PRIVATE PLACEMENT MEMORANDUM DATED DECEMBER 5, 2006

Transcription

1 NEW ISSUES Book-Entry Only PRIVATE PLACEMENT MEMORANDUM DATED DECEMBER 5, 2006 RATINGS: See RATINGS herein. In the opinion of Steptoe & Johnson PLLC, Bond Counsel, based upon an analysis of existing laws, regulations, published rulings and court decisions, and assuming the accuracy of certain representations and certifications and compliance with certain covenants, interest on the Series 2006 A Bonds and Series 2006 B Bonds is excludable from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations, but such interest will be includable in adjusted current earnings when calculating corporate alternative minimum taxable income. In the opinion of Bond Counsel, the Series 2006 A Bonds and Series 2006 B Bonds, together with the interest and income therefrom, shall be exempt from all State of West Virginia income taxes, whether imposed on individuals, corporations or other persons, from State business franchise taxes and from ad valorem property taxes. Interest on the Series 2006 C Bonds is not exempt from gross income for federal income tax purposes and is not exempt from present West Virginia income taxes. See TAX MATTERS. $35,000,000 WHEELING JESUIT UNIVERSITY, INC Bonds consisting of: $12,425,000 $1,215,000 THE COUNTY COMMISSION OF OHIO COUNTY, WEST VIRGINIA THE OHIO COUNTY (WEST VIRGINIA) Tax-Exempt Commercial Development Improvement and BUILDING COMMISSION Refunding Revenue Bonds Tax-Exempt Refunding Revenue Bonds (Wheeling Jesuit University, Inc. Project) (Wheeling Jesuit University, Inc. Project) Series 2006 A Series 2006 B $21,360,000 WHEELING JESUIT UNIVERSITY, INC. Taxable Refunding Bonds Series 2006 C Dated: Date of Delivery Price: As shown on the inside cover page Due: As shown on inside cover page The Series 2006 A Bonds will be issued and secured under a Bond Trust Indenture (the 2006 A Indenture ), dated December 1, 2006, between The County Commission of Ohio County, West Virginia (the County Commission ) and Branch Banking and Trust Company, as bond trustee (the 2006 A Bond Trustee ). The Series 2006 B Bonds (collectively with the Series 2006 A Bonds the Tax-Exempt Bonds ) will be issued and secured under a Bond Trust Indenture (the 2006 B Indenture and collectively with the 2006 A Indenture, the Bond Indentures ), dated December 1, 2006, between the Ohio County (West Virginia) Building Commission (the Building Commission and collectively with the County Commission the Tax-Exempt Issuers ) and Branch Banking and Trust Company, as bond trustee (the 2006 B Bond Trustee and collectively with the 2006 A Bond Trustee, the Bond Trustee ). The Series 2006 C Bonds (the Taxable Bonds and collectively with the Tax-Exempt Bonds the 2006 Bonds ) will be issued and secured under the Master Trust Indenture (the Master Indenture ), dated October 1, 2006, between Wheeling Jesuit University, Inc. (the University ) and Branch Banking and Trust Company, as master trustee (the Master Trustee ). The County Commission, the Building Commission, and the University shall collectively be referred to as the Issuers. The 2006 Bonds, when issued, will be registered initially only in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository for the 2006 Bonds. Each series of 2006 Bonds shall be delivered in the form of fully registered 2006 Bonds, in denominations of $5,000 or any integral multiple thereof. Purchasers of the 2006 Bonds will not receive certificates representing their interests in the 2006 Bonds purchased. Ownership by each actual purchaser of each 2006 Bond (the Beneficial Owners ) will be evidenced by book-entry only. Principal of, premium, if any, interest and other amounts payable on the Tax-Exempt Bonds will be paid by the Bond Trustee or, in the case of the Taxable Bonds, the University or the Master Trustee, to DTC, which in turn will remit such principal, premium, if any, and interest payments to its participants for subsequent disbursement to the Beneficial Owners of 2006 Bonds. As long as Cede & Co. is the registered owner as nominee of DTC, payments on the 2006 Bonds will be made to such registered owner, and disbursement of such payments will be the responsibility of DTC and its participants. See THE 2006 BONDS Book-Entry System. THE TAXABLE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. ANY SALE, RESALE OR ASSIGNMENT OF THESE BONDS MAY BE MADE ONLY TO A QUALIFIED INSTITUTIONAL BUYER AS SUCH TERM IS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE TAX-EXEMPT BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE TAX-EXEMPT ISSUERS, PAYABLE SOLELY FROM AND SECURED BY A PLEDGE OF REVENUES AND FUNDS PROVIDED THEREFOR UNDER THE BOND INDENTURES. THE TAX-EXEMPT BONDS SHALL NOT CONSTITUTE A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OR TAXING POWER OF THE STATE OF WEST VIRGINIA OR OF ANY COUNTY, MUNICIPALITY OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF WEST VIRGINIA. The Tax-Exempt Bonds are secured under the provisions of the Bond Indentures and the Master Indenture, and are payable solely from revenues and other moneys derived by the County Commission, as to the Series 2006 A Bonds, and the Building Commission, as to the Series 2006 B Bonds, from payments made under the 2006 A Loan Agreement (as described herein) between the County Commission and the University, and the 2006 B Lease Agreement (as described herein) between the Building Commission and the University and from the A Note and B Note (as herein defined), respectively, issued by the University pursuant to the Master Indenture. The Taxable Bonds are secured under the provisions of the Master Indenture and are payable solely from funds pledged by the University under the Master Indenture. As obligations of the University under the Master Indenture, the A Note, and B Note shall be on a parity with the Taxable Bonds, as to lien on gross receipts and source of payment. The University shall also execute a Deed of Trust in favor of the Master Trustee providing for a lien on the Campus Real Property which shall equally and ratably secure all obligations issued under the Master Indenture, including the A Note, the B Note and the Taxable Bonds. The sources of payment of, and security for, the 2006 Bonds are more fully described in the Private Placement Memorandum. The proceeds derived from the sale of the Tax-Exempt Bonds will be loaned to the University to (i) finance certain improvements to the University s campus, (ii) currently refund tax-exempt bonds previously issued to finance the costs of the construction, expansion, improvement, and equipping of certain of the educational facilities of the University and the acquisition of certain items of equipment and additions and improvements located generally on the campus of the University, and (iii) pay the costs of issuing the Tax-Exempt Bonds. The proceeds derived from the sale of the Taxable Bonds will be used by the University to (i) currently refund taxable debt previously incurred by the University, (ii) pay the costs of issuing the 2006 Bonds, and (iii) pay capitalized interest costs on the Taxable Bonds. See PLAN OF FINANCING and ESTIMATED SOURCES AND USES OF FUNDS. There are risks associated with the purchase of the 2006 Bonds. For a discussion of certain of these risks, see the caption BONDHOLDERS RISKS. In addition to being secured under the provisions of the Bond Indentures and the Master Indenture, the 2006 Bonds are partially guaranteed by the Roman Catholic Diocese of Wheeling-Charleston (the Diocese ) through a Guaranty Agreement under which the Diocese will guarantee to pay up to $3,500,000 of the University s obligations on the 2006 Bonds The obligations of the Diocese under the Guaranty Agreement shall remain in full force and effect until all payments of principal and interest required with respect to the 2006 Bonds have been paid. See SECURITY AND SOURCES OF PAYMENT FOR THE 2006 BONDS Guaranty Agreement. THE 2006 BONDS WILL BE SUBJECT TO REDEMPTION PRIOR TO MATURITY, See THE 2006 BONDS Redemption of 2006 Bonds. THIS COVER PAGE, INCLUDING THE INSIDE COVER PAGE HERETO, CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT INTENDED TO BE A SUMMARY OF ALL FACTORS RELATING TO AN INVESTMENT IN THE 2006 BONDS. INVESTORS ARE ADVISED TO READ THIS PRIVATE PLACEMENT MEMORANDUM IN ITS ENTIRETY BEFORE MAKING AN INVESTMENT DECISION. The 2006 Bonds are offered when, as and if issued by the Issuers and accepted by the Underwriter, subject to prior sale or withdrawal or modification of the offer without notice, and subject to receipt of an approving legal opinion of Steptoe & Johnson PLLC, Bond Counsel. Certain legal matters will be passed upon for the Issuers by Bailey Riley Buch and Harman, counsel for the University; Jackson Kelly PLLC, counsel for the County Commission and for the Building Commission; and for the Underwriter by its counsel, Spilman Thomas & Battle, PLLC. Concord Public Financial Advisors, Inc. has served as financial adviser to the University. The 2006 Bonds are expected to be available for delivery through the facilities of DTC in New York, New York, on or about December 5, LEHMAN BROTHERS

2 $12,425,000 THE COUNTY COMMISSION OF OHIO COUNTY, WEST VIRGINIA Tax-Exempt Commercial Development Improvement and Refunding Revenue Bonds (Wheeling Jesuit University, Inc. Project) Series 2006 A $35,000,000 WHEELING JESUIT UNIVERSITY, INC Bonds consisting of: $21,360,000 WHEELING JESUIT UNIVERSITY, INC. Taxable Refunding Bonds Series 2006 C $1,215,000 THE OHIO COUNTY (WEST VIRGINIA) BUILDING COMMISSION Tax-Exempt Refunding Revenue Bonds (Wheeling Jesuit University, Inc. Project) Series 2006 B SERIES 2006 A TERM BOND $12,425, % Term Bond due June 1, 2036 Price of to Yield 5.75% CUSIP BD8 Interest Payment Dates: June 1 and December 1, commencing June 1, 2007 SERIES 2006 B TERM BOND $1,215, % Term Bond due June 1, 2015 Price of to Yield 5.5% CUSIP BK1 Interest Payment Dates: June 1 and December 1, commencing June 1, 2007 SERIES 2006 C TERM BOND $21,360, % Term Bond due June 1, 2032 Price of to Yield 7.934% CUSIP AA5 Interest Payment Dates: June 1 and December 1, commencing June 1, 2007

