NEW JERSEY INSTITUTE of TECHNOLOGY General Obligation Bonds, 2017 Series a (Federally Taxable)

The Preliminary Offering Memorandum and the information contained herein are subject to completion or amendment without notice. These securities may not be sold nor may offers to buy them be accepted prior to the time the Offering Memorandum is delivered in final form. Under no circumstances shall this Preliminary Offering Memorandum constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, qualification or filing under the securities laws of any such jurisdiction. herein. Bonds arenotincludableasgrossincomeundertheNewJerseyGrossIncomeTaxAct.See“TAXTREATMENT” of McCarter & English, LLP, Bond Counsel to NJIT, interest on and any gain from the sale of the 2017 Series A being issuedinrelianceontheexemptionfromregistration containedinSection3(a)(4)oftheSecurities not andwillberegisteredundertheSecurities Offering and mandatorysinkingfundredemption,asdescribedunder“THE2017SERIESABONDS–RedemptionProvisions.” (or priorredemption)attheapplicableratessetforthoninsidecoverpage. on, January1,2018.The2017SeriesABondsofeachmaturitywillbearinterestfromtheirdateddateto maturity multiple thereof.Interestonthe2017SeriesABondsispayablesemi-annuallyJanuary1andJuly1,commencing Beneficial Ownersofthe2017SeriesABonds.See“BOOK-ENTRY-ONLYSYSTEM.” 2017 SeriesABonds,referenceshereintotheownersorregisteredwillmeanCede&Co.,andnot mean the representing theirinterestsinthe2017SeriesABonds.SolongasCede&Co.,nomineeofDTC,isowner ofthe will bemadeinbook-entryformonly.Purchasersofsuchinterests(the“BeneficialOwners”)notreceivecertificates Depository Trust Company, New York, New York (“DTC”). Individual purchases of interest in the 2017 Series ABonds or aloanpledgeofthecreditbepayableoutpropertyfundsStateNewJersey. FINANCE” herein.The2017SeriesABondsshallnotbedeemedorconstruedtocreateconstituteadebt, liability, to theissuanceandsaleof2017SeriesABonds,asmorefullysetforthinthisOfferingMemorandum.See“PLAN OF A Projects”);(ii)financetherefundingofRefundedBonds(asdefinedherein)and(iii)paycertaincosts incidental the MasterIndenture,“Indenture”). dated asofMay1,2017,byandbetweenNJITtheTrustee(the“SecondSupplementalIndenture,”togetherwith Deutsche BankNationalTrustCompany),astrustee(the“Trustee”)andaSecondSupplementalIndentureofTrust, and supplemented(the“MasterIndenture”),bybetweenNJITU.S.BankNationalAssociation(successorto A BondsshallbesecuredundertheprovisionsofanIndentureTrust,datedasJuly1,2012,previouslyamended payable fromrevenuesandlegallyavailablefundsofNJITasdescribedinthisOfferingMemorandum.The2017Series A A or disapprovedthe2017Series facilities ofDTCinNewYork, NewYorkonorabout______,2017. City, NewJersey.Itisexpected thatthe2017SeriesABondsindefinitiveformwill beavailablefordeliverythroughthe be passeduponforNJITby itsGeneralCounseland,fortheUnderwritersbytheir counsel,ConnellFoley,LLP,Jersey approval oflegalitybyMcCarter&English,LLP,Newark, NewJersey,BondCounseltoNJIT.Certainlegalmatterswill jurisdictions’ securitieslaws(the“blueskylaws”) mayrequireafilingandfeetosecurethe2017Series complete. * Dated: ______, 2017 D NE

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MATURITIES, AMOUNTS, INTEREST RATES AND PRICES

Due Principal Interest CUSIP July 1 Amount Rate Price No.**

$______% Term Bond due July 1, ___, Priced at ______CUSIP No. ______** $______% Term Bond due July 1, ___, Priced at ______CUSIP No. ______**

* Preliminary, subject to change. ** Registered trademark of American Bankers Association. CUSIP numbers are provided by Standard & Poor’s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed above are being provided solely for the convenience of Bondholders only at the time of issuance of the Bonds does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

REGARDING USE OF THIS OFFERING MEMORANDUM

No dealer, broker, salesperson or other person has been authorized by New Jersey Institute of Technology (“NJIT”), to give any information or to make any representations with respect to the 2017 Series A Bonds other than those contained in this Offering Memorandum, and, if given or made, such other information or representations must not be relied upon as having been authorized by NJIT. This Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2017 Series A Bonds, by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. Certain information contained herein has been obtained from sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation of NJIT. NJIT HAS RELIED ENTIRELY ON DTC FOR INFORMATION PERTAINING TO DTC AND THE INFORMATION INCLUDED IN “BOOK-ENTRY ONLY SYSTEM”.

Estimates and opinions included in this Offering Memorandum should not be interpreted as statements of fact. Summaries of documents do not purport to be complete statements of their provisions. NJIT does not make any representation as to the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Offering Memorandum nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the parties referred to above since the date hereof. The Trustee and its counsel have not participated in the preparation of this Offering Memorandum and disclaim any responsibility for the accuracy or completeness of the information set forth herein.

Certain statements included or incorporated by reference in this Offering Memorandum constitute “forward-looking statements”. Such statements are generally identifiable by the terminology used, such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although such expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. NJIT is not obligated to issue any updates or revisions to the forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based, do or do not occur.

THE UNDERWRITERS HAVE PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFERING MEMORANDUM. THE UNDERWRITERS HAVE REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, THEIR RESPONSIBILITIES TO INVESTORS UNDER FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITERS DO NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, HAS NOT REVIEWED, PROVIDED OR UNDERTAKEN TO DETERMINE THE ACCURACY OF ANY OF THE INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM AND MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTERS CONTAINED IN THIS OFFICIAL STATEMENT, INCLUDING, BUT NOT LIMITED TO, (I) THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION, OR (II) THE VALIDITY OF THE 2017 SERIES A BONDS.

IN CONNECTION WITH THE OFFERING OF THE 2017 SERIES A BONDS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF SUCH 2017 SERIES A BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE 2017 SERIES A BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. IN ADDITION, THE 2017 SERIES A BONDS HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAW.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF NJIT AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.

TABLE OF CONTENTS PAGE

INTRODUCTION ...... 1

THE 2017 SERIES A BONDS ...... 1 General ...... 1 Redemption Provisions ...... 2

DEBT SERVICE REQUIREMENTS...... 4

SECURITY FOR THE BONDS ...... 5 General ...... 5 Additional Bonds ...... 5

BOOK ENTRY-ONLY SYSTEM ...... 5

PLAN OF FINANCE ...... 8 Refunding Project ...... 8 The 2017 Series A Projects ...... 9

ESTIMATED SOURCES AND USES OF FUNDS ...... 9

TAX TREATMENT ...... 9 Tax Status of the 2017 Series A Bonds ...... 10 Original Issue Discount...... 10 Sale, Exchange or Redemption of the 2017 Series A Bonds ...... 11 Defeasance ...... 11 U.S. Holders - Information Reporting and Backup Withholding Tax ...... 11 ERISA And Certain Related Considerations ...... 11 General Fiduciary Matters ...... 12 Prohibited Transaction Issues ...... 12 Representation...... 13 New Jersey Gross Income Tax ...... 13

VERIFICATION OF MATHEMATICAL COMPUTATIONS ...... 13

RATINGS ...... 13

STATE NOT LIABLE ON THE 2017 SERIES A BONDS ...... 13

LEGAL MATTERS ...... 13

UNDERWRITING ...... 14

FINANCIAL ADVISOR ...... 15

INDEPENDENT AUDITORS...... 15

LITIGATION ...... 15

CONTINUING DISCLOSURE UNDERTAKING ...... 15

CLOSING CERTIFICATE ...... 17

APPENDIX A INFORMATION CONCERNING NJIT ...... A-I

APPENDIX B INDEPENDENT AUDITORS’ REPORT AND FINANCIAL STATEMENTS OF NEW JERSEY INSTITUTE OF TECHNOLOGY ...... B-I

APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ...... C-I

APPENDIX D PROPOSED FORM OF OPINION OF MCCARTER & ENGLISH, LLP, BOND COUNSEL TO NJIT ...... D-I

APPENDIX E SUMMARY OF BONDS TO BE REFUNDED ...... E-I

OFFERING MEMORANDUM Relating to $78,500,000* NEW JERSEY INSTITUTE OF TECHNOLOGY General Obligation Bonds, 2017 Series A (Federally Taxable) INTRODUCTION

The purpose of this Offering Memorandum is to furnish information concerning New Jersey Institute of Technology (“NJIT”) and its $78,500,000* General Obligation Bonds, 2017 Series A (Federally Taxable) (the “2017 Series A Bonds”), to be dated the date of delivery. The 2017 Series A Bonds shall be secured under the provisions of an Indenture of Trust, dated as of July 1, 2012, as previously amended and supplemented (the “Master Indenture”), by and between NJIT and U.S. Bank National Association (as successor to Deutsche Bank National Trust Company), as trustee (the “Trustee”), and a Second Supplemental Indenture of Trust, dated as of May 1, 2017, by and between NJIT and the Trustee, (the “Second Supplemental Indenture” and together with the Master Indenture, the “Indenture”). The 2017 Series A Bonds are authorized under the provisions of the New Jersey Institute of Technology Act of 1995, constituting Chapter 64E of Title 18A of the New Jersey Statutes Annotated (the “Act”), and the Indenture. The Second Supplemental Indenture was authorized pursuant to resolution adopted by the Board of Trustees of NJIT on April 13, 2017 (the “Resolution”). The Resolution authorized NJIT to issue one series of Bonds to provide funds for (i) to finance the acquisition of certain capital projects (the “2017 Series A Projects”); (ii) the refunding of the Refunded Bonds (as defined herein), and (iii) the payment of certain costs incidental to the issuance and sale of the 2017 Series A Bonds, as described more particularly in this Offering Memorandum. The information contained in this Offering Memorandum is furnished in connection with the initial sale of the 2017 Series A Bonds. Capitalized terms not defined herein shall have the meanings ascribed to such terms in the Indenture.

The 2017 Series A Bonds will be general obligations of NJIT, payable from the revenues and other legally available funds of NJIT.

As of January 1, 2017, NJIT has $324.7 million principal amount of bonds, notes and capital leases outstanding under various indentures. The payment obligation of NJIT on such indebtedness constitutes a general obligation of NJIT, payable from any legally available funds of NJIT. See “APPENDIX A - INFORMATION CONCERNING NJIT — Other Borrowings.” THE 2017 SERIES A BONDS General The 2017 Series A Bonds will be issued as fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof. The 2017 Series A Bonds will be dated the date of delivery, will bear interest from the date of delivery at the rates, and will mature on July 1 of each of the designated years in the principal amounts, all as set forth on the inside cover of this Offering Memorandum.

______*Preliminary, subject to change.

The 2017 Series A Bonds are subject to redemption under certain circumstances as summarized under “THE 2017 SERIES A BONDS — Redemption Provisions.”

Redemption Provisions

Optional Redemption

The 2017 Series A Bonds maturing on or before July 1, 20__ are not subject to optional redemption prior to maturity. The 2017 Series A Bonds maturing on or after July 1, ____, will be subject to optional redemption at the option of NJIT, as a whole or in part at any time, at 100% of the principal amount of the 2017 Series A Bonds or portions thereof to be redeemed, in each case together with accrued interest to the redemption date.

Make-Whole Redemption

The 2017 Series A Bonds will be subject to redemption prior to maturity on any Business Day, at the option of NJIT, in whole or in part and if in part, among maturities to be designated by NJIT (and pro rata within a maturity) at the Make-Whole Redemption Price described below.

The “Make-Whole Redemption Price” is the greater of (i) 100% of the principal amount of the 2017 Series A Bonds to be redeemed and (ii) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of the 2017 Series A Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which the 2017 Series A Bonds are to be redeemed, discounted to the date on which such 2017 Series A Bonds are to be redeemed on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate (as defined below) plus ___ basis points, plus, in each case, accrued and unpaid interest on the 2017 Series A Bonds to be redeemed on the redemption date. The Trustee may retain, at the expense of NJIT, an independent accounting firm or financial advisor to determine the Make-Whole Redemption Price and perform all actions and make all calculations required to determine the Make-Whole Redemption Price. The Trustee and NJIT may conclusively rely on such accounting firm’s or financial advisor’s calculations in connection with, and determination of, the Make-Whole Redemption Price, and none of the Trustee or NJIT will have any liability for their reliance.

The “Treasury Rate” is, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (excluding inflation indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to the maturity date of the 2017 Series A Bonds to be redeemed. However, if the period from the redemption date to such maturity date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Sinking Fund Installment Redemption

The 2017 Series A Bonds maturing on July 1, ____ and July 1, ____ (the “Term Bonds”) will be subject to mandatory sinking fund installment redemption, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued interest to the redemption date, on July 1 of the years and in the amounts set forth below: 2017 Series A Bonds 2017 Series A Bonds Year Maturing July 1, ___ Year Maturing July 1, ___

______† Final Maturity. 2

Redemption Procedures

When 2017 Series A Bonds (or portions thereof) are to be redeemed, NJIT must give or cause to be given notice of the redemption of the 2017 Series A Bonds to the Trustee no later than forty-five (45) days prior to the redemption date or such shorter period as shall be acceptable to the Trustee. Thereafter, the Trustee must give or cause to be given notice of the redemption of the 2017 Series A Bonds (or portions thereof) in the name of NJIT which notice must specify: (i) the 2017 Series A Bonds to be redeemed in whole or in part; (ii) the redemption date; (iii) the numbers and other distinguishing marks of the 2017 Series A Bonds to be redeemed (except in the event that all of the Outstanding Bonds are to be redeemed); and (iv) that such 2017 Series A Bonds will be redeemed at the designated corporate trust office of the Trustee. Such notice must further state that on such date there is due and payable upon each 2017 Series A Bond (or a portion thereof) to be redeemed the Redemption Price thereof, together with interest accrued to the redemption date, and that, from and after such date, interest thereon ceases to accrue. Such notice must be given, not more than sixty (60) nor less than thirty (30) days prior to the redemption date, by the Trustee by mail, postage prepaid, to the Bond owners of any 2017 Series A Bonds which are to be redeemed, at their addresses appearing on the registration books maintained by the Trustee. Notice having been given in accordance with the foregoing, failure to receive any such notice by any of such Bond owners or any defect therein, will not affect the redemption or the validity of the proceedings for the redemption of the 2017 Series A Bonds.

With respect to any notice of optional redemption, unless, upon the giving of such notice, such 2017 Series A Bonds shall be deemed to have been paid, such notice shall state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of and interest on such 2017 Series A Bonds to be redeemed, and that if such moneys shall not have been so received said notice shall be of no force and effect and NJIT shall not be required to redeem such Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

Redemption in Part

If less than all of the 2017 Series A Bonds of a maturity shall be called for redemption, such 2017 Series A Bonds of a maturity shall be redeemed in part, on a pro rata basis; provided that, so long as the 2017 Series A Bonds are held in book-entry-only form, the selection for redemption of such 2017 Series A Bonds of a maturity shall be made in accordance with the operational arrangements of DTC then in effect, and, if the DTC operational arrangements do not allow for redemption on a pro rata basis, the 2017 Series A Bonds will be selected for redemption in accordance with DTC procedures, by lot or in such other manner as is in accordance with applicable DTC operational arrangements. Neither the University nor the Underwriters can provide any assurance that DTC, DTC’s direct and indirect participants, or any other intermediary will allocate partial redemptions among beneficial owners of the 2017 Series A Bonds of a maturity on a pro rata basis. See “BOOK - ENTRY ONLY SYSTEM” for a description of DTC and the Book - Entry Only System.

DEBT SERVICE REQUIREMENTS

The following table sets forth, for each respective bond year ending June 30, subsequent to the issuance of the 2017 Series A Bonds, the estimated total debt service on NJIT’s outstanding bonds issued by the New Jersey Educational Facilities Authority (“NJEFA”), estimated debt service in NJIT’s outstanding General Obligation Bonds (collectively, the “Prior Bonds”), and the debt service on other obligations of NJIT (collectively, the “Other Debt”).

Year Debt Service2 on 2017 Series A Bonds Total Debt Ending Prior Bonds3, and Service June 301 Other Debt4 Principal Interest 2017 $18,836,163 2018 23,381,276 2019 24,711,568 2020 23,496,404 2021 23,943,350 2022 24,068,697 2023 24,059,230 2024 23,563,764 2025 23,380,612 2026 18,781,292 2027 18,782,541 2028 18,779,958 2029 18,781,722 2030 18,782,064 2031 18,782,090 2032 18,755,621 2033 18,715,152 2034 18,673,114 2035 18,628,336 2036 18,579,758 2037 18,534,153 2038 17,965,796 2039 17,912,904 2040 17,859,353 2041 17,803,500 2042 17,801,000 2043 17,798,750 2044 17,800,000 2045 17,802,750 2046 2047

Total $576,760,917 1 Includes principal and interest to be paid on July 1, following each period 2 Includes debt service paid prior to the date of this Offering Memorandum 3 Interest for federally taxable Build America Bonds prior to interest subsidy 4 Includes debt service on Bonds to be Refunded. 4

SECURITY FOR THE BONDS General The Indenture provides that the 2017 Series A Bonds shall be direct and general obligations of NJIT, and that the full faith and credit of NJIT shall be pledged for the payment of the principal and Redemption Price thereof and interest thereon; provided, however, there shall be excluded from the pledge of the Indenture any revenues, moneys, securities or funds heretofore or hereafter specially pledged by NJIT for the payment of other bonds, notes or other indebtedness. Payment of the principal and Redemption Price of the 2017 Series A Bonds and the interest thereon shall be additionally secured equally and ratably under the Indenture by a pledge of the revenues set aside by NJIT and received by the Trustee and all the moneys or securities held or set aside by the Trustee under the Indenture. In addition, NJIT has reserved the right pursuant to the Indenture to issue Additional Bonds for Additional Projects permitted thereunder upon the terms and conditions set forth therein. See “APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Additional Bonds for Additional Projects and Other Purposes” herein.

NJIT has covenanted in the Indenture that it will not issue any bonds or other evidences of indebtedness, other than the 2017 Series A Bonds, secured by a pledge of monies, securities or funds held or set aside by NJIT or by the Trustee under the Indenture and shall not create or cause to be created any lien or charge on such monies, securities or funds; provided, however, that nothing contained in the Indenture shall prevent NJIT from issuing evidences of indebtedness payable out of, or secured by a pledge of NJIT’s general obligation or general revenues or any other sources available to NJIT.

Further, NJIT also has covenanted in the Indenture that it will at all times charge and collect tuition, fees, rents, charges and other revenues which, together with other legally available funds, shall be sufficient to make all payments as the same become due of principal, interest and Sinking Fund Installments with respect to any and all Indebtedness of NJIT and to meet all other obligations of NJIT.

The 2017 Series A Bonds shall not be deemed or construed to create or constitute a debt, liability, or a loan or pledge of the credit or be payable out of property or funds of the State of New Jersey (the “State”).

Additional Bonds One or more Series of Additional Bonds may be issued under and secured by the Indenture for the purpose of providing funds for each Additional Project (including for the purpose of completing any Project). The Bonds of each such Series shall be authenticated and delivered by the Trustee only upon receipt by it of, among other things, a certificate of an Authorized Officer of NJIT stating that NJIT is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Indenture.

BOOK ENTRY-ONLY SYSTEM

Payment of principal of, premium, if any, and interest on the 2017 Series A Bonds will be made directly to The Depository Trust Company (“DTC”), New York, New York, or its nominee, Cede & Co., by the Trustee. In the event the 2017 Series A Bonds are not in a book entry only system, payment of principal of, premium, if any, and interest on the 2017 Series A Bonds will be made as described in the Indenture.

The information in this Offering Memorandum concerning The Depository Trust Company (“DTC”), New York, New York, and DTC’s book-entry-only system has been obtained from DTC and NJIT takes no responsibility for the completeness or accuracy thereof. NJIT cannot and does not give any assurances that DTC, DTC Direct Participants or DTC Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the 2017 Series A Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the 2017 Series A Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the 2017 Series A Bonds, or that 5

they will so do on a timely basis, or that DTC, DTC Direct Participants or DTC Indirect Participants will act in the manner described under this heading. The current “Rules” applicable to DTC are on file with The Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

DTC will act as securities depository for the 2017 Series A Bonds. The 2017 Series A 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 Security certificate will be issued for each maturity of the 2017 Series A Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to both U.S. and non-U.S. securities brokers and dealers, bank 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 a Standard & Poor’s rating: of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of the 2017 Series A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2017 Series A Bonds on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2017 Series A Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2017 Series A Bonds, except in the event that use of the book-entry system for the 2017 Series A Bonds is discontinued.

To facilitate subsequent transfers, all 2017 Series A 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 2017 Series A 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 2017 Series A Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2017 Series A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the 2017 Series A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2017 Series A Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of the 2017 Series A Bonds may wish to ascertain that the nominee holding the 2017 Series A 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 2017 Series A Bonds within a maturity are being redeemed, the amount of interest of each Direct Participant in such maturity to be redeemed shall be determined in accordance with DTC’s practices.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 2017 Series A Bonds unless authorized by a Direct Participant in accordance with DTC’s MME Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the 2017 Series A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal of, premium, if any, and interest evidenced by the 2017 Series A 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 NJIT or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Direct 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 Direct Participant and not of DTC (nor its nominee), the Trustee or NJIT, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of, premium, if any, and interest evidenced by the 2017 Series A Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of NJIT or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

NEITHER NJIT NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC DIRECT PARTICIPANTS, DTC INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS WITH RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC DIRECT PARTICIPANTS, DTC INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION OF BONDS FOR PREPAYMENT.

DTC may discontinue providing its services as depository with respect to the 2017 Series A Bonds at any time by giving reasonable notice to NJIT or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

NJIT may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that NJIT believes to be reliable, but NJIT takes no responsibility for the accuracy thereof.

PLAN OF FINANCE

The 2017 Series A Bonds are being issued to provide funds to (i) finance the acquisition of certain capital projects (the “2017 Series A Projects”), (ii) pay the cost of refunding the Refunded Bonds (as defined herein) and (iii) pay certain costs of issuing the 2017 Series A Bonds.

Refunding Project On the date of issuance and delivery of the 2017 Series A Bonds, a portion of the proceeds of the 2017 Series A Bonds to be used for the refunding of all or a portion of the outstanding (A) New Jersey Educational Facilities Authority, Revenue Bonds, New Jersey Institute of Technology Issue, Series 2010 H (the “Series 2010 H Bonds to be Refunded”), (B) New Jersey Institute of Technology, General Obligation Bonds, 2012 Series A (the “2012 Series A Bonds to be Refunded”), and (C) New Jersey Institute of Technology, General Obligation Refunding Bonds, 2012 Series B (Federally Taxable) (the “2012 Series B Bonds to be Refunded”, and collectively with the Series 2010 H Bonds to be Refunded and the 2012 Series A Bonds to be Refunded, the “Bonds to be Refunded”, all as more particularly described in Exhibit E hereto).

The Bank of New York Mellon, as Trustee relating to the Series 2010 H Bonds to be Refunded (the “Series 2010 H Trustee”) and the New Jersey Educational Facilities Authority will enter into an Letter of Instruction for the Series 2010 H Bonds to be Refunded (the “2010 H Letter of Instruction”), pursuant to which the Series 2010 H Trustee shall create a special and irrevocable fund for the Series 2010 H Bonds to be Refunded (the “2010 H Escrow Fund”), to be held by the Series 2010 H Trustee for the payment, upon redemption, of the Series 2010 H Bonds to be Refunded.

U.S. Bank National Association, as Escrow Agent for the 2012 Series A Bonds to be Refunded (the “2012 Series A Escrow Agent”), and NJIT will enter into an Escrow Deposit Agreement for the 2012 Series A Bonds to be Refunded (the “2012 Series A Escrow Agreement”), pursuant to which the 2012 Series A Escrow Agent shall create a special and irrevocable fund for the 2012 Series A Bonds to be Refunded (the “2012 A Escrow Fund”), to be held by the 2012 Series A Escrow Agent for the payment, upon redemption or maturity (as the case may be), of the 2012 Series A Bonds to be Refunded.

U.S. Bank National Association, as Escrow Agent for the 2012 Series B Bonds to be Refunded (the “2012 Series B Bonds Escrow Agent”), and NJIT will enter into an Escrow Deposit Agreement for the 2012 Series B Bonds to be Refunded (the “2012 B Escrow Agreement”) pursuant to which the 2012 Series B Escrow Agent shall create a special and irrevocable fund for the 2012 Series B Bonds to be Refunded (the “2012 B Escrow Fund”) to be held by the 2012 Series B Escrow Agent for the payment, upon redemption or maturity (as the case may be), of the 2012 Series B Bonds to be Refunded.

A portion of the proceeds of the 2017 Series A Bonds, together with other available funds, shall be deposited in the respective Escrow Fund to pay when due, the principal of, redemption price of an interest on Bonds to be Refunded to their respective maturity or call dates. Such deposit of proceeds of the 2017 Series A Bonds, together with other available funds, plus investment earnings thereon, shall be sufficient, without reinvestment, to pay the principal and redemption price of and interest on the each series of the Bonds to be Refunded to their respective maturity or call dates.

The holders of the Bonds to be Refunded will have a lien on the cash and securities on deposit in each respective Escrow Fund.

