No party other than the parties hereto 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 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] 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. REVISED 2/16/10 13 Lessor Lessee REVISED 2/16/10 14 Lessor Lessee 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 [SIGNATURES CONTINUED FROM PREVIOUS PAGE] APPROVED: By: Attest: SONNY PERDUE Governor BRIAN P. KEMP Secretary of State By: LINDA M. DANIELS Vice Chairman for Facilities L.S. Signed, sealed and delivered as to Governor in the presence of: (Great Seal of the State of Georgia) Attest: JAMES BURNS NEWSOME Secretary to the Board L.S. Unofficial Witness Signed, sealed and delivered as to Lessor in the presence of: Unofficial Witness (Seal Affixed Here) Official Witness, Notary Public My Commission Expires: Official Witness, Notary Public My Commission Expires: APPROVAL OF INSTITUTION: [SIGNATURES CONTINUED ON NEXT PAGE] By: Earl G. Yarbrough President [SIGNATURES CONTINUED ON NEXT PAGE] REVISED 2/16/10 15 Lessor Lessee REVISED 2/16/10 16 Lessor Lessee

203 [SIGNATURES CONTINUED FROM PREVIOUS PAGE] LESSEE: SSU COMMUNITY DEVELOPMENT I, LLC EXHIBIT A LEGAL DESCRIPTION LEASE LIMITS Signed, sealed and delivered as to Lessee in the presence of: Unofficial Witness Official Witness, Notary Public My Commission Expires: By: Attest: Manager Secretary (Seal Affixed Here) L.S. L.S. BUILDING A LEASE AREA ALL THAT CERTAIN TRACT OF LAND LOCATED IN THE 5 TH G. M. DISTRICT, TOWN OF THUNDERBOLT, CHATHAM COUNTY, GEORGIA. BEING KNOWN AS SAVANNAH STATE UNIVERSITY FRESHMEN HOUSING, BUILDING A LEASE AREA. BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT A MAGNETIC NAIL (MAG NAIL) IN THE INTERSECTION OF THE CENTERLINES OF FALLIGANT AVENUE AND B. J. JAMES DRIVE, SAID MAG NAIL HAVING COORDINATES OF N 738,209.95, E 1,000,487.97; THENCE S W A DISTANCE OF TO A POINT, BEING THE NORTHEAST CORNER OF THE SAVANNAH STATE UNIVERSITY FRESHMEN HOUSING, BUILDING A LEASE AREA, LOCATED INSIDE THE PROPERTY OF THE UNIVERSITY SYSTEM OF GEORGIA, SAID POINT HAVING COORDINATES OF N 738,005.62, E 1,000,183.56, AND BEING THE POINT OF BEGINNING; THENCE ALONG A LINE WITHIN THE PROPERTY OF THE UNIVERSITY SYSTEM OF GEORGIA THE FOLLOWING COURSES AND DISTANCES: S W A DISTANCE OF TO A POINT, N W A DISTANCE OF TO A POINT, S W A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF 8.00 TO A POINT, S W A DISTANCE OF TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF TO A POINT, N W A DISTANCE OF 8.00 TO A POINT, S W A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF 1.00 TO A POINT, N W A DISTANCE OF TO A POINT, N E A DISTANCE OF TO A POINT, S E A DISTANCE OF 4.67 TO A POINT, N E A DISTANCE OF TO A POINT, S E A DISTANCE OF TO A POINT, N E A DISTANCE OF 5.00 TO A POINT, S E A DISTANCE OF TO A POINT, S W A DISTANCE OF 5.00 TO A POINT, S E A DISTANCE OF TO THE POINT OF BEGINNING; AND CONTAINING ACRE, OR 14,673 SQUARE FEET. COORDINATES, BEARINGS, AND DISTANCES IN THE ABOVE DESCRIPTION ARE BASED ON THE STATE PLANE COORDINATE SYSTEM OF GEORGIA, EAST ZONE, USING THE NORTH AMERICAN DATUM OF 1983 (NAD83). REVISED 2/16/10 17 Lessor Lessee REVISED 2/16/10 A-1 Lessor Lessee OTHER EASEMENTS In addition, Lessor hereby grants to Lessee the following easements, rights and privileges subject to the limitations set forth below and provided that Lessee s use of