3 TABLE OF CONTENTS Page INTRODUCTION...1 THE ISSUERS...3 The County Commission of Ohio County, West Virginia...3 The Ohio County (West Virginia) Building Commission...4 Wheeling Jesuit University, Inc...4 THE 2006 BONDS...4 General Description...5 Redemption of 2006 Bonds...6 Purchase of 2006 Bonds...10 Bond Registration, Transfer and Exchanges...10 Book-Entry-Only System...11 SECURITY AND SOURCES OF PAYMENT FOR THE 2006 BONDS...13 Limited Obligations...13 The Bond Indentures...14 Mortgage on Campus Real Property...15 The 2006 Related Financing Documents...15 The 2006 Notes...15 Guaranty Agreement...16 PLAN OF FINANCING...17 ESTIMATED SOURCES AND USES OF FUNDS...17 AGGREGATE DEBT SERVICE ON THE 2006 BONDS...19 BONDHOLDERS RISKS...19 Uncertainty of Revenues...19 Tuition and Other Revenues...20 Possible Changes in Tax Exempt Status...20 Enforceability of Remedies...20 Diocese Under the Guaranty Agreement...21 United States Department of Education Title IV, Higher Education Act Programs Participation...21 LITIGATION...22 The County Commission of Ohio County, West Virginia...22 The Ohio County (West Virginia) Building Commission...22 The University...22 UNDERWRITING...23 TAX MATTERS...23 Series 2006 A Bonds; Series 2006 B Bonds...23 Series 2006 C Bonds (Taxable)...25 Original Issue Discount...25 i

4 RATINGS...25 LEGAL MATTERS...26 AUDITED FINANCIAL STATEMENTS...26 FINANCIAL ADVISOR...26 CONTINUING DISCLOSURE...26 MISCELLANEOUS...27 APPENDIX A -- INFORMATION CONCERNING THE UNIVERSITY APPENDIX B -- FINANCIAL STATEMENTS OF THE UNIVERSITY APPENDIX C -- SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES, THE MASTER INDENTURE, AS SUPPLEMENTED, AND THE 2006 RELATED FINANCING DOCUMENTS APPENDIX D -- PROPOSED FORM OF BOND COUNSEL OPINION APPENDIX E -- FORM OF CONTINUING DISCLOSURE AGREEMENT

5 $12,425,000 THE COUNTY COMMISSION OF OHIO COUNTY, WEST VIRGINIA Tax-Exempt Commercial Development Improvement and Refunding Revenue Bonds (Wheeling Jesuit University, Inc. Project) Series 2006 A PRIVATE PLACEMENT MEMORANDUM relating to $35,000,000 WHEELING JESUIT UNIVERSITY, INC Bonds consisting of: $21,360,000 WHEELING JESUIT UNIVERSITY, INC. Taxable Refunding Bonds Series 2006 C INTRODUCTION $1,215,000 THE OHIO COUNTY (WEST VIRGINIA) BUILDING COMMISSION Tax-Exempt Refunding Revenue Bonds (Wheeling Jesuit University, Inc. Project) Series 2006 B The purpose of this Private Placement Memorandum is to set forth certain information concerning the issuance and sale of the $35,000,000 Wheeling Jesuit University, Inc Bonds, dated their date of delivery, consisting of the $12,425,000 The County Commission of Ohio County, West Virginia Tax-Exempt Commercial Development Improvement and Refunding Revenue Bonds (Wheeling Jesuit University, Inc. Project) Series 2006 A (the Series 2006 A Bonds ); the $1,215,000 The Ohio County (West Virginia) Building Commission Tax-Exempt Refunding Revenue Bonds (Wheeling Jesuit University, Inc. Project) Series 2006 B (the Series 2006 B Bonds and together with the Series 2006 A Bonds, the Tax-Exempt Bonds ); and the $21,360,000 Wheeling Jesuit University, Inc. Taxable Refunding Bonds Series 2006 C (the Series 2006 C Bonds or the Taxable Bonds ). The Series 2006 A Bonds will be issued and secured under a Bond Indenture dated December 1, 2006 (the 2006 A Indenture ), between The County Commission of Ohio County, West Virginia (the County Commission ) and Branch Banking and Trust Company, as bond trustee (the 2006 A Bond Trustee ). The Series 2006 B Bonds will be issued and secured under a Bond Indenture dated December 1, 2006 (the 2006 B Indenture and collectively with the 2006 A Indenture, the Bond Indentures ), between the Ohio County (West Virginia) Building Commission (the Building Commission and collectively with the County Commission the Tax-Exempt Issuers ) and Branch Banking and Trust Company, as bond trustee (the 2006 B Bond Trustee and collectively with the 2006 A Bond Trustee, the Bond Trustee ). The Taxable Bonds (collectively with the Tax-Exempt Bonds the 2006 Bonds ) will be issued and secured under the Master Trust Indenture (the Master Indenture ), dated October 1, 2006, between Wheeling Jesuit University, Inc. (the University ) and Branch Banking and Trust Company, as master trustee (the Master Trustee ). The 2006 Notes, as hereinafter described, will be issued under the Master Indenture to evidence the University s obligation to make payments to the Tax-Exempt Issuers, to pay the principal of, premium, if any, interest and other amounts payable to the Tax-Exempt bondholders, which Notes will be on a parity with the Taxable Bonds. The University will maintain an agreement with United Bank, Inc. for a $6,000,000 Operating Line of Credit which will be subject to the provisions of the Master Indenture. The note evidencing the University s obligation under the Operating Line of Credit will be on a parity with the 2006 Notes and the Taxable Bonds. The University has also entered into an agreement with Wesbanco Bank, Inc. for an $880,000 letter of credit, dated November 3, The letter of credit has been submitted to the Secretary of the

6 United States Department of Education in order to allow the University to continue to participate in Title IV, Higher Education Act programs. The note evidencing the University s obligation under the loan and security agreement relating to the letter of credit will also be on a parity with the 2006 Notes and the Taxable Bonds. See BONDHOLDERS RISKS United States Department of Education Title IV, Higher Education Act Programs Participation. The County Commission, the Building Commission, and the University shall collectively be referred to as the Issuers. The proceeds from the sale of the Series 2006 A Bonds will be used to make a loan to the University pursuant to the terms of a Loan Agreement between the County Commission and the University (the 2006 A Loan Agreement ) for the purpose of (i) financing certain improvements to the University s campus (the 2006 Project ), (ii) currently refunding tax-exempt bonds issued to finance the costs of the construction, expansion, improvement, and equipping of certain of the educational facilities of the University and the acquisition of certain items of equipment and additions and improvements located generally on the campus of the University, and (iii) paying the costs of issuing the Series 2006 A Bonds. The proceeds from the sale of the Series 2006 B Bonds will be used pursuant to the terms of a Lease Agreement between the Building Commission and the University (the 2006 B Lease Agreement and together with the 2006 A Loan Agreement the 2006 Related Financing Documents ) for the purpose of (i) currently refunding tax-exempt bonds issued to finance the costs of the construction, expansion, improvement, and equipping of certain of the educational facilities of the University and the acquisition of certain items of equipment and additions and improvements located generally on the campus of the University, and (ii) paying the costs of issuing the Series 2006 B Bonds. The proceeds derived from the sale of the Taxable Bonds will be used by the University to (i) currently refund taxable debt previously incurred by the University, (ii) pay the costs of issuing the 2006 Bonds, and (iii) pay capitalized interest costs on the Taxable Bonds. See PLAN OF FINANCING and ESTIMATED SOURCES AND USES OF FUNDS. The University is a private, co-educational institution of higher education located in Wheeling, West Virginia. The University was founded by the Maryland Province of the Society of Jesus and the Catholic Diocese of Wheeling-Charleston in 1954, was chartered by the State of West Virginia in 1955 as Wheeling College, was granted University status in 1996, and is currently affiliated with the Catholic Church and the Society of Jesus. The University is dedicated to serving the Appalachian Region and the State of West Virginia. It is the newest of the twenty-eight Jesuit colleges and universities in the United States and continues a 450 year tradition of Jesuit education world wide. Students of all denominations are welcome and the University offers four year programs with thirty majors in liberal arts and sciences, nursing, pre-professional programs, six Adult Education Degree Programs and six Graduate Degree Programs. See APPENDIX A, INFORMATION CONCERNING THE UNIVERSITY and APPENDIX B, FINANCIAL STATEMENTS OF THE UNIVERSITY. The Series 2006 A Bonds are limited obligations of the County Commission and are payable solely out of the Trust Estate. The Series 2006 A Bonds and the interest thereon shall not constitute an indebtedness of Ohio County, the County Commission, the State of West Virginia or any political subdivision thereof, within the meaning of any constitutional provision or statutory limitation and shall not constitute or give rise to a pecuniary liability of Ohio County, the County Commission, the State of West Virginia or any political subdivision thereof. Neither shall the Series 2006 A Bonds and interest thereon be a charge against the general credit or taxing powers of Ohio County, the County Commission, the State of West Virginia or any political subdivision thereof. The Series 2006 B Bonds are special obligations of the Building Commission and are payable solely out of the Trust Estate. The Series 2006 B Bonds do not constitute an indebtedness of the Building Commission, Ohio County, the County Commission, the State of West Virginia or any political subdivision thereof within the meaning of any 2

7 provision, limitation, or restriction of the Constitution of the State of West Virginia relating to the creation or incurring of indebtedness or the issuance of an instrument constituting a bond or a debt. No recourse shall be had for the payment of the Series 2006 B Bonds, or interest thereon, or any part thereof, against the general fund of the Building Commission, Ohio County, the County Commission, the State of West Virginia or any political subdivision thereof, nor shall the credit or taxing power, if any, of the Building Commission, Ohio County, the County Commission, the State of West Virginia or any political subdivision thereof be deemed to be pledged thereto. The Building Commission has no taxing power. The Taxable Bonds are secured under the provisions of the Master Indenture and are payable solely from funds pledged by the University under the Master Indenture. See SECURITY AND SOURCES OF PAYMENT FOR THE 2006 BONDS. The information contained under the caption INTRODUCTION is qualified by reference to the entire Private Placement Memorandum, including the Appendices hereto. This introduction is only a brief description, and a full review should be made of the entire Private Placement Memorandum, including the Appendices, as well as the documents summarized or described herein. The summaries and descriptions of and references to all of the documents, statutes and other instruments referred to in this Private Placement Memorandum, including the Appendices, do not purport to be complete and are qualified in their entirety by reference to the full text of each such document, statute or instrument. The order and placement of materials in this Private Placement Memorandum, including the Appendices, are not to be deemed to be a determination of relevance, materiality or relative importance, and this Private Placement Memorandum, including the Appendices, which are integral parts of this Private Placement Memorandum, must be considered in its entirety. Definitions of certain terms used herein are set forth in APPENDIX C, SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES, THE MASTER INDENTURE, AS SUPPLEMENTED, AND THE 2006 RELATED FINANCING DOCUMENTS. All capitalized terms used in this Private Placement Memorandum that are not otherwise defined herein shall have the meanings ascribed to them in the Bond Indentures and the Master Indenture. THE ISSUERS The County Commission of Ohio County, West Virginia Description. Ohio County, West Virginia, acting by and through the County Commission is a duly created and existing political subdivision of the State of West Virginia. Bonds of the County Commission. The County Commission is authorized pursuant to the Industrial Development and Commercial Development Bond Act, Article 2C of Chapter 13 of the Code of West Virginia, 1931, as amended (the Revenue Bond Act ), for certain purposes set forth in the Revenue Bond Act, including borrowing money and issuing bonds and other evidence of indebtedness to finance and refinance commercial development facilities under the Revenue Bond Act. The Series 2006 A Bonds issued by the County Commission under the Revenue Bond Act are limited obligations of Ohio County, as more fully described in the INTRODUCTION, above. Other Matters. The County Commission makes no warranty or representation, whether express or implied, with respect to the 2006 Project, or the use thereof. Further, the County Commission has not prepared any material for inclusion in this Private Placement Memorandum, except that material under the headings THE ISSUERS The County Commission of Ohio County, West Virginia and LITIGATION The County Commission of Ohio County, West Virginia. The distribution of this Private Placement Memorandum has been duly approved and authorized by the County Commission. Such approval and authorization does not, however, constitute a representation or approval by the County 3