The 2017 Series A Projects A portion of the proceeds of the 2017 Series A Bonds, together with other available funds of NJIT will be used to finance the acquisition of certain capital projects (collectively the “2017 Series A Projects”). For a further description of the 2017 Series A Projects, see “Appendix A”.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds to be received from the sale of the 2017 Series A Bonds are expected to be applied as set forth below:

SOURCES OF FUNDS Principal Amount of 2017 Series A Bonds $ Total Sources of Funds $

USES OF FUNDS Deposit to the Escrow Fund for 2010 H Bonds $ Deposit to the Escrow Fund for 2012 A Bonds Deposit to the Escrow Fund for 2012 B Bonds Deposit to the 2017 Series A Construction Account Costs of Issuance* Total Uses of Funds $

______

*Costs of issuance include, legal fees, underwriters’ discount, financial advisory fees, rating agency fees, accountant’s fees, printing fees and other associated costs related to the 2017 Series A Bonds.

TAX TREATMENT

The following is a summary of certain U.S. federal income tax consequences relating to the purchase, ownership and disposition of the 2017 Series A Bonds. It does not provide a complete analysis of all potential tax considerations relating to the purchase, ownership and disposition of the 2017 Series A Bonds.

This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the applicable Treasury Regulations promulgated or proposed under the Code (the "Treasury Regulations"), judicial authority and administrative rulings and practice, all of which are subject to change, possibly retroactively, or to different interpretation.

This summary applies only to initial purchasers of the 2017 Series A Bonds that are "U.S. holders" (as defined below), acquire the 2017 Series A Bonds at their original issue price within the meaning of Section 1273 of the Code and hold the 2017 Series A Bonds as capital assets. A capital asset is generally an asset held for investment rather than as inventory or as property used in a trade or business. This summary does not discuss all of the aspects of U.S. federal income taxation which may be relevant to investors in light of their particular investment or other circumstances. This summary also does not discuss the particular tax consequences that might be relevant to investors that are subject to special rules under the federal income tax laws. Special rules apply, for example, to trusts; estates; tax - exempt investors; foreign investors; banks, thrifts, insurance companies, regulated investment companies, or other financial institutions or financial service companies; brokers or dealers in securities, commodities or foreign currency; U.S. persons that have a functional currency other than the U.S. dollar; partnerships or other flow-through entities; real estate investment trusts, financial asset 9

securitization investment trusts, subchapter S corporations; persons subject to alternative minimum tax; persons who own the 2017 Series A Bonds as part of a straddle, hedging transaction, constructive sale transaction or other risk- reduction transaction; persons who have ceased to be U.S. citizens or to be taxed as resident aliens; or persons who acquire the 2017 Series A Bonds in connection with their employment or other performance of services.

The following summary does not address all possible tax consequences. In particular, except as specifically described below, it does not discuss any estate, gift, generation skipping, transfer, state, local or foreign tax consequences or the 3.8% tax on net investment income to which some taxpayers are subject. No ruling from the Internal Revenue Service (the "IRS") has been sought with respect to the statements made and the conclusions reached in the following summary, and there is no assurance that the IRS will agree with those statements and conclusions. For all these reasons, each prospective investor should consult with its tax advisor about the federal income tax and other tax consequences of the acquisition, ownership and disposition of the 2017 Series A Bonds.

As used herein, a "U.S. holder" is a beneficial owner of the 2017 Series A Bonds who is a "United States person" and whose status as a U.S. holder is not overridden under the provisions of an applicable tax treaty. For these purposes, a "United States person" is a citizen or resident of the United States; a corporation or partnership that is created or organized in or under the Laws of the United States or any of the fifty States or the District of Columbia, unless, in the case of a partnership, otherwise provided by the Treasury Regulations; an estate the income of which is subject to federal income taxation regardless of its source; or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

Tax Status of the 2017 Series A Bonds The 2017 Series A Bonds will be treated as indebtedness for U.S. federal income tax purposes. This summary assumes that the IRS will respect this classification.

A holder generally must include the stated interest on the 2017 Series A Bonds in its gross income as ordinary interest income (1) when it is received, if the holder uses the cash method of accounting for U.S. federal income tax purposes; or (2) when it accrues, if the holder uses the accrual method of accounting for U.S. federal income tax purposes.

Holders of the 2017 Series A Bonds that have a basis in the 2017 Series A Bonds that is greater than the principal amount of the 2017 Series A Bonds should consult their tax advisors with respect to whether or not they should elect to amortize such premium under Section 171 of the Code.

Original Issue Discount Any 2017 Series A Bond that is issued at an issue price which is less than the principal amount for such maturity will have “original issue discount,” a portion of which will accrue as taxable income to the holder in each taxable year, in addition to taxation of regular stated interest, regardless of whether the holder uses the cash or accrual method of accounting and regardless of the fact that the holder receives no actual payment of the original issue discount until the maturity of the 2017 Series A Bond. Taxation of original issue discount in this manner is subject to a de minimis exception based on the amount of the original issue discount in relation to the maturity of the 2017 Series A Bond. Holders of 2017 Series A Bonds issued with original issue discount should consult their tax advisors regarding the accrual of original issue discount and the effect of such accruals on their tax basis for their 2017 Series A Bonds.

Sale, Exchange or Redemption of the 2017 Series A Bonds A holder generally will recognize gain or loss upon the sale, exchange, redemption, retirement or other disposition (which would include a legal defeasance, described below) of a 2017 Series A Bond measured by the difference between (i) the amount of cash proceeds and the fair market value of any property received (except to the extent attributable to accrued interest income not previously included in income, which will generally be taxable as ordinary income, or attributable to accrued interest previously included in income, which amount may be received without generating further income), and (ii) the holder's adjusted tax basis in such 2017 Series A Bonds. A holder's adjusted tax basis in a Bond generally will equal its cost of the 2017 Series A Bonds less any principal payments received the holder. Gain or loss on the disposition of the 2017 Series A Bonds will generally be a capital gain or loss (although any gain attributable to accrued market discount of the 2017 Series A Bonds not yet taken into income will be ordinary) and will be a long-term gain or loss if the 2017 Series A Bonds have been held for more than one year at the time of disposition. The deductibility of capital losses is subject to limitations. Prospective investors should consult their tax advisors regarding the treatment of capital gains and losses.

Defeasance Defeasance of any 2017 Series A Bond may result in a reissuance thereof, in which event a holder will recognize taxable gain or loss equal to the difference between the amount realized from the deemed exchange (less any accrued qualified stated interest which will be taxable as such) and the holder's adjusted tax basis in the 2017 Series A Bonds.

U.S. Holders - Information Reporting and Backup Withholding Tax In general, information reporting requirements will apply to payments to certain noncorporate U.S. holders of principal and interest on a 2017 Series A Bond and the proceeds of the sale of a 2017 Series A Bond. A U.S. holder may be subject to backup withholding when it receives interest with respect to the 2017 Series A Bonds or when it receives proceeds upon the sale, exchange, redemption, retirement or other disposition of the 2017 Series A Bonds. The backup withholding rate currently is 28%. In general, an investor can avoid this backup withholding by properly executing under penalties of perjury an IRS Form W-9 or substantially similar form that provides (1) such investor's correct taxpayer identification number; and (2) a certification that such investor (a) is exempt from backup withholding because it is a corporation or comes within another enumerated exempt category, (b) has not been notified by the IRS that it is subject to backup withholding, or (c) has been notified by the IRS that it is no longer subject to backup withholding.

If an investor does not provide its correct taxpayer identification number on the IRS Form W-9 or substantially similar form, such investor may be subject to penalties imposed by the IRS. Backup withholding does not apply to payments made to certain holders, including corporations, tax-exempt organizations and certain foreign persons, provided their exemptions from backup withholding are properly established. Amounts withheld are generally not an additional tax and may be refunded or credited against an investor's federal income tax liability if such investor furnishes the required information to the IRS. The amount of any "reportable payments" for each calendar year and the amount of tax withheld, if any, with respect to those payments will be reported to the U.S. holders of the 2017 Series A Bonds and to the IRS.

ERISA And Certain Related Considerations The following is a summary of certain considerations associated with the purchase of the 2017 Series A Bonds by employee benefit plans that are subject to Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of the Code or ERISA (collectively, "Similar Laws"), and entities whose

underlying assets are considered to include "plan assets" of any such plan, account or arrangement (each, a "Plan").

General Fiduciary Matters ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an "ERISA Plan") and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.

In considering an investment in the 2017 Series A Bonds of a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary's duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.

Prohibited Transaction Issues Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans and other plans such as individual retirement accounts that are subject to Section 4975 but not Title I of ERISA, including entities whose underlying assets are considered to include "plan assets" of any such plan, account or arrangement, from engaging in specified transactions involving plan assets with persons or entities who are "parties in interest," within the meaning of ERISA, or "disqualified persons," within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. The acquisition and/or holding of the 2017 Series A Bonds by an ERISA Plan with respect to which the issuer or the underwriter is considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions, or "PTCEs," that may apply to the acquisition and holding of the 2017 Series A Bonds. These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in- house asset managers. In addition, Section 408(17) of ERISA and Section 4975(d)(20) of the Code provide relief from the prohibited transaction provisions of ERISA and Section 4975 of the Code for certain transactions, provided that neither the issuer of the securities nor any of its affiliates (directly or indirectly) have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any ERISA Plan involved in the transaction and provided further that the ERISA Plan pays no more than adequate consideration in connection with the transaction. There can be no assurance that all of the conditions of any such exemptions will be satisfied.

Because of the foregoing, the 2017 Series A Bonds should not be acquired or held by any person investing "plan assets" of any Plan, unless such acquisition and holding will not constitute a non-exempt prohibited transaction under ERISA and the Code or a similar violation of any applicable Similar Laws.

Representation Accordingly, by acceptance of a Bond, each purchaser and subsequent transferee of a Bond will be deemed to have represented and warranted that either (A) (i) no portion of the assets used by such purchaser or transferee to acquire or hold the 2017 Series A Bonds constitutes assets of any Plan or (ii) the acquisition, holding and disposition of the 2017 Series A Bonds by such purchaser or transferee will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 497S of the Code or a similar violation under any applicable Similar Laws and (B) the purchaser will not transfer the 2017 Series A Bonds to any person or entity, unless such person or entity could itself truthfully make the foregoing representations and covenants.

The foregoing discussion is general in nature and is not intended to be all inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing the 2017 Series A Bonds on behalf of, or with the assets of, any Plan, consult with their counsel regarding the potential applicability of ERISA, Section 497S of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase and holding of the 2017 Series A Bonds.

New Jersey Gross Income Tax Interest on and any gain realized on the sale of the 2017 Series A Bonds is not includable in gross income under the existing New Jersey Gross Income Tax Act.

VERIFICATION OF MATHEMATICAL COMPUTATIONS

The arithmetical accuracy of certain computations included in the schedules relating to computation of amounts deposited in the respective Escrow Funds and the payments of principal, interest and premium, if any, to redeem the Refunded Bonds as described in “PLAN OF FINANCE” will be verified by Causey Demgen & Moore P.C. (the “Verification Agent”). Such computation will be based upon information, assumptions and calculations supplied to the Verification Agent by the Underwriter.

RATINGS

Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC, (“S&P”) have assigned the ratings of “A1” and “A”, respectively to the 2017 Series A Bonds. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organization, and NJIT makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the 2017 Series A Bonds.

STATE NOT LIABLE ON THE 2017 SERIES A BONDS

Nothing in the 2017 Series A Bonds or the Indenture shall be deemed or construed to create or constitute a debt, liability, or a loan or pledge of the credit or be payable out of property or funds of the State.

LEGAL MATTERS

All legal matters incident to the authorization and issuance of the 2017 Series A Bonds are subject to the approval of McCarter & English, LLP, Newark, New Jersey, Bond Counsel to NJIT, whose approving opinion in substantially the form included herein as Appendix D will be attached to the 2017 Series A Bonds and delivered 13

with such Bonds. Certain legal matters will be passed upon for NJIT by its General Counsel. Certain legal matters will be passed upon for the Underwriters by their counsel, Connell Foley, LLP, Jersey City, New Jersey.

UNDERWRITING

The 2017 Series A Bonds are being purchased from NJIT by Morgan Stanley & Co. LLC on behalf of itself and as representative of Wells Fargo Securities (collectively, the “Underwriters). The Underwriters have agreed, subject to certain conditions, to purchase all of the 2017 Series A Bonds at a purchase price of $______, which price reflects an underwriters’ discount equal to $______. The initial public offering prices of the 2017 Series A Bonds set forth on the inside cover page may be changed without notice by the Underwriters. The Underwriters may offer and sell the 2017 Series A Bonds to certain dealers (including dealers depositing 2017 Series A Bonds into investment trusts, certain of which may be sponsored or managed by the Underwriters) and others at prices or yields lower than the offering prices or yields set forth on the inside cover page hereof.

Morgan Stanley & Co. LLC, one of the Underwriters of the 2017 Series A Bonds, has entered into a retail distribution with Morgan Stanley Smith Barney LLC. As part of the distribution arrangement, Morgan Stanley & Co. LLC may distribute municipal securities to retail investors through the financial advisor network of Morgan Stanley Smith Barney LLC. As part of this arrangement, Morgan Stanley & Co. LLC may compensate Morgan Stanley Smith Barney LLC for its selling efforts with respect to the 2017 Series A Bonds.

Wells Fargo Securities is the trade name for certain securities-related capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Bank, National Association, which conducts its municipal securities sales, trading and underwriting operations through the Wells Fargo Bank, NA Municipal Products Group, a separately identifiable department of Wells Fargo Bank, National Association, registered with the Securities and Exchange Commission as a municipal securities dealer pursuant to Section 15B(a) of the Securities Exchange Act of 1934.

Wells Fargo Bank, National Association, acting through its Municipal Products Group ("WFBNA"), one of the underwriters of the Bonds, has entered into an agreement (the "WFA Distribution Agreement") with its affiliate, Wells Fargo Clearing Services, LLC (which uses the trade name “Wells Fargo Advisors”) ("WFA"), for the distribution of certain municipal securities offerings, including the 2017 Series A Bonds. Pursuant to the WFA Distribution Agreement, WFBNA will share a portion of its underwriting or remarketing agent compensation, as applicable, with respect to the 2017 Series A Bonds with WFA. WFBNA has also entered into an agreement (the “WFSLLC Distribution Agreement”) with its affiliate Wells Fargo Securities, LLC (“WFSLLC”), for the distribution of municipal securities offerings, including the 2017 Series A Bonds. Pursuant to the WFSLLC Distribution Agreement, WFBNA pays a portion of WFSLLC’s expenses based on its municipal securities transactions. WFBNA, WFSLLC, and WFA are each wholly-owned subsidiaries of Wells Fargo & Company.”

The Underwriters and their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriters and their affiliates may have, from time to time, performed and may in the future perform, various investment banking services for NJIT, for which they may have received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of NJIT.

FINANCIAL ADVISOR

Prager & Co., LLC (“Prager”) has been retained to act as financial advisor for NJIT in connection with the issuance of the 2017 Series A Bonds. Although Prager has assisted in the preparation of this Offering Memorandum, Prager is not obligated to undertake, and has not undertaken to make, any independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Offering Memorandum.

INDEPENDENT AUDITORS

As noted therein, NJIT’s financial statements include the Foundation at the New Jersey Institute of Technology, New Jersey Innovation Institute, Inc. and ten Urban Renewal Limited Liability Companies, which for accounting purposes are treated as component units of NJIT, for the years ended June 30, 2016 and 2015, included in Appendix B to this Offering Memorandum, have been audited by Grant Thornton LLP, independent certified public accountants, as stated in their report appearing in Appendix B to this Offering Memorandum. Only NJIT is obligated to pay debt service on the 2017 Series A Bonds.

LITIGATION

There is not now pending any litigation restraining or enjoining the issuance or delivery of the 2017 Series A Bonds, or questioning or affecting the validity of the 2017 Series A Bonds or the proceedings and authority under which they are to be issued. Neither the creation, organization or existence of NJIT, nor the title of the present officers of NJIT to their respective offices, is being contested except as otherwise described in this Offering Memorandum.

NJIT, in its normal operations, is a defendant in various legal actions. The administration of NJIT is of the opinion that the outcome of these matters will not have a material adverse effect on the financial position or operations of NJIT.

CONTINUING DISCLOSURE UNDERTAKING

The Securities and Exchange Commission (the “SEC”), pursuant to the Securities Exchange Act of 1934, as amended and supplemented (the “Securities Exchange Act”) has adopted amendments to its Rule 15c2-12 (“Rule 15c2-12”) effective July 3, 1995 which generally prohibit a broker, dealer, or municipal securities dealer (“Participating Underwriter”) from purchasing or selling municipal securities, such as the 2017 Series A Bonds, unless the Participating Underwriter has reasonably determined that an issuer of municipal securities or an obligated person has undertaken in a written agreement or contract for the benefit of holders of such securities to provide certain annual financial information and event notices to various information repositories.

NJIT has covenanted with the Trustee for the benefit of Bondholders to provide certain financial information and operating data relating to NJIT by not later than 180 days following the end of NJIT’s Fiscal Year beginning with the Fiscal Year ending June 30, 2017 (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events within ten (10) business days after the occurrence of such events. The specific nature of the information to be contained in the Annual Report or the notices of certain enumerated events is summarized in “APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Continuing Disclosure Undertaking.” The Annual Report consists of NJIT’s financial statements and independent auditors’ report (the “CAFR”) and its operating data as of June 30 of each fiscal year (the “Operating Data”), and accordingly, NJIT satisfies its continuing disclosure undertakings by filing both the CAFR and the Operating Data with EMMA.

The Annual Report will be filed, or caused to be filed, by NJIT through the Electronic Municipal Market Access system (“EMMA”) operated by the Municipal Securities Rulemaking Board. The notices of certain enumerated events will be filed, or caused to be filed, by NJIT with EMMA.

NJIT has procedures in place with respect to its continuing disclosure undertakings and has engaged the related bond trustee for each series of Bonds to serve as dissemination agent (each a “Dissemination Agent”) to assist it in its compliance. The following information describes the instances of non-compliance with such continuing disclosure undertakings, known to NJIT, in the past five years:

For the Fiscal Year 2016, NJIT’s CAFR was filed within 180 days at the end of the Fiscal Year June 30, 2016 with respect to NJEFA Revenue Bonds, NJIT Issue Series 2010 H (Tax-Exempt), NJEFA Revenue Bonds, NJIT Issue Series 2010 I (Build America Bonds – Direct Payment), General Obligation Refunding Bonds, 2012 Series A (Federally Taxable), General Obligation Refunding Bonds, 2012 Series B (Federally Taxable), and General Obligation Bonds, 2015 Series A (the “Series 2010 H Bonds”, “Series 2010 I Bonds”, “2012 Series A Bonds”, “2012 Series B Bonds”, and “2015 Series A Bonds”, respectively). It has come to NJIT’s attention that there was a failure to file NJIT’s Operating Data within 180 days following the end of the Fiscal Year June 30, 2016. It has also come to NJIT’s attention that there was a failure to file NJIT’s audited financial statements within 180 days following the end of the Fiscal Year June 30, 2015. These failures were remedied. Further, it has come to NJIT’s attention that for Fiscal Year 2015 and Fiscal Year 2016 there was a failure to provide proper indexing in relation to the Series 2001 H (Taxable for Federal Income Tax Purposes) (the “Series 2001 H Bonds”) with respect to NJIT’s audited financial statements.

For Fiscal Year 2013, NJIT’s CAFR was filed within 180 days following the end of the fiscal year June 30, 2013 with respect to the Series 2001 H Bonds. It has come to NJIT’s attention that there was a failure to file NJIT’s Operating Data within 180 days following the end of the fiscal year June 30, 2013. With respect to the 2012 Series A, and 2012 Series B Bonds, this failure was remedied on February 11, 2014. Further, it has come to NJIT’s attention that there was a failure to provide proper indexing in relation to the Series 2001 H Bonds, with respect to NJIT’s Operating Data, to the Series 2010 H and Series 2010 I, with respect to the Annual Report and to the 2012 Series A Bonds and 2012 Series B Bonds with respect to the CAFR. For Fiscal Year 2012, NJIT’s CAFR was filed within 180 days following the end of the fiscal year June 30, 2012 with respect to the Series 2001 H Bonds, the 2012 Series A Bonds and the 2012 Series B Bonds and NJIT’s Operating Data was filed within 180 days following the end of the fiscal year June 30, 2012 with respect to the 2012 Series A Bonds and 2012 Series B Bonds. It has come to NJIT’s attention that there was a failure to provide proper indexing in relation to the Series 2001 H Bonds with respect to the Operating Data and the Series 2010 H Bonds and Series 2010 I Bonds with respect to the Annual Report.

These indexing discrepancies have since been remedied.

CLOSING CERTIFICATE

Concurrently with delivery of the 2017 Series A Bonds, NJIT, will furnish a certificate executed by its President or Senior Vice President for Finance and Chief Financial Officer to the effect that this Offering Memorandum, as of the date of this Offering Memorandum and as of the date of delivery of the 2017 Series A Bonds, does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein, in light of the circumstances under which they were made, not misleading.

The references herein to the Act and the Indenture are brief summaries of certain provisions thereof. Such summaries do not purport to be complete, and reference is made to the Act and the Indenture, respectively, for a full and complete statement of such provisions. Copies of the documents mentioned in this paragraph are on file at the Office of NJIT’s Senior Vice President for Finance and Chief Financial Officer.

The execution and delivery of this Offering Memorandum by its Senior Vice President for Finance and Chief Financial Officer has been duly authorized by NJIT.

NEW JERSEY INSTITUTE OF TECHNOLOGY

By:

Senior Vice President for Finance and Chief Financial Officer

Dated: ______, 2017

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APPENDIX A

INFORMATION CONCERNING NJIT

[THIS PAGE INTENTIONALLY LEFT BLANK] Appendix A NEW JERSEY INSTITUTE OF TECHNOLOGY

Description

New Jersey Institute of Technology (“NJIT” or the “University”), a public research university, enrolled 11,446 matriculating students in Fall 2016 in undergraduate, graduate, and Ph.Ds. In the 2015-2016 academic year, the University awarded 2,682 degrees from the baccalaureate through the Ph.D. in an array of disciplines, including engineering and technology, computer and information science, architecture, management, applied sciences, mathematics and biotechnology. One of the most computing-intensive campuses in America, NJIT contributes significantly to the State of New Jersey’s economy and economic development. An Economic Impact Study completed in 2016 showed NJIT’s an annual impact to the State of New Jersey to be $1.74 billion. In 2015, NJIT was designated an Innovation & Economic Prosperity University by the Association of Public Land-Grant Universities. Less than 1 percent of U.S. universities currently have this designation. The honor acknowledges NJIT as working with public and private sector partners in New Jersey and its surrounding region to support economic development through a variety of activities, including innovation and entrepreneurship, technology transfer, talent and workforce development, and community development. Currently, over 25% of all engineers working in New Jersey hold an NJIT degree.

NJIT is managed by its President, who reports to the Board of Trustees. The Board includes up to 15 members appointed by the Governor of New Jersey. The Mayor of the City of Newark and the Governor of the State of New Jersey serve as ex officio members of the Board of Trustees. In addition, a Board of Overseers, currently numbering forty-two, consisting primarily of executives from many of New Jersey’s leading corporations, acts in a fiduciary role with regard to the Foundation at New Jersey Institute of Technology (“The Foundation”), a separate and not-for-profit corporation. The Foundation acts solely for the benefit of NJIT and holds responsibility for resource development. New Jersey Innovation Institute (NJII), a NJIT 501(c)(3) corporation launched in July 2014, was created to promote economic engagement and providing services to businesses and industry. Through its five I-labs, NJII is projected to generate $60 million in FY17.

History

NJIT was founded in 1881 when the State legislature, acting largely at the urging of the Newark Board of Trade, passed “An Act to Provide for the Establishment of Schools of Industrial Education.” As a result of the Act, the Newark Technical School opened with 90 students, ranging in age from 16 to 42, to be educated for technical careers in local industry. For over 136 years, the school that is now NJIT has retained its initial purpose of teaching students the skills needed to participate in and provide leadership for technological industries and offer government and industry in the State the skilled personnel needed to foster a thriving technology-based economy.

In 1918, the school received approval to offer college-level courses offering programs leading to B.S. degrees in chemical, electrical and mechanical engineering. Civil engineering was added in 1931, one year after the name was changed to Newark College of Engineering.

Beginning in 1946, Master of Science programs were offered in chemical, civil, electrical and mechanical engineering. NJIT has since seen 71 years of expanded initiatives and programs. The 1950’s and 1960’s saw the establishment of the Research Foundation, the Science Fairs, and the NJIT Educational Opportunity Program for disadvantaged students, as well as the expansion of the graduate program and physical development of the campus that continues to this day.

In 1974, the New Jersey School of Architecture was established; its bachelor’s degree program was accredited in 1978. In 1975 the new organization and mission of Newark College of Engineering was officially recognized with the name change to New Jersey Institute of Technology. With the establishment in 1982 of the College of Science and Liberal Arts, NJIT achieved a structure of three distinct colleges (Newark College of Engineering, New Jersey School of Architecture, now called College of Architecture and Design, and College of Science and Liberal Arts), all with significantly expanded graduate programs. In 1988, a fourth college, the School of Industrial Management, now called the Martin Tuchman School of Management, was established. The Albert Dorman Honors College was established in 1994 and the College of Computing Sciences, now called the Ying Wu College of Computing, was founded in 2001.

A-1 Appendix A In the Higher Education Restructuring Act of 1994, the State Legislature conferred on NJIT statutory designation as a “public research university.” Subsequently, New Jersey recognized NJIT as “essential” and “necessary for the welfare of the State and the people of New Jersey” in legislation signed by Governor Whitman in January 1996. The New Jersey Institute of Technology Act of 1995 provides an updated statutory basis for the University and asserts NJIT’s status and role as one of the State’s public research universities.

Rankings

NJIT has earned top rankings among all U.S. colleges and universities for Return on Investment because the average starting salary of its graduates is nearly double the annual tuition/fee charged to out-of-state students. Using NJIT’s tuition rate for New Jersey residents increases the University’s value proposition, making alumni average starting salaries nearly four times greater than NJIT’s annual tuition cost.