the easements below does not unreasonably interfere with Lessor s use of its property adjacent to the Premises or existing and future walkways and drives, respectively. The easements, rights and privileges granted hereby shall run with the land during the term of this Lease. UTILITY AND COMMUNICATION EASEMENTS: Lessor grants to Lessee a non-exclusive easement on, over, across and through Lessor s property adjacent to the Premises to connect to and use Lessee s water, sewer (both storm and sanitary), electrical, telephone, electronic and other communication facilities, television, internet, chilled water and other such utility lines and services to those of Lessor or those of any governmental authority or utility provider currently available or available in the future to the Premises so long as Lessee pays to Lessor when due all of Lessor s cost for extending any such utility lines to the Premises and Lessor s cost of Lessee s usage of any such utility services. In addition, Lessor grants to Lessee a non-exclusive easement over Lessor s property adjacent to the Premises to install electronic data and communication lines and transformers in such locations as may be approved by the Lessor, such approval not to be unreasonably withheld. The non-exclusive easement herein granted shall expire automatically upon the expiration or earlier termination of this Ground Lease. INGRESS/EGRESS EASEMENTS: During the term of this Lease, Lessor grants to Lessee a non-exclusive easement over and across all existing and future walkways and drives between the adjacent public road Falligant Avenue and the Premises for vehicular and pedestrian ingress and egress to and from the Premises. CONSTRUCTION LIMITS PHASE I -BUILDING A & B - CONSTRUCTION LIMITS ALL THAT CERTAIN TRACT OF LAND LOCATED IN THE 5TH G. M. DISTRICT, TOWN OF THUNDERBOLT, CHATHAM COUNTY, GEORGIA. BEING KNOWN AS SAVANNAH STATE UNIVERSITY FRESHMEN HOUSING PHASE I PROJECT LIMITS. BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT A MAGNETIC NAIL (MAG NAIL) IN THE INTERSECTION OF THE CENTERLINES OF FALLIGANT AVENUE AND B. J. JAMES DRIVE, SAID MAG NAIL HAVING COORDINATES OF N 738,209.95, E 1,000,487.97; THENCE N71 55'54"W A DISTANCE OF ' TO A POINT IN THE EAST BOUND LANE OF FALLIGANT AVENUE; THENCE LEAVING SAID FALLIGANT AVENUE, AND INTO THE PROPERTY OF THE UNIVERSITY SYSTEM OF GEORGIA THE FOLLOWING COURSES AND DISTANCES: S11 37'16"W A DISTANCE OF ' TO A POINT, S09 35'30"W A DISTANCE OF ' TO A POINT, BEING THE NORTHEAST CORNER OF THE UNIVERSITY SYSTEM OF GEORGIA, SAVANNAH STATE UNIVERSITY FRESHMEN HOUSING PHASE I PROJECT LIMITS, LOCATED INSIDE THE PROPERTY OF THE UNIVERSITY SYSTEM OF GEORGIA, SAID POINT HAVING COORDINATES OF N 737,995.33, E 1,000,227.15, AND BEING THE POINT OF BEGINNING; THENCE ALONG A LINE WITHIN THE PROPERTY OF THE UNIVERSITY SYSTEM OF GEORGIA AND ADJOING STREET RIGHT-OF-WAYS THE FOLLOWING COURSES AND DISTANCES: S09 35'30"W A DISTANCE OF 24.39' TO A POINT, S20 38'17"W A DISTANCE OF 8.73' TO A POINT, N84 32'35"W A DISTANCE OF 21.38' TO A POINT, S27 15'10"W A DISTANCE OF 50.13' TO A POINT, S56 56'31"W A DISTANCE OF ' TO A POINT ON A NON-TANGENT CURVE, CONTINUE THENCE ALONG A CURVE TO THE LEFT HAVING A LENGTH OF 84.99', A RADIUS OF ', A TANGENT OF 43.64', A DELTA ANGLE OF 32 05'56", A BEARING OF S83 13'54"W, AND A CHORD OF 83.88' TO A POINT, S64 01'42"W