8 Commission of the accuracy or sufficiency of any information contained herein except to the extent of the material under the headings referenced in this paragraph. The offices of the County Commission are located at 1500 Chapline Street, Wheeling, West Virginia 26003, and its telephone number is (304) The Ohio County (West Virginia) Building Commission Description. The Building Commission is a body corporate and governmental instrumentality organized and existing under the laws of the state of West Virginia. Bonds of the Building Commission. The Building Commission is authorized pursuant to the Building Commission Act, Article 33 of Chapter 8 of the Code of West Virginia,1931, as amended (the Building Commission Act ), for certain purposes set forth in the Building Commission Act, including borrowing money and issuing bonds and other evidences of indebtedness to finance public facilities under the Building Commission Act, and the Revenue Bond Refunding Act, Article 2E of Chapter 13 of the Code of West Virginia 1931, as amended (the Refunding Act ). The Series 2006 B Bonds issued by the Building Commission pursuant to the Building Commission Act and Refunding Act are special obligations of the Building Commission, as more fully described in the INTRODUCTION, above. Other Matters. The Building Commission has not prepared any material for inclusion in this Private Placement Memorandum, except that material under the headings THE ISSUERS The Ohio County (West Virginia) Building Commission and LITIGATION The Ohio County (West Virginia) Building Commission. The distribution of this Private Placement Memorandum has been duly approved and authorized by the Building Commission. Such approval and authorization does not, however, constitute a representation or approval by the Building Commission of the accuracy or sufficiency of any information contained herein except to the extent of the material under the headings referenced in this paragraph. The offices of the Building Commission are located at 1500 Chapline Street, Wheeling, West Virginia 26003, and its telephone number is (304) Wheeling Jesuit University, Inc. Description. The University is described in Appendix A, which is appended hereto. Obligations of the University. The articles of incorporation of the University gives its Board of Trustees the power to control and manage the University and to generally do all things proper to be done by the governing or controlling board of such an institution. Among the objects and purposes of the University set forth in the articles of incorporation is borrowing money for its corporate purposes. The University thus has the full power and authority to enter into the Master Indenture, to refund prior debt; to approve the issuance of refunding bonds, to authorize the execution and delivery of financing agreements in connection with the refunding bonds, and to make pledges for the payment thereof; and to enter into financing agreements and other agreements relating to the refunding of prior debt. The offices of the University are located at 316 Washington Avenue, Wheeling, West Virginia 26003, and the telephone number of its Vice President for Business and Finance is (304) THE 2006 BONDS The following is a summary of certain provisions applicable to the 2006 Bonds. Reference is made to the Bond Indentures and the Master Indenture and to the summary of certain provisions of the 4

9 Bond Indentures and Master Indenture included in APPENDIX C for a more complete description of the 2006 Bonds. The discussion herein is qualified by such reference. General Description The Tax-Exempt Bonds will be issued and secured under the Bond Indentures and the Taxable Bonds will be issued and secured under the Master Indenture as fully registered 2006 Bonds, in denominations of $5,000 or any integral multiple thereof. The 2006 Notes, as hereinafter described, will be issued under the Master Indenture to evidence the University s obligation to make payments to the Tax-Exempt Issuers to pay the principal of, premium, if any, interest and other amounts payable to the Tax-Exempt bondholders, which Notes will be on a parity with the Taxable Bonds. The University will maintain an agreement with United Bank, Inc. for a $6,000,000 Operating Line of Credit which will be subject to the provisions of the Master Indenture. The note evidencing the University s obligation under the Operating Line of Credit will be on a parity with the 2006 Notes and the Taxable Bonds. On November 3, 2006 Wesbanco Bank, Inc. issued an $880,000 letter of credit on behalf of the University to the Secretary of the United States Department of Education in order to allow the University to continue to participate in Title IV, Higher Education Act programs. The note evidencing the University s obligation under the loan and security agreement relating to the letter of credit will also be on a parity with the 2006 Notes and the Taxable Bonds. See BONDHOLDERS RISKS United States Department of Education Title IV, Higher Education Act Programs Participation. When issued, the 2006 Bonds will be registered initially only in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York ( DTC ). The 2006 Bonds will mature in the amounts and on the dates, and will bear interest from their date of delivery, at the rates per annum, as set forth on the inside front cover page of this Private Placement Memorandum. Interest on the 2006 Bonds will be payable on June 1, 2007, and semi-annually thereafter on December 1 and June 1 of each year (each such date, an Interest Payment Date ). Principal of, premium, if any, interest and other amounts payable on the 2006 Bonds will be paid by the Bond Trustee or, in the case of the Taxable Bonds, the University or the Master Trustee, to DTC, which in turn will remit such principal, premium, if any, and interest payments to its participants for subsequent disbursement to each actual purchaser of each 2006 Bond (the Beneficial Owners ) of the 2006 bonds. As long as Cede & Co. is the registered owner as nominee of DTC, payments on the 2006 Bonds will be made to such registered owner, and disbursement of such payments will be the responsibility of DTC and its participants. The University will deposit with the Master Trustee at least thirty (30) days prior to each due date of the principal of, premium, if any, and interest or other amounts due with respect to the 2006 Bonds, a sum sufficient to pay such principal of, premium, if any, interest or other amounts so becoming due. Purchases of beneficial interests in the 2006 Bonds will be made in book-entry-only form. Beneficial Owners will not receive physical delivery of certificates representing their interests in the 2006 Bonds. For so long as the 2006 Bonds are held in book-entry-only form, payments of principal, premium, if any, and interest on the 2006 Bonds will be paid by the Trustee only to DTC or its nominee. Neither the Tax-Exempt Issuers, the University, the Bond Trustee, nor the Master Trustee will have any responsibility for a Beneficial Owner s receipt from DTC or its nominee, or from any Direct Participant (as hereinafter defined) or Indirect Participant (as hereinafter defined), of any payments of principal of or redemption premium, if any, or interest on any 2006 Bonds. See Book-Entry-Only System. 5

10 Redemption of 2006 Bonds General. References below to the Bond Trustee, the Bond Indentures, the 2006 A Loan Agreement, or the 2006 B Lease Agreement pertain to redemption of Tax-Exempt Bonds. References to the Master Trustee, Master Indenture or Supplemental Master Trust Indenture (the Supplemental Indenture ) pertain to redemption of Taxable Bonds. Mandatory Sinking Fund Redemption. The Series 2006 A Bonds shall be subject to mandatory redemption prior to maturity in part from moneys on deposit in the Debt Service Fund at a redemption price equal to the principal amount thereof, plus accrued interest to the mandatory redemption date, on June 1, 2032, and annually thereafter to and including June 1, 2035 in principal amounts as follows: Date Amount June 1, 2032 $1,595,000 June 1, ,495,000 June 1, ,630,000 June 1, ,775,000 When such Series 2006 A Bonds have been redeemed as set out above, the balance of $2,930,000 will mature on June 1, The estimated average life for the Series 2006 A Bonds is years. The Series 2006 B Bonds shall be subject to mandatory redemption prior to maturity in part from moneys on deposit in the Debt Service Fund at a redemption price equal to the principal amount thereof, plus accrued interest to the mandatory redemption date, on June 1, 2008, and annually thereafter to and including June 1, 2014 in principal amounts as follows: Date Amount June 1, 2008 $120,000 June 1, ,000 June 1, ,000 June 1, ,000 June 1, ,000 June 1, ,000 June 1, ,000 When such Series 2006 B Bonds have been redeemed as set out above, the balance of $185,000 will mature on June 1, The estimated average life for the Series 2006 B Bonds is years. The Taxable Bonds shall be subject to mandatory redemption prior to maturity in part from moneys on deposit in the Debt Service Fund at a redemption price equal to the principal amount thereof, plus accrued interest to the mandatory redemption date, on June 1, 2008, and annually thereafter beginning June 1, 2016 through and including June 1, 2031 in principal amounts as follows: Date Amount June 1, 2008 $5,000 June 1, ,000 June 1, ,000 June 1, ,000 June 1, ,000 6