NJIT is preparing its graduates for professional success and the University and its faculty are doing so at a reasonable cost. While there is a great deal of concern publicly about the cost of higher education, NJIT offers an outstanding value proposition.

NJIT repeatedly demonstrates its expertise in preparing students in the fields of science, technology, engineering, mathematics, architecture, design, and management among other disciplines. Maintaining affordability while producing graduates who fill a vital state and regional need is the University’s primary goal. In a world of intense competition for jobs with other states in our region as well as other countries, economic growth depends on innovation through the STEM disciplines. In New Jersey alone, the demand for employees with these science and technological skills is projected to reach 269,000 by 2018, and recent studies have discovered that each new high-tech job created in the U.S. yields an additional 5 jobs. At NJIT, we are focused on providing students of all socio-economic backgrounds with access to the highest caliber of a science, technology, engineering and mathematical education. In fact, a recent NY Times report ranked NJIT #1 nationally for colleges with the highest percentage of students from the bottom fifth of the income distribution who end up in the top three-fifths of the income distribution resulting from the graduate’s earnings after college.

Other Notable NJIT National rankings include:

Institutional Rankings NJIT Rank US News - Best Colleges (National Universities) 135 US News - Top Public Schools 64 NY Times - Social Mobility 1 PayScale - Best Value ROI 26 PayScale - College Salary Report 60 Programmatic Rankings US News - Best Graduate Engineering Programs 87 Center for World Univesity Rankings - Computer Science, 2 Internationally Cybernetics/Cybersecurity Design Intelligence - CIDA-accredited Programs 13 Value Colleges - Top 50 Best Value Online Master's in Management 28 US News - Best Online Graduate Computer Information Technology 38 Program

A-2 Appendix A Recent Highlights

NJIT has also achieved a number of additional noteworthy milestones:

A record total enrollment - Fall 2016 Headcount: 11,446 (8,293 undergraduate, 3,153 graduate)

A near record freshmen enrollment of 1,110 students in Fall 2016 with first-time, full-time average math SAT scores of 628, top 25% percentile in the nation, and a combined SAT verbal/math average of 1,219 – the highest average composite SAT score in NJIT history. For Albert Dorman Honors College freshmen (14% of freshmen cohort), the average composite SAT score was 1420.

In an Economic Impact study completed in 2016, the following was identified as NJIT’s impact in the State of New Jersey:

– $1.74 billion annual economic impact to the State

– 11,353 jobs generated annually

– $941.8 million research-related activity

– Over 25% of all engineers working in New Jersey hold an NJIT degree

Strategic Planning

The University focus on continued improvement and growth has been articulated in NJIT’s five-year strategic plan. The plan was developed with the input of 200 members of the University community. The Board of Trustees unanimously approved the plan at its February 2015 meeting. 2020 Vision - A Strategic Plan for NJIT sets a bold challenge for NJIT, one that plans to move the University into the top tier of technological research universities. With its pragmatic focus on students, learning, scholarly research, community and investment, it lays out a blueprint for growth. The plan offers specific objectives and strategies that will improve the way NJIT educates students, advances research, and ultimately contributes to the local, regional and national economy, thereby responding to its four-part mission of education, research, service, and economic development. It also describes the specific investments required to implement the improvements and achieve the goals. Additional information on 2020 Vision is available via: http://www5.njit.edu/2020vision/

NJIT continues investing in the 2020 Vision, which will guide the University over the period of 2015-2020. To date, cumulative investments in the strategic plan total $47.18M, with 52% in support of Strategic Priority #5 - Investments, which includes capital expenditures and faculty renewal as its largest spend categories.

To support this vision; NJIT has identified five strategic priorities that focus on the development of students, the transformation of the curriculum, the growth of scholarship, the investment in infrastructure, and the fostering of a diverse community:

Strategic Priority 1 – Students Strategic Priority 2 – Learning Strategic Priority 3 – Scholarly Research Strategic Priority 4 – Community Strategic Priority 5 – Investments Organizational Structure

In anticipation of the challenges and opportunities of the strategic plan, the organizational structure of the University continues to evolve.

A-3 Appendix A

The Office of Provost and Senior Vice President for Academic Affairs has been elevated to Senior Executive Vice President and Provost. A new position Vice President for Real Estate Development and Capital Operations was created to provide greater focus on that area thereby providing the Senior Vice President for Finance and CFO the opportunity to focus on long-term fiscal planning without the responsibilities of physical plant operations and capital planning which are now part of the portfolio of the new Vice President.

On the academic side, the responsibilities for research and economic development activities have been separated. The former is overseen by a new position, Vice Provost for Research, reporting to the Provost and Senior Executive Vice President. The responsibilities for economic development are now the responsibility of the Senior Vice President of Technology and Business Development, who also maintains the title of President of the New Jersey Innovation Institute (NJII). NJII, a NJIT 501(c)(3) corporation, described more fully below, is off to a strong start in this new linkage between the academic and the business worlds.

A final change expanded the Senior Staff of the University to include the college deans in addition to the vice presidents for improved communications and decision making across the University to facilitate the accelerated rate of change and growth in order to be a highly competitive university for students, faculty, staff, research and other resources.

Governance and Administration

The members of the Board of Trustees as of June 30, 2016 are:

Honorable Christopher J. “Chris” Christie, Governor of the State of New Jersey ex-officio

Honorable Ras J. Baraka, ex-officio Mayor of the City of Newark

Mr. Stephen P. DePalma, PE, PP CME ‘72, Chairman and CEO (Ret.) (Chair) Schoor DePalma, Inc.

Mr. Lawrence A. Raia, P.E. ’65 Partner (Co-Vice Chair) Raia Properties

Dr. Vincent L. DeCaprio ‘72 President (Ret.) (Co-Vice Chair) Vyteris, Inc.

Ms. Elizabeth Garcia, PE ‘73 Manager, Public Affairs (Ret.) (Co-Vice Chair) Infineum USA, LP

Mr. Philip K. Beachem President New Jersey Alliance for Action

Mr. Dennis M. Bone President (Ret.) Verizon New Jersey

Mr. Peter A. Cistaro ‘68 Vice President, Gas Delivery (Ret.) Public Service Electric & Gas Company

Mr. Gary C. Dahms, PE, PP, CME President & CEO T&M Associates

Mr. Anthony J. Knapp Jr. Proprietor (formerly) Black Horse Restaurant Group

A-4 Appendix A

Ms. Ranjini Poddar President Artech Information Systems

Mr. Anthony R. Slimowicz, Esq. Executive Vice President Crum & Forster

Dr. Binay Sugla Chairman Vestac, LLC

Mr. Joseph M. Taylor Chairman & CEO (Retired 4/1/17) Panasonic Corporation of North America

Ms. Holly Stern, Esq. Secretary to Board

Mr. Edward J. Bishof, Sr. Treasurer to Board

The policies of the Board are carried out under the direction of the President of NJIT and its principal officers. They include:

Joel Bloom, Ed.D., President

Dr. Bloom provides executive leadership to NJIT and oversees all aspects of University operations. He manages NJIT's senior administrative team and plays a central role in strategic planning, fundraising, government and industry partnerships, and constituent relations. In addition, he is a fierce advocate for NJIT's students.

Dr. Bloom began his career in industry working as an economist, later becoming an educator and administrator for the New York City public schools. He also worked as a research director and instructor at Teachers College, Columbia University before coming to New Jersey for the purpose of directing state- and federally-funded curriculum development and training centers. From 1983 through 1990, Dr. Bloom served as assistant commissioner at the New Jersey Department of Education. Since joining NJIT in July 1990, Dr. Bloom has served in several capacities, including as Dean of the Albert Dorman Honors College, vice president for academic and student services, and as President. He is chair of the Science Park Board, chair of the New Jersey Innovation Institute, vice chair of the New Jersey President’s Council, and treasurer of the NJEDge.Net Board. Dr. Bloom serves as a member of the following boards: U.S. Air Force Civilian Advisory Board, Governors Innovation Council, NJ Technology Council, Newark Alliance, Philadelphia Alliance for Minority Participation, La Casa Don Pedro, and the Association of Public and Land-grant Universities Presidents Council. Dr. Bloom holds a master’s degree and a doctorate from Teachers College, Columbia University. He also earned master’s and bachelor’s degrees from Hunter College of the City University, New York City.

Fadi P. Deek, Ph.D., Provost and Senior Executive Vice President

Reporting to the President of the University, the Provost is the chief academic officer of NJIT, responsible for the educational and research mission of the University. Also serving as the Senior Executive Vice President for the University, the Provost collaborates with the President in setting overall University priorities and allocating resources to carry these priorities forward. Reporting to the Provost are all academic colleges and schools, Office of Research, Office of Graduate Studies, Office for Continuing and Professional Education, Office for Information Services and Technology, University Libraries, Office of Institutional Effectiveness, Office of Planning and Accreditation, and Murray Center for Women in Technology.

Dr. Deek began his academic career at NJIT as a student in the early 1980s. He received his B.S., 1985; M.S., 1986; and Ph.D., 1997, all in Computer Science from NJIT. Dr. Deek is a Distinguished Professor with appointments in two departments: Informatics and Mathematical Sciences. Administratively, Dr. Deek has been privileged to gain experience at NJIT in positions of increasing responsibility, beginning as a Program Coordinator and rising to Provost and Senior Executive Vice President.

A-5 Appendix A Edward J. Bishof, Sr., Senior Vice President for Finance and CFO and Secretary, Foundation at NJIT

Reporting to the President of NJIT, Mr. Bishof serves as the University’s Senior Vice President for Finance and Chief Financial Officer. In a collaborative and transparent manner, he leads the offices of Budget, Purchasing, Accounts Payable, Risk Management, General Accounting, Financial Systems, Payroll, NJII Financial Operations, Bursar and Treasury Management.

Mr. Bishof received his MBA in Finance and his Bachelor’s degree in Accounting from Seton Hall University. Appointed as NJIT’s Budget Director in 1988, he has developed strong enterprise-wide relationships with peers, division heads, faculty, researchers, administrators, staff, alumni, and students. Mr. Bishof was appointed interim Vice President for Finance in September 2015, and appointed Senior Vice President for Finance and CFO in February 2016. He has been actively engaged in numerous campus initiatives including the 2020 Vision- The NJIT Strategic Plan Steering Committee, co-chairing the subcommittee on investments, as well as the 2012 Middle States Accreditation Steering Committee. Prior to joining NJIT, he spent more than six years in the Budget Office of UMDNJ, now known as Rutgers Biomedical and Health Sciences and prior to that, two years in the City of Newark Office of Management and Budget.

Donald H. Sebastian, Ph.D. President and Chief Executive Officer of the New Jersey Innovation Institute (NJII) and Senior Vice President of Technology and Business Development at New Jersey Institute of Technology

Reporting to the President of NJIT, Dr. Sebastian is responsible for the conduct of the University’s technology and economic development mission. As both a Senior Vice President, and the CEO of the New Jersey Innovation Institute he is responsible for providing vison and leadership to an enterprise that encompasses everything from new business incubation, through small business assistance to providing advanced technology development and new product and service innovation to large corporate partners.

Dr. Sebastian holds a bachelor’s, master’s and Ph.D. in Chemical Engineering from Stevens Institute of Technology, and holds the rank of Professor of Chemical, Biological and Pharmaceutical Engineering at NJIT. He serves on more than half a dozen external non-profit boards and is a member of the NJ High-Tech Hall of Fame.

Charles R. Dees, Jr., Ph.D., Senior Vice President for University Advancement and President and Chief Operating Officer, Foundation at NJIT

Reporting to the President of the University, Dr. Dees arrived at the University in 2003 and is responsible for all fund raising for the University (annual and capital), alumni relations programs and events, strategic communications, publications, public relations, marketing, the web, social media and special University sponsored events.

Dr. Dees holds a Ph.D. from the University of Pittsburgh, a Master’s Degree (M. Ed.) from Duquesne University and Bachelor of Arts (B.A.) from LaSalle College. Dr. Dees received an ACE government fellowship and served in both the Carter and Reagan administrations in Washington D.C. Dr. Dees has had successful tenures at the senior administrative level at the University of Pittsburgh, Seton Hall University, Fairleigh Dickinson University, and the Jackie Robinson Foundation.

Dr. Dees is retiring on June 30, 2017; an active search for his replacement is underway.

Charles J. Fey, Ed.D., Vice President for Academic Support and Student Affairs

Reporting to the President of the University, Dr. Fey oversees numerous offices and departments at NJIT, including enrollment management (Admissions, Financial Aid and Registrar); academic support (New Student Programs and Services, Academic Preparation and Enrichment, Academic Advising, EOP and Student Support Services, and Pre- College Programs such as Upward Bound and Trio); student life (Dean of Students, Parents and Veterans’ Services, International Student Services, Campus Center and Student Life, Residence Life, Learning Communities and Service Learning/Community Service), student development (Health Services, Counseling and Psychological Services, Career Center); and athletics and recreation (Intercollegiate Athletics, Recreation and Intramurals, Physical Education.)

A-6 Appendix A Dr. Fey holds or has held numerous board positions in ACPA, and APLU (NASULGC). He was the founding President of the Massachusetts College Personnel Association and was President of the Texas Association of College and University Personnel Association (TACUSPA). Dr. Fey has received numerous awards including the Pillar of the Profession award from NASPA; Esther Lloyd Jones Professional Service Award from ACPA; is a Diamond Honoree of ACPA’s Foundation; twice received the Outstanding Service award from the Commission on Administrative Leadership of ACPA; and an exemplary service award from MCPA. Dr. Fey earned his bachelor’s degree in liberal arts and his master’s of education degree in counselor education, college student personnel services, both from The Pennsylvania State University. He holds a doctorate in higher education administration from Texas A&M University.

Dr. Fey is retiring on June 30, 2017; an active search for his replacement is underway.

Andrew P. Christ, PE, Vice President for Real Estate Development and Capital Operations

Reporting to the President of NJIT, Mr. Christ oversees Real Estate Development, Facilities Services, Design and Construction, Facilities Systems, Building Services, Parking, Public Safety, and Environmental Health and Safety.

Mr. Christ, who returned to his alma mater in 2014, holds a Bachelor and Master of Science, Civil Engineering from New Jersey Institute of Technology. He is a professional engineer licensed in the State of New Jersey. His experience includes positions in the pharmaceutical, auto, consulting engineering, and higher education industries.

Holly Stern, J.D., General Counsel and Vice President, Legal Affairs

Reporting to the President of the University, Ms. Stern arrived at NJIT in 1993 and now serves as the University’s chief legal officer, and Secretary to the Board of Trustees, providing leadership and oversight of all legal matters in furtherance of the University’s mission, as well as oversees legal compliance. In her role, she provides joint oversight with the Vice Provost for Research to the University’s Intellectual Property department. Among her direct reports are the Ethics Liaison Officer and the University Custodian of Records. She also serves as ex-officio non-voting member on the Board of New Jersey Innovation Institute, an NJIT not-for-profit corporation.

Ms. Stern holds a joint Juris Doctorate and Masters of Public Administration from the University of Southern California Law Center and a Bachelor of Arts in political science from Stanford University. She has been admitted to practice law in the State of New Jersey since 1979.

Kay Turner, Esq., SPHR, Vice President of Human Resources

Reporting to the President of NJIT, Ms. Turner serves as the University's chief human resources and labor relations officer. Since her arrival in 2013, she has been charged with providing vision and executive leadership in fulfillment of the University's mission and strategic planning initiatives.

Ms. Turner holds a Juris doctorate degree from St. John's University School of Law and a Bachelor’s in Economics from City University of New York at York College. Ms. Turner is an attorney admitted to the New York State Bar, a certified Senior Professional in Human Resources and a certified mediator with the National Mediation Board and the United States Equal Employment Opportunity Commission.

Programs

51 undergraduate degree programs include, among others, those leading to the bachelor’s degree in Computer Science; Information Technology; Industrial, Civil, Chemical, Electrical, Computer, Mechanical and Manufacturing Engineering; Engineering Science; Engineering Technology; Biomedical Engineering; Applied Physics; Applied Mathematics; Chemistry; Management, Business, Business Information Systems, Applied Sciences, Biostatistics; Architecture; and an inter-disciplinary program called Science, Technology and Society.

59 graduate degree programs include, among others, those leading to the degree of Master of Architecture and Master of Science in Architectural Studies. Other programs include master’s programs in Chemistry; Applied Mathematics; Computer Science; Information Systems; Engineering Science; Management; Transportation; Biomedical

A-7 Appendix A Engineering; Chemical Engineering; Civil Engineering; Electrical and Computer Engineering; Environmental Engineering; Masters of Business Administration in Management of Technology.

19 doctoral degree programs are offered in, among others, Applied Physics, Biomedical Engineering, Civil Engineering, Chemical Engineering, Data Analytics, Electrical Engineering, Mathematical Science, Materials Science & Engineering, Mechanical Engineering; Computer Science; Environmental Science, and Transportation.

The NJIT Division of Continuing Professional Education (CPE) offers professional development programs, credentials and courses in the classroom and online to adults interested in obtaining the skills and knowledge needed to advance in their careers. The Division also takes to the road to deliver essential education and training programs to employees of New Jersey companies. Through tailored programs, be they academic or non-credit, employers ensure that their staff has the skills needed to execute business strategies. Created in 1955, CPE continues to support both New Jersey residents and employers as they pursue their personal and business goals.

Research

NJIT’s technologically-based education and research programs are closely aligned to support the design, computing, engineering, and life sciences clusters identified in the State Strategic Plan – New Jersey’s State Development and Redevelopment Plan (the “State Plan”). NJIT’s educational and research programs have made and continue to make a significant economic impact in the State of New Jersey- estimated to be $1.74 billion annually as determined by a recent study. NJIT’s faculty-led research and its business incubation have produced significant results. To date, NJIT has been issued 220 unexpired U.S. patents, a significant portion of which have been licensed to third parties. This level of research expenditure ranks NJIT in the top 10 nationally among universities whose research is principally in engineering. In FY2016, NJIT’s research and associated expenses surpassed $131 million and was recently ranked 5th in external research expenditures among national polytechnic research universities.

The NJIT 2020 Vision Strategic Plan identified and implemented several focal areas for growth and development in education of students and professionals, research and economic development:

Life Sciences and Engineering: Life Sciences and Engineering research cluster includes both basic and applied research in the areas of traumatic brain injury, neuroscience, neural engineering, regenerative medicine, rehabilitation engineering, tissue engineering, lab-on-a-chip and point of care technologies.

Sustainable Systems: This cluster represents research areas in urban ecology and sustainability, advanced materials and nanotechnologies, additive manufacturing, and smart pharmaceutical drugs manufacturing systems.

Data Science and Information Technology: This research cluster includes cybersecurity, information systems, smart communication systems, and big data science for extracting information and knowledge that can then be used for medical, finance, science and engineering applications.

Transdisciplinary Areas: This cluster includes research focus groups and centers on mathematical sciences, transportation systems and science and technology impact in society.

Recently the research synergy into the myriad complexities of the brain and neurophysiology has gained momentum at NJIT across diverse disciplines, including biology, biomedical engineering, mathematical sciences and computing. With the formal inauguration of the University’s Institute for Brain and Neuroscience Research (IBNR) in March 2017, the efforts of NJIT researchers to increase basic understanding of the brain that could lead to new healing therapies for related injuries and disease will be more sharply focused and closely coordinated. As the primary home for all neuroscience initiatives at NJIT, the IBNR will serve as an umbrella and organizing framework for collaborative research and training in areas ranging from brain injury, to neural engineering, to neurobiology, to computational neuroscience. Researchers at NJIT take a multi-pronged approach to understanding neural circuits and their disruption. Neurobiologists Farzan Nadim, Dirk Bucher and Gal Haspel examine the simple nervous systems of animals such as crustaceans and worms, while mathematicians Casey Diekman and Horacio Rotstein develop models of neuronal patterns. Biochemist Yong-Ick Kim, who conducts laboratory analyses of the biochemical building blocks of the A-8 Appendix A circadian clock, works with them to examine hypotheses about entrainment mechanisms — the means by which brainwave oscillations synchronize with external stimuli.

NJIT researchers are mitigating the effects of disabling neurological disorders and injuries by designing devices and therapies that help people function to their full potential. In these efforts, our neurorehabilitation and biomechanics engineers work closely with imaging experts such as Bharat Biswal, whose early work gave rise to important research in clinical neuroscience, including the mapping of brains affected by diseases such as Alzheimer’s and developmental conditions such as ADHD and dyslexia. Biomedical engineers Richard Foulds and Sergei Adamovich partner with the Kessler Institute and hospital-based rehabilitation centers to develop exoskeletons and other devices that will help people with neurological disorders participate in classrooms and in workplaces.

NJIT has developed a unique blast simulation lab at the Center for Brain Injury Biomechanics, Material and Medicine (CIBM3) led by Namas Chandra to research the connection between the strength, distance, speed, and positioning of a blast, and the type and degree of injury it causes. They are also assessing the physical damage to both the structure of cells and their capabilities, including the ability to transmit signals. Namas Chandra and Bryan Pfister, who study traumatic brain injury, collaborate with New Jersey-based physicians and medical researchers on their work for the U.S. Department of Defense.

NJIT researchers are developing innovative pharmaceutical manufacturing technologies in collaboration with the State’s leading firms. The National Science Foundation funded Engineering Research Center for Structure Organic Particulate System (C-SOPS) brings together a cross-disciplinary team of engineers and scientists from four universities including NJIT & Rutgers, as well as industry leaders to improve the way pharmaceuticals, foods and agriculture products are manufactured. C-SOPS will focus on advancing the scientific foundation for the optimal design of nano- particulate pharmaceutical formulations with advanced functionality while developing the methodologies for their active control and manufacturing. The Polymer Processing Institute, hosted by NJIT, is developing hot-melt extrusion technologies that empower pharmaceutical manufacturers to deliver higher potency medications with greater bioavailability. Improvements through manufacturing technology are critical to the success of this industry as basic drug discovery proves more expensive and elusive than in the past.

NJIT civil engineers brought their expertise to help the State respond to Superstorm Sandy. Professor Michel Boufadel and his Center for Natural Resource and Preservation received a National Science Foundation Rapid Response Grant in the wake of the storm to study the patterns of damage and make recommendations for more resilient communities. He has since been engaged by FEMA to rethink flood plain delineations and funded by NJDEP to assist in flood mitigation planning. Colleagues in the Civil Engineering Department also received state funding to create the Flood Mitigation Engineering Resource Center to provide technical assistance to New Jersey’s Department of Environmental Protection to reduce the risk to vulnerable coastal and inland populations, and to ensure a sustainable and robust landscape in the State that supports public safety and economic development.

NJIT researchers are also researching the material building blocks of civilization — the asphalt, concrete and steel that compose roads, bridges and tunnels for it durability and performance. Matthew Adams and Matthew Bandelt, in civil engineering are assessing the soundness of massive backlogs of infrastructure projects expeditiously through experimental testing across multiple scales, in combination with creating robust computational models to predict the durability of new construction materials under scenarios that vary widely in temperature, weather volatility, chemical applications such as de-icing salts and loading conditions. They are currently taking part in a Federal Highway Administration research program designed to produce tools to conduct large-scale assessments of bridge infrastructure performance by analyzing data from a representative sample of highway bridges nationwide. The aim is to improve durability by using predictive and forecasting models on deterioration and maintenance that will optimize the management of bridges.

NJIT has developed a unique group of solar observatories at Big Bear Solar Observatory (BBSO) and Owens Valley Solar Array in California, and at the Polar Engineering Development Center in Antarctica. The BBSO has the largest Near-Infrared (NIR) Telescope in the world. The 1.6-meter Solar Telescope at BBSO is capable of penetrating deep below the Sun’s corona to capture the first high-resolution images of phenomena such as the flaring magnetic structures known as solar flux ropes at their point of origin in the Sun’s photosphere, or solar surface. These bundles of magnetic fields together rotate and twist around a common axis, driven by convection deep within the Sun. The new

A-9 Appendix A images offer powerful new clues about the initiation of flux ropes and other phenomena and their relationship to solar flares and coronal mass ejections, massive energy releases. Haimin Wang and his team are studying these solar eruptions that are important towards understanding the disruptions in earth atmospheres including climate change, electromagnetic radiations and satellite communications.

NJIT’s Cybersecurity Research Center was established in 2015 to develop cybersecurity technologies that will protect data from inception to end use, beginning with the production of software to manage it to its remote storage in the cloud. Broadly, the center identifies systemic weaknesses that make cyber systems vulnerable to attack, designs systems to make them more secure and hardens cyber infrastructure that has already been deployed. More specifically, its researchers develop and apply new approaches to practical encryption, securing cloud-computing services, improving secure software development techniques, data encoding and communication protocols, and researching human factors relevant to cyber technology. The center is currently working on methods to improve the security of the entire software supply chain and is well funded by Department of Defense and National Security Agency.

NJIT’s Center for Big Data, is a transdisciplinary research center aimed at building a unified platform with a rich set of big data enabling technologies and services to advance collaboration and scientific discovery in a number of domains, from financial analytics, to life sciences, to homeland security. The Center is co-directed by Chase Wu from Computer Science and Yi Chen from the Martin Tuchman School of Management. In collaboration with Oak Ridge National Laboratory and Argonne National Laboratory, Wu heads a high-performance networking project to develop fast and reliable data transfer methods to help diverse users move big data over long distances for collaborative data analytics. More specifically, he is also leading a U.S. Department of Homeland Security project in collaboration with partners at Oak Ridge to design network algorithms to quickly and accurately detect and localize low-level radiation sources based on a large volume of sensor readings.

NJIT’s Martin Tuchman School of Management (MTSM) has aligned itself accordingly with several initiatives to support big data research, something of a new direction for the school. Just this past fall semester, MTSM opened two new labs — the Ray Cassetta Financial Analysis Laboratory and the Business Analytics Laboratory — and launched a Ph.D. program in business data science that is one of the first in the country to integrate business analytics and management-systems theory with statistics, computing science and engineering. MTSM has brought two new investigators into the fold: Associate Professors Dantong Yu and Maggie Cheng. Both are computer scientists with extensive experience in big data with applications in industry, scientific research and health care.