A DISTANCE OF ' TO A POINT, CONTINUE THENCE ALONG A NON-TANGENT CURVE TO THE LEFT HAVING A LENGTH OF ', A RADIUS OF ', A TANGENT OF 52.31', A DELTA ANGLE OF 39 32'31", A BEARING OF S44 10'04"W, AND A CHORD OF 98.45' TO A POINT, S27 59'05"W A DISTANCE OF 86.26' TO A POINT, N56 24'01"W A DISTANCE OF ' TO A POINT, N38 40'40"W A DISTANCE OF 13.68' TO A POINT, N61 16'02"W A DISTANCE OF 85.56' TO A POINT, N66 52'47"W A DISTANCE OF 16.35' TO A POINT, N26 58'22"E A DISTANCE OF ' TO A POINT, S68 31'21"E A DISTANCE OF 55.99' TO A POINT, S61 10'01"E A DISTANCE OF 10.65' TO A POINT, N33 45'29"E A DISTANCE OF 36.08' TO A POINT, N39 30'49"E A DISTANCE OF 47.16' TO A POINT, N48 34'35"E A DISTANCE OF 20.56' TO A POINT, N51 05'32"E A DISTANCE OF 99.96' TO A POINT, N43 10'24"E A DISTANCE OF 23.55' TO A POINT, N37 02'37"E A DISTANCE OF 24.48' TO A POINT, N34 58'42"E A DISTANCE OF 23.74' TO A POINT, N28 57'59"E A DISTANCE OF 11.64' TO A POINT, S68 21'57"E A DISTANCE OF ' TO A POINT, S34 12'11"E A DISTANCE OF 29.53' TO A POINT, N34 14'54"E A DISTANCE OF 50.45' TO A POINT, S67 49'47"E A DISTANCE OF ' TO THE POINT OF BEGINNING. COORDINATES, BEARINGS, AND DISTANCES IN THE ABOVE DESCRIPTION ARE BASED ON THE STATE PLANE COORDINATE SYSTEM OF GEORGIA, EAST ZONE, USING THE NORTH AMERICAN DATUM OF 1983 (NAD83). EXCEPTING THEREFROM ACRES OF LEASE AREA KNOWN AS BUILDINGS "A", AND "B" LEASE AREA LOCATED WITHIN THE CONFINES OF THE SAVANNAH STATE UNIVERSITY FRESHMEN HOUSING PHASE I PROJECT LIMITS; BEING DESCRIBED AND ATTACHED HERETO. CONTAINING ACRES, OR 170,797 SQUARE FEET OF PHASE I PROJECT LIMITS AREA. REVISED 2/16/10 A-2 Lessor Lessee REVISED 2/16/10 A-3 Lessor Lessee

204 EXHIBIT B Special Stipulations [None] EXHIBIT C [Indicate with specificity the program, plans, AND specifications that will be the basis for the improvements under this Ground Lease] VOLUME ONE A000.1 Cover Sheet Volume 1 12/03/10 C1.0 Cover 12/03/10 General Notes 12/03/10 C2.0 C4.0 Demolition Plan 12/03/10 C5.0 Overall Site Plan 12/03/10 C5.1 Site Staking Plan 12/03/10 C6.0 Overall Utility Plan 12/03/10 C7.0 Sanitary Plan 12/03/10 C8.0 Water Plan 12/03/10 C9.0 Grading Plan 12/03/10 C9.1 Storm Profiles 12/03/10 C10.0 Erosion Control Plan Phase 1 12/03/10 C10.1 Erosion Control Plan Phase 2 12/03/10 C10.2 Erosion Control Plan Phase 3 12/03/10 C10.3 Erosion Control Notes 12/03/10 C10.4 Erosion Control Notes 12/03/10 C11.0 Details 12/03/10 C11.1 Details 12/03/10 C11.2 Details 12/03/10 C11.3 Details 12/03/10 C11.4 Details 12/03/10 C11.5 Details 12/03/10 1/3 Topographic Survey 08/02/10 2/3 Topographic Survey 08/02/10 3/3 Topographic Survey 08/02/10 AS-1.0 Site Development Plan 09/25/10 AS-2.0 Site Development Details 09/25/10 L-1.0 Landscape Plan 09/25/10 L-2.0 Landscape Details 09/25/10 AL A01 Life Safety Plans Building A 12/03/10 AL B01 Life Safety Plans Building B 12/03/10 AL C01 Life Safety Plans Building C 12/03/10 AL C02 Life Safety Plans Building C 12/03/10 AL D01 (Untitled - Life Safety Floor Plan) 12/03/10 AL E01 Adams Hall Life Safety Plan 12/03/10 AL H01 Life Safety Plans Building H (Hubert Hall) 12/03/10 A001 Abbreviation, Sign & Typical Details 12/03/10 A002 Wall, Ceiling & Roof Assembly, Blocking Details 12/03/10 A003 UL Listings: Wall & Roof-Ceiling Assemblies 12/03/10 A004 UL Listings: Wall & Floor-Ceiling Assemblies 12/03/10 A005 UL Listing: Floor-Ceiling Assembly (L503) 12/03/10 A006 UL Listing: Fire Penetrations 12/03/10 A007 UL Listing: Fire Penetrations 12/03/10 A A100 Building A Floor Plan 1st & 2nd Floors 12/03/10 A A101 Building A Floor Plan 3rd Floor & Attic 12/03/10 A A102 Building A Roof Plan 12/03/10 REVISED 2/16/10 B-1 Lessor Lessee REVISED 2/16/10 C-1 Lessor Lessee A B100 Building B Floor Plan 1st Floor 12/03/10 A B101 Building B Floor Plan 2nd Floor 12/03/10 A B102 Building B Floor Plan 3rd Floor 12/03/10 A B103 Building B Attic Plan 12/03/10 A B104 Building B Roof Plan 12/03/10 A A200 Building A Exterior Elevations 12/03/10 A A201 Building A Exterior Elevations & Enlarged Elevations 12/03/10 A A300 Building A Reflected Ceiling 1st & 2nd Floors 12/03/10 A A301 Building A Reflected Ceiling 3rd Floor 12/03/10 A A350 Building A Floor Finish 1st & 2nd Floors 12/03/10 A A351 Building A Floor Finish 3rd Floor 12/03/10 A A400 Building A Enlarged Floor Plans 12/03/10 A A401 Building A Enlarged Floor Plans 12/03/10 A A402 Building A Enlarged Floor Plans 12/03/10 A A420 Building A Enlarged Stair Plans 12/03/10 A A450 Building A Interior Elevations 12/03/10 A B200 Building B Exterior Elevations 12/03/10 A B201 Building B Exterior Elevations 12/03/10 A B300 Building B Reflected Ceiling 1st Floor 12/03/10 A B301 Building B Reflected Ceiling 2nd Floor 12/03/10 A B302 Building B Reflected Ceiling 3rd Floor 12/03/10 A B350 Building B Floor Finish 1st Floor 12/03/10 A B351 Building B Floor Finish 2nd Floor 12/03/10 A B352 Building B Floor Finish 3rd Floor 12/03/10 A B400 Building B Enlarged Floor Plans 12/03/10 A B401 Building B Enlarged Floor Plans 12/03/10 A B402 Building B Enlarged Floor Plans 12/03/10 A B420 Building Enlarged Stair Plans 12/03/10 A B450 Building B Interior Elevations 12/03/10 A C100 Building C Floor Plan 1st Floor 12/03/10 A C101 Building C Floor Plan 2nd Floor 12/03/10 A C102 Building C Floor Plan 3rd Floor 12/03/10 A C103 Building C Floor Plan 4th Floor 12/03/10 A C104 Building C Attic Plan 12/03/10 A C105 Building C Roof Plan 12/03/10 A C200 Building C Exterior Elevations 12/03/10 A C201 Building C Exterior Elevations 12/03/10 A C300 Building C Reflected Ceiling 1st Floor 12/03/10 A C301 Building C Reflected Ceiling 2nd Floor 12/03/10 A C302 Building C Reflected Ceiling 3rd Floor 12/03/10 A C303 Building C Reflected Ceiling 4th Floor 12/03/10 A C350 Building C Floor Finish 1st Floor 12/03/10 A C351 Building C Floor Finish 2nd Floor 12/03/10 A C352 Building C Floor Finish 3rd Floor 12/03/10 A C353 Building C Floor Finish 4th Floor 12/03/10 A C400 Building C Enlarged Floor Plans 12/03/10 A C401 Building C Enlarged Floor Plans 12/03/10 A C402 Building C Enlarged Floor Plans 12/03/10 A C403 Building C Enlarged Floor Plans 12/03/10 A C420 Building C Enlarged Stair Plans 12/03/10 A C421 Building C Enlarged Stair Plans 12/03/10 A C450 Building C Interior Elevations 12/03/10 A D400 Interior Elevations & Details 12/03/10 A D401 Morgan Hall Exterior Steps, Ramp & Railing Details 12/03/10 A E400 Adams Hall Enlarged Plans & Elevations 12/03/10 A E401 Adams Hall Enlarged TLT Plans & Elevations 12/03/10 A D100 Morgan Hall Existing Floor Plan W/Photo Tags 12/03/10 A D101 Morgan Hall Proposed Floor Plan 12/03/10 A D102 Morgan Hall Roof Plan 12/03/10 A D200 Morgan Hall Exterior Elevations 12/03/10 A- D201 Morgan Hall Exterior Elevations 12/03/10 A D202 Morgan Hall