11 Date Amount June 1, ,000 June 1, ,035,000 June 1, ,115,000 June 1, ,200,000 June 1, ,295,000 June 1, ,390,000 June 1, ,500,000 June 1, ,615,000 June 1, ,740,000 June 1, ,875,000 June 1, ,020,000 June 1, ,180,000 When such Taxable Bonds have been redeemed as set out above, the balance of $755,000 will mature on June 1, The estimated average life for the Series 2006 C Bonds is years. On or before the thirtieth (30 th ) day prior to each such mandatory sinking fund redemption date, the Bond Trustee or the Master Trustee shall proceed to call the principal amount of the 2006 Bonds indicated above for redemption on the next June 1, as applicable, and give notice of such call. At its option, to be exercised by delivery of an Officer s Certificate of the Issuers, at the direction of the University, to the Bond Trustee or the Master Trustee not more than 360 days nor less than 65 days preceding the applicable sinking fund redemption date, the Issuers may (a) deliver to the Bond Trustee or the Master Trustee for cancellation, 2006 Bonds of the applicable series and maturity date subject to redemption pursuant to the terms of the mandatory sinking fund provided in Section 3.02 of the Bond Indentures or Section 403 of the Supplemental Indenture, in an aggregate principal amount desired or (b) receive credit in respect of its sinking fund redemption obligation for any 2006 Bonds of the applicable series and maturity date subject to redemption pursuant to the terms of the mandatory sinking fund provided in Section 3.02 of the Bond Indentures, or Section 403 of the Supplemental Indenture which prior to said date have been canceled (otherwise than through the operation of the sinking fund redemption schedule) by the Bond Trustee or the Master Trustee and not theretofore applied as a credit against such sinking fund redemption obligation. Each 2006 Bond of the applicable series and maturity date so delivered or previously redeemed shall be credited by the Bond Trustee or the Master Trustee at the principal amount thereof against the obligation of the Issuer on such sinking fund redemption date, and the principal amount of 2006 Bonds to be redeemed by operation of such sinking fund redemption schedule on such date shall be accordingly reduced. Optional Redemption. The Series 2006 A Bonds are subject to optional redemption at the option of the University prior to maturity any time on or after June 1, 2016, in whole or in part (and if in part subject to selection by DTC or the Bond Trustee), at a redemption price equal to the principal amount thereof, plus accrued interest to and including the redemption date. The Taxable Bonds are subject to optional redemption at the option of the University prior to maturity at any time in whole or in part at a redemption price equal to the greater of: (1) 100% of the principal sum of the Taxable Bonds to be redeemed; or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Taxable Bonds to be redeemed (exclusive of interest accrued to the date fixed for redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Note Rate plus 50 basis points. In either case, accrued and unpaid interest to and including the redemption date for the Taxable Bonds being redeemed will be added to the redemption price. 7

12 Mandatory Redemption of Bonds Upon Determination of Taxability. A series of Tax-Exempt Bonds shall be subject to mandatory redemption prior to maturity by the County Commission or the Building Commission, as a whole and not in part, on the earliest practicable date for which notice can be given following the occurrence of a Determination of Taxability, at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date. Mandatory Redemption from Surplus Bond Proceeds. To the extent that moneys are transferred from the Project Fund to the Debt Service Fund pursuant to Section 4.02(b) of the 2006 A Indenture for purposes of redeeming Series 2006 A Bonds, the Series 2006 A Bonds are subject to mandatory redemption in part in Authorized Denominations on the next scheduled Interest Payment Date at a redemption price equal to 100% of the aggregate principal amount of the Series 2006 A Bonds to be redeemed plus accrued interest to the redemption date. Extraordinary Redemption from Insurance and Condemnation Proceedings. The 2006 Bonds are subject to redemption in whole or in part on any June 1 or December 1, without premium or penalty, at a redemption price equal to 100% of the principal amount of the 2006 Bonds to be prepaid plus interest accrued thereon to the redemption date, upon the occurrence of any of the following events: (a) The Campus Facilities or any material portion of the Campus Facilities shall have been damaged or destroyed to such extent that, in the opinion of the President of the University (expressed in an Officer s Certificate filed with the Bond Trustee or Master Trustee and the Underwriter within sixty (60) days after such damage or destruction), (i) the Campus Facilities or any such portion of the Campus Facilities cannot be reasonably restored within a period of nine (9) consecutive months after such damage or destruction to the condition thereof immediately preceding such damage or destruction, (ii) the University is thereby prevented or is reasonably expected to be thereby prevented from carrying on its normal operations within the Campus Facilities or such portion of the Facilities for a period of nine (9) consecutive months after such damage or destruction, or (iii) the cost of restoration of the Campus Facilities or such portion of the Facilities would exceed the Net Proceeds of insurance carried thereon, and (iv) the cost of restoration of such damage or destruction would be in excess of $5 million; or (b) Title to, or the use of, all or any material part of the Campus Facilities shall have been taken by condemnation such that, in the opinion of the President of the University (expressed in an Officer s Certificate filed with the Bond Trustee or Master Trustee and the Underwriter within sixty (60) days after the date of such taking), the University is thereby prevented from carrying on its normal operations therein for a period of nine (9) consecutive months after such taking. Selection of Bonds for Redemption. If less than all of the Tax-Exempt Bonds are called for redemption, they shall be redeemed from an applicable Series of Tax-Exempt Bonds (provided, however, that if an Event of Default has occurred and is continuing any Tax-Exempt Bonds called for redemption shall be redeemed in proportion by series and maturity), subject to selection by the Bond Trustee or the Master Trustee as provided below. The portion of any Tax-Exempt Bond to be redeemed shall be an Authorized Denomination or any multiple thereof and in selecting Tax-Exempt Bonds for redemption, each Tax-Exempt Bond shall be considered as representing that number of Tax-Exempt Bonds which is obtained by dividing the principal amount of such 2006 Bond by the minimum Authorized Denomination. If a portion of a Tax-Exempt Bond shall be called for redemption, a new Tax-Exempt Bond in principal amount equal to the unredeemed portion thereof shall be issued to the Bondholder upon the surrender thereof. If for any reason the principal amount of Tax-Exempt Bonds called for redemption would result in a redemption of a series of Tax-Exempt Bonds less than the Authorized Denomination, the Bond Trustee or the Master Trustee, to the extent possible within the principal amount of Tax-Exempt Bonds to be redeemed, is hereby authorized to adjust the selection of Tax-Exempt Bonds for such purpose in order to minimize any such redemption. Notwithstanding the foregoing, the DTC shall select the Tax-Exempt Bonds for redemption according to its stated procedures. 8

13 If less than all of the 2006 Taxable Bonds are called for redemption, the particular 2006 Taxable Bonds or portions thereof shall be selected for redemption on a pro rata basis based upon the principal amount of such 2006 Taxable Bonds owned by each beneficial holder of 2006 Taxable Bonds at the time of such redemption. Notice of Redemption. (a) When a series of 2006 Bonds (or portions thereof) are to be optionally redeemed, the applicable Issuer shall give or cause to be given notice of the redemption of the 2006 Bonds to the Bond Trustee or the Master Trustee, as the case may be, no later than 45 days prior to the redemption date or such shorter time as may be acceptable to the Bond Trustee or the Master Trustee. In the case of an optional redemption, the notice to the Bond Trustee or Master Trustee may state (1) that it is conditioned upon the deposit of moneys, in an amount equal to the amount necessary to effect the redemption, with the Bond Trustee or Master Trustee no later than the date that is five (5) Business Days prior to the redemption date or (2) that the University retains the right to rescind such notice on or prior to the scheduled redemption date (in either case, a Conditional Redemption ), and such notice and optional redemption shall be of no effect if such moneys are not so deposited and/or of the notice is rescinded as described under paragraph (d), below. The Bond Trustee or the Master Trustee, at the expense of the University, shall send notice of any redemption, identifying the 2006 Bonds to be redeemed stating whether or not it is a Conditional Redemption, the redemption date and the method and place of payment and the information required by paragraph (b), below, by first class mail to each holder of a 2006 Bond called for redemption to the holder s address listed on the Bond Register. Such notice shall be sent by the Bond Trustee or the Master Trustee by first class mail between 30 and 60 days prior to the scheduled redemption date. With respect to Book Entry Bonds, if the Bond Trustee or Master Trustee sends notice of redemption to DTC pursuant to the Letter of Representations, the Bond Trustee or Master Trustee shall not be required to give the notice set forth in the immediately preceding sentence. If notice is given as stated in this paragraph (a), failure of any Bondholder to receive such notice, or any defect in the notice, shall not affect the redemption or the validity of the proceedings for the redemption of the 2006 Bonds. (b) In addition to the foregoing, the redemption notice shall contain with respect to each 2006 Bond being redeemed, (1) the CUSIP number, (2) the date of issue, (3) the interest rate, (4) the series and maturity date, and (5) any other descriptive information determined by the Bond Trustee or the Master Trustee to be needed to identify the 2006 Bonds being redeemed. If a redemption is a Conditional Redemption, the notice shall so state. The Bond Trustee or the Master Trustee shall also send each notice of redemption at least thirty (30) days before the redemption date to (A) any Rating Service then rating the 2006 Bonds to be redeemed; (B) all of the registered clearing agencies known to the Bond Trustee or the Master Trustee to be in the business of holding substantial amounts of bonds of a type similar to the 2006 Bonds; and (C) one or more national information services that disseminate notices of redemption of bonds. (c) On or before the date fixed for redemption, subject to the provisions of paragraphs (a) and (d), moneys shall be deposited with the Bond Trustee or Master Trustee to pay the principal of, redemption premium, if any, and interest accrued to the redemption date on the 2006 Bonds called for redemption. Upon the deposit of such moneys, unless the applicable Issuer has given notice of rescission as described in paragraph (d), below, the 2006 Bonds shall cease to bear interest on the redemption date and shall no longer be entitled to the benefits of the Bond Indentures or the Master Indenture (other than for payment and transfer and exchange) and shall no longer be considered Outstanding. (d) Any Conditional Redemption may be rescinded in whole or in part at any time prior to the fifth Business Day prior to the redemption date if the applicable Issuer delivers an Officer s Certificate to the Bond Trustee or Master Trustee, the University, in the case of a rescission by a Tax-Exempt Issuer, and the Rating Service, if any, instructing the Bond Trustee or Master Trustee to rescind the redemption notice. The Bond Trustee or Master Trustee shall give prompt notice of such rescission to the DTC. Any 2006 Bonds subject to Conditional Redemption where redemption has been rescinded shall remain 9