Through digital technology and manufacturing efficiencies employed by sectors such as the aerospace and automotive industries, Adam Modesitt, assistant professor of architecture, is bringing new direct-to-fabrication, advanced process integration and customizable workflow capabilities to NJIT’s College of Architecture and Design. Modesitt led large-scale projects ranging from the redesign of LaGuardia Airport to the development of a master plan for Konza City, Kenya, a planned municipality outside of Nairobi designed as a sustainable city, technology hub and economic driver for the country. He also led the design, implementation and fabrication of the weathered steel panels that form the façade of the Barclays Center Arena. His initiatives are now leading a new era in digital fabrications through online and cloud based technological frameworks. The group has developed D.O.T.T.I.E. (digitally operated tectonic integrated environment) with a single-family sustainable house that integrates the digital and the analog, local traditions and global considerations.

NJIT’s College of Architecture and Design launched a Resilient Design Program drawing on the experience of students and faculty that actively participated in the post-Katrina recovery in New Orleans. Through research, design and actual demonstration projects, the Program provides State and local leaders, business owners and residents with actionable 21st Century ready-to-build designs and expertise for disaster recovery in areas hard hit by Superstorm Sandy.

NJIT supports transportation research that helps New Jersey with key initiatives critical to a growing economy, such as enhancing freight movement at domestic and international gateways; increasing global competitiveness; optimizing intermodal passenger and freight transportation systems; and modeling tools for transportation planning, design and operations. With grant awards from the Federal Highway Administration, NJIT has developed and deployed sophisticated transportation project planning software called TELUS that is being using in Metropolitan Transportation Organizations across the country. In a related project for the Federal Transit Administration, NJIT researchers have

A-10 Appendix A completed a comprehensive study of transit-oriented development providing State leaders’ guidance in the form of best practice throughout the country.

Economic Development

What follows below is an array of initiatives that exemplify NJIT’s commitment to supporting State and local economic development in order to retain and attract high-tech business for New Jersey:

New Jersey Innovation Institute (NJII) - As a partner in economic development, is working to spur growth in key economic sectors by collaborating with industry and government.

NJII’s mission is to serve the needs of the State’s key industrial sectors through product & process innovation, technology development and business partnership formation and is organized through i-Labs, each serving a unique sector. The five initial i-Labs overlay the State’s Target Industrial Clusters: Healthcare Delivery Systems, Biotechnology and Pharmaceutical Production, Defense & Homeland Security, Civil Infrastructure and Financial Services. While serving as a catalyst for regional economic growth, NJII was carefully planned with the expectation that will enable highly significant opportunities for faculty engagement and student employment. Since its inception, NJII has secured multi-million dollar contracts with the Department of Defense, Department of Health, Environmental Protection Agency, JP Morgan Chase, and has corporate funded memberships from AECOM, Berger International, Cisco, Hackensack University Medical Center, Panasonic North America, Prudential, and Torcon.

A number of the NJII programs are detailed below:

MarketShift is a program funded by the U.S. Department of Defense’s Office of Economic Adjustment to create a series of cross-cutting functions that serve to strengthen and grow the ecosystem of existing and future defense suppliers into new markets with new strategies and new products. Launched initially with a $5M 2 year grant, it has just been renewed for another year in April 2017.

Practice Transformation Network (PTN) is a 4-year, $49M program with the U.S. Department of Health’s Center for Medicaid Medicare Innovation. The program is working with 15,000 primary care physicians to coach them to achieve outcomes-driven models of patient care with metrics spanning 10 different disease states and practice efficiency measures that support Accountable Care reimbursement models.

New Jersey Health Information Network (NJHIN) is a 2 year, $5M program to create a Master Patient Index system that links patient medical records that are dispersed across physician, hospital, pharmacy, clinical lab and insurer data systems that reside on multiple public and private Health Information Networks across the State.

NJ Unmanned Aircraft Systems Test Site (NJUASTS) has received a $700,000 grant from the NJ Economic Development Authority to operate a flight center in Cape May, NJ. The NJUASTS helps client companies and universities secure permission to fly in civilian airspace, provides engineering integration, pre- flight validation, in-flight support and post-flight reporting services. The activity is a pivotal element of Cape May County’s economic development strategy to brand the region as a high-tech hub.

Technology Assessment & Renewal Center (TARC) is entering its third year with $8M committed over the first two years of the program and $15M pending in the next two Federal budgets. The program is developing the tools, technologies and talent for the U.S. Army to master next generation munitions production systems and transition them to the national defense industrial base.

Advanced Development of Asset Protection Technologies (ADAPT) is a $1M/year effort to capitalize on new technological breakthroughs in active materials, smart coatings, nano-technology, advanced and additive manufacturing, 3D material printing, micro-electronics, etc., to develop materials and devices that meet the Army’s objectives for “smarter,” more rapidly deployable, lighter weapons systems.

Small Business Forward is a J.P. Morgan Chase Foundation national effort to accelerate the growth of small to mid-sized businesses. At NJII, this new program will target growth stage Health IT entrepreneurs that A-11 Appendix A have initial revenues (ranging from $250,000-$5M in annual revenues) and accelerate their commercialization pathway to achieve 20% annual revenue growth. These high growth firms have been identified as key drivers of job creation. Coordinated cluster focused networking efforts will link and leverage allowing them to strengthen their product pipeline and accelerate their growth trajectory.

Enterprise Development Center (EDC), the largest business incubator system in the State, is an ecosystem promoting startups and small businesses. An average 95 portfolio companies choose to build their businesses at NJIT. These companies have attracted more than $80 million in third-party funding and had revenues surpassing $67 million.

Descriptions of three representative EDC companies that align with each of our strategic priority areas (convergent life science, information everywhere and sustainable systems) follow:

Endomedix, Inc. core focus is in hydrogel technology in the growing medical device market. In particular, Endomedix is focused on the tissue sealant, hemostat and biomedical adhesive market. The company recently received a grant from the federal government under the SBIR program for $1.4M.

iSpeech, Inc. (Talkz), provides embedded and cloud solutions for text to speech (TTS) and speech recognition (ASR) for any connected device or application via its proprietary SaaS (software as a service). Text to Speech (TTS) or text to voice Software can be used to make audio versions of any text content. Applications include email and text message readers that allow drivers to operate their vehicle, with eyes on the road while listening to their messages in a synthesized natural language, voice.

WattLots is a leader in the green building movement with an understanding of the building and planning industry. WattLots, LLC was formed to address opportunities within this tremendous, unexploited market. Their signature product, Power Arbor™, is a uniquely styled parking lot canopy system that is specifically designed to retrofit existing surface parking lots providing substantial quantities of clean, renewable electrical energy where it is needed.

In 2013, the NJIT Highlanders Angel Network, Inc., an independent non-profit corporation dedicated to providing a forum for angel investors, was established to provide investment capital, mentoring, and access to a network of resources for EDC companies and NJIT student/faculty startups and spinouts. The network is comprised of accredited investors including NJIT alumni, NJIT faculty/staff members, private investors, large and small business executives, and industry professionals.

Procurement Technical Assistance Center provides small, minority and women-owned businesses with assistance in procuring government contracts. Most of the Center’s services are offered free of charge. Since its inception in 1986, New Jersey businesses have received more than $2.62 billion in government prime and subcontract awards as a direct result of the assistance provided by the center. This translates into 78,594 jobs created or saved. The Center maintains satellite offices throughout New Jersey with the main office in Newark on the campus of New Jersey Institute of Technology.

North Jersey Transportation Planning Authority (NJTPA) is the federally authorized Metropolitan Planning Organization for the 13-county northern New Jersey region. NJTPA is hosted and staffed by NJIT. The NJTPA serves a region of approximately 6.5 million people, making it the fifth most populous MPO region in the nation.

NJIT hosts the Polymer Processing Institute, Inc. (PPI) as an affiliate of NJII. PPI works with its industrial partners to develop high performance materials and products by offering them expertise in polymer processing, and advanced mixing, compounding and blending technologies. PPI’s innovations have led to new production technologies that helped to secure Picatinny Arsenal’s place against closure in the recent round of Defense Department cutbacks. That same technology base is now being extended to assist the State’s pharmaceutical industry in creating novel manufacturing techniques optimized for next generation nano-particle formulations.

NJIT led the formation of the New Jersey Manufacturing Extension Program (NJMEP) that helps New Jersey’s small and medium-sized manufacturers become more productive. Field agents with manufacturing experience are based

A-12 Appendix A in every county in the State to help companies improve operations. NJMEP services have resulted in nearly $200 million in cost savings, new or retained sales and 3,000 jobs created or retained.

The Medical Device Concept Lab has created a new chemical basis for advanced synthetic materials that is based on corn sugars rather than petroleum. Working in partnership with the Iowa Corn Promotion Board, this technology is being licensed to international firms for scale up to full production. One of these materials is a replacement for the chemical Bisphenol A (BPA) used in some plastic bottles and deemed to be a cancer risk.

By executive order from the Governor, NJIT serves as the New Jersey Homeland Security Technology Systems Center. The Center is leading the implementation of new security measures under federally funded demonstration projects in the State’s shopping malls and elementary schools. NJIT’s experts are coordinating a statewide effort to validate campus safety and security practices through a peer review process.

Other activities, organized under the University’s leadership include the following:

NJIT is the lead institution for the NJ DoLWD Advanced Manufacturing Talent Network. (ManufactureNJ), which is now in its sixth year of operation. The Talent Network’s work involves both an industry demand-side driven strategy to respond to current and future employment and education needs within this rapidly changing industry and also an emphasis on assisting job seekers to gain the expertise needed to fill open positions in the State in this industry sector.

NJIT is the lead institution for the NJ Department of Labor Technology & Entrepreneurship Talent Network (TETN), which is now in its fourth year under NJIT stewardship. This Talent Network’s work involves developing strategic partnerships of employers, educators, and workforce development professionals to work together to strengthen the workforce in NJ’s Information Technology industry sectors and to provide technical assistance and support to the State’s promising and aspiring entrepreneurs.

NJIT is the lead institution for the NJ Department of Labor Transportation, Logistics & Distribution Talent Network (TLDTN) that builds partnerships in the TLD industry to develop and support TLD in the Garden State and formulate strategies for competing at the regional, national, and global levels. The TLDTN connects with businesses, other educational institutions, workforce organizations, training groups, and community- and faith-based organizations to gather ground-level intelligence on the industry to make informed decisions on high-quality public workforce investments and expand the number of New Jersey residents with industry-valued credentials or degrees.

MechaFORCE: Registered Internship Manufacturing Program (M-RIM), Provides NJ manufacturers with a steady stream of appropriately trained workers, who begin as Registered Interns in specific manufacturing occupations, and charts out a clear career and educational advancement pathway.

NJIT was awarded a $5 million grant by the U.S. Labor Department H1-B Technical Skills Training Program to create a technical skills training program for the City of Newark and Bergen, Essex, Passaic, Morris and Hudson counties.

New Jersey Technical Assistance Program for Brownfields (NJTAB) is one of three U.S. EPA funded centers and serves EPA Regions 1, 3 and 4. The Center provides technical assistance to communities and other stakeholders on Brownfields issues with the goal of increasing the community's understanding and involvement in brownfields cleanup and revitalization, and helps to move brownfields sites forward toward cleanup and reuse.

Area Development

As a major aspect of NJIT’s engagement in regional economic development, NJIT is making a major contribution to the well-publicized Renaissance now taking place in Newark. The University’s Campus Gateway Plan to revitalize its surrounding neighborhood continues to progress.

The first phase of the project, the Warren Street Village, was completed in 2013. The new village includes fraternity/sorority housing, dedicated housing for NJIT Honors College students, student dining facilities and a convenience store. The Board of Trustees has designated a development team to work on the Campus Gateway Project Phase 2, which will include more than 100 residential units, 60,000 square feet of commercial space and a structured A-13 Appendix A parking garage. The second phase of the Gateway plan, encompassing 18 acres and $1 billion of redevelopment, will create a vital urban center in the heart of Newark’s University Heights section.

With the goal of creating an “urban living environment”, the project intends to foster a bustling neighborhood, full of pedestrian activity. NJIT will continue to work with its development partners, neighbors, and the City of Newark to move the next phase of the project forward. Newark is experiencing an exciting revival and the Gateway Redevelopment is NJIT’s contribution, reinforcing the University as a neighborhood anchor while working to maintain its historic character.

The second phase of the Campus Gateway Project includes adaptive re-use of the former NJIT Enterprise Development Center building at 240 Martin Luther King Jr. Boulevard. This renovated building will provide more than market rate residential housing units within walking distance of NJIT, the Broad Street Station, and downtown Newark. A mix of studio, 1 bedroom, and 2 bedroom units will be constructed to attract a diverse population to the facility.

Just across Martin Luther King Jr. Boulevard, the MLK Gateway Development will continue, utilizing the current parking lot for St. Michael’s Medical Center, and other properties between James and Orange Streets. By completing this project in increments, we will maintain the necessary operational needs of the thriving St. Michael’s Medical Center, while creating ground floor retail, market rate, graduate, and faculty and staff housing opportunities and the associated parking. In its final form, a 1,200 plus space parking garage with 500 spaces for NJIT students, faculty, staff, and visitors will be constructed. The garage will be shared with St. Michael’s Medical Center, residential unit occupants, and the neighborhood. Mixed-use development of ground floor retail; shops, restaurants, and neighborhood businesses; along with additional residential units will be constructed.

As this phase of the Gateway Development unfolds, well-paying construction jobs will be created. NJIT and its development partners are committed to maintaining a good faith effort to employ residents of the City of Newark in the construction of the project. Creating jobs by redeveloping University Heights into a destination for college students contributes further to the revitalization of our community.

Accreditation

NJIT is accredited by the Middle States Association of Colleges and Secondary Schools that accredits degree- granting colleges and universities in the Middle States region. The most recent Middle States accreditation was reaffirmed in 2012, effective through academic year 2021-2022. In addition, there are various additional accreditations associated with degrees and programs including the Accreditation Board for Engineering and Technology (ABET) for college and university programs in applied science, computing, engineering, and technology. The BA/BS programs in Computer Science and Information are accredited by the Computing Accreditation Commission of ABET. The programs in Construction Engineering Technology (CET), Electrical and Computer Engineering Technology (ECET), and Mechanical Engineering Technology (MET) are accredited by the Technology Accreditation Commission of ABET. Business courses are accredited by the Association to Advance Collegiate Schools of Business (AACSB) and the architecture programs are accredited by the National Architectural Accrediting Board (NAAB). The interior design program at NJIT’s School of Art + Design has been officially awarded full accreditation by the Council for Interior Design Accreditation (CIDA). The College of Architecture and Design is further accredited by the National Association of Schools of Art and Design (NASAD).

A-14 Appendix A Faculty

Over the past 5 years, the University hired 89 tenured / tenure-track faculty, bringing the total to 303, with 23 additional faculty expected to be hired this fall. Full-time, teaching faculty as of the Fall 2016 totaled 445, of whom 68% are tenured. 100% of the faculty holds Ph.D./terminal degrees in their fields of expertise. The headcount and percentage distribution by rank is as follows:

Rank Headcount Percentage Distinguished Professor 31 6.9% Professor 110 24.7% Associate Professor 99 22.2% Assistant Professor 63 14.2% Research Professor 17 3.8% Asst. Research Professor 10 2.3% Sr. University Lecturer 45 10.1% University Lecturer 67 15.1% Professor of Practice 3 0.7% Total 445 100.0% Unions

NJIT has settled all existing union contracts, with effective dates through June 30, 2019. Recently, NJIT and the Rutgers Council of AAUP Chapters, AAUP-AFT, AFL-CIO (UCAN) acknowledged UCAN as the exclusive representative of a bargaining unit of adjunct instructors. The University is currently awaiting this new union’s leadership to be established before negotiations commence.

Student Admission, Enrollment and Degrees Conferred

The below tables provide NJIT’s undergraduate and graduate enrollment, numbers of bachelors, masters and doctoral degrees conferred, and freshmen admissions for the term indicated. NJIT’s student headcount increased by 15% from Fall 2012 to Fall 2016 stemming from improved retention and recruitment efforts. As a result of improved enrollment trends and other investments related to the Strategic Plan, NJIT continues planning for increases in faculty, academic, and infrastructure support to meet the needs of increased student headcount.

As part of 2020 Vision goal of improving student quality and national rankings, the quality of accepted graduate student profiles and GRE scores were raised for the Fall 2016 semester. This resulted in a decline of enrolled master’s degree students in the Newark College of Engineering (NCE). Recent national rankings have elevated NCE’s rank to 87, an improvement from the previous ranking of 92.

While overall enrollment increased in Fall 2016, NJIT experienced a decrease in graduate student enrollment from the previous year primarily from the decline in master’s level international students. The University is focused on continuing to grow its enrollment and address the emerging external factors and trends potentially impacting our stratgic plan goals of attracting and retaining high-achieving students. Examples of NJIT’s proactive efforts are partnering with specific international student recruitment agencies and assisting students with their Visa application process.

Enrollment Data - Headcount Undergraduate Graduate Total Term Headcount Headcount Headcount Fall 2012 7,111 2,833 9,944 Fall 2013 7,286 2,844 10,130 Fall 2014 7,550 3,096 10,646 Fall 2015 8,008 3,317 11,325 Fall 2016 8,293 3,153 11,446

A-15 Appendix A

Enrollment Data - FTE

Term Undergraduate FTE Graduate FTE Total FTE Fall 2012 6,292 2,185 8,477 Fall 2013 6,491 2,228 8,719 Fall 2014 6,714 2,444 9,158 Fall 2015 7,049 2,694 9,743 Fall 2016 7,373 2,524 9,897

Degrees Conferred

Bachelors Masters Doctorate Total FY 2012 1,008 1,048 65 2,121 FY 2013 1,144 942 66 2,152 FY 2014 1,130 1,058 56 2,244 FY 2015 1,352 1,099 65 2,516 FY 2016 1,415 1,210 57 2,682

Admissions Data – Undergraduate Students First Time First Time Freshmen Percent of Freshmen Percent of Number of Applications Applicants Applicants Accepted Freshmen Applications Accepted Accepted Registered Registered SAT Average Fall 2012 4,216 2,684 64% 1,045 39% 1163 Fall 2013 4,344 2,844 65% 1,031 36% 1164 Fall 2014 4,777 3,028 63% 1,053 35% 1184 Fall 2015 6,054 3,673 61% 1,108 30% 1212 Fall 2016 7,222 4,283 59% 1,100 26% 1219

Note: SAT scores reported for First Time Full Time Undergraduate.

Admissions Data – Graduate Students Old Scoring New Scoring First Time First Time New New Graduate Percent of Graduate Percent of Graduate Graduate Number of Applications Applicants Applicants Accepted Student GRE Student GRE Applications Accepted Accepted Registered Registered Average** Average** Fall 2012 5,898 3,759 64% 930 25% 1122 - Fall 2013 6,159 3,680 60% 1,101 30% 1118 - Fall 2014 6,305 3,544 56% 1,005 28% 1097 - Fall 2015 6,687 3,856 58% 1,350 35% 1120 302 Fall 2016 6,679 3,436 51% 909 26% 1160 305

**Note: GRE (verbal + quantitative) scores shown for first-time full-time degree seeking graduate students

A-16 Appendix A Financial Information

A summary of the University’s revenue, expenses and changes in net position for the years ended June 30, 2016, 2015, 2014, 2013 and 2012 follows.

New Jersey Institute of Technology Summarized Statement of Revenues, Expenses, and Changes in Net Position For the years ended June 30, ($000s) 2016 2015 2014 2013(1) 2012(1) Operating revenues: Student tuition and fees, net of scholarship allowances $ 135,189 $ 122,749 $ 112,253 $ 103,442 $ 94,898 Federal grants and contracts 80,635 67,804 66,908 68,649 66,078 State grants and contracts 23,590 22,092 21,012 19,219 17,781 Other grants and contracts 4,113 4,195 3,957 4,535 4,659 Auxiliary enterprises, net of scholarship allowances 15,721 14,357 13,337 12,492 12,258 Other operating revenues 3,974 3,267 3,070 2,396 2,314 Total operating revenues $ 263,222 $ 234,464 $ 220,537 $ 210,733 $ 197,988

Operating expenses: Instruction $ 104,479 $ 91,111 $ 97,995 $ 88,002 $ 77,509 Research and programs 71,428 56,243 56,938 59,955 55,927 Public service 2,077 1,989 1,612 1,507 1,615 Academic support 30,438 27,091 27,294 23,944 22,075 Student services 24,866 21,444 20,426 18,566 17,134 Institutional support 52,346 45,683 40,522 39,137 37,664 Operation and maintenance of plant 20,367 20,449 19,751 14,827 13,532 Scholarships and fellowships 9,967 10,175 10,936 9,965 8,782 Depreciation and amortization 25,568 22,178 19,406 18,363 18,640 Auxiliary enterprises 8,299 8,569 9,937 10,811 9,972 Total operating expenses (2) $ 349,835 $ 304,932 $ 304,817 $ 285,077 $ 262,850

Nonoperating revenues (expenses) and other revenues: State appropriations $ 87,532 $ 80,890 $ 92,086 $ 80,795 $ 65,382 Gifts and bequests 2,468 3,672 4,777 2,435 2,730 Interest expense (9,135) (9,386) (8,502) (6,198) (7,588) Investment income (loss) 17 2,294 14,701 6,555 (1,039) Other nonoperating revenues, net 4,084 3,411 820 2,267 1,457 Capital grants and gifts 3,240 21,470 69,091 1,165 159 Additions to permanent endowments 4,185 2,971 4,921 4,668 4,008 Net nonoperating and other revenues $ 92,391 $ 105,322 $ 177,894 $ 91,687 $ 65,109

Increase in net position $ 5,778 $ 34,854 $ 93,614 $ 17,343 $ 247 Cumulative effect of change in accounting principle – GASB 68 (2) - (103,977) - - - Increase (decrease) in net position, net of cumulative change in accounting principle $ 5,778 $ (69,123) $ 93,614 $ 17,343 $ 247

(1) Effective July 1, 2013 the University adopted GASB Statement No. 65, which requires that certain items that were previously reported as assets and liabilities be classified as deferred outflows of resources or deferred inflows of resources in the Statements of Net Position. (2) Effective July 1, 2014, the University adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68 (collectively, GASB 68), which address accounting and financial reporting for pensions that are provided to employees of governmental employers through pension plans that are administered through trusts. The effect of the adoption of GASB 68 on the Statement of Revenue, Expenses, and Changes in Net Position was primarily the recording of a cumulative effect of a change in accounting principle in fiscal year 2015 of $103,977 and an increase in operating expenses for fiscal years 2016 and 2015 of $7,576 and $6,268, respectively.

A-17 Appendix A Tuition, Fees and Charges

The full-time in-state charge for the 2016-2017 academic year are $13,602 for undergraduate and $19,008 for graduate students. Student fees for full-time students for the academic year are $2,828 for undergraduates and $2,806 for graduate students. For Fall 2016, typical room & board is $12,167 annually.

Over the past five years average tuition & fee rates grew 3.3% annually. Future tuition rate increases are partly dependent on the amount of public funding provided by the State.

Undergraduate Fall 2016 Fall 2015 Fall 2014 Fall 2013 Fall 2012 Tuition (Resident) $13,602 $13,434 $13,120 $12,800 $12,400 Mandatory Fees 2,828 2,674 2,528 2,418 2,340 Total Tuition & Fees (Resident) $16,430 $16,108 $15,648 $15,218 $14,740 Tuition (Non-Resident) 28,206 27,652 26,760 25,856 24,800 Total Tuition & Fees (Non-Resident) $31,034 $30,326 $29,288 $28,274 $27,140

Graduate Fall 2016 Fall 2015 Fall 2014 Fall 2013 Fall 2012 Tuition (Resident) $19,008 $18,500 $18,066 $17,384 $16,836 Mandatory Fees 2,806 2,652 2,506 2,444 2,318 Total Tuition & Fees (Resident) $21,814 $21,152 $20,572 $19,828 $19,154 Tuition (Non-Resident) 28,092 27,340 26,458 25,404 24,370 Total Tuition & Fees (Non-Resident) $30,898 $29,992 $28,964 $27,848 $26,688

University students are recipients of financial assistance from various governmental assistance programs and grants, as well as other sources. The below table provides a summary of student financial assistance for the fiscal years ended June 30, 2016, 2015, 2014, 2013 and 2012.

NJIT Student Financial Aid ($000s) Fiscal Year Ended June 30, 2016 2015 2014 2013 2012 Source Federal Funds $14,427 $14,312 $13,845 $12,783 $12,415 State Funds 19,001 18,545 17,953 16,101 13,199 Industry & Other 266 254 154 221 247 University Funds 31,959 27,879 25,805 25,346 23,786 Total $65,653 $60,990 $57,757 $54,451 $49,647

A-18 Appendix A New Jersey State Budget

The base State appropriation declined by 6% in FY 2016. Despite the reduction of base State appropriation support, NJIT continues to aggressively recruit students. Base State appropriation is level in FY17 and the FY18 Governor’s Proposed Budget recommends level funding to continue at $35.440M.

NJIT State Appropriations ($000s)

Fiscal Year Ended June 30, 2016 2015 2014 2013 2012 Base State Appropriation $35,440 $37,696 $37,696 $37,696 $37,697 State Fringe Benefits (1) $52,092 $43,194 $54,390 $43,099 $27,685 Total Appropriation $87,532 $80,890 $92,086 $80,795 $65,382

(1) Approximately 95% of fringe benefit expenses are funded by the State and treated as a ‘pass-through’ revenue.