Exterior Elevations 12/03/10 A-D203 Morgan Hall Exterior Elevations 12/03/10 A D300 Morgan Hall Proposed Floor Plan 12/03/10 A E300 Adams Hall Reflecting Ceiling Plan 12/03/10 A E100 Adams Hall Existing Floor Plan - Demo 12/03/10 A E101 Adams Hall Proposed Floor Plan 12/03/10 A E102 Adams Hall Proposed Roof Plan 12/03/10 A H100 EX Existing Conditions Hubert Hall 12/03/10 A H100 1st & 2nd Floor Plans Hubert Hall 12/03/10 A H101 3rd Floor Plan Hubert Hall 12/03/10 A E103 Proposed Exterior Floor Plan W/Photo Tag 12/03/10 A E200 Adams Hall Existing Exterior Elevations 12/03/10 A E201 Adams Hall Existing Exterior Elevations 12/03/10 A E202 Adams Hall Proposed Exterior Elevations 12/03/10 A E203 Adams Hall Proposed Exterior Elevations 12/03/10 A400 1 Bedroom Unit Plans & Internal Elevations 12/03/10 A401 2 Bedroom Unit Plan & Internal Elevations 12/03/10 A402 2 Bedroom RD Unit Plans & Internal Elevations 12/03/10 A403 Enlarged 2 Bedroom Type A and B Floor Plans and Elevation 12/03/10 Hubert A404 Enlarged 1 Bed Type A and B Floor Plans and Elevation Hubert 12/03/10 A405 Enlarged 4 Bedroom Type B Floor Plans and Elevation - Hubert 12/03/10 A500 Building Section 12/03/10 A 501 Camilla Hubert Hall Existing Building Section 12/03/10 A 502 Camilla Hubert Hall Proposed Building Section 12/03/10 A E500 Adams Hall Building Sections & Details 12/03/10 A601 Exterior Wall Sections 12/03/10 A602 Corridor Section 12/03/10 A603 Section Thru Party Wall & Store Front 12/03/10 A605 Door & Window Details 12/03/10 A606 Stair Section 12/03/10 A607 Elevator Section & Shaft Wall Detail 12/03/10 A608 Alternate Stair Section for 3 Story Stair Chase 12/03/10 A609 Alternate Stair Details 12/03/10 A650 Entrance Canopy Enlarged Elevations and Sections 12/03/10 A651 Porch Plan, Enlarged Elevations and Roof Plan 12/03/10 A800 Door and Finish Schedule 12/03/10 A810 Window and Storefront Schedule 12/03/10 A811 Window and Storefront Schedule 12/03/10 A812 Installation Details 12/03/10 A D800 Morgan Hall Finish Schedule 12/03/10 A D810 Morgan Hall Window Schedule 12/03/10 A E800 Adams Hall Finish Door and Window Schedule 12/03/10 S100 Structural Notes 12/03/10 S101 Foundation Sections 12/03/10 SA100 Building A Foundation & 2nd Floor Framing Plans 12/03/10 SA101 Building A 3rd Floor & Roof Framing Plans 12/03/10 SB100 Building B Foundation Plan 12/03/10 SB101 Building B 2nd Floor Framing Plan 12/03/10 SB102 Building B 3rd Floor Framing Plan 12/03/10 SB103 Building B Roof Framing Plan 12/03/10 REVISED 2/16/10 C-2 Lessor Lessee REVISED 2/16/10 C-3 Lessor Lessee

205 SC100 Building C Foundation Plan 12/03/10 SC101 Building C 2nd Floor Framing Plan 12/03/10 SC102 Building C 3rd Floor Framing Plan 12/03/10 SC103 Building C 4th Floor Framing Plan 12/03/10 SC104 Building C Roof Framing Plan 12/03/10 S200 Framing Details 12/03/10 S600 Shearwall Layouts/Schedules 12/03/10 S601 Sheawall Layouts/Schedules 12/03/10 S700 Typical Details 12/03/10 S701 Framing Details 12/03/10 VOLUME TWO A000.2 Cover Sheet Volume 2 12/03/10 P001 Legends, Notes & Schedules 12/03/10 P002 Plumbing Details 12/03/10 PA100 Building A Floor Plan 1st & 2nd Floors 12/03/10 PA100-UG Building A Floor Plan 1st Floor-Underground 12/03/10 PA101 Building A Floor Plan 3rd Floor & Attic 12/03/10 PB100 Building B Floor Plan 1st Floor 12/03/10 PB100-UG Building B Floor Plan 1st Floor-Underground 12/03/10 PB101 