14 Outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a Conditional Redemption, the failure of the applicable Issuer to make funds available in part or in whole on or before the redemption date shall not constitute an Event of Default, and the Bond Trustee or Master Trustee shall give Immediate Notice to the DTC that the redemption did not occur and that the 2006 Bonds called for redemption and not so paid remain Outstanding. Purchase of 2006 Bonds The University may purchase 2006 Bonds at any time. Such purchase of 2006 Bonds shall be made with funds of the University and not with any portion of the Trust Estate or any Defeasance Obligations. Upon purchase by the University, such 2006 Bonds may be delivered to the Master Trustee for cancellation pursuant to Section 3.10 of the Bond Indentures, for the Tax-Exempt Bonds, or Section 407 of the Supplemental Indenture, for the Taxable Bonds. Nothing in the Bond Indentures or the Supplemental Indenture shall prevent the University from purchasing 2006 Bonds on the open market without the involvement of the Bond Trustee or the Master Trustee, and delivering such 2006 Bonds to the Bond Trustee for cancellation pursuant to Section 3.10 of the Bond Indentures, or to the Master Trustee, for cancellation pursuant to Section 407 of the Supplemental Indenture. Tax-Exempt Bonds purchased pursuant to Section 3.10 of the Bond Indentures which are subject to the mandatory sinking fund redemption schedule in Section 3.02 of the Bond Indentures shall be credited against future mandatory sinking fund redemption payments in accordance with Section 3.02 of the Bond Indentures. Taxable Bonds purchased pursuant to Section 407 of the Supplemental Indenture which are subject to the mandatory sinking fund redemption schedule in Section 403 of the Supplemental Indenture shall be credited against future mandatory sinking fund redemption payments in accordance with Section 403 of the Supplemental Indenture. The principal amount of the 2006 Bonds to be redeemed by optional redemption under the Bond Indentures or the Supplemental Indenture may be reduced by the principal amount of the 2006 Bonds purchased by the University and delivered to the Bond Trustee or Master Trustee for cancellation at least forty-five days prior to the redemption date. Bond Registration, Transfer and Exchanges The Bond Trustee or the Master Trustee, as the case may be, shall act as the initial bond registrar (the Bond Registrar ) and in such capacity shall maintain a bond register (the Bond Register ) for the registration and transfer of the 2006 Bonds. Upon surrender of any 2006 Bonds at the Office of the Bond Trustee or Master Trustee, together with an assignment duly executed by the current Bondholder of such 2006 Bonds or such Bondholder s duly authorized attorney or legal representative in such form as shall be satisfactory to the Bond Trustee or Master Trustee, such 2006 Bonds may, at the option of the Bondholder, be exchanged for an equal aggregate principal amount of 2006 Bonds of the same series and maturity, of Authorized Denominations and bearing interest at the same rate and in the same form as the 2006 Bonds surrendered for exchange, registered in the name or names requested by the assignee of the then Bondholder; provided the Bond Trustee or Master Trustee is not required to exchange or register the transfer of 2006 Bonds after the giving of notice calling such 2006 Bond for redemption, in whole or in part. The Issuer shall execute and the Bond Trustee or Master Trustee shall authenticate any 2006 Bonds whose execution and authentication is necessary to provide for exchange of 2006 Bonds pursuant to Section 2.08 of the Bond Indentures or Section 408 of the Supplemental Indenture and the Issuer may rely on a representation from the Bond Trustee or Master Trustee that such execution is required. The Bond Trustee or Master Trustee may make a charge to any Bondholder requesting such exchange or registration in the amount of any tax or other governmental charge required to be paid with respect thereto but will not impose any other charge. 10

15 Prior to due presentment for registration of transfer of any 2006 Bond, the Bond Trustee or Master Trustee shall treat the Person shown on the Bond Register as owning a 2006 Bond as the Bondholder and the Person exclusively entitled to payment of principal thereof, redemption premium, if any, and interest thereon and, except as otherwise expressly provided herein, the exercise of all other rights and powers of the owner thereof, and neither the Issuer, the University, the Bond Trustee or Master Trustee nor any agent of the Issuer, the University, or the Bond Trustee or Master Trustee shall be affected by notice to the contrary. At reasonable times and under reasonable regulations established by the Bond Registrar, the Bond Register may be inspected and copied by or delivered to the University, the Issuer or, upon written request by holders of 51% or more in principal amount of any Series of the 2006 Bonds then Outstanding, to a designated representative thereof. THE TAXABLE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF ANY SALE, RESALE OR ASSIGNMENT OF THESE BONDS MAY BE MADE ONLY TO A QUALIFIED INSTITUTIONAL BUYER AS SUCH TERM IS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Book-Entry-Only System The following information concerning DTC has been extracted from a schedule prepared by DTC entitled Sample Offering Document Language Describing Book-Entry Only Issuance. Neither the Issuers nor the University makes any representation as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. DTC will act as securities depository for the 2006 Bonds. The 2006 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 certificate will be issued for each annual maturity of each series of the 2006 Bonds, each in the aggregate principal amount of such annual maturity, and such certificates will be deposited with DTC. DTC, the world s largest depository, is a limited-purpose trust company organized under 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 1934, as amended. DTC holds and provides asset servicing for over 2.2 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, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, FICC and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc. 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 11

16 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 securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2006 Bonds on DTC s records. The ownership interest of each 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 of 2006 Bonds. 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 2006 Bonds are to be accomplished by entries made on the books of the Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2006 Bonds, except in the event that the use of the book-entry system for the 2006 Bonds is discontinued. To facilitate subsequent transfers, all 2006 Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the 2006 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 2006 Bonds; DTC s records reflect only the identity of the Direct Participants to whose account such 2006 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 2006 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2006 Bonds, such as redemptions, tenders, defaults and proposed amendments to the bond documents. For example, Beneficial Owners of 2006 Bonds may wish to ascertain that the nominee holding the 2006 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the 2006 Bonds of a series are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such series and maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 2006 Bonds unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as practicable after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose account the 2006 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions and dividend payments on the 2006 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 Issuers, the Bond Trustee, or the Master Trustee on the payable date in accordance 12

17 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 Issuers, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuers, the Bond Trustee, or the Master Trustee disbursement of such payments to the Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the 2006 Bonds at any time by giving reasonable notice to the Issuers, the Bond Trustee or the Master Trustee. Under such circumstances, in the event that a successor depository is not obtained, 2006 Bond certificates are required to be printed and delivered. The Issuers may discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, 2006 Bond certificates will be printed and delivered to DTC. NEITHER THE ISSUERS, THE BOND TRUSTEE, THE MASTER TRUSTEE NOR THE UNDERWRITERS WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO: (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT INCLUDING WITHOUT LIMITATION AS TO THE BENEFICIAL OWNERSHIP OF ANY 2006 BONDS; (2) THE PAYMENT BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO PRINCIPAL OF, OR INTEREST ON, THE 2006 BONDS; (3) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO OWNERS; OR (4) ANY CONSENT GIVEN BY DTC OR OTHER ACTION TAKEN BY DTC AS AN OWNER. SECURITY AND SOURCES OF PAYMENT FOR THE 2006 BONDS Limited Obligations THE SERIES 2006 A BONDS ARE LIMITED OBLIGATIONS OF OHIO COUNTY AND ARE PAYABLE SOLELY OUT OF THE TRUST ESTATE. THE SERIES 2006 A BONDS AND THE INTEREST THEREON SHALL NOT CONSTITUTE AN INDEBTEDNESS OF OHIO COUNTY, THE COUNTY COMMISSION, THE STATE OF WEST VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, WITH THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND SHALL NOT CONSTITUTE OR GIVE RISE TO A PECUNIARY LIABILITY OF OHIO COUNTY, THE COUNTY COMMISSION, THE STATE OF WEST VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF. NEITHER SHALL THE SERIES 2006 A BONDS NOR THE INTEREST THEREON BE A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF OHIO COUNTY, THE COUNTY COMMISSION, THE STATE OF WEST VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF. THE SERIES 2006 B BONDS ARE SPECIAL OBLIGATIONS OF THE BUILDING COMMISSION AND ARE PAYABLE SOLELY OUT OF THE TRUST ESTATE. THE SERIES 2006 B BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE BUILDING COMMISSION, OHIO COUNTY, THE COUNTY COMMISSION, THE STATE OF WEST VIRGINIA OR ANY 13

18 POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY PROVISION, LIMITATION, OR RESTRICTION OF THE CONSTITUTION OF THE STATE OF WEST VIRGINIA RELATING TO THE CREATION OR INCURRING OF INDEBTEDNESS OR THE ISSUANCE OF AN INSTRUMENT CONSTITUTING A BOND OR A DEBT. NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE SERIES 2006 B BONDS, OR INTEREST THEREON, OR ANY PART THEREOF, AGAINST THE GENERAL FUND OF THE BUILDING COMMISSION, OHIO COUNTY, THE COUNTY COMMISSION, OR THE STATE OF WEST VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, NOR SHALL THE CREDIT OR TAXING POWER, IF ANY, OF THE BUILDING COMMISSION, OHIO COUNTY, THE COUNTY COMMISSION, THE STATE OF WEST VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF BE DEEMED TO BE PLEDGED THERETO. THE BUILDING COMMISSION HAS NO TAXING POWER. THE TAXABLE BONDS ARE SECURED UNDER THE PROVISIONS OF THE MASTER INDENTURE AND ARE PAYABLE SOLELY FROM FUNDS PLEDGED BY THE UNIVERSITY UNDER THE MASTER INDENTURE. The 2006 Notes, as hereinafter described, will be issued under the Master Indenture to evidence the University s obligation to make payments to Tax-Exempt Issuers to pay principal of, premium, if any, interest and other amounts payable to the Tax-Exempt bondholders, which Notes will be on a parity with the Taxable Bonds. The Bond Indentures In the Bond Indentures, the Tax-Exempt Issuers will assign to the Bond Trustee, as security for the payment of the Tax-Exempt Bonds, all right, title and interest of the Tax-Exempt Issuers in and to the following (the Trust Estate ): (a) the Loan Documents, for the Series 2006 A Bonds, and the Lease Documents, for the Series 2006 B Bonds, (except for Unassigned Issuer s Rights); (b) (c) Revenues; Funds (except for the Rebate Fund); and (d) all other property of every name and nature from time to time hereafter by delivery or by writing mortgaged, pledged, delivered, or hypothecated as and for additional security under the Bond Indentures by the Tax-Exempt Issuers or by anyone on their behalf or with their written consent in favor of the Bond Trustee. See SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES, THE MASTER INDENTURE, AS SUPPLEMENTED, AND THE 2006 RELATED FINANCING DOCUMENTS in APPENDIX C. Master Trust Indenture The Master Indenture provides that, so long as any Obligations are Outstanding, as security for the University s obligation to make payments on such Obligations and other Obligations issued under the Master Indenture (all of such Obligations being issued on a parity under the Master Indenture), the University pledges, assigns, conveys, transfers, grants and ratifies to the Master Trustee a first priority security interest in, general lien upon and the right of set-off against the following described personal property of the University, whether now owned or existing or hereafter acquired or arising or wherever located: 14