The below table provides a summary of University revenues consisting of Federal, State, and other grants and contracts for the fiscal years ended June 30, 2016, 2015, 2014, 2013 and 2012.

NJIT Grants and Contracts ($000s) Fiscal Year Ended June 30, 2016 2015 2014 2013 2012

Federal grants and contracts $80,635 $67,804 $66,908 $68,649 $66,078 State grants and contracts 23,590 22,092 21,012 19,219 17,781 Other grants and contracts 4,113 4,195 3,957 4,535 4,659 Total grants and contracts $108,338 $94,091 $91,877 $92,403 $88,518

The below table provides a summary of the fair market value of the University’s endowment investments as of June 30, 2016, 2015, 2014, 2013 and 2012.

NJIT Cash and Cash Equivalents and Investments and Endowment Investments Fair Value ($000s) As of June 30, 2016 2015 2014 2013 2012

Cash and Cash Equivalents and Investments $110,085 $89,696 $81,220 $68,018 $51,275 Endowment Investments 98,100 99,233 98,197 82,925 74,513 Total $208,185 $188,929 $179,417 $150,943 $125,788 As of June 30, 2016, the University’s pooled investments were composed of approximately 53% equity securities, 18% fixed income securities, and 29% hedge and other investment funds. As of March 31, 2017, the endowment totaled $107.256 million, the pooled investments were composed of approximately 53% equity securities, 16% fixed income securities, and 31% hedge and other investment funds. As per NJIT’s investment policy statement, there is an annual drawdown of no more than 5%, with 95% of those funds going to scholarship support.

In addition to the endowment investments cited above, the University had $128.6 million in cash and cash equivalents and investments as of March 31, 2017. A-19 Appendix A

Development

NJIT has been in the public phase of its NJIT NEXT capital campaign since 2012. Its original $150 million goal targeted: $50 million for endowed scholarships and fellowships for all NJIT colleges, to provide vital financial support for students pursuing degrees in the University’s core academic specialties; $25 million to endow chairs and professorships to retain and recruit outstanding faculty to enhance NJIT’s distinctive learning environment and support professor-student research projects; and $75 million to continue the development of NJIT’s Next Generation Campus, using advanced wireless systems to enhance connectivity between people and information to the benefit of the entire University Heights neighborhood, serving both on and off campus communities. In the fall of 2015 the campaign goal was increased by $50 million in support of the construction of the Wellness and Events Center. To date, over $182 million has been raised of NJIT NEXT’s expanded $200 million goal.

The below table provides a summary of the University’s net position as of June 30, 2016, 2015, 2014, 2013 and 2012.

NJIT Net Position ($000s) As of June 30, 2016 2015 2014 2013 2012

Net investment in capital assets $138,838 $118,359 $104,903 $75,469 $78,147

Restricted for: Nonexpendable: Scholarships and fellowships 59,983 57,515 54,797 49,135 43,488 Instructional and other 11,383 10,251 9,951 9,817 9,709

Expendable: Capital projects 32,885 50,697 48,296 - - Scholarships and fellowships 8,486 11,610 12,962 6,688 5,336 Instructional and other 8,281 9,060 8,844 7,537 7,149 Research and programs 855 934 1,502 517 276 Debt service 6,445 6,275 5,020 5,660 4,430 Loans 1,070 1,060 1,050 1,041 1,034

Unrestricted 105,216 94,790 72,950 70,797 59,749

Net position prior to GASB 68 impact 373,442 360,551 320,275 226,661 209,318 Unrestricted GASB 68 impact (116,512) (109,399) - - - Total net position $256,930 $251,152 $320,275 $226,661 $209,318

A-20 Appendix A Outstanding Indebtedness ($000s)

The below table reflects outstanding indebtedness of the University as of June 30, 2016 and 2015.

June 30, 2016 June 30, 2015 General Obligation Bonds: 2015 Series A issue: Serial bonds (interest rates from 3.00% to 5.00%, due on $ 12,520 $ 12,520 various dates through fiscal year 2032) Step coupon bonds (interest rates from 2.50% to 5.50%, 15,080 15,080 final maturity in fiscal year 2036) Term bonds (interest rate at 5.00%, final maturity in fiscal 89,080 89,080 year 2046) 2012 Series A issue: Serial bonds (interest rates of 4.00% and 5.00%, due on 5,470 5,470 various dates through fiscal year 2028) Term bonds (interest rate at 5.00%, final maturity in 60,025 60,025 fiscal year 2043) 2012 Series B issue: Serial bonds (interest rates from 0.90% to 3.723%, due 25,390 29,615 on various dates through fiscal year 2026) Term bond (interest rate at 3.323%, maturity in fiscal 17,310 17,310 year 2025) Revenue Bonds (issued by NJ Educational Facilities Authority): 2010 Series H issue: Serial bonds (interest rates from 3.00% to 5.00%, due on 28,875 29,760 various dates through fiscal year 2026) Term bonds (interest rate at 5.00%, final maturity in 21,205 21,205 fiscal year 2032) 2010 Series I issue: Term bonds (interest rate at 6.41%, final maturity in 20,450 20,450 fiscal year 2041) 2001 Series H issue: Term bonds (interest rate at 6.05%, final maturity in 1,235 2,400 fiscal year 2017) Other Long Term Debt: Higher Education Capital Improvement Fund 20,627 21,936 Equipment Leasing Fund 1,280 1,429 TD Master Leases 3,709 4,996 New Jersey Economic Development Authority note 1,657 1,797 Capital Leases 1,190 86 Total $325,103 $333,159

NJIT plans to refinance portions of the 2010H, 2012A, and 2012B Bonds identified above, totaling approximately $63.6 million.

A-21 Appendix A Facilities and Capital Planning

The NJIT campus encompasses approximately 45 acres. Its 36 buildings contain approximately 3.5 million gross square feet. Of the total building space on campus, about 80% was constructed after 1965 with several new or fully rehabilitated structures having come on line in the past few years. Effective July 1, 1997, management of the Big Bear Solar Observatory in Big Bear Lake, California, and a dedicated array of solar radio telescopes at Owens Valley Radio Observatory in Owens Valley, California, became the responsibility of the Center for Solar Research at New Jersey Institute of Technology. In 2014, the University purchased the observatory in Big Bear Lake. The observatories and equipment are valued at approximately $12 million.

The physical facility of the campus continues to improve and expand. NJIT completed in June, 2009 the purchase of the historic Central High School building, which is now called the Central King Building. The complete renovation and renewal of this approximately 200,000 square foot, collegiate gothic building was completed in April 2017 providing flexible and adaptive facilities for the modern teaching and learning pedagogies. The first phase, completed in 2014, renovated the 3rd and 4th floors into bio-teaching laboratories and classrooms to accommodate approximately 900 students. The Department of Biology is now housed on the 4th floor, with laboratories and offices. Open spaces, whiteboards, pinup panels and audio/visual have been provided throughout the building to promote collaborative work and research by faculty, undergraduate and graduate students throughout the building. The balance of the academic and student support spaces opened in January 2017, providing classrooms, break out spaces, collaboration rooms, and student congregation spaces throughout the facility. Finally, the Martin Luther King Level opened in April 2017 as the home for the New Jersey Innovation Institute.

NJIT has other large projects currently in progress, funded through the 2015 Series A Bonds and the recent State bond issues. The projects funded through the 2015 Series A Bonds are the Wellness and Events Center and Science and Technology Park Parking Garage. The new 984 space parking deck was completed in August of 2016 and provided much needed capacity to the University. The 209,000 square foot Wellness and Events Center is currently under construction and expected to be completed in early Fiscal Year 2018. This multipurpose facility will support campus events, professional conferences, recreation, intramural, and the intercollegiate athletic needs of NJIT into the foreseeable future.

The 24,000 sq. ft. addition to the York Center for Environmental Science for the integration of life sciences and engineering will be completed in May 2017. In July 2016, NJIT was awarded $20M from the 2015 Higher Education Capital Facilities Program for the Integrated Makerspace project, which will upgrade the infrastructure of Faculty Memorial Hall. This facility was constructed in 1967 and was determined to have considerable renewal needs. In addition, a 9,100 square foot Makerspace will be constructed in the Guttenberg Information Technology Center, which will encourage active learning, creativity, and skill development through practice and training. Students learn real world, tangible skills such as product design and prototyping, manual and computerized metal and wood work, industrial metrology, and computer aided design. These skills prepare them to enter the workplace and take leading roles in manufacturing and product development.

NJIT has examined its facilities master planning needs as they align with the 2020 Vision Strategic Plan. Based on the recently completed space needs study, the ongoing and recently completed projects, together with the capital renewal and replacement projects funded by the University, will provide the needed facilities to implement the 2020 Vision Strategic Plan.

Future Borrowing:

Approximately $15 million of the 2017A borrowing will be used for strategic capital projects, with no additional debt foreseen in the near term.

A-22

APPENDIX B

INDEPENDENT AUDITORS’ REPORT AND FINANCIAL STATEMENTS OF NEW JERSEY INSTITUTE OF TECHNOLOGY

[THIS PAGE INTENTIONALLY LEFT BLANK] NEW JERSEY INSTITUTE OF TECHNOLOGY

Financial Statements and Management’s Discussion and Analysis Together with Report of Independent Certified Public Accountants

June 30, 2016 and 2015 NEW JERSEY INSTITUTE OF TECHNOLOGY June 30, 2016 and 2015 Table of Contents

Page

Report of Independent Certified Public Accountants 1

Management’s Discussion and Analysis 3

Financial Statements:

Statement of Net Position at June 30, 2016 and 2015 14

Statement of Revenues, Expenses, and Changes in Net Position for the years ended June 30, 2016 and 2015 15

Statement of Cash Flows for the years ended June 30, 2016 and 2015 16

Notes to Financial Statements:

1. Organization and Summary of Significant Accounting Policies 17

2. Cash and Cash Equivalents, Investments, and Deposits Held with Trustees 22

3. Capital Assets 26

4. Supplementary Statement of Net Position Detail 27

5. Noncurrent Liabilities 28

6. Long Term Debt 29

7. Compensated Absences 32

8. Retirement Programs 32

9. Investment Income 41

10. Condensed Combining Financial Statement Information 42

11. Net Position 46

12. Commitments and Contingencies 46

Required Supplementary Information:

Schedules of Proportionate Share of the Net Pension Liability – Last 10 Years 47

Schedules of Employer Contributions – Last 10 Years 48

Grant Thornton LLP 186 Wood Avenue Iselin, NJ 08830 T 732.516.5500 F 732.516.5502 GrantThornton.com linkd.in/GrantThorntonUS twitter.com/GrantThorntonUS

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Trustees of New Jersey Institute of Technology:

We have audited the accompanying financial statements of the business-type activities of New Jersey Institute of Technology (the University), a component unit of the State of New Jersey, as of and for the years ended June 30, 2016 and 2015, and the related notes to the financial statements, which collectively comprise the University’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the University’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the net position of the business-type activities of New Jersey Institute of Technology as of June 30, 2016 and 2015, and the changes in its net position and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis included on pages 3 through 13 and the Schedules of Proportionate Share of the Net Pension Liability – Last 10 Years and the Schedules of Employer Contributions – Last 10 Years included on pages 47 and 48 be presented to supplement the basic financial statements. Such supplementary information, although not a required part of the basic financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. This required supplementary information is the responsibility of management. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America. These limited procedures consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. However, we do not express an opinion or provide any assurance on the Management’s Discussion and Analysis, the Schedules of Proportionate Share of the Net Pension Liability – Last 10 Years, and the Schedules of Employer Contributions – Last 10 Years information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Iselin, New Jersey October 21, 2016

- 2 - NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

Introduction

The following discussion and analysis provides an analytical overview of the financial position and activities of New Jersey Institute of Technology (NJIT), Foundation at New Jersey Institute of Technology (the Foundation), New Jersey Innovation Institute, Inc. (NJII), and ten urban renewal limited liability companies (the UREs) (collectively, the University) at and for the years ended June 30, 2016 and 2015. This discussion has been prepared by management and should be read in conjunction with the financial statements and the notes thereto, which follow this section.

Since its founding in 1881, NJIT has been transformed from a local technical school to one of America’s top tier national research universities. While moving steadily to increasingly higher levels of excellence in educational performance, NJIT has become a research and development hub, participating in entrepreneurial development and building business partnerships through research and development initiatives. NJIT has evolved into an international presence, both in the scope of its educational programs, including on-site and distance learning offerings, attraction of international students to its programs, and through the reach of its educational, scientific, and technological influence at international forums and in international research projects.

NJIT is a public, student-centered, urban research university, committed to the pursuit of excellence in undergraduate, graduate, and continuing professional education, in the conduct of research with emphasis on applied and multi-disciplinary areas, in contributing to the economic development of New Jersey (the State), and in service to both its local communities and the broader society of the State and the nation. In fiscal year 2016, 410 full-time faculty members served 11,325 students. NJIT offers a diverse range of degree programs in an array of engineering and technology disciplines, computer and information science, architecture, applied sciences, management, statistics and actuarial science, including Ph.D. programs in nineteen professional areas, masters programs in fifty-nine specialties, and fifty baccalaureate degree programs. NJIT also operates a small business incubator whose mission is to accelerate the successful development of entrepreneurial companies through an array of business support resources and services.

NJIT was formally recognized as a body corporate and politic by The New Jersey Institute of Technology Act of 1995. The Foundation is a separately incorporated 501(c)(3) tax-exempt resource development organization that encourages private philanthropy on behalf of NJIT. NJII is a separately incorporated 501(c)(3) tax-exempt charitable organization that applies the intellectual and technological resources of NJIT to challenges identified by industry partners. The UREs operate residential buildings for NJIT student Greek organizations.

- 3 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

The Financial Statements

The University’s financial statements include a statement of net position at June 30, 2016 and 2015, and statements of revenues, expenses, and changes in net position and of cash flows for the years then ended. The financial statements are prepared in accordance with U.S. generally accepted accounting principles as promulgated by the Governmental Accounting Standards Board (GASB).

Effective July 1, 2015, the University adopted GASB Statement No. 72, Fair Value Measurement and Application, which clarifies the definition of fair value, establishes a framework for measuring fair value, provides additional fair value application guidance, and enhances disclosures of fair value measurements.

Financial Highlights

The University’s financial position at June 30, 2016 and 2015 was sound, with total assets of $799,276 and $770,653, total deferred outflows of resources of $22,719 and $6,534, total liabilities of $563,257 and $521,464, and total deferred inflows of resources of $1,808 and $4,571, respectively. Net position, which represents the excess of the University’s assets and deferred outflows of resources over its liabilities and deferred inflows of resources, totaled $256,930 and $251,152 at June 30, 2016 and 2015, respectively. The University’s net position increased $5,778 in fiscal year 2016, primarily due to an excess of net nonoperating and other revenues over the operating loss. The University’s net position decreased $69,123 in fiscal year 2015, primarily due to the cumulative effect of change in accounting principle as a result of the adoption of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, offset by an excess of net nonoperating and other revenues over the operating loss.

- 4 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

Statement of Net Position

The statement of net position presents the University’s financial position at June 30, 2016 and 2015, and is summarized as follows. The summarized statement of net position at June 30, 2014, is also presented for comparative purposes.

June 30, 2016 2015 2014

Current assets $ 137,872 $ 115,743 $ 101,594 Endowment investments 98,100 99,233 98,197 Capital assets, net 393,043 338,984 318,194 Other assets 170,261 216,693 93,499 Total assets 799,276 770,653 611,484 Deferred outflows of resources 22,719 6,534 2,362

Current liabilities 76,827 56,740 56,035 Long term debt, noncurrent portion 334,027 343,361 223,474 Other liabilities 152,403 121,363 13,644 Total liabilities 563,257 521,464 293,153 Deferred inflows of resources 1,808 4,571 418

Net investment in capital assets 138,838 118,359 104,903 Restricted nonexpendable 71,366 67,766 64,748 Restricted expendable 58,022 79,636 77,674 Unrestricted (11,296) (14,609) 72,950 Total net position $ 256,930 $ 251,152 $ 320,275

Current assets consist principally of cash and cash equivalents, grants and accounts receivable, net, deposits held with trustees, and short term investments. The increase in current assets at June 30, 2016 as compared to June 30, 2015 of $22,129 principally relates to increases in cash and cash equivalents, deposits held with trustees, and grants and accounts receivable, net. The increase in current assets at June 30, 2015 as compared to June 30, 2014 of $14,149 principally relates to increases in short term investments, grants and accounts receivable, net, deposits held with trustees, and cash and cash equivalents.

Current liabilities are comprised of accounts payable and accrued liabilities, the current portion of long term debt, unearned advance payments, and amounts due to affiliates. The increase in current liabilities at June 30, 2016 of $20,087 principally relates to increases in accounts payable and accrued liabilities and unearned advance payments. The increase in current liabilities at June 30, 2015 of $705 principally relates to increases in unearned advance payments, current portion of long term debt, and due to affiliates, partially offset by a decrease in accounts payable and accrued liabilities.

- 5 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

Excluding deposits held with trustees, which can only be used for debt service and facilities construction, and the current portion of long term debt, current assets exceeded current liabilities by $58,104 and $57,365 at June 30, 2016 and 2015, respectively. The University had $89,734 and $70,877 in cash and cash equivalents and short term investments to fund current operations, facilities rehabilitation projects, and other activities at June 30, 2016 and 2015, respectively. The net increase in cash and cash equivalents and short term investments at June 30, 2016 and 2015 of $18,857 and $6,942, respectively, principally relates to reimbursement from capital grants of a portion of the expenditures for the rehabilitation and renovation of an academic facility and advance payments from grants in fiscal year 2016, and increased tuition and fees cash collections in both fiscal years.

Endowment investments include gifts from donors that are to be invested in perpetuity, annuity funds, unrestricted funds established by NJIT as quasi-endowment, and the related income and appreciation. Except for quasi-endowments, which can be expended at the discretion of NJIT, only the realized income and appreciation can be spent for the purposes specified by the donors in the gift documents. Endowment investments decreased 1.1% and increased 1.1% during fiscal years 2016 and 2015, respectively, reflecting growth from new gifts, realized net investment gains, net decreases in the fair value of investments at June 30, 2016 and 2015, and endowment spending.

Capital assets increased 11.4% and 6.4% at cost during fiscal years 2016 and 2015, respectively. The fiscal year 2016 and 2015 increases result primarily from the construction in progress of a parking facility, a wellness and events center, and a state-of-the-art research facility; continued work on the rehabilitation and renovation of an academic facility; and campus facilities renovations; partially offset by the write-off of equipment and other assets no longer in service. The parking facility was completed in early fiscal year 2017, and completion of the wellness and events center and state-of- the-art research facility is expected in fiscal year 2018.

Other assets are comprised of investments, investments – capital construction, deposits held with trustees, and other noncurrent assets. The decrease in other assets at June 30, 2016 of $46,432 was principally due to the utilization of investments – capital construction and deposits held with trustees and the collection of Building Our Future receivables, recorded in other assets, for capital expenditures. The increase in other assets at June 30, 2015 of $123,194 principally relates to an increase in investments - capital construction, attributable to the 2015 Series A bond proceeds, partially offset by a decrease in deposits held with trustees.

Deferred outflows of resources consist of loss on defeasance of debt and certain changes in the net pension liability. The increase in deferred outflows of resources of $16,185 and $4,172 at June 30, 2016 and 2015, respectively, are principally the result of changes in actuarial assumptions and increases in the University’s proportionate share of the net pension liability.

Total long term debt at June 30, 2016 and 2015 totaled $344,565 and $353,327, respectively. In fiscal year 2015, the University issued 2015 Series A General Obligation Bonds in the amount of $116,680 to finance, in part, the construction of the parking facility and the wellness and events center referred to above.

Other liabilities consist of net pension liability, other noncurrent liabilities, and U.S. government grants refundable. The increase in other liabilities at June 30, 2016 of $31,040 principally relates to increases in net pension liability and other noncurrent liabilities, primarily the result of a new faculty

- 6 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015 separation incentive program. The increase in other liabilities at June 30, 2015 of $107,719 principally relates to the recording of the University’s net pension liability, partially offset by a decrease in other noncurrent liabilities.

Deferred inflows of resources consist of gain on defeasance of debt and certain changes in the net pension liability. The decrease in deferred inflows of resources of $2,763 at June 30, 2016 and the increase in deferred inflows of resources of $4,153 at June 30, 2015 principally relates to certain changes in the net pension liability.

Net investment in capital assets represents the University’s interests in land and land improvements, buildings and building improvements, equipment and other assets, and construction in progress, less related depreciation and amortization, and the debt incurred to finance their acquisition. Net investment in capital assets increased $20,479 and $13,456 during fiscal years 2016 and 2015, respectively, principally due to the increase in capital assets discussed above, partially offset by depreciation expense in both fiscal years 2016 and 2015, a net decrease in long term debt during fiscal year 2016, and a net increase in long term debt during fiscal year 2015.

Restricted nonexpendable net position represents the original value of additions to the University’s endowment and annuity funds. Restricted expendable net position includes gifts that are restricted to use for specific purposes by the donor, capital grants and gifts, endowment income, and other restricted sources. As discussed above, donor-restricted endowment funds represent gifts from donors that are to be invested in perpetuity. Annuity funds are given to the University to be invested with the stipulation that the University pay an agreed-upon amount to designated individuals for a period of time or for the beneficiary’s lifetime, after which period the remaining funds become part of the University’s endowment or are used for the purpose designated by the donor.

Restricted net position decreased $18,014 during fiscal year 2016, primarily due to decreases in restricted expendable net position for capital projects, resulting from the expenditures of capital grant funds; restricted expendable net positions for scholarships and fellowships and instructional and other, principally due to the net decrease in the fair value of investments at June 30, 2016; partially offset by an increase in restricted nonexpendable net position for scholarships and fellowships and instructional and other as a result of additions to permanent endowments. Restricted net position increased $4,980 during fiscal year 2015, primarily due to increases in restricted nonexpendable net position for scholarships and fellowships as a result of additions to permanent endowments; net realized investment gains; restricted expendable net position for capital projects, primarily resulting from a capital grant; and restricted expendable net position for debt service; partially offset by a decrease in restricted expendable net position for scholarships and fellowships, primarily due to the net decrease in the fair value of investments at June 30, 2015.

Unrestricted net position is all other net position that is available for general operations in support of the University’s mission. Even though unrestricted net position is not subject to external restrictions, management has designated a portion of the unrestricted net position for the following specified purposes. The June 30, 2014 unrestricted net position is also presented for comparative purposes.

- 7 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

June 30, 2016 2015 2014 Designated unrestricted net position: Quasi-endowments $ 12,384 $ 13,141 $ 13,413 Instructional and other 2,902 3,790 2,578 Construction and capital programs 31,770 22,265 18,655 Wellness and events center construction 10,000 5,000 - State bond funds required match 9,925 16,140 6,000 Debt service 6,546 4,804 4,558 Outstanding purchase orders 7,398 5,000 4,000 80,925 70,140 49,204 Undesignated unrestricted net position: Pension related (116,512) (109,399) - Operations 24,291 24,650 23,746 $ (11,296) $ (14,609) $ 72,950

Statement of Revenues, Expenses, and Changes in Net Position

The statement of revenues, expenses, and changes in net position presents the operating results and the nonoperating and other revenues and expenses of the University.

The components of revenues for the fiscal years ended June 30, 2016 and 2015 are as follows. The components of revenues for the fiscal year ended June 30, 2014 are also presented for comparative purposes:

Fiscal Year Ended June 30, 2016 2015 2014 Operating revenues: Student tuition and fees, net $ 135,189 $ 122,749 $ 112,253 Federal, State, and other grants and contracts 108,338 94,091 91,877 Auxiliary enterprises, net 15,721 14,357 13,337 Other operating revenues 3,974 3,267 3,070 Total operating revenues 263,222 234,464 220,537

Nonoperating and other revenues: State appropriations 87,532 80,890 92,086 Gifts and bequests, capital grants and gifts, and additions to permanent endowments 9,893 28,113 78,789 Investment income 17 2,294 14,701 Other nonoperating revenues, net 4,084 3,411 820 Total nonoperating and other revenues 101,526 114,708 186,396 Total revenues $ 364,748 $ 349,172 $ 406,933

- 8 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

The components of expenses for the fiscal years ended June 30, 2016 and 2015 are as follows. The components of expenses for the fiscal year ended June 30, 2014 are also presented for comparative purposes:

Fiscal Year Ended June 30, 2016 2015 2014 Operating expenses: Instruction $ 104,479 $ 91,111 $ 97,995 Research and programs 71,428 56,243 56,938 Public service 2,077 1,989 1,612 Academic support 30,438 27,091 27,294 Student services 24,866 21,444 20,426 Institutional support 52,346 45,683 40,522 Operation and maintenance of plant 20,367 20,449 19,751 Scholarships and fellowships 9,967 10,175 10,936 Depreciation 25,568 22,178 19,406 Auxiliary enterprises 8,299 8,569 9,937 Total operating expenses 349,835 304,932 304,817

Nonoperating expenses - interest expense 9,135 9,386 8,502 Total expenses $ 358,970 $ 314,318 $ 313,319

Student tuition and fees, auxiliary enterprises, and State appropriations are the primary sources of funding for the University’s operating expenses.

Student tuition and fees totaled $135,189, $122,749, and $112,253, net of scholarship allowances of $51,132, $46,588, and $42,885 in fiscal years 2016, 2015, and 2014, respectively. The fiscal year 2016 and 2015 increases are attributable to a strategic growth in enrollment and tuition and mandatory fees increases of 2.9% and 2.5%, respectively.

Auxiliary enterprises revenues, net of scholarship allowances of $4,554, $4,227, and $3,936 in fiscal years 2016, 2015, and 2014, respectively, increased 9.5% to $15,721 in fiscal year 2016 and 7.6% to $14,357 in fiscal year 2015, principally due to increased occupancy and residence hall charges in both fiscal years and the reopening of Redwood Hall in fiscal year 2015.