Building B Floor Plan 2nd Floor 12/03/10 PB102 Building B Floor Plan 3rd Floor 12/03/10 PC100 Building C Floor Plan 1st Floor 12/03/10 PC100-UG Building C Floor Plan 1st Floor-Underground 12/03/10 PC101 Building C Floor Plan 2nd Floor 12/03/10 PC102 Building C Floor Plan 3rd Floor 12/03/10 PC103 Building C Floor Plan 4th Floor 12/03/10 P D100 Morgan Hall Proposed Floor Plan 12/03/10 P E100 Adams Hall Proposed Floor Plan 12/03/10 P H101 Camilla Hubert Hall First Floor Plan 12/03/10 P H101-UG Camilla Hubert Hall First Floor Plan-Underground 12/03/10 P H102 Camilla Hubert Hall Second Floor Plan 12/03/10 P H103 Camilla Hubert Hall Third Floor Plan 12/03/10 P400 Enlarged Plans 12/03/10 P401 Enlarged Plans 12/03/10 P402 Enlarged Plans 12/03/10 P403 Enlarged Plans 12/03/10 P406 Camilla Hubert Hall Enlarged Unit Plans 12/03/10 P500 Sanitary Isometrics 12/03/10 P501 Water Isometrics 12/03/10 P502 Water Isometrics 12/03/10 M001 Legends, Notes & Drawing Index-HVAC 12/03/10 M A100 Building A Floor Plan 1st & 2nd Floors 12/03/10 M A101 Building A Floor Plan 3rd Floor & Attic 12/03/10 M B100 Building B Floor Plan 1st Floor 12/03/10 M B101 Building B Floor Plan 2nd Floor 12/03/10 M B102 Building B Floor Plan 3rd Floor 12/03/10 M B103 Building B Attic/Roof Plan 12/03/10 M C100 Building C Floor Plan 1st Floor 12/03/10 M C101 Building C Floor Plan 2nd Floor 12/03/10 M C102 Building C Floor Plan 3rd Floor 12/03/10 M C103 Building C Floor Plan 4th Floor 12/03/10 M C104 Building C Attic/Roof Plan 12/03/10 M D100 Morgan Hall Proposed Floor Plan-HVAC 12/03/10 M E100 Adams Hall Proposed Floor Plan-HVAC 12/03/10 M H101 Camilla Hubert Hall Proposed Floor Plans 12/03/10 PROJECT SPECIFICATIONS Volume I New Student Housing, Adams Hall & Morgan Hall, & Camilla Hubert Hall SECTION TABLE OF CONTENTS PROCUREMENT AND CONTRACTING REQUIREMENTS Division Procurement and Contracting Requirements Table of Contents Available Project Information Contracting Forms and Supplements Agreement Form General Conditions Supplementary Conditions SPECIFICATIONS Division General Requirements Price and Payment Procedures Administrative Requirements Quality Requirements Temporary Facilities and Controls Product Requirements Execution and Closeout Requirements Division Existing Conditions (NOT USED) Division Concrete Cast-in-Place Concrete Cast Underlayment Division Masonry Unit Masonry Cast Stone Masonry Division Metals Structural Steel Metal Fabrications Metal Stairs Pipe and Tube Railings Division Wood, Plastics, and Composites REVISED 2/16/10 C-4 Lessor Lessee REVISED 2/16/10 C-5 Lessor Lessee Rough Carpentry Prefabricated Metal Plate Connected Wood Trusses Finish Carpentry Division Wood, Plastics, and Composites (continued) Plastic Laminate Veneer Paneling Division Thermal and Moisture Protection Bituminous Dampproofing Crystalline Waterproofing Thermal Insulation Foamed-in-Place Insulation Blown Insulation Weather Barriers Asphalt Shingles Metal Roof Panels Sheet Metal Flashing and Trim Roof Specialties Firestopping Joint Sealers Division Openings Hollow Metal Doors and Frames Flush Wood Doors Access Doors and Panels Aluminum-Framed Storefronts Glazed Aluminum Curtain Walls Vinyl Windows Hardware Glazing Mirrors Louvers Division Finishes Gypsum Board Assemblies Tiling Stone Tile Acoustical Ceilings Resilient Flooring Carpeting Painting and Coating Division