19 (a) All of the University s Gross Receipts, Accounts, Bank Accounts, General Intangibles, and all Related Rights; (b) Except as specifically provided in the Master Indenture, all moneys and securities held from time to time by the Master Trustee under the Master Indenture, including, without limitation, moneys and securities held in the funds and accounts established under the Master Indenture; and (c) All proceeds, cash proceeds, cash equivalents, products, replacements, additions and improvements to, substitutions for, and accessions of any and all property described in subsections (a) and (b) above. See SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES, THE MASTER INDENTURE, AS SUPPLEMENTED, AND THE 2006 RELATED FINANCING DOCUMENTS in APPENDIX C. Mortgage on Campus Real Property Upon execution of the Supplemental Indenture, the University shall execute a Deed of Trust in favor of the Master Trustee providing for a lien on the Campus Real Property, which shall equally and ratably secure all Obligations issued under the Master Indenture. The Master Trustee shall immediately record such Deed of Trust in the office of the County Clerk of Ohio County, West Virginia. The Trustees of such Deed of Trust shall not, and the Deed of Trust shall so provide, take any action to sell or otherwise enforce their rights under the Deed of Trust unless a payment related default has occurred with respect to any Outstanding Obligation. The failure of the University to make an early deposit pursuant to the Supplemental Indenture shall not constitute a payment related default. Upon payment in full of all Obligations the Master Trustee shall execute and file with the County Clerk of Ohio County, West Virginia a release releasing such Deed of Trust. See SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES, THE MASTER INDENTURE, AS SUPPLEMENTED, AND THE 2006 RELATED FINANCING DOCUMENTS in APPENDIX C. The 2006 Related Financing Documents Pursuant to the 2006 Related Financing Documents, the University agrees to make payments directly to the Bond Trustee on behalf of the Tax-Exempt Issuers in such amounts and at such times as are sufficient to pay in full, when due, the principal of, and premium, if any, interest and other amounts payable on the 2006 Notes, which amounts will be sufficient to pay the principal of, and premium, if any, interest and other amounts payable on the Tax-Exempt Bonds. Upon the satisfaction in full of the 2006 Notes, the University will be released from liability on the 2006 Notes and under the 2006 Related Financing Documents. See SUMMARY OF CERTAIN PROVISIONS OF THE BOND INDENTURES, THE MASTER INDENTURE, AS SUPPLEMENTED, AND THE 2006 RELATED FINANCING DOCUMENTS in APPENDIX C. The 2006 Notes To evidence and secure its obligations under the 2006 Related Financing Documents, the University will sell to the Tax-Exempt Issuers pursuant to the 2006 Related Financing Documents the 2006 Notes, each in a principal amount equal to the aggregate principal amount of the corresponding series of 2006 Bonds. The County Commission will purchase the A Note and then pledge and assign it to the Bond Trustee. The Building Commission will purchase the B Note and then pledge and assign it to the Bond Trustee. All payments by the University of principal of, and premium, if any, 15

20 interest and other amounts payable on the 2006 Notes will be made to the Bond Trustee, and each payment will be made on or before the date when the corresponding payment is required to be made on the 2006 Bonds. The 2006 Notes require payments by the University to correspond to the amount of principal of, and premium, if any, interest and other amounts payable on the 2006 Bonds. The 2006 Notes will at all times be in fully registered form and will be non-transferable except by written assignment to a successor trustee. The 2006 Notes constitute a general obligation of the University. Guaranty Agreement General. The Roman Catholic Diocese of Wheeling-Charleston (the Diocese ) has agreed to guarantee to pay up to $3,500,000 of the University s obligations to make payments on the 2006 Notes and the Taxable Bonds through a Guaranty Agreement dated December 5, 2006 (the Guaranty Agreement ) with the Master Trustee. The obligations of the Diocese under the Guaranty Agreement shall remain in full force and effect until all payments of principal and interest required with respect to the 2006 Obligations have been paid. Under the Guaranty Agreement, the Diocese unconditionally guarantees to the Master Trustee that should the University fail to deposit with the Master Trustee an amount required to be deposited on the date such deposit is required to be made, then the Diocese shall, within ten (10) days of receiving written notice of such failure from the Master Trustee, deposit with the Master Trustee an amount equal to the amount that the University failed to deposit with the Master Trustee up to an aggregate amount not to exceed $3,500,000. The failure of the Diocese to make such a deposit with the Master Trustee within such ten (10) day period shall be an Event of Default by the Diocese under the Guaranty Agreement. The maximum amount of the Diocese s liability under the Guaranty Agreement is $3,500,000. Should the Diocese make a payment under the Guaranty Agreement and then be reimbursed by either the Master Trustee or the University for such payment, the Diocese s potential liability under its Guaranty Agreement shall be increased by the amount of such reimbursement, but in no event shall the Diocese s liability be in excess of $3,500,000. When notice is received from the Master Trustee that a payment is due the Master Trustee under the Guaranty Agreement, then the Diocese shall pay the Master Trustee the amount of such payment within ten (10) days of receipt of such notice. In order to secure its obligations under the Guaranty Agreement, the Diocese shall execute a Pledge and Security Agreement and an Account Control Agreement. Pursuant to the Pledge and Security Agreement and Account Control Agreement, the Diocese shall at all times maintain balances in its pledged accounts (the Pledged Accounts ) an amount equal to the lesser of $3,500,000 or all remaining principal and interest payable with respect to the 2006 Notes and the Taxable Bonds (the Required Value ). Pursuant to the Pledge and Security Agreements, the Master Trustee is granted a security interest in the Pledged Accounts, as security for the performance of the obligations of the Diocese under the terms and provisions of the Guaranty Agreement. The Master Trustee s security interest in the Diocese s Pledged Account shall be up to the maximum amount of $3,500,000, and the Diocese pledges that it will not, at any time while the Pledge and Security Agreement is in effect, do or suffer any act or thing whereby the rights of the Master Trustee in the Pledged Account would or might be impaired. The custodian of the Account Control Agreement must submit directly to the Diocese and the Master Trustee at closing and on a monthly basis thereafter a statement setting forth the value and holdings of the Pledged Account. Pursuant to the Account Control Agreement, the Diocese must deposit in the Pledged Account investment securities having a fair market value of greater than $3,500,000 on the date of deposit. The Diocese warrants in the Account Control Agreement that it has not granted and will not grant a security interest in the Pledged Account to any party other than the Master Trustee. If the Diocese suffers an Event of Default under the Pledge and Security Agreement, in order to enable the Master Trustee to enforce its security interest in the Pledged Account, the Diocese authorizes and directs the custodian of the Pledged Account to deliver, after ten (10) days written notice thereof to the Diocese, cash 16

21 and/or security or proceeds from the sale thereof or distributions thereon from the Pledged Account to the Master Trustee upon receipt of a certificate in writing from an authorized officer of the Master Trustee certifying that the Diocese has suffered an Event of Default under the Pledge and Security Agreement. Deposit to Reserve Fund. Pursuant to the Guaranty Agreement, in the event that the balance in the Pledged Account of the Diocese shall be less than the Required Value, other than by reason of a draw thereon under the Guaranty Agreement, then the Diocese shall, within five (5) days of receipt of notice from the Master Trustee that the balance in such Pledged Account is below the Required Value, deposit such amounts as are necessary to cause the balance in the Pledged Account to be at least equal to the Required Value. In the event that the Diocese does not make such a deposit, then such failure shall be an Event of Default under the Guaranty Agreement and the Master Trustee, as the secured party under the Diocese s Pledge and Security Agreement and the Diocese s Account Control Agreement, shall cause the funds held in the Pledged Account to be transferred to the Master Trustee who shall place such funds in a Debt Service Reserve Fund for the 2006 Notes and the Taxable Bonds. In such an event, the Master Trustee is authorized to draw upon amounts in such Debt Service Reserve Fund in the event of a payment default with respect to the 2006 Notes and the Taxable Bonds. PLAN OF FINANCING The proceeds derived from the sale of the Series 2006 A Bonds will be loaned to the University to (i) finance certain improvements to the University s campus (the 2006 Project ); (ii) currently refund The County Commission of Ohio County Commercial Development Revenue Bonds, Series 1992 (Wheeling Jesuit College, Inc. Health/Recreation Complex Project) (the 1992 Bonds ); (iii) currently refund The County Commission of Ohio County Commercial Development Revenue Bonds, Series 1993 (Wheeling Jesuit College, Inc. Residence Hall Commercial Project) (the 1993 Bonds ); (iv) currently refund The County Commission of Ohio County Commercial Development Revenue Bonds, Series 1999 (Sarah Tracy Hall Addition and Renovations to Steenrod School Project) (the 1999 Bonds ); and (v) pay the costs of issuing the Series 2006 A Bonds. The proceeds from the sale of the Series 2006 B Bonds will be loaned to the University to (i) currently refund the Ohio County Building Commission Revenue Bonds, Series 2002 (Wheeling Jesuit University Project) (the 2002 Bonds ); and (ii) pay the costs of issuing the Series 2006 B Bonds. The proceeds derived from the sale of the Taxable Bonds will be used by the University to (i) currently refund taxable debt previously incurred by the University, (ii) pay the costs of issuing the 2006 Bonds, and (iii) pay capitalized interest costs on the Taxable Bonds. The 1992 Bonds, the 1993 Bonds, the 1999 Bonds, and the 2002 Bonds are expected to be redeemed on or about the delivery date for the 2006 Bonds. ESTIMATED SOURCES AND USES OF FUNDS Proceeds from the sale of the Series 2006 A Bonds are estimated to be used as follows: Sources of Funds: Par Amount of Series 2006 A Bonds $12,425, Less Original Issue Discount 438, TOTAL $11,986,

22 Uses of Funds: Refund Prior County Commission Bonds $ 10,240, Deposit to Project Fund 1,500, Costs of Issuance, Underwriter s Discount, and Additional Proceeds 245, TOTAL $11,986, Proceeds from the sale of the Series 2006 B Bonds are estimated to be used as follows: Sources of Funds: Par Amount of Series 2006 B Bonds $1,215, Less Original Issue Discount 20, Uses of Funds: TOTAL $1,194, Refund Prior Building Commission Bonds $1,175, Costs of Issuance, Underwriter s Discount, and Additional Proceeds 18, TOTAL $1,194, Proceeds from the sale of the Series 2006 C Bonds are estimated to be used as follows: Sources of Funds: Par Amount of Series 2006 C Bonds $21,360, Less Original Issue Discount 427, Uses of Funds: TOTAL $20,932, Refund Outstanding Taxable Debt of the University $14,553, Refinancing of Line of Credit 5,000, Capitalized Interest 755, Costs of Issuance, Underwriter s Discount, and Additional Proceeds 623, TOTAL $20,932,