In accordance with GASB requirements, State appropriations are reported as nonoperating revenues despite the fact that their purpose is to fund operating activities.

- 9 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

The components of State appropriations are as follows:

Fiscal Year Ended June 30, 2016 2015 2014 Direct appropriations for general operating purposes $ 35,440 $ 37,696 $ 37,696 FICA and fringe benefits paid by the State for University employees 39,117 37,551 33,661 Fringe benefit equalization adjustment 12,975 5,643 20,729 $ 87,532 $ 80,890 $ 92,086

The fiscal year 2016 increase in State appropriations was the result of an equalization adjustment to the State’s fringe benefit rate and an increase in fringe benefits paid by the State, partially offset by a decrease in the direct appropriations for general operating purposes. The fiscal year 2015 decrease in State appropriations was primarily the result of an equalization adjustment to the State’s fringe benefit rate.

Federal, State, and other grants and contracts revenues, which include facilities and administrative costs recovery, primarily fund the University’s research and development activities and student financial assistance programs, and are comprised of the following:

Fiscal Year Ended June 30, 2016 2015 2014 Federal grants and contracts, including ARRA awards of $341, $1,059, and $8,666, respectively $ 80,635 $ 67,804 $ 66,908 State grants and contracts 23,590 22,092 21,012 Other grants and contracts 4,113 4,195 3,957 $ 108,338 $ 94,091 $ 91,877

Federal grants and contracts revenues increased 18.9% and 1.3% in fiscal years 2016 and 2015, respectively, due to increases in research grants and contracts and student financial assistance grants. State grants and contracts revenues increased 6.8% and 5.1% in fiscal years 2016 and 2015, respectively, due to increases in research grants and contracts and student financial assistance grants. Other grants and contracts revenues decreased 2.0% and increased 6.0% in fiscal years 2016 and 2015, respectively.

Private support from corporations, foundations, alumni, and other donors is an important factor in the University’s growth and development. Gifts and bequests totaled $2,468 and $3,672, and capital grants and gifts amounted to $3,240 and $21,470, in fiscal years 2016 and 2015, respectively. The fiscal year 2016 decrease in capital grants and gifts was principally due to the receipt of a Building Our Future award in fiscal year 2015. Additions to permanent endowments were $4,185 and $2,971 in fiscal years 2016 and 2015, respectively.

- 10 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

Investment income includes interest and dividends, as well as realized and unrealized gains and losses. During fiscal years 2016 and 2015, investment income of $17 and $2,294 was due to interest and dividends, realized net gain on sale of investments, and net decreases in the fair value of investments at June 30, 2016 and 2015.

Instruction, academic support, student services, and scholarships and fellowships expenses totaled $169,750, $149,821, and $156,651 in fiscal years 2016, 2015, and 2014, respectively. The increase of 13.3% in fiscal year 2016 is primarily due to increased salaries and fringe benefits due to the faculty separation incentive program, the fringe benefit equalization adjustment, and pension expense; increased consulting services expense and computer software maintenance and licenses expense. The decrease of 4.4% in fiscal year 2015 is primarily due to decreased salaries and fringe benefits due to the fringe benefit equalization adjustment and the faculty separation incentive program expense recorded in the prior year, as well as a decrease in scholarships and fellowships, partially offset by an increase in pension expense.

Research and programs expense increased 27.0% to $71,428 in fiscal year 2016, primarily as a result of increases in Federal and State research and programs expenditures, and decreased 1.2% to $56,243 in fiscal year 2015, primarily as a result of decreases in salaries and fringe benefits, due to the fringe benefit equalization adjustment, consulting and professional services expense, and a reclassification of pre-college program expenses to public service expense; partially offset by increases in pension expense and Federal and State research and programs expenditures.

Public service expense remained relatively constant in fiscal year 2016 after increasing 23.4% to $1,989 in fiscal year 2015. The fiscal year 2015 increase was primarily due to a reclassification of pre-college program expenses from research and programs expense and an increase in pension expense, partially offset by a reduction in service center expenses.

Institutional support expense increased 14.6% to $52,346 and 12.7% to $45,683 in fiscal years 2016 and 2015, respectively, primarily due to increases in salaries and fringe benefits, due to increased personnel and pension expense, increases in the allowance for doubtful student accounts, and consulting and professional services expense in both fiscal years, and the fringe benefit equalization adjustment in fiscal year 2016.

Operation and maintenance of plant expense remained relatively constant in fiscal year 2016, after increasing 3.5% to $20,449 in fiscal year 2015, primarily due to an increase in pension expense.

Auxiliary enterprises expense decreased 3.2% to $8,299 in fiscal year 2016, primarily due to decreases in consulting and professional services expense and operation and maintenance costs, and decreased 13.8% to $8,569 in fiscal year 2015, primarily due to a decrease in operation and maintenance costs, partially offset by an increase in pension expense.

During fiscal years 2016 and 2015, the University incurred long term debt interest costs of $14,148 and $10,431, of which $5,013 and $1,045, respectively, was capitalized and will be amortized over the estimated useful lives of the associated capital assets.

- 11 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

Summary and Outlook

The University is in a sound financial position at June 30, 2016. Overall enrollment increased 6.4% for the fiscal 2016 academic year. The University continues to pursue its strategy of enhancing its research and development activities. The University’s fundraising activities are successful, and have generated a significant endowment.

The University’s debt is rated Al by Moody’s Investors Service and A by Standard & Poor’s. Moody’s affirmed its rating in fiscal year 2015 with a negative outlook, noting “the negative outlook reflects uncertainty around state funding and a heightened risk that NJIT will have to cover an increasing portion of fringe benefits.” Moody’s further noted the University’s “A1 rating reflects the University’s niche market as the sole public stand-alone technical research university in the state, resulting in strong student demand. NJIT is relatively well positioned to absorb some funding cuts due to its positive operations, growing enrollment, and net tuition revenue. The rating also incorporates relatively moderate financial resources and liquidity.” Standard & Poor’s March 2015 report noted “The outlook is stable. The rating reflects the University’s strong enterprise profile with a niche in engineering and research, the steady enrollment growth, and a stable and proactive management team. In addition, the University’s rating reflects a limited dependence on ongoing funding from New Jersey for operations since it receives considerable state support; we, however, believe that other revenue sources provide the majority of revenue and that these other sources are of sufficient strength and breadth to allow us to rate the University at the same rating as the state.”

The University’s relations with its employees are good. Contracts are in place with three of the seven labor unions; one contract is being finalized; negotiations with two unions are ongoing; negotiations have not yet commenced with another. It is anticipated that remaining negotiations will come to mutually favorable conclusions.

The University’s endowment is prudently managed, with a broad-based asset allocation. The University’s endowment investment strategy is designed to maintain purchasing power of pooled endowment fund assets, with an emphasis on total return, via a group of managers, each focused on their sector of the asset allocation, limited exposure to sub-prime investments, and the use of alternative investments.

As part of its long range plan, the University expects that its activities will continue to increase the total operating budget. As a result of the State’s reduction in funding for higher education over the past several fiscal years, management initiated steps to increase alternative funding sources and to reduce expenses, including increases in enrollment, cost containment initiatives, a more aggressive research and development program, a more intensive fund raising program, and increases in tuition and fees. Included in the University’s strategic plan are a greater emphasis on expanded outreach programs, increased scholarships, the establishment of new programs and extension sites in order to generate increases in enrollment, and the hiring of new faculty members who have a stronger inclination to become involved in research activities in addition to their teaching responsibilities in order to expand its research and development program. The University’s efforts in these resource generating and expense management initiatives have been and are anticipated to continue to be successful.

- 12 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Management’s Discussion and Analysis (Dollars in thousands) June 30, 2016 and 2015

In fiscal year 2016, the State authorized a second round of grant funding from the 2012 Building Our Future Bond Act, as well as new grant awards from the Higher Education Capital Improvement Fund. The University anticipates receiving $20 million in fiscal year 2017 for classroom and lab space renovations. Chief among the projects will be the creation of Makerspace at NJIT, a state-of-the-art facility that will heed the call for innovation, invention, and production in today’s burgeoning science, technology, engineering, and math economy. In addition, the investment will continue the University’s commitment to the renewal and replacement of its facilities and infrastructure to provide current teaching and research facilities for our students, faculty, and staff. The University will be responsible for a portion of the debt service payments and related program expenses.

Management has been and will continue to be an active participant in the State’s planning process, in order to ensure that its voice is heard and the University’s needs are properly presented and considered in the State’s financial deliberations.

All in all, the University’s management is of the opinion that the University’s financial condition is sound.

- 13 - NEW JERSEY INSTITUTE OF TECHNOLOGY Statement of Net Position (Dollars in thousands) At June 30, 2016 and 2015

2016 2015 Assets Current assets: Cash and cash equivalents $ 79,378 $ 60,660 Short term investments 10,356 10,217 Grants and accounts receivable, net 33,235 31,626 Deposits held with trustees 13,479 11,604 Other current assets 1,424 1,636 Total current assets 137,872 115,743 Noncurrent assets: Endowment investments 98,100 99,233 Investments 20,351 18,819 Investments - capital construction 102,037 129,069 Deposits held with trustees 9,913 22,070 Other assets 37,960 46,735 Capital assets, net of accumulated depreciation of $354,147 and $331,499, respectively 393,043 338,984 Total noncurrent assets 661,404 654,910 Total assets $ 799,276 $ 770,653

Deferred outflows of resources Loss on defeasance of debt, net $ 1,696 $ 1,972 Pension related 21,023 4,562 Total deferred outflows of resources $ 22,719 $ 6,534

Liabilities Current liabilities: Accounts payable and accrued liabilities $ 47,614 $ 30,708 Long term debt, current portion 10,538 9,966 Unearned advance payments 12,965 10,714 Due to affiliates 5,710 5,352 Total current liabilities 76,827 56,740 Noncurrent liabilities: Long term debt 334,027 343,361 Other noncurrent liabilities 14,444 9,687 Net pension liability 135,999 109,736 U.S. government grants refundable 1,960 1,940 Total noncurrent liabilities 486,430 464,724 Total liabilities $ 563,257 $ 521,464 Deferred inflows of resources Gain on defeasance of debt, net $ 272 $ 346 Pension related 1,536 4,225 Total deferred inflows of resources $ 1,808 $ 4,571 Net Position Net investment in capital assets $ 138,838 $ 118,359 Restricted for: Nonexpendable: Scholarships and fellowships 59,983 57,515 Instructional and other 11,383 10,251 Expendable: Capital projects 32,885 50,697 Scholarships and fellowships 8,486 11,610 Instructional and other 8,281 9,060 Research and programs 855 934 Debt service 6,445 6,275 Loans 1,070 1,060 Unrestricted (note 11) (11,296) (14,609) Total net position $ 256,930 $ 251,152

The accompanying notes are an integral part of these financial statements. - 14 - NEW JERSEY INSTITUTE OF TECHNOLOGY Statement of Revenues, Expenses, and Changes in Net Position (Dollars in thousands) For the years ended June 30, 2016 and 2015

2016 2015 Operating revenues Student tuition and fees, net of scholarship allowances of $51,132 and $46,588, respectively $ 135,189 $ 122,749 Federal grants and contracts 80,635 67,804 State grants and contracts 23,590 22,092 Other grants and contracts 4,113 4,195 Auxiliary enterprises, net of scholarship allowances of $4,554 and $4,227, respectively 15,721 14,357 Other operating revenues 3,974 3,267 Total operating revenues 263,222 234,464 Operating expenses Instruction 104,479 91,111 Research and programs 71,428 56,243 Public service 2,077 1,989 Academic support 30,438 27,091 Student services 24,866 21,444 Institutional support 52,346 45,683 Operation and maintenance of plant 20,367 20,449 Scholarships and fellowships 9,967 10,175 Depreciation 25,568 22,178 Auxiliary enterprises 8,299 8,569 Total operating expenses 349,835 304,932 Operating loss (86,613) (70,468) Nonoperating revenues (expenses) State appropriations 87,532 80,890 Gifts and bequests 2,468 3,672 Interest expense (9,135) (9,386) Investment income 17 2,294 Other nonoperating revenues, net 4,084 3,411 Net nonoperating revenues 84,966 80,881 (Loss) income before other revenues (1,647) 10,413 Other revenues Capital grants and gifts 3,240 21,470 Additions to permanent endowments 4,185 2,971 Total other revenues 7,425 24,441 Increase in net position 5,778 34,854 Net position, beginning of year 251,152 320,275 Cumulative effect of change in accounting principal - (103,977) Net position, end of year $ 256,930 $ 251,152

The accompanying notes are an integral part of these financial statements. - 15 - NEW JERSEY INSTITUTE OF TECHNOLOGY Statement of Cash Flows (Dollars in thousands) For the years ended June 30, 2016 and 2015

2016 2015 Cash flows from operating activities Student tuition and fees $ 133,116 $ 124,843 Grants and contracts 108,741 90,401 Payments for salaries and benefits (178,617) (165,970) Payments for goods and services (75,118) (70,817) Payments for scholarships and fellowships (9,967) (10,175) Loans issued to students - (519) Loans collected from students 356 289 Auxiliary enterprises 15,686 14,440 University programs 332 2,484 Affiliates 360 789 Other receipts (payments) 3,969 (194) Net cash used by operating activities (1,142) (14,429) Cash flows from noncapital financing activities State appropriations 47,346 49,444 Gifts and bequests for other than capital purposes 3,128 2,599 Additions to permanent endowments 4,013 2,832 Other receipts 11,683 2,803 Net cash provided by noncapital financing activities 66,170 57,678 Cash flows from capital financing activities Proceeds from capital debt - 130,236 Mortgage payments received 126 253 Capital grants and gifts 1,035 21,050 Purchase of capital assets (63,016) (45,920) Principal paid on long term debt (9,495) (8,815) Interest paid on long term debt (13,259) (9,589) Purchase of investments – capital construction (1,163) (129,128) Sale of investments – capital construction 27,983 - Deposits with trustees (19,485) (36,310) Withdrawals from trustees 29,767 42,084 Net cash used by capital financing activities (47,507) (36,139) Cash flows from investing activities Proceeds from sales and maturities of investments 29,567 35,001 Interest and dividends on investments 3,832 1,662 Purchase of investments (32,202) (41,860) Net cash provided (used) by investing activities 1,197 (5,197) Net increase in cash and cash equivalents 18,718 1,913 Cash and cash equivalents, beginning of year 60,660 58,747 Cash and cash equivalents, end of year $ 79,378 $ 60,660

Reconciliation of operating loss to net cash used by operating activities Operating loss $ (86,613) $ (70,468) Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 25,568 22,178 Noncash operating expenses 47,648 37,609 Changes in assets and liabilities: Grants and accounts receivable (2,885) (4,507) Other assets, current and noncurrent 82 (145) Accounts payable and accrued liabilities 11,129 (1,288) Unearned advance payments 3,571 1,403 Due to affiliates 358 789 Net cash used by operating activities $ (1,142) $ (14,429)

Noncash transactions: State appropriations for fringe benefits $ 40,702 $ 31,346 Gifts and bequests for other than capital purposes (685) 1,073 Investment income 1 6 Gifts for capital purposes 2,205 420 Additions to permanent endowments 172 139 Capital assets 9,040 (4,000) Capital leases 1,514 101

The accompanying notes are an integral part of these financial statements. - 16 - NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

1. Organization and Summary of Significant Accounting Policies

New Jersey Institute of Technology (NJIT), a public research university, includes six collegiate units: Newark College of Engineering, Ying Wu College of Computing Sciences, College of Architecture and Design, College of Science and Liberal Arts, Martin Tuchman School of Management, and Albert Dorman Honors College; a graduate division; a continuing education program; and a number of research centers. Fields of study include engineering, computer science, architecture, applied sciences, management, statistics, and actuarial science. NJIT offers programs and courses leading to bachelors, masters, and doctoral degrees, and also conducts an extensive research program.

The New Jersey Institute of Technology Act of 1995 established NJIT as a body corporate and politic and determined that the exercise of NJIT’s powers was a public and essential government function. NJIT has its origins in an 1881 New Jersey statute.

Foundation at New Jersey Institute of Technology (the Foundation) is a component unit of NJIT. The Foundation raises and manages funds to support the further development and growth of programs at NJIT. Because of the significance of its operational and financial relationships with NJIT and because it exclusively benefits NJIT, the Foundation’s financial statements are combined and reported on a blended basis with those of NJIT. Copies of the Foundation’s financial statements can be obtained by writing to Foundation at New Jersey Institute of Technology, University Heights, Newark, New Jersey 07102, Attention: University Advancement Office.

New Jersey Innovation Institute, Inc. (NJII) is a component unit of NJIT. NJII applies the intellectual and technological resources of NJIT to challenges identified by industry partners in order to spur product creation and enhancement, develop solutions for sector-wide and/or company-focused challenges, and serve as a catalyst for regional economic growth. Because of the significance of its operational and financial relationships with NJIT, NJII’s financial statements are combined and reported on a blended basis with those of NJIT. Copies of NJII’s financial statements can be obtained by writing to New Jersey Innovation Institute, Inc., c/o New Jersey Institute of Technology, University Heights, Newark, New Jersey 07102.

Ten urban renewal limited liability companies (the UREs) are component units of NJIT. The UREs operate residential buildings for NJIT student Greek organizations. Because of the significance of their operational and financial relationships with NJIT, the UREs’ financial statements are combined and reported on a blended basis with those of NJIT.

Pursuant to the provisions of Governmental Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, and GASB Statement No. 61, The Financial Reporting Entity: Omnibus, NJIT, which is financially dependent on the State of New Jersey (the State), is considered to be a component unit of the State for its financial reporting purposes. Accordingly, the financial statements of NJIT, the Foundation, NJII, and the UREs (collectively, the University) are included in the State’s Comprehensive Annual Financial Report.

- 17 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

(a) Basis of Presentation The University’s financial statements have been prepared on the accrual basis of accounting using the economic resources measurement focus, in accordance with U.S. generally accepted accounting principles as promulgated by the GASB. All significant transactions between NJIT, the Foundation, NJII, and the UREs have been eliminated.

(b) Use of Estimates The financial statements include estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the statement of net position dates, as well as the reported amounts of revenues and expenses for the fiscal years then ended. Actual results could differ from those estimates.

(c) Cash and Cash Equivalents The University considers money market funds, investments with original maturities of three months or less, and investments in sweep accounts with original maturities of twelve months or less to be cash equivalents, except for those included in endowment investments and deposits held with trustees.

(d) Fair Value Measurement The University’s investments are measured at fair value using valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs are based on market assumptions. The fair value hierarchy is comprised of the following three levels of inputs, of which the first two are considered observable and the last unobservable: Level 1: Quoted prices in active markets for identical assets. Level 2: Inputs other than Level 1 that are observable either directly or indirectly, such as quoted prices in markets that are not as active, or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that are supported by little or no market activity. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of input significant to the fair value measurement. The categorization of an investment is based upon its pricing transparency and liquidity and does not necessarily correspond to the University’s perceived risk of that investment. (e) Investments and Deposits Held with Trustees Investments and deposits held with trustees include investments in marketable equity securities, debt instruments, and mutual funds and are carried at fair value, based on quoted market prices.

- 18 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Hedge and other investment funds are carried at estimated fair value based principally on the Net Asset Values (NAV) reported by the fund managers, which are reviewed by management for reasonableness. Those estimated fair values may differ from the values that would have been used had a ready market for these securities existed.

Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, changes in the values of investment securities could occur. Such changes could materially affect the amounts reported in the statement of net position.

(f) Capital Assets Capital assets are carried at cost or, in the case of gifts, fair value at date of donation. Expenditures for replacements are capitalized, and the replaced items are retired. Gains or losses resulting from disposal of property are included in other nonoperating revenues, net.

Depreciation is calculated on the straight-line basis. The University’s capital assets policy establishes the following capitalization thresholds and estimated useful lives:

Capitalization Estimated Threshold Useful Life

Land improvements $ 50,000 20 years Buildings and building improvements 50,000 20 to 40 years Software 50,000 5 to 10 years Equipment and other assets 5,000 3 to 10 years

(g) Due to Affiliates Due to affiliates consists of amounts the University is holding as agent for the following entities:

June 30, 2016 2015

NJEDge.Net $ 4,298 $ 4,291 Student organizations 1,054 873 Other organizations 358 188 $ 5,710 $ 5,352

(h) Classification of Net Position The University classifies its resources into three net position categories:

Net investment in capital assets is comprised of land and land improvements, buildings and building improvements, equipment and other assets, and construction in progress of the University, net of depreciation and amortization and the indebtedness incurred to finance their acquisition and construction. Title to capital assets acquired through research - 19 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

grants and contracts remains with the University at the conclusion of the grant or contract period with the permission of the grantor.

Restricted nonexpendable net position is comprised of endowment and annuity funds. Endowments are subject to restrictions of gift instruments requiring that the principal be invested in perpetuity. Annuity funds consist of gift annuities and charitable remainder unitrusts (Unitrusts) which are given to the University to be invested with the stipulation that the University pay an agreed-upon amount to designated individuals for a period of time or for the beneficiary’s lifetime. At the termination of the agreement, the remaining funds either become part of the University’s endowment or are used for the purpose designated by the donor.

Restricted expendable net position includes gifts that are restricted to use for specific purposes by the donor, capital grants and gifts, endowment income and appreciation, and other restricted resources. Funds that are restricted are utilized only for the specified purposes.

Unrestricted net position is derived principally from student tuition and fees, gifts and bequests, and investment income, and is expended to meet the objectives of the University. The University designates portions of its unrestricted net position for certain specific purposes (see Note 11).

The University’s policy is to first utilize available restricted expendable, and then unrestricted, resources in the conduct of its operations.

(i) Classification of Revenue and Expense Operating revenues are those that result from the provision of services related to the University’s principal purposes of instruction and research, and are generally associated with exchange transactions. Nonoperating revenues result from activities that are not directly related to the University’s principal purposes, but that exist in order to support them, and generally consist of nonexchange transactions. Other revenues arise from nonexchange transactions which provide funding for acquisitions of capital assets and additions to permanent endowments.

Interest expense is reported as a nonoperating activity.

(j) Revenue Recognition Student tuition and fees revenues are recognized in the period earned. Student tuition and fees collected in advance of the fiscal year-end are recorded as unearned advance payments in the statement of net position.

Grants and contracts revenues are recognized when the related expenditures are incurred. The unexpended portion of advance grant payments is recorded as unearned advance payments in the statement of net position.

Investment income, which includes interest, dividends, and realized and unrealized gains and losses, is recognized on the accrual basis. Gains and losses on investments are determined using specific identification, except for mutual funds, which are based on average cost. - 20 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Gifts and bequests are recorded upon receipt by the University. Pledges, other than endowment, are recognized as gift income and recorded at their present value. Additions to permanent endowments are recognized upon their receipt.

(k) Facilities and Administrative Costs Recovery Facilities and administrative costs are recovered at rates specified under the various grants and contracts or at a predetermined rate negotiated with the U.S. Department of Health and Human Services, the University’s cognizant Federal agency, and are recorded as grants and contracts revenues as expenditures are incurred.

(l) Auxiliary Activities Auxiliary activities consist primarily of residence hall and parking operations.

(m) Fringe Benefits Paid by the State Certain fringe benefits for the University’s employees are paid by the State. Such amounts ($52,092 and $43,194 in fiscal years 2016 and 2015, respectively) are included in State appropriations. The offsetting expenses are recorded within the appropriate operating expense categories.

(n) Risk Management The University carries commercial insurance covering its risks of loss related to real and personal property, personal injuries, torts, errors and omissions, environmental damage, and natural and other unforeseen disasters.

(o) Tax Status NJIT, the Foundation, and NJII have received determination letters from the Internal Revenue Service stating that they are organizations as described in Sections 115(a)(2), 501(c)(3), and 501(c)(3), respectively, of the Internal Revenue Code (the Code) and, therefore, are exempt from Federal income taxes under Section 501(a) of the Code on income generated by activities that are substantially related to their tax-exempt purposes. The UREs, which are wholly-owned limited liability companies, have the same tax status as NJIT.

(p) Reclassifications Certain prior year amounts have been reclassified in the Statement of Cash Flows to conform with the current year’s presentation.

- 21 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

2. Cash and Cash Equivalents, Investments, and Deposits Held with Trustees

Cash and cash equivalents, comprised of cash and money market funds, total $79,378 and $60,660 at fair value ($79,378 and $60,660 at cost) at June 30, 2016 and 2015, respectively.

The cost and fair value of investments and deposits held with trustees, and their fair value measurements within the fair value hierarchy, are as follows:

June 30, 2016 Fair Value Measurements Cost Fair Value Level 1 Level 2 Level 3 Investments: Money market funds $ 13,397 13,397$ $ 12,118 $ 1,279 $ - Certificates of deposit 3,000 3,000 3,000 - - U.S. Treasury and government agency bonds 23,728 23,945 6,067 17,878 - Commercial paper 29,623 29,716 - 29,716 - Corporate equity securities 34,130 40,802 40,802 - - Corporate debt securities 43,055 42,730 1,441 41,289 - Mutual equity funds 24,506 24,831 24,723 108 - Mutual bond funds 26,711 26,316 26,316 - - Hedge and other investment funds 24,152 26,107 2,373 - 23,734 222,302 230,844 116,840 90,270 23,734 Deposits held with trustees: Money market funds 23,392 23,392 8,990 14,402 - $ 245,694 $ 254,236 $ 125,830 $ 104,672 $ 23,734

June 30, 2015 Fair Value Measurements Cost Fair Value Level 1 Level 2 Level 3 Investments: Money market funds $ 8,234 8,234$ 6,398$ $ 1,836 $ - Certificates of deposit 22,350 22,344 - 22,344 - U.S. Treasury and government agency bonds 34,647 34,680 6,453 28,227 - Commercial paper 32,070 32,083 - 32,083 - Corporate equity securities 32,847 39,997 39,997 - - Corporate debt securities 43,996 43,951 2,859 41,092 - Mutual equity funds 25,778 27,055 26,938 117 - Mutual bond funds 23,197 23,332 12,988 10,344 - Hedge and other investment funds 22,362 25,662 2,652 - 23,010 245,481 257,338 98,285 136,043 23,010 Deposits held with trustees: Money market funds 32,363 32,363 7,660 24,703 - U.S. Treasury and government agency bonds 1,310 1,311 - 1,311 - 33,673 33,674 7,660 26,014 - $279,154 $291,012 $105,945 $162,057 $ 23,010

- 22 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Endowment investments totaling $3,684 and $3,876 at fair value ($3,305 and $3,393 at cost) at June 30, 2016 and 2015, respectively, are held and administered by external trustees, while the remainder are held and administered by the University.