Specialties Signage Corner Guards Toilet, Bath, and Laundry Accessories Fire Protection Specialties Mail Boxes Wire Storage Shelving Division 11 Equipment (NOT USED) Division Furnishings Horizontal Louver Blinds Casework Countertops Division Special Construction (NOT USED) Division Conveying Equipment Passenger Elevators Divisions (NOT USED) Division Fire Suppression Fire Protection General Electric Fire Pump and Accessories Division 22 Plumbing Plumbing General Domestic Water Pressure Booster System Natural Gas Piping System Plumbing Fixtures & Supports Division Heating, Ventilating, and Air-Conditioning (HVAC) HVAC General Noise and Vibration Control Testing, Adjusting and Balancing (TAB) HVAC Insulation Automatic Controls Refrigerant Piping Ductwork and Accessories Unitary Exhaust and Supply Fans and Ventilators REVISED 2/16/10 C-6 Lessor Lessee REVISED 2/16/10 C-7 Lessor Lessee

206 Louvers, Grilles, Registers and Diffusers Single-Packaged Vertical Air Conditioners (VTAC) Division Heating, Ventilating, and Air-Conditioning (HVAC) (continued) Split System Air Conditioning Split System Air Conditioning 100% Outside Air Ductless Split System (Cooling Only) Electrical Unit Heaters Division (NOT USED) Division (NOT USED) Division 26 Electrical Electrical General Medium Voltage Cable Medium Voltage Cable Terminations, Splices and Accessories Conductors Primary System Grounding Grounding Firestopping for Electrical Systems Conduit and Raceways Outlet Boxes and Junction Boxes Underground Duct Banks Pad Mounted Transformers Switchboards Panelboards Wiring Devices Disconnect Switches Emergency Generator System and Switching Lightning Protection System Surge Protective Devices (SPD) Lighting Division 27 Communications Communications Firestopping for Communications Systems Grounding and Bonding for Communications Systems Pathways for Communications Systems Underground Ducts and Raceways for Communications Systems Identifications for Communications Systems Commissioning of Communications Division 27 Communications (continued) Communications Entrance Protection Communications Cabinets, Racks and Enclosures Communications Termination Blocks and Patch Panels Communications Cable Management and Ladder Rack Communications Rack-Mounted Power Protection and Power Strips Communications Copper Backbone Communications Optical Fiber Backbone Cabling Communications Coaxial Backbone Cabling Communications Copper Horizontal Cabling Communications Optical Fiber Horizontal Cabling Communications Coaxial Horizontal Cabling Communications Faceplates and Connectors Communications Patch Cords and Station Cords Wireless Access Points CATV Distribution Equipment Division Electronic Safety and Security Access Control System Video Surveillance System Fire Alarm System (Addressable) Division Earthwork Subsurface Conditions Site Clearing Earthwork Erosion Control Termite Control Topsoiling and Grassing Division Exterior Improvements Asphaltic Concrete Paving Concrete Paving Pavement Markings REVISED 2/16/10 C-8 Lessor Lessee REVISED 2/16/10 C-9 Lessor Lessee Division 33 Utilities Site Utilities Water Distribution System Sanitary Sewers Storm Sewer END OF VOLUME 1 TABLE OF CONTENTS REVISED 2/16/10 C-10 Lessor Lessee

207 Appendix K Specimen Financial Guaranty Insurance Policy

208 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

209 K-1

210 K-2