23 AGGREGATE DEBT SERVICE ON THE 2006 BONDS The following table sets forth, for each Bond Year ending June 30, the amounts required in each such year for the payment of principal at maturity for the 2006 Bonds, the payment of interest on the 2006 Bonds, and the total principal and interest payments on the 2006 Bonds. Bond Year Ending June 30 Principal on the 2006 Bonds Interest on the 2006 Bonds Total Debt Service on the 2006 Bonds 2007 $1,174, $1,174, $125,000 2,402, ,527, ,000 2,395, ,525, ,000 2,389, ,529, ,000 2,381, ,526, ,000 2,374, ,529, ,000 2,365, ,530, ,000 2,357, ,532, ,000 2,348, ,533, ,000 2,338, ,533, ,000 2,323, ,088, ,000 2,263, ,088, ,000 2,200, ,090, ,000 2,131, ,091, ,035,000 2,056, ,091, ,115,000 1,976, ,091, ,200,000 1,890, ,090, ,295,000 1,797, ,092, ,390,000 1,696, ,086, ,500,000 1,588, ,088, ,615,000 1,472, ,087, ,740,000 1,347, ,087, ,875,000 1,212, ,087, ,020,000 1,067, ,087, ,180, , ,090, ,350, , ,091, ,495, , ,090, ,630, , ,088, ,775, , ,088, ,930, , ,091, BONDHOLDERS RISKS The risk factors discussed below should be considered by potential investors in evaluating an investment in the 2006 Bonds. The discussion of risk factors is not, and is not intended to be, exhaustive. Uncertainty of Revenues The Tax-Exempt Bonds will be payable solely from revenues and other moneys derived by the County Commission, as to the Series 2006 A Bonds, and the Building Commission, as to the Series 2006 B Bonds, from payments made under the 2006 Related Financing Documents between the County 19

24 Commission or the Building Commission and the University and from the A Note and B Note, respectively, issued by the University pursuant to the Master Indenture. The Taxable Bonds will be payable from funds pledged by the University under the Master Indenture. The ability of the University to make payments on the 2006 Bonds is dependent upon the generation by the University of revenues in the amounts necessary for the University to pay the principal of, premium, if any, interest and other amounts payable on the 2006 Bonds, as well as other operating, capital and debt service expenses. The realization of future revenues and expenses are subject to, among other things, tuition, fees, contributions, grants, returns on the University s investment portfolio, and future economic and other conditions that are unpredictable and that may affect revenues and payment of principal of, premium, if any, interest and other amounts payable on the 2006 Bonds. No representation or assurance can be made that revenues will be realized by the University in amounts sufficient to make the required payments with respect to debt service on the 2006 Bonds. Tuition and Other Revenues The University s financial condition is dependent on revenues received from tuition, fees, contributions, grants, and earnings on its investment portfolio. Because tuition, fees, contributions, grants, and earnings on its investment portfolio depend on a variety of factors, including economic factors, many of which are outside the control of the University, it is possible that the University s revenues from tuition, fees, contributions, grants, and earnings on its investment portfolio will not continue at expected levels in the future, which may result in a materially adverse impact on the financial condition of the University. A sizable reduction in the enrollment of students at the University would have a materially adverse impact on the financial condition of the University. A sizable reduction of the amount of the University s investment portfolio also could have a materially adverse impact on the financial condition of the University. Possible Changes in Tax Exempt Status The possible modification or repeal of certain existing federal income or state tax laws or other loss by the University of the present advantages of certain provisions of the federal income or state tax laws could materially and adversely affect the status of the University and thereby its revenues. The University is an exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the Code ). As an exempt organization, the University is subject to a number of requirements affecting its operations. The failure of the University to remain qualified as an exempt organization may affect the funds available for payments to be made under the 2006 Notes. Failure of the University or the Tax-Exempt Issuers to comply with certain requirements of the Code, or adoption of amendments to the Code to restrict the use of tax-exempt bonds for facilities such as those being financed with the Tax-Exempt Bond proceeds, could cause interest on the Tax-Exempt Bonds to be included in the gross income of Tax-Exempt Bond Bondholders or former Tax-Exempt Bondholders for federal income tax purposes. See TAX EXEMPTION. Enforceability of Remedies The enforceability of the rights and remedies of the Bond Trustee, Master Trustee, or the holders of the 2006 Bonds under the Bond Indentures and Master Indenture and the availability of remedies to any party seeking to enforce the Bond Indentures and Master Indenture are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code (the federal bankruptcy code), the enforceability of the rights and remedies under the Bond Indentures and Master 20

25 Indenture and the availability of remedies to any party seeking to enforce the security granted thereby may be limited. The various legal opinions to be delivered concurrently with the delivery of the 2006 Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by the valid exercise of the constitutional powers of the State of West Virginia and the United States of America, by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally, and by general principles of equity (regardless of whether such enforceability is considered in a preceding in equity or at law). These exceptions would encompass any exercise of federal, State of West Virginia or local police powers (including the police powers of the State of West Virginia), in a manner consistent with the public health and welfare. The enforceability of the Bond Indentures and Master Indenture and the availability of remedies to a party seeking to enforce a pledge of security under the Bond Indentures and Master Indenture in a situation where such enforcement or availability may adversely affect public health and welfare may be subject to these police powers. Diocese Under the Guaranty Agreement The Diocese, under the terms of the Pledge and Security Agreement, is liable for and shall from time to time pay and discharge all taxes, assessments and governmental charges imposed upon its Pledged Account or imposed on the holder and/or registered owner of the Pledged Account by any federal state or local authority. If not paid and discharged, the liens created by such taxes, assessments and governmental charges may be held prior to the right of the Master Trustee in and to the Pledged Account. In the event that the Diocese files for bankruptcy protection after executing the Guaranty Agreement, the Master Trustee will be a secured creditor of the Diocese pursuant to the terms of the Pledge and Security Agreement and Account Control Agreement. A bankruptcy filing by the Diocese more than ninety days after executing the Guaranty Agreement will not affect the enforceability of the Master Trustee s security interest under the Pledge and Security Agreement or the Account Control Agreement; however, no representation or assurance can be made with respect to the amount the Master Trustee will be able to collect from the Diocese if it files for bankruptcy or with respect to the timeliness of the collection. A bankruptcy filing by the Diocese within ninety days or less after executing the Guaranty Agreement may adversely affect the Master Trustee s ability to enforce its security interest under the Pledge and Security Agreement and the Account Control Agreement as well as its ability to collect from the Diocese. United States Department of Education Title IV, Higher Education Act Programs Participation The United States Department of Education (the U.S. Department of Education ) mandates that an institution of higher education demonstrate that it is financially responsible in order to participate in Title IV, Higher Education Act Programs, i.e., Federal Financial Aid Programs ( Title IV, HEA Programs ). The institution must maintain a composite financial ratio score of 1.5 out of a possible 3.0 in order to be considered financially responsible by the Secretary of the Department of Education. The U.S. Department of Education School Participation Team-Philadelphia has reviewed the audited financial statements of the University for fiscal years ending on June 30 th of 2002 through 2005, and based on these reviews, determined that the University failed to meet the composite financial ratio score of 1.5 for each of these years. The composite financial ratio score was 1.1 in 2002, and 1.4 for fiscal years 2004 and The University had a failing composite financial ratio score of.3 in The U.S. Department of Education allows schools that have composite financial ratio scores between 1.0 and 1.4 to continue to participate in Title IV, HEA Programs as a financially responsible institution through a Zone Alternative. Beginning with fiscal year 2002, the University began participating in Title IV, HEA Programs through the Zone Alternative. However, an institution that qualifies under the Zone Alternative for three consecutive years or for one of those years, may not seek to 21

26 qualify again under this alternative until the year after the institution achieves a composite financial ratio score of at least 1.5, as determined by the Secretary of the U.S. Department of Education. The University, however, will continue to participate in Title IV, HEA Programs through the U.S. Department of Education s Provisional Certification Alternative. Under this alternative, the University has submitted to the Secretary of Education an irrevocable letter of credit from Wesbanco Bank, Inc. in the amount of $880,000, representing 10% of Title IV, HEA Program funds for the most recently completed fiscal year, which will enable the University to be provisionally certified for a period of up to three award years. The University s disbursement of Title IV, HEA Program funds will be subject to the cash monitoring method of payment and, by selecting this alternative, the University acknowledges that it has not met the standards of financial responsibility required by the U.S. Department of Education. To date, the University s failure to meet the standards of financial responsibility required by U.S. Department of Education guidelines has not adversely affected its accreditation through the North Central Association of Colleges and Schools, its approval by the West Virginia Department of Education, or its recognition by the Ohio Board of Regents. These entities have been privy to written correspondence regarding Title IV, HEA Programs between the University and the Department of Education, and will continue to be included on such written correspondence in the future. No representations or assurances can be made that the University will continue to receive accreditation from the North Central Association of Colleges and Schools, approval by the West Virginia Department of Education, or recognition by the Ohio Board of Regents if it continues to fail to meet the U.S. Department of Education s standards of financial responsibility. The University s failure to receive such accreditation, approval, or recognition would have a materially adverse impact on the financial condition of the University. LITIGATION The County Commission of Ohio County, West Virginia There is no pending or threatened litigation seeking to restrain or enjoin the issuance, sale or delivery of the Series 2006 A Bonds, or in any way contesting or affecting the validity of the Series 2006 A Bonds or any proceedings of the County Commission taken with the respect to the issuance or sale thereof, or in any way questioning or affecting the validity or enforceability of the 2006 A Loan Agreement between the County Commission and University or the 2006 A Indenture, the use of the Series 2006 A Bond proceeds or the existence of the County Commission The Ohio County (West Virginia) Building Commission There is no pending or threatened litigation seeking to restrain or enjoin the issuance, sale or delivery of the Series 2006 B Bonds, or in any way contesting or affecting the validity of the Series 2006 B Bonds or any proceedings of the Building Commission taken with the respect to the issuance or sale thereof, or in any way questioning or affecting the validity or enforceability of the 2006 B Lease Agreement between the Building Commission and University or the 2006 B Indenture, the use of the Series 2006 B Bond proceeds or the existence of the Building Commission. The University The University has advised that no litigation or proceedings are pending or, to its knowledge, threatened against it except litigation which, in the opinion of the University, is not expected to result in a materially adverse change in the operations or condition, financial or otherwise, of the University. The University also has advised that there is no litigation pending, or to the knowledge of the University, 22