Hedge and other investment funds are comprised of directional and multi-strategy funds, private equity, and real assets. The University is committed to invest an additional $3,850 in these funds over the next several fiscal years.

Investments – capital construction represent the proceeds of the 2015 Series A bonds (see Note 6). These funds are separately invested, and are designated for the costs of construction of a wellness and events center and a parking facility.

Deposits held with trustees represent restricted funds held by U.S. Bank and The Bank of New York Mellon under terms of the revenue bond and debt agreements with the New Jersey Educational Facilities Authority (NJEFA), and by U.S. Bank under terms of the general obligation bond agreements (see Note 6). At June 30, 2015, $1,310 was required to be maintained in accordance with the mortgage bond indenture agreement.

The University invests its endowment funds in accordance with applicable limitations set forth in gift instruments or guidelines established by NJIT’s Board of Trustees and the Foundation’s Board of Overseers. The University’s investment strategy is to maintain purchasing power of pooled endowment fund assets, with an emphasis on total return. The following are the University’s aggregate allocation guidelines by asset class: equities, up to 70%; real assets, up to 20%; multi-strategy hedges, up to 25%; and fixed income instruments, up to 35%. There are further allocation guidelines for specific investment categories within each asset class. The University may also invest in below investment grade bonds as equity substitutes within the overall allocation for equities.

Custodial credit risk - deposits is the risk that, in the event of the failure of a depository financial institution, the University will not be able to recover deposits that are in that institution’s possession. The University’s investment policy does not address custodial credit risk - deposits. Cash and cash equivalents have a bank balance of $84,348 and $63,265, including cash held by depositories of $3,376 and $1,697 at June 30, 2016 and 2015, respectively, of which $845 and $841 are insured by the Federal Deposit Insurance Corporation (FDIC). Cash and cash equivalents of $500 at both June 30, 2016 and 2015 are insured by the Securities Investor Protection Corporation (SIPC); amounts in excess are neither collateralized nor insured.

Custodial credit risk - investments is the risk that, in the event of the failure of a counterparty, the University will not be able to recover the value of the investments that are in that counterparty’s possession. The University’s investment policy does not address custodial credit risk - investments. The University’s investment securities are exposed to custodial credit risk if the securities are uninsured and unregistered and held by the counterparty, or by its trust department or agent, but not in the University’s name. At June 30, 2016 and 2015, $250,551 and $287,135, respectively, of investments and deposits held with trustees are either insured or held by the University or its agent in the University’s name.

- 23 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The University’s investment policy places no limitation on the ratings for debt instruments. U.S. Treasury and government agency bonds are considered to have no credit risk. The money market funds and mutual bond funds included in the University’s investment portfolio are not rated. The University’s investments in commercial paper and corporate debt securities are rated as follows by Standard & Poor’s:

June 30, Rating 2016 2015

Commercial paper A-1+ $ 5,973 $ - Commercial paper A-1 23,743 32,083 Total commercial paper 29,716 32,083

Corporate debt securities AA+ 4,293 4,317 Corporate debt securities AA 4,268 4,355 Corporate debt securities AA- 6,338 6,396 Corporate debt securities A+ 2,014 5,098 Corporate debt securities A 12,629 13,989 Corporate debt securities A- 7,881 5,761 Corporate debt securities BBB+ 5,299 3,240 Corporate debt securities BBB 6 792 Corporate debt securities BBB- 2 3 Total corporate debt securities 42,730 43,951 $ 72,446 $ 76,034

Concentration of credit risk is the risk of loss attributed to the magnitude of the University’s investment in a single issuer. There is no limit on the amount the University may invest in any issuer. The University’s investments are diversified and are not currently exposed to this risk.

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The University’s investment policy does not limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. At June 30, 2016 and 2015, fixed income investments included in cash and cash equivalents, investments, and deposits held with trustees have the following maturities:

- 24 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

June 30, 2016 Investment Maturities (in years) Less Fair Value Than 1 1 to 5 5 to 10

Money market funds $ 114,573 $ 114,573 $ - $ - Certificates of deposit 3,000 3,000 - - U.S. Treasury and government agency bonds 23,945 16,361 4,295 3,289 Commercial paper 29,716 29,716 - - Corporate debt securities 42,730 37,721 4,979 30 Mutual bond funds 26,316 10,414 15,443 459 $ 240,280 $ 211,785 $ 24,717 $ 3,778 June 30, 2015 Investment Maturities (in years) Less Fair Value Than 1 1 to 5 5 to 10

Money market funds $ 99,640 $ 99,640 $ - $ - Certificates of deposit 22,344 22,344 - - U.S. Treasury and government agency bonds 35,991 1,870 30,157 3,964 Commercial paper 32,083 32,083 - - Corporate debt securities 43,951 5,705 38,221 25 Mutual bond funds 23,332 10,422 12,752 158 $ 257,341 $ 172,064 $ 81,130 $ 4,147

A portion of the University’s endowment investments are held in an endowment investment pool. The cost and fair value of the pooled investments are as follows:

June 30, 2016 2015 Cost Fair Value Cost Fair Value

Money market funds $ 1,716 $ 1,716 $ 1,701 $ 1,701 Corporate equity securities 28,560 34,388 27,638 34,279 Mutual equity funds 14,090 14,054 17,472 18,382 Mutual bond funds 15,279 14,883 11,870 12,029 Hedge and other investment funds 23,848 25,754 22,011 25,288 $ 83,493 $ 90,795 $ 80,692 $ 91,679

Endowment investment pool units are assigned to new gifts based upon the value of the pool at the end of the quarter in which the gifts are received. There were 428,964 and 408,426 pool units with a fair unit value of $211.66 and $224.47 at June 30, 2016 and 2015, respectively.

- 25 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

For the years ended June 30, 2016 and 2015, the average (loss) return for the endowment investment pool was (1.4%) and 1.6%, respectively.

The spending policy for endowment funds requires an annual calculation based on a three year rolling average of the fair value per pool unit. The spending rates for the years ended June 30, 2016 and 2015 were 4.9% and 5.0%, respectively. The University complies with the State’s “Uniform Prudent Management of Institutional Funds Act”, which governs the management and use of funds held by it.

3. Capital Assets

The activity in capital assets and accumulated depreciation for the years ended June 30, 2016 and 2015 was as follows:

June 30, Placed Into June 30, 2015 Additions Retirements Service 2016 Depreciable assets: Land improvements $ 12,218 $ - $ - $ - $ 12,218 Buildings and building improvements 520,186 - - 6,929 527,115 Equipment and other assets 106,727 8,517 (2,963) 1,431 113,712 639,131 8,517 (2,963) 8,360 653,045 Accumulated depreciation: Land improvements 5,028 564 - - 5,592 Buildings and building improvements 250,460 16,220 - - 266,680 Equipment and other assets 76,011 8,784 (2,920) - 81,875 331,499 25,568 (2,920) - 354,147 307,632 (17,051) (43) 8,360 298,898 Nondepreciable assets: Land 18,375 - - - 18,375 Construction in progress 12,977 71,153 - (8,360) 75,770 $ 338,984 $ 54,102 $ (43) $ - $ 393,043

June 30, Placed Into June 30, 2014 Additions Retirements Service 2015 Depreciable assets: Land improvements $ 11,479 $ - $ - 739$ $ 12,218 Buildings and building improvements 456,155 - - 64,031 520,186 Equipment and other assets 98,026 5,609 (2,583) 5,675 106,727 565,660 5,609 (2,583) 70,445 639,131 Accumulated depreciation: Land improvements 4,402 626 - - 5,028 Buildings and building improvements 235,846 14,614 - - 250,460 Equipment and other assets 71,650 6,938 (2,577) - 76,011 311,898 22,178 (2,577) - 331,499 253,762 (16,569) (6) 70,445 307,632 Nondepreciable assets: Land 18,375 - - - 18,375 Construction in progress 46,057 37,365 - (70,445) 12,977 $ 318,194 $ 20,796 $ (6) $ - $ 338,984

- 26 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

4. Supplementary Statement of Net Position Detail

June 30, 2016 2015 Grants and accounts receivable: Federal and State grants and accounts receivable $ 29,347 $ 27,446 Student accounts receivable 6,286 4,365 Program services accounts receivable 1,175 673 Other grants and accounts receivable 773 1,393 Pledges receivable, current portion 678 1,107 Student loans receivable, current portion 268 289 Accrued interest receivable 283 327 38,810 35,600 Less: allowance for doubtful accounts 5,575 3,974 $ 33,235 $ 31,626 Other assets, noncurrent: Building Our Future Bonds proceeds receivable $ 31,297 $ 39,659 Student loans receivable, net 1,646 1,981 Mortgages receivable 3,556 3,682 Pledges receivable, net 467 1,022 Other 994 391 $ 37,960 $ 46,735 Accounts payable and accrued liabilities: Salaries and fringe benefits $ 15,576 $ 13,236 Accrued interest expense 7,128 5,659 Accounts payable - construction 12,127 3,087 Accounts payable - other 10,703 6,419 Other noncurrent liabilities, current portion 2,080 2,307 $ 47,614 $ 30,708

- 27 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

5. Noncurrent Liabilities

The activity in noncurrent liabilities for the years ended June 30, 2016 and 2015 was as follows:

June 30, June 30, Current 2015 Additions Reductions 2016 Portion

Long term debt $ 333,159 $ 1,439 $ (9,495) $ 325,103 $ 9,708 Unamortized net premium 20,168 75 (781) 19,462 830 Total long term debt 353,327 1,514 (10,276) 344,565 10,538

Retirement incentive programs 5,913 5,755 (1,538) 10,130 1,392 Annuity funds liability 977 262 (335) 904 159 Insurance liability reserve 1,442 - - 1,442 - Compensated absences 3,177 477 (318) 3,336 325 Other 485 505 (278) 712 204 Total other noncurrent liabilities 11,994 6,999 (2,469) 16,524 2,080

Net pension liability 109,736 27,717 (1,454) 135,999 - U.S. government grants refundable 1,940 38 (18) 1,960 -

$ 476,997 $ 36,268 $ (14,217) $ 499,048 $ 12,618

June 30, June 30, Current 2014 Additions Reductions 2015 Portion

Long term debt $ 225,193 116,781$ (8,815)$ 333,159$ 9,185$ Unamortized net premium 7,348 13,556 (736) 20,168 781 Total long term debt 232,541 130,337 (9,551) 353,327 9,966

Retirement incentive programs 7,519 134 (1,740) 5,913 1,801 Annuity funds liability 1,116 473 (612) 977 165 Insurance liability reserve 1,441 2 (1) 1,442 - Compensated absences 3,295 140 (258) 3,177 260 Other 438 3,154 (3,107) 485 81 Total other noncurrent liabilities 13,809 3,903 (5,718) 11,994 2,307

Net pension liability - 109,736 - 109,736 - U.S. government grants refundable 1,908 47 (15) 1,940 -

$ 248,258 $ 244,023 $ (15,284) $ 476,997 $ 12,273

The current portion of other noncurrent liabilities is included in accounts payable and accrued liabilities.

Included in annuity funds liability are net decreases of $137 and $325 in the fair value of investments at June 30, 2016 and 2015, respectively.

- 28 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

6. Long Term Debt

Long term debt is composed of:

June 30, 2016 2015 General Obligation Bonds: 2015 Series A issue: Serial bonds (interest rates from 3.00% to 5.00%, due on various dates through fiscal year 2032) $ 12,520 $ 12,520 Step coupon bonds (interest rates from 2.50% to 5.50%, final maturity in fiscal year 2036) 15,080 15,080 Term bonds (interest rate at 5.00%, final maturity in fiscal year 2046) 89,080 89,080 2012 Series A issue: Serial bonds (interest rates of 4.00% and 5.00%, due on various dates through fiscal year 2028) 5,470 5,470 Term bonds (interest rate at 5.00%, final maturity in fiscal year 2043) 60,025 60,025 2012 Series B issue: Serial bonds (interest rates from 0.90% to 3.723%, due on various dates through fiscal year 2026) 25,390 29,615 Term bond (interest rate at 3.323%, maturity in fiscal year 2025) 17,310 17,310 Revenue Bonds: 2010 Series H issue: Serial bonds (interest rates from 3.00% to 5.00%, due on various dates through fiscal year 2026) 28,875 29,760 Term bonds (interest rate at 5.00%, final maturity in fiscal year 2032) 21,205 21,205 2010 Series I issue: Term bonds (interest rate at 6.41%, final maturity in fiscal year 2041) 20,450 20,450 2001 Series H issue: Term bonds (interest rate at 6.05%, final maturity in fiscal year 2017) 1,235 2,400 Other Long Term Debt: Higher Education Capital Improvement Fund 20,627 21,936 Equipment Leasing Fund 1,280 1,429 TD Master Leases 3,709 4,996 New Jersey Economic Development Authority note 1,657 1,797 Other 1,190 86 325,103 333,159 Unamortized net premium on obligations 19,462 20,168 344,565 353,327 Less: current portion 10,538 9,966 $ 334,027 $ 343,361

- 29 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

The interest rates on all of the University’s long term debt are fixed.

The 2015 Series A Bonds were issued by the University to provide funds to finance, in part, the costs of constructing a wellness and events center and a parking facility. The bonds were issued at a premium of $13,556, which is being amortized against interest expense over the life of the bonds. The 2015 Series A Serial Bonds and Term Bonds are subject to optional redemption prior to maturity on or after July 1, 2025, and the 2015 Series A Step Coupon Bonds are subject to optional redemption prior to maturity on or after July 1, 2020, at a price of 100%.

The 2012 Series A Bonds were issued by the University to provide funds to finance, in part, the costs of constructing the Warren Street Village. The bonds were issued at a premium of $6,463, which is being amortized against interest expense over the life of the bonds. The 2012 Series A Bonds are subject to optional redemption prior to maturity on or after July 1, 2022 at a price of 100%.

The 2012 Series B Bonds were issued by the University for the purpose of advance refunding a prior issue of revenue bonds. The 2012 Series B Bonds are subject to optional redemption prior to maturity at any time at a price equal to the greater of 100% or the sum of the present value of the remaining scheduled payments of principal and interest.

The 2010 Series H and 2010 Series I Bonds were issued by NJEFA pursuant to an agreement with the University for the purpose of advance refunding a prior issue of revenue bonds and financing, in whole or in part, the costs of the acquisition, rehabilitation, and renovation of an academic facility and of campus deferred maintenance. The 2010 Series H Bonds were issued at a premium of $2,489, which is being amortized against interest expense over the life of the bonds.

The 2010 Series H Bonds maturing on or before July 1, 2020 are not subject to optional redemption prior to maturity. The 2010 Series H Bonds maturing on or after July 1, 2021 are subject to redemption prior to maturity on or after July 1, 2020 at a price of 100%.

The 2010 Series I Bonds have been designated as “Build America Bonds”. Up to thirty-five percent of the interest payments will be paid by the Federal government. For the fiscal years ended June 30, 2016 and 2015, $428 and $425, respectively, of Federal government interest payments are included in interest expense and in other nonoperating revenues, net in the statement of revenues, expenses, and changes in net position. The 2010 Series I Bonds are subject to optional redemption prior to maturity on or after July 1, 2020 at a price of 100%.

The 2001 Series H Bonds were issued by NJEFA pursuant to an agreement with the University to provide funds to finance the costs of constructing a small business incubator facility. The University’s mortgage obligations to NJEFA are collateralized by certain land, buildings and building improvements, and equipment. The 2001 Series H Bonds are not subject to optional redemption, except for extraordinary optional redemption as described in the debt agreement.

- 30 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

The Higher Education Capital Improvement Fund (HECIF) debt was issued by NJEFA to provide funds for certain construction and facilities improvements at the State’s public institutions of higher education. The University is responsible for one-third of its allocated debt service payments and related program expenses. The HECIF debt bears interest rates from 4.0% to 5.0% and matures at various dates through fiscal year 2034. Subsequent to June 30, 2016, the State refunded $6,051 of the University’s existing HECIF debt. The refunding resulted in a gain of $473 to be recorded in fiscal year 2017.

The Equipment Leasing Fund (ELF) debt was issued by NJEFA to provide funds to finance certain equipment at the State’s public institutions of higher education. The University is responsible for twenty-five percent of the debt service payments and related program expenses. The ELF debt matures in fiscal year 2023.

The TD Master Leases were entered into for the purpose of repaying a prior master lease and financing the costs of an upgrade to the University’s information technology and research infrastructure. The TD debt bears interest rates of 1.58% and 1.72% with final maturity in fiscal year 2019.

The New Jersey Economic Development Authority (NJEDA) note, which matures in fiscal year 2028, is noninterest bearing and payable monthly. Imputed interest expense totaled $71 and $75 in fiscal years 2016 and 2015, respectively.

At June 30, 2016, deposits held with trustees included $6,445 for principal payments on revenue bonds due on July 1, 2016. Payments due on long term debt, including mandatory sinking fund payments on the revenue bonds, and net of gain on refunding of HECIF debt of $473, to be recorded in fiscal year 2017, are as follows for the fiscal years ending June 30:

Principal Interest Total

2017 $ 9,913 14,338$ $ 24,251 2018 10,115 14,096 24,211 2019 10,432 13,759 24,191 2020 9,581 13,396 22,977 2021 10,241 13,188 23,429 2022 to 2026 51,138 60,116 111,254 2027 to 2031 39,838 51,471 91,309 2032 to 2036 50,212 40,540 90,752 2037 to 2041 63,595 25,961 89,556 2042 to 2045 63,120 8,083 71,203 $ 318,185 $ 254,948 $ 573,133

The University’s line of credit agreement with a bank permitting it to borrow up to $6,000 at the London Interbank Offered Rate (LIBOR) plus 1.0% at time of utilization was not renewed in fiscal year 2016. There were no borrowings against the agreement in fiscal years 2016 and 2015.

- 31 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Deferred loss on refunding associated with the University’s long term debt totaled $1,696 and $1,972, net of accumulated amortization of $1,799 and $1,523, at June 30, 2016 and 2015, respectively.

Deferred gain on refunding associated with the University’s long term debt totaled $272 and $346, net of accumulated amortization of $161 and $87, at June 30, 2016 and 2015, respectively.

Interest charges incurred in fiscal years 2016 and 2015 totaled $14,148 and $10,431, respectively. Of these amounts, $5,013 and $1,045 were capitalized in fiscal years 2016 and 2015, respectively.

7. Compensated Absences

Eligible employees accrue vacation leave based upon time employed with a maximum accumulation at June 30 of 10 to 50 days. In addition, eligible employees who retire are paid 50% of their unused sick time up to a maximum of $15 per employee.

At June 30, 2016 and 2015, accounts payable and accrued liabilities include accrued vacation and related fringe benefits of $6,407 and $6,143, respectively, and unused sick time of $325 and $260, respectively. At June 30, 2016 and 2015, other noncurrent liabilities include $3,011 and $2,917, respectively, of unused sick time. In fiscal years 2016 and 2015, payments for unused sick time totaled $318 and $258, respectively.

8. Retirement Programs

General Information about Pension Plans

The University participates in several retirement plans covering its employees – the Public Employees’ Retirement System (PERS), the Police and Firemen’s Retirement System (PFRS), the Teachers’ Pension and Annuity Fund (TPAF), and the Alternate Benefit Program (ABP), which are administered by the State of New Jersey, Division of Pensions and Benefits (the Division), New Jersey Institute of Technology Supplemental Benefit Program and Trust (the Supplemental Program) administered by the University’s Board of Trustees, and the NJII 401(k) Plan (the NJII Plan) administered by United of Omaha Life Insurance Company. PERS, PFRS, and TPAF are defined benefit pension plans and ABP, the Supplemental Program, and the NJII Plan are defined contribution pension plans. Generally, all employees, except certain part-time employees, participate in one of these plans.

The State issues a publicly available Comprehensive Annual Financial Report of the State of New Jersey, Division of Pensions and Benefits, which includes financial statements, required supplementary information, and detailed information about the PERS, PFRS, and TPAF fiduciary net position. These reports can be obtained by writing to the State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, P.O. Box 295, Trenton, New Jersey 08625-0295, or obtained at www.nj.gov/treasury/pensions/annrpts.shtml.

- 32 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Defined Benefit Plans

Public Employees’ Retirement System

PERS is a cost-sharing multiple-employer defined benefit pension plan which provides coverage to substantially all full-time employees and certain part-time employees of the State or public agencies who are not members of another State-administered retirement system.

Membership is mandatory for eligible employees. The vesting and benefit provisions are set by N.J.S.A. 43:15A. PERS provides retirement, death, and disability benefits, including post- retirement health care benefits. All benefits vest after ten years of service, except for health care benefits, which vest after 25 years of service, or under the disability provisions of PERS. Benefits are determined by member’s tier (based on date of enrollment), as defined in the PERS plan documents, member’s age, years of service, and final compensation.

The contribution policy is set by N.J.S.A. 43:15A and requires contributions by active members and contributing employers. The current employee contribution rate is 7.06% of base salary. Employer contributions are based on an actuarially determined rate. The annual employer contributions include funding for basic retirement allowances and noncontributory death benefits. The State’s contribution on behalf of the University (State Contribution) to PERS was $2,836 and $736 for the fiscal years ended June 30, 2016 and 2015, respectively, which is recognized as a deferred outflow of resources in the statement of net position.

The University participated in the State’s early retirement incentive programs and is responsible for retirement incentive program contributions to PERS, which were $205 and $199 for the years ended June 30, 2016 and 2015, respectively.

Police and Firemen’s Retirement System

PFRS is a cost-sharing multiple-employer defined benefit pension plan which provides coverage for substantially all permanent, full-time police officers and firemen in the State.

Membership is mandatory for eligible employees. The vesting and benefit provisions are set by N.J.S.A. 43:16A. PFRS provides retirement, death, and disability benefits, including post- retirement health care benefits. All benefits vest after ten years of service, except for health care benefits, which vest after 25 years of service, and disability benefits, which vest after four years of service. Benefits are determined by member’s tier (based on date of enrollment), as defined in the PFRS plan documents, member’s age, years of service, and final compensation.

The contribution policy is set by N.J.S.A. 43:16A and requires contributions by active members and contributing employers. The current employee contribution rate is 10% of base salary. Employer contributions are based on an actuarially determined rate. The annual employer contributions include funding for basic retirement allowances and noncontributory death benefits. The State Contribution to PFRS was $551 and $545 for the fiscal years ended June 30, 2016 and 2015, respectively, which is recognized as a deferred outflow of resources in the statement of net position.

- 33 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Teachers’ Pension and Annuity Fund

TPAF is a cost sharing multiple-employer defined benefit pension plan with a special funding situation, by which the State is responsible to fund 100% of the University’s contributions, excluding any of the University’s early retirement incentive contributions. The University does not have any active members in TPAF.

Membership is mandatory for eligible employees. The vesting and benefit provisions are set by N.J.S.A. 18A:66. TPAF provides retirement, death, and disability benefits, including post- retirement health care benefits. All benefits vest after ten years of service, except for health care benefits, which vest after 25 years of service or under the disability provisions of TPAF. Members are always fully vested in their own contributions and, after three years of service credit, become vested for 2% of related interest earned on the contributions. In the case of death before retirement, members’ beneficiaries are entitled to full interest credited to the members’ accounts. Benefits are based on member’s tier (based on date of enrollment), as defined in the TPAF plan documents, member’s age, years of service, and final compensation.

The contribution policy is set by N.J.S.A. 18A:66 and requires contributions by active members and contributing employers. The State Contribution is based on an actuarially determined rate, and includes funding for basic retirement allowances and noncontributory death benefits for all participating employers. For the fiscal years ended June 30, 2016 and 2015, respectively, the University recognized both state appropriation revenue and pension expense of $463 and $453 for contributions by the State. The University participated in the State’s early retirement incentive programs and is responsible for retirement incentive program contributions to TPAF, which were $57 and $56 for the years ended June 30, 2016 and 2015, respectively.

Net pension liabilities, pension expense, deferred outflows of resources, and deferred inflows of resources related to pensions

Net pension liabilities, pension expense, deferred outflows of resources, and deferred inflows of resources amounts are reflective of the respective plan’s published financial statements and actuarial valuations as of June 30, 2015 and 2014.

The University’s respective net pension liability, deferred outflows of resources, deferred inflows of resources, and net pension expense related to PERS and PFRS, at and for the fiscal years ended June 30, 2016 and 2015, are as follows:

- 34 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

PERS PFRS Total Proportionate share of the net pension liability ($) 2015 $ 113,033 22,966$ $ 135,999 2014 $ 91,665 $ 18,071 $ 109,736 Proportionate share of the net pension liability (%) 2015 0.476 % 0.535 % 2014 0.455 % 0.509 % Deferred outflows of resources 2015 $ 17,286 $ 3,737 $ 21,023 2014 $ 3,649 $ 913 $ 4,562 Deferred inflows of resources 2015 $ 558 $ 978 $ 1,536 2014 $ 2,782 $ 1,443 $ 4,225 Net pension expense 2015 $ 5,508 $ 1,605 $ 7,113 2014 $ 4,743 $ 679 $ 5,422

The University’s proportionate share of each respective plan’s 2015 and 2014 net pension liability was based on the State Contribution to the respective plans from July 1, 2014 to June 30, 2015 and July 1, 2013 to June 30, 2014, respectively, relative to the total contributions from all participating employers.