27 threatened, which in any manner questions the right of the University to enter into the financing described herein or affecting the validity of the 2006 Related Financing Documents, the Master Indenture, the Supplemental Master Trust Indenture , the Bond Indentures, the Series 2006 C Bonds or the 2006 Notes or contesting the corporate existence, powers or tax-exempt status of the University. UNDERWRITING The 2006 Bonds are being purchased, subject to certain conditions, by Lehman Brothers (the Underwriter ). The Underwriter has agreed, subject to certain conditions, to purchase all, but not less than all, of the 2006 Bonds at a purchase price equal to $33,579, (which represents the original aggregate principal amount of the 2006 Bonds less net original issue discount of $886, and less Underwriter s discount of $533,750.00). The bond purchase agreement for the 2006 Bonds provides that the Underwriter will purchase all of the 2006 Bonds if any of the 2006 Bonds are purchased, and the University agrees, among other things, to indemnify the Underwriter and the Tax-Exempt Issuers against losses, claims, damages and liabilities arising out of any incorrect statement or information contained in or information omitted from this Private Placement Memorandum pertaining to the University or other matters. TAX MATTERS Series 2006 A Bonds; Series 2006 B Bonds Federal tax law contains a number of requirements and restrictions which apply to the Tax- Exempt Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters. The Tax-Exempt Issuers and the University have covenanted to comply with all requirements that must be satisfied in order for the interest on the Tax-Exempt Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Tax-Exempt Bonds to become includible in gross income for federal income tax purposes retroactively to the date of issuance of the Tax-Exempt Bonds. Subject to compliance by the Tax-Exempt Issuers and the University with the above-referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Tax-Exempt Bonds is excludable from the gross income of the owners thereof for federal income tax purposes, and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations. Interest on the Tax-Exempt Bonds is taken into account, however, in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In rendering its opinion, Bond Counsel will rely upon certifications of the Tax-Exempt Issuers and of the University with respect to certain material facts solely within the Tax-Exempt Issuers or the University s respective knowledge, will rely on the opinion of the General Counsel to the University that the University is a 501(c)(3) organization and as to certain other matters, and will rely upon the computations of yield on the Tax-Exempt Bonds. Bond Counsel s opinion represents its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result. See APPENDIX D, PROPOSED FORM OF OPINION OF BOND COUNSEL. The Code includes provisions for an alternative minimum tax ( AMT ) for corporations in addition to the corporate regular tax in certain cases. The AMT, if any, depends upon the corporation s alternative minimum taxable income ( AMTI ), which is the corporation s taxable income with certain adjustments. One of the adjustment items used in computing AMTI of a corporation (with certain exceptions) is an amount equal to 75% of the excess of such corporation s adjusted current earnings 23

28 over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). Adjusted current earnings would include all tax exempt interest, including interest on the Tax-Exempt Bonds. Ownership of the Tax-Exempt Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Tax-Exempt Bonds should consult their tax advisors as to applicability of any such collateral consequences. The issue price (the Issue Price ) for each maturity of the Tax-Exempt Bonds is the price at which a substantial amount of such maturity of the Tax-Exempt Bonds is first sold to the public. The Issue Price of each maturity of the Tax-Exempt Bonds is expected to be the amount corresponding to the yield on such maturity of Tax-Exempt Bonds, but is subject to change based on actual sales. Owners of Tax-Exempt Bonds who dispose of Tax-Exempt Bonds prior to the stated maturity (whether by sale, redemption or otherwise), purchase Tax-Exempt Bonds in the public offering, but at a price different from the Issue Price or purchase Tax-Exempt Bonds subsequent to the initial public offering should consult their own tax advisors. If a Tax-Exempt Bond is purchased at any time for a price that is less than the Tax-Exempt Bond s stated redemption price at maturity (the Revised Issue Price ), the purchaser will be treated as having purchased a Tax-Exempt Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a Tax-Exempt Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser s election, as it accrues. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such Tax-Exempt Bond. Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the Tax-Exempt Bonds. An investor may purchase a Tax-Exempt Bond at a price in excess of its stated principal amount. Such excess is characterized for federal income tax purposes as bond premium and must be amortized by an investor on a constant yield basis over the remaining term of the Tax-Exempt Bond in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a Tax-Exempt Bond. The amortized bond premium is treated as a reduction in the tax-exempt interest received. As bond premium is amortized, it reduces the investor s basis in the Tax- Exempt Bond. Investors who purchase a Tax-Exempt Bond at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the Tax-Exempt Bond s basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Tax-Exempt Bond. There are or may be pending in the Congress of the United States legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Tax-Exempt Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to such enactment. Prospective purchasers of the Tax-Exempt Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation. The Internal Revenue Service (the Service ) has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is 24

29 includible in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Tax-Exempt Bonds. If an audit is commenced, under current procedures the Service will treat each Tax-Exempt Issuer as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Tax-Exempt Bonds until the audit is concluded, regardless of the ultimate outcome. Interest on the Tax-Exempt Bonds is exempt from present West Virginia income taxes, whether imposed on individuals, corporations or other persons, and from State of West Virginia business franchise taxes and from ad valorem property taxes. Ownership of the Tax-Exempt Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Tax-Exempt Bonds. Prospective purchasers of the Tax-Exempt Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. Series 2006 C Bonds (Taxable) Interest on the Series 2006 C Bonds is not exempt from gross income for federal income tax purposes, and is not exempt from present West Virginia income taxes. Ownership of the Series 2006 C Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Series 2006 C Bonds. Prospective purchasers of the Series 2006 C Bonds should consult their own tax advisors regarding the applicability of any such state and local taxes. Original Issue Discount In the opinion of Bond Counsel, under existing law, the original issue discount in the selling price of any Tax-Exempt Bonds sold at an original issue discount (an "OID Bond"), to the extent properly allocable to each owner of such OID Bond, is excludible 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 or principal due at maturity of such OID Bond over its initial offering price to the public, excluding underwriters and other intermediaries, at which price a substantial amount of such OID Bonds was sold. Under Section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of an OID Bond during any accrual period generally equals (i) the issue price of such OID Bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of such OID Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (iii) any interest payable on such OID 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 excludable from gross income for federal income tax purposes and will increase the owner's tax basis in such OID Bond. Purchasers of any Tax- Exempt Bonds at an original issue discount should consult their tax advisors regarding the determination and treatment of original issue discount for federal income tax purposes, and with respect to state and local tax consequences of owning such Tax-Exempt Bonds. RATINGS The 2006 Bonds are not rated by a recognized rating agency. 25

30 LEGAL MATTERS Certain legal matters incident to the authorization, issuance and sale of the 2006 Bonds are subject to the approving legal opinion of Steptoe & Johnson PLLC, Charleston, West Virginia, as Bond Counsel (the Bond Counsel ) who has been retained as Bond Counsel to the Issuers. The proposed form of Bond Counsel s opinion is appended hereto as APPENDIX D - FORM OF BOND COUNSEL OPINION. Bond Counsel has not been retained or consulted on disclosure matters and has not undertaken to review or verify the accuracy, completeness or sufficiency of this Private Placement Memorandum or other offering material relating to the 2006 Bonds and assumes no responsibility for the statements or information contained in or incorporated by reference in this Private Placement Memorandum, except that in its capacity as Bond Counsel, Steptoe & Johnson PLLC has, at the request of the Underwriters, supplied the information under the heading TAX MATTERS, and reviewed the statements describing its approving opinion solely to determine whether such information is accurate in all material respects. This review was undertaken solely at the request and for the benefit of the Underwriters. Certain legal matters will be passed upon for The County Commission of Ohio County, West Virginia by its counsel, Jackson Kelly PLLC; for the Ohio County (West Virginia) Building Commission by its counsel Jackson Kelly PLLC; for the University by its counsel Bailey Riley Buch and Harman; and for the Underwriter by its counsel, Spilman Thomas & Battle, PLLC, Charleston, West Virginia. AUDITED FINANCIAL STATEMENTS The financial statements of the University as of and for the years ended June 30, 2006 and 2005, included in APPENDIX B hereto, have been audited by Crowe Chizek and Company LLC, Columbus, Ohio, independent auditors, as set forth in their report thereon. The University believes, as of the date hereof, that there has been no material adverse change in the financial condition of the University since June 30, 2006, which is the most recent fiscal year for which audited financial statements are available. There can be no assurance that the financial results achieved in the future will be similar to historical results. Such future results will vary from historical results, and actual variations may be material. The historical operating results of the University contained in this Private Placement Memorandum cannot be taken as a representation that the University will be able to generate sufficient revenues in the future to pay debt service on the 2006 Bonds. FINANCIAL ADVISOR Concord Public Financial Advisors, Inc. (the Financial Advisor ) has served as financial adviser to the University on matters related to the structuring and negotiations related to the 2006 Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in this Private Placement Memorandum. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. CONTINUING DISCLOSURE The University will enter into a Continuing Disclosure Agreement (the Continuing Disclosure Agreement ) in connection with the issuance and sale of the 2006 Bonds to provide certain financial and operating data concerning its affairs on a continuing basis for owners of the 2006 Bonds. No financial or 26

31 operating data concerning the Tax-Exempt Issuers will be provided on a continuing basis, and the Tax- Exempt Issuers assume and will have no liability to the owners of either the 2006 Bonds (or the owner of any beneficial interest therein) or any other person with respect to any of the information provided by the University pursuant to the Continuing Disclosure Agreement. The form of the Continuing Disclosure Agreement is included as APPENDIX E - FORM OF CONTINUING DISCLOSURE AGREEMENT hereto. MISCELLANEOUS The references herein to the 2006 Bonds, the Revenue Bond Act, the Building Commission Act, the Refunding Act, the 2006 Notes, the Bond Indentures, the Master Indenture, the 2006 Related Financing Documents and the Continuing Disclosure Agreement are summaries of certain provisions thereof. Such summaries do not purport to be complete, and for full and complete statements of the provisions thereof reference is made to the 2006 Bonds, the Revenue Bond Act, the Building Commission Act, the Refunding Act, the 2006 Notes, the Bond Indentures, the Master Indenture, the Loan Agreements and the Continuing Disclosure Agreement. Copies of such documents are on file at the offices of the Underwriters and following the delivery of the 2006 Bonds will be on file at the offices of the Bond Trustee and Master Trustee. All estimates and other statements in this Private Placement Memorandum involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. The attached Appendices are integral parts of this Private Placement Memorandum and must be read together with all of the foregoing statements. The University has reviewed the information contained herein which relates to it, its property and operations, and has approved all such information for use within this Private Placement Memorandum. The execution and delivery of this Private Placement Memorandum has been duly authorized by the University. The distribution of this Private Placement Memorandum has been duly approved and authorized by the Issuers. WHEELING JESUIT UNIVERSITY, INC. By: /s/ Dr. James Birge Title: Interim President 27

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