The components of pension related deferred outflows of resources and deferred inflows of resources as of June 30, 2016 and June 30, 2015 are as follows:

Deferred outflows of resources June 30, 2016 PERS PFRS Total Differences between expected and actual experience$ 1,580 $ - $ 1,580 Net difference between projected and actual earnings on pension plan investments - 62 62 Changes in assumption 8,616 2,355 10,971 Changes in proportion 4,254 769 5,023 Contributions paid subsequnet to June 30, 2015 2,836 551 3,387 $ 17,286 $ 3,737 $ 21,023

June 30, 2015 PERS PFRS Total Changes in assumption $ 2,022 $ 368 $ 2,390 Changes in proportion 891 - 891 Contributions paid subsequnet to June 30, 2014 736 545 1,281 $ 3,649 $ 913 $ 4,562

- 35 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Deferred inflows of resources June 30, 2016 PERS PFRS Total Net difference between projected and actual earnings on pension plan investments $ 558 $ - $ 558 Differences between expected and actual experience - 174 174 Changes in proportion - 804 804 $ 558 $ 978 $ 1,536

June 30, 2015 PERS PFRS Total Net difference between projected and actual earnings on pension plan investments $ 2,782 $ 446 $ 3,228 Changes in proportion - 997 997 $ 2,782 $ 1,443 $ 4,225

The State is legally obligated to fund TPAF on behalf of the University. The University’s proportionate share of deferred outflows of resources, deferred inflows of resources, and the collective net pension liability of $7,578 and $8,415 as of June 30, 2015 and 2014, respectively, are reported by the State.

The $3,387 and $1,281 reported as deferred outflows of resources related to pensions resulting from State Contributions paid subsequent to June 30, 2015 and 2014, respectively, are recorded as deferred outflows of recourses as of June 30, 2016 and 2015, respectively, and will be recognized as a reduction of the net pension liability in the fiscal years ended June 30, 2017 and 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be reflected in pension expense as follows:

PERS PFRS Total

2017 $ 2,780 $ 452 $ 3,232 2018 2,780 452 3,232 2019 2,780 452 3,232 2020 3,475 563 4,038 2021 2,077 289 2,366 13,892 2,208 16,100 Contributions paid subsequent to June 30, 2015 2,836 551 3,387 $ 16,728 $ 2,759 $ 19,487

- 36 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Actuarial Assumptions as of June 30, 2015

The University’s net pension liability as of June 30, 2015 was determined by an actuarial valuation as of July 1, 2014, which was rolled forward to June 30, 2015. The actuarial valuations used the following actuarial assumptions:

PERS PFRS TPAF

Inflation rate 3.04% 3.04% 2.50%

Salary increases: 2.15 - 4.40% 2.60 - 9.48% Varies based 2012-2021 based on age based on age on experience

Thereafter 3.15 - 5.40% 3.60 - 10.48% Varies based based on age based on age on experience

Investment rate of return 7.90% 7.90% 7.90%

PERS mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (setback 1 year for males and females) for service retirement and beneficiaries of former members with adjustments for mortality improvements from the base year 2012 based on Projection Scale AA. The RP-2000 Disabled Mortality Tables (setback 3 years for males and setback 1 year for females) are used to value disabled retirees. PERS actuarial assumptions used in the July 1, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2008 to June 30, 2011. It is likely that future experience will not exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated. The more experience deviates, the larger the impact on future financial statements.

PFRS mortality rates were based on the RP-2000 Combined Healthy Mortality Tables projected one year using Projection Scale AA and one year using Projection Scale BB for male service retirements with adjustments for mortality improvements from the base year based on Projection Scale BB. Mortality rates were based on the RP-2000 Combined Healthy Mortality Tables projected fourteen years using Projection Scale BB for female service retirements and beneficiaries with adjustments for mortality improvements from the base year of 2014 based on Projection Scale BB. PFRS actuarial assumptions used in the July 1, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2010 to June 30, 2013.

TPAF mortality rates were based on the RP-2000 Healthy Annuitant Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. Pre-retirement mortality improvements for active members are projected using Scale AA from the base year of 2000 until the valuation date plus 15 years to account for future mortality improvements. Post-retirement mortality improvements for non-disabled annuitants are projected using Scale AA from the base year of 2000 for males and 2003 for females until the valuation date plus 7 years to account for future mortality improvements. TPAF actuarial assumptions used in the July 1, 2014 valuations were based on the results of an actuarial experience study for the period July 1, 2009 to June 30, 2012.

- 37 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

Actuarial Assumptions as of June 30, 2014

The University’s net pension liability as of June 30, 2014 was determined by an actuarial valuation as of July 1, 2013, which was rolled forward to June 30, 2014. The actuarial valuations used the following actuarial assumptions:

PERS PFRS TPAF

Inflation rate 3.01% 3.01% 2.50%

Salary increases: 2.15 - 4.40% 3.95 - 8.62% Varies based 2012-2021 based on age based on age on experience

Thereafter 3.15 - 5.40% 4.95 - 9.62% Varies based based on age based on age on experience

Investment rate of return 7.90% 7.90% 7.90%

PERS mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (setback 1 year for females) with adjustments for mortality improvements from the base year 2012 based on Projection Scale AA. PERS actuarial assumptions used in the July 1, 2013 valuations were based on the results of an actuarial experience study for the period July 1, 2008 to June 30, 2011.

PFRS mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables with adjustments for mortality improvements from the base year 2011 based on Projection Scale AA. PFRS actuarial assumptions used in the July 1, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2007 to June 30, 2010.

TPAF mortality rates were based on the RP-2000 Healthy Annuitant Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. Pre-retirement mortality improvements for active members are projected using Scale AA from the base year of 2000 until the valuation date plus 15 years to account for future mortality improvements. Post-retirement mortality improvements for non-disabled annuitants are projected using Scale AA from the base year of 2000 for males and 2003 for females until the valuation date plus 7 years to account for future mortality improvements. TPAF actuarial assumptions used in the July 1, 2013 valuations were based on the results of an actuarial experience study for the period July 1, 2009 to June 30, 2012.

Long Term Expected Rate of Return

The long term expected rate of return on plan investments is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and the Division of Pensions and Benefits, each pension plan’s board of trustees, and the actuaries. Best estimates of real rates of return for each major asset class included in each of PERS, PFRS, and TPAF’s target asset allocations as of June 30, 2015 are as follows:

- 38 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

PERS and PFRS TPAF Long Term Long Term Target Expected Real Target Expected Real Asset Class Allocation Rate of Return Allocation Rate of Return

Cash 5.00% 1.04% 5.00% 0.53% Mortgages 2.10% 1.62% 2.10% 2.54% High yield bonds 2.00% 4.03% 2.00% 4.57% Inflation-indexed bonds 1.50% 3.25% 1.50% 1.47% Broad U.S. equities 27.25% 8.52% 27.25% 5.63% Developed foreign equities 12.00% 6.88% 12.00% 6.22% Emerging market equities 6.40% 10.00% 6.40% 8.46% Private equity 9.25% 12.41% 9.25% 9.15% Hedge funds/absolute return 12.00% 4.72% - - Real estate (property) 2.00% 6.83% 4.25% 3.97% Real estate (REITS) 4.25% 5.12% - - Commodities 1.00% 5.32% 1.00% 3.58% U.S. Treasuries 1.75% 1.64% - - Investment Grade Credit 10.00% 1.79% - - Global Debt ex US 3.50% -0.40% - - U.S. government bonds - - 1.75% 1.39% U.S. credit bonds - - 13.50% 2.72% Timber - - 1.00% 4.09% Farmland - - 1.00% 4.61% Hedge funds - multi-strategy - - 4.00% 4.59% Hedge funds - equity hedge - - 4.00% 5.68% Hedge funds - distressed - - 4.00% 4.30%

Discount Rate

The discount rates used to measure the total pension liability for PERS, PFRS, and TPAF were 4.90%, 5.79%, and 4.13% as of June 30, 2015, and 5.39%, 6.32%, and 4.68% as of June 30, 2014, respectively. The single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.90% and a municipal bond rate of 3.80% and 4.29% as of June 30, 2015 and 2014, respectively, based on the Bond Buyer GO 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average rate of AA/Aa or higher for PERS, PFRS, and TPAF. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based on the average of the last five years of contributions made in relation to the last five years of recommended contributions. Based on those assumptions, each plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2033, 2045, and 2027 for PERS, PFRS, and TPAF, respectively. Therefore, the long- term expected rate of return on plan investments was applied to projected benefit payments through 2033, 2045, and 2027 for PERS, PFRS, and TPAF, respectively, and the municipal bond

- 39 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

rate was applied to projected benefit payments after these dates in determining the total pension liability.

Discount Rate Sensitivity

The University’s proportionate share of the net pension liability as of June 30, 2015 and 2014, calculated using the respective discount rate, as well as what the University’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate are as follows:

June 30, 2015 PERS PFRS Rate Amount Rate Amount

1% decrease 3.90%$ 132,473 4.79%$ 27,652 Current discount rate 4.90% 113,033 5.79% 22,966 1% increase 5.90% 96,797 6.79% 19,159

June 30, 2014 PERS PFRS Rate Amount Rate Amount

1% decrease 4.39%$ 108,267 5.32%$ 21,847 Current discount rate 5.39% 91,665 6.32% 18,071 1% increase 6.39% 77,742 7.32% 14,961

Defined Contribution Pension Plans

Alternate Benefits Program

ABP is a defined contribution retirement program administered by the Division for eligible full- time employees in accordance with N.J.S.A. 52:18A.

Membership is mandatory for eligible employees. ABP provides retirement, death, and disability benefits, including post-retirement health care benefits. Employee contributions are immediately vested and non-forfeitable. Employer contributions vest after one year of service and become non-forfeitable. Disability benefits vest after one year of service; life insurance benefits vest after ten years of service; and health care benefits vest after 25 years of service. Benefits are determined by the amount of individual accumulations and the retirement income option selected.

The current employee contribution rate is 5% of base salary. Employees may contribute a voluntary additional contribution up to the maximum Federal statutory limit, on a pre-tax basis. Employer contributions are 8% of base salary up to $141. For the fiscal years ended June 30, 2016 and 2015, the University’s contributions to ABP were $7,017 and $7,071.

- 40 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

New Jersey Institute of Technology Supplemental Benefit Program and Trust

The Supplemental Program is a defined contribution plan administered by the University’s Board of Trustees for ABP participants whose base salary is in excess of $141, but not in excess of the Federal limit. All plan assets are held in trust. Employer contributions vest after one year of service and become non-forfeitable.

Employer contributions are at the discretion of the University, while employees may not contribute. The University’s contribution was $525 in fiscal year 2016. No contribution was made in fiscal year 2015.

NJII SEP IRA and 401(k) Plans

Eligible employees of NJII participated in the NJII SEP IRA through August 31, 2015 and the NJII 401(k) Plan, which became effective September 1, 2015.

Employees eligible to participate in the NJII 401(k) Plan are able to contribute up to 5% of base salary, with an employer safe harbor matching contribution equal to 160% of the elective deferral that does not exceed the 5% of base compensation. The NJII 401(k) Plan is administered by United of Omaha Life Insurance Company. Employee contributions and employer safe harbor contributions and earnings are immediately 100% vested. NJII’s contributions to the NJII 401(k) Plan was $228 in fiscal year 2016.

The NJII SEP IRA was a defined contribution plan and was administered by Security Benefits. Employer contributions were at the discretion of NJII and were immediately vested and non- forfeitable, while employees were not able to contribute. NJII’s contributions to the SEP IRA were $19 and $58 in fiscal years 2016 and 2015, respectively.

9. Investment Income

Investment income is comprised of the following for the fiscal years ended June 30:

2016 2015

Interest and dividends $ 2,581 1,827$ Realized net gain on sale of investments 615 5,098 Net decrease in the fair value of investments (3,179) (4,631) $ 17 $ 2,294

Investment income of $1,119 and $91 was capitalized in fiscal years 2016 and 2015, respectively.

- 41 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

10. Condensed Combining Financial Statement Information

The condensed combining statements of net position, of revenues, expenses, and changes in net position, and of cash flows for NJIT, the Foundation, NJII, and the UREs at June 30, 2016 and for the year then ended are as follows:

June 30, 2016 Reclassifications/ NJIT Foundation NJII UREs Eliminations Combined

Cash and cash equivalents $ 78,375 $ 3,806 $ 1,003 $ 2 $ (3,808) $ 79,378 Other current assets 56,205 514 1,769 6 - 58,494 Due from NJII and UREs ------Due from affiliates - - - 3 (3) - Due from NJIT - - 2,117 - (2,117) - Capital assets, net 369,367 - 43 23,633 - 393,043 Other noncurrent assets 172,278 98,583 - - (2,500) 268,361 Investment in UREs 23,615 - - - (23,615) - Total assets 699,840 102,903 4,932 23,644 (32,043) 799,276

Deferred outflows of resources 22,719 - - - - 22,719

Due to Foundation 3,806 - - - (3,806) - Due to NJIT ------Due to NJII and UREs 2,119 - - - (2,119) - Other current liabilities 74,271 166 2,364 29 (3) 76,827 Noncurrent liabilities 485,685 745 2,500 - (2,500) 486,430 Total liabilities 565,881 911 4,864 29 (8,428) 563,257

Deferred inflows of resources 1,808 - - - - 1,808

Net investment in capital assets 115,162 - 43 23,633 - 138,838 Restricted nonexpendable - 71,366 - - - 71,366 Restricted expendable 41,313 16,514 195 - - 58,022 Unrestricted (1,605) 14,112 (170) (18) (23,615) (11,296) Total net position $ 154,870 $ 101,992 $ 68 $ 23,615 $ (23,615) $ 256,930

- 42 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

For the Year Ended June 30, 2016 Reclassifications/ NJIT Foundation NJII UREs Eliminations Combined Gifts and bequests $ - $ 5,580 $ 285 $ - $ (5,865) $ - Grants from Foundation 8,555 - - - (8,555) - Other operating revenues 254,614 2,728 11,372 1,517 (7,009) 263,222 Total operating revenues 263,169 8,308 11,657 1,517 (21,429) 263,222 Depreciation 24,651 - 3 914 - 25,568 Grants to NJIT - 8,555 - - (8,555) - Grants to NJIT student fraternities - 126 - - (126) - Grants to NJII - 595 - - (595) - Other operating expenses 316,628 2,839 11,477 1,909 (8,586) 324,267 Total operating expenses 341,279 12,115 11,480 2,823 (17,862) 349,835 Operating(loss)profit (78,110) (3,807) 177 (1,306) (3,567) (86,613) Gifts and bequests - - - - 2,468 2,468 Investment income (loss) 1,624 (1,607) - - - 17 Other nonoperating revenues, net 83,273 33 - 422 (1,247) 82,481 Capital grants and gifts 10 - - - 3,230 3,240 Additions to permanent endowments - 4,185 - - - 4,185 Increase (decrease) in net position 6,797 (1,196) 177 (884) 884 5,778 Net position, beginning of year 148,073 103,188 (109) 24,499 (24,499) 251,152

Net position, end of year $ 154,870 $ 101,992 $ 68 $ 23,615 $ (23,615) $ 256,930

For the Year Ended June 30, 2016 Reclassifications/ NJIT Foundation NJII UREs Eliminations Combined Net cash proviced by (used by): Operating activities $ (1,869) $ (2,979) $ (1,325) $ (422) $ 5,453 $ (1,142) Noncapital financing activities 67,066 4,053 2,000 422 (7,371) 66,170 Capital financing activities (48,486) - (46) - 1,025 (47,507) Investing activities 1,380 (183) - - - 1,197 Net increase (decrease) in cash and cash equivalents 18,091 891 629 - (893) 18,718 Cash and cash equivalents, beginning of year 60,284 2,915 374 2 (2,915) 60,660

Cash and cash equivalents, beginning of year $ 78,375 $ 3,806 $ 1,003 $ 2$ (3,808) $ 79,378

- 43 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

June 30, 2015 Reclassifications/ NJIT Foundation NJII UREs Eliminations Combined

Cash and cash equivalents $ 60,284 $ 2,915 $ 374 $ 2 $ (2,915) $ 60,660 Other current assets 53,753 981 336 13 - 55,083 Due from NJII and UREs 120 - - - (120) - Capital assets, net 314,437 - - 24,547 - 338,984 Other noncurrent assets 216,155 100,271 - - (500) 315,926 Investment in UREs 24,499 - - - (24,499) - Total assets 669,248 104,167 710 24,562 (28,034) 770,653

Deferred outflows of resources 6,534 - - - - 6,534

Due to Foundation 2,915 - - - (2,915) - Due to NJIT - - 95 25 (120) - Other current liabilities 56,311 167 224 38 - 56,740 Noncurrent liabilities 463,912 812 500 - (500) 464,724 Total liabilities 523,138 979 819 63 (3,535) 521,464

Deferred inflows of resources 4,571 - - - - 4,571

Net investment in capital assets 93,812 - - 24,547 - 118,359 Restricted nonexpendable - 67,766 - - - 67,766 Restricted expendable 58,897 20,639 100 - - 79,636 Unrestricted (4,636) 14,783 (209) (48) (24,499) (14,609) Total net position $ 148,073 $ 103,188 $ (109) $ 24,499 $ (24,499) $ 251,152

- 44 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

For the Year Ended June 30, 2015 Reclassifications/ NJIT Foundation NJII UREs Eliminations Combined Gifts and bequests $ - $ 5,269 $ 573 $ - $ (5,842) $ - Grants from Foundation 6,372 - - - (6,372) - Other operating revenues 232,286 2,318 1,699 1,255 (3,094) 234,464 Total operating revenues 238,658 7,587 2,272 1,255 (15,308) 234,464 Depreciation 21,264 - - 914 - 22,178 Grants to NJIT - 6,216 - - (6,216) - Grants to NJIT student fraternities - 153 - - (153) - Other operating expenses 280,402 3,132 2,381 819 (3,980) 282,754 Total operating expenses 301,666 9,501 2,381 1,733 (10,349) 304,932 Operating(loss)profit (63,008) (1,914) (109) (478) (4,959) (70,468) Gifts and bequests - - - - 3,672 3,672 Investment income 660 1,634 - - - 2,294 Other nonoperating revenues, net 74,565 55 - (4,686) 4,981 74,915 Capital grants and gifts 20,000 - - - 1,470 21,470 Additions to permanent endowments - 2,971 - - - 2,971 Increase (decrease) in net position 32,217 2,746 (109) (5,164) 5,164 34,854 Net position, beginning of year 219,833 100,442 - 29,663 (29,663) 320,275

Cumulative effect of change in accounting principle (103,977) - - - - (103,977)

Net position, end of year $ 148,073 $ 103,188 $ (109) $ 24,499 $ (24,499) $ 251,152

For the Year Ended June 30, 2015 Reclassifications/ NJIT Foundation NJII UREs Eliminations Combined Net cash provided by (used by): Operating activities $ (14,588) $ (3,113) $ (126) $ 520 $ 2,878 $ (14,429) Noncapital financing activities 59,354 2,887 500 (851) (4,212) 57,678 Capital financing activities (37,188) - - - 1,049 (36,139) Investing activities (6,041) 844 - - - (5,197) Net increase (decrease) in cash and cash equivalents 1,537 618 374 (331) (285) 1,913

Cash and cash equivalents, beginning of year 58,747 2,297 - 333 (2,630) 58,747 Cash and cash equivalents, end of year $ 60,284 $ 2,915 $ 374 $ 2$ (2,915) $ 60,660

- 45 - (continued) NEW JERSEY INSTITUTE OF TECHNOLOGY Notes to Financial Statements (Dollars in thousands) June 30, 2016 and 2015

11. Net Position

The components of unrestricted net position are as follows:

June 30, 2016 2015 Designated unrestricted net position: Quasi-endowments $ 12,384 $ 13,141 Instructional and other 2,902 3,790 Construction and capital programs 31,770 22,265 Wellness and Events Center construction 10,000 5,000 State bond funds required match 9,925 16,140 Debt service 6,546 4,804 Outstanding purchase orders 7,398 5,000 80,925 70,140 Undesignated unrestricted net position: Pension related (116,512) (109,399) Operations 24,291 24,650 $ (11,296) $ (14,609)

12. Commitments and Contingencies

At June 30, 2016, open purchase orders totaled $100,687, primarily for construction and capital program and research expenditures.

In the normal course of business, the University is subject to various lawsuits and claims. Management believes that the ultimate resolution of these matters will not have a significant effect on the University’s financial position.

- 46 - Required Supplementary Information

Schedules of Proportionate Share of the Net Pension Liability – Last 10 Years

Schedules of Employer Contributions – Last 10 Years

NEW JERSEY INSTITUTE OF TECHNOLOGY Required Supplementary Information Schedules of Proportionate Share of the Net Pension Liability – Last 10 Years* (Dollars in thousands) June 30, 2016

NJIT’s proportionate Reporting share of the net fiscal year pension liability Plan fiduciary (Actuarial NJIT’s as a percentage net position as a Valuation NJIT’s proportion of the covered of its covered percentage of Date, net pension liability employee employee the total pension June 30,) % $ payroll payroll liability

Public Employees’ Retirement System (PERS)

2016 (2015) 0.476%$ 113,033 $ 24,038 470.23% 24.96% 2015 (2014) 0.455%$ 91,665 $ 23,781 385.45% 30.06%

Police and Firemen’s Retirement System (PFRS)

2016 (2015) 0.535%$ 22,966 $ 2,391 960.52% 29.07% 2015 (2014) 0.509%$ 18,071 $ 2,249 803.51% 34.70%

NJIT’s proportionate Reporting State’s share of the net fiscal year proportionate pension liability Plan fiduciary (Actuarial share of the net NJIT’s as a percentagenet position as a Valuation NJIT’s proportion of the pension liability covered of its covered percentage of Date, net pension liability attributable employee employee the total pension June 30,) % $ to NJIT payroll payroll liability

Teachers’ Pension and Annuity Fund (TPAF) 2016 (2015) 0.000% $ - $ 7,578 $ - 0.00% 28.71% 2015 (2014) 0.000% $ - $ 8,415 $ - 0.00% 33.64%

* This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 47 - NEW JERSEY INSTITUTE OF TECHNOLOGY Required Supplementary Information Schedules of Employer Contributions – Last 10 Years* (Dollars in thousands) June 30, 2016

Contributions in relation to the NJIT’s Contributions as Contractually contractually Contribution covered a percentage of Reporting required required deficiency employee employee fiscal year contribution contribution (excess) payroll covered payroll

Public Employees’ Retirement System (PERS)

2016 $ 9,452 $ 2,836 $ 6,616 24,111$ 11.76% 2015 $ 736 $ 736 $ - $ 24,038 3.06%

Police and Firemen’s Retirement System (PFRS)

2016 $ 1,838 $ 551 $ 1,287 2,654$ 20.76% 2015 $ 545 $ 545 $ - 2,391$ 22.79%

*This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 48 - [THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX C

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE

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SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE

The statements made herein concerning the Master Indenture are summaries and do not purport to be complete. Such statements use certain terms defined in the Master Indenture and are qualified in their entirety by reference to the detailed provisions of the Master Indenture. Reference in this summary to the Indenture will be deemed to be references to the Master Indenture.

Account shall mean a special trust account established under the Indenture.

Accountant’s Certificate shall mean a certificate signed by an independent certified public accountant or firm of certified public accountants, selected by the University, who may be the accountant or firm of accountants who regularly audit the books of the University.

Act shall mean the New Jersey Institute of Technology Act of 1995, Chapter 64E of Title 18A of the New Jersey Statutes Annotated, as amended and supplemented.

Additional Bonds shall mean one or more Series of Bonds issued under and secured by the Indenture for the purpose of providing funds for each Additional Project.

Additional Project shall mean one or more Facilities of the University all or part of the cost of which has been or is being financed by Additional Bonds pursuant to the Indenture or refinanced by Refunding Bonds pursuant to the Indenture.

Aggregate Debt Service Requirements for any Fiscal Year shall mean, as of any date of calculation, the sum of the Debt Service Requirements for such Fiscal Year with respect to all Bonds authenticated and delivered under the Indenture.

Annual Debt Service shall mean the aggregate of Principal Installments and Interest Requirements as the same become due and payable on all Outstanding Bonds of the University.

Annual Financial Information shall mean, with respect to the Indenture, collectively,

(a) (i) the Audited Financial Statements of the University for the preceding Fiscal Year (commencing with the Fiscal Year ending on June 30, 2012), and Unaudited Financial Statements for such Fiscal Year if such Audited Financial Statements are unavailable, pursuant to the Indenture;

(ii) an update of financial information presented in an applicable Official Statement with respect to a Series of Bonds, if required; and

(iii) the information regarding amendments to the Indenture required pursuant to the Indenture.

Annual Financial Information shall include Audited Financial Statements, if available, or Unaudited Financial Statements; and

(b) such narrative explanation as may be necessary to avoid misunderstanding and to assist the reader in understanding the presentation of such financial and operating data listed in (a) above.

Any or all of the items listed above may be included by specific reference to other documents which have been submitted to the MSRB or filed with the SEC. If such document is an Official Statement, it must be available from the MSRB.

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In the event that any of the financial information or operating data constituting Annual Financial Information that no longer can be generated because the operations to which such information or data relate have been materially changed or discontinued, or such information is deemed to be no longer meaningful, a statement to that effect shall be provided in lieu of such information.

Audited Financial Statements shall mean, with respect to the University, the annual financial statements, if any, of the University, audited by such auditor selected by the University. Audited Financial Statements shall be prepared in accordance with GAAP; provided, however, that the University may from time to time, if required by federal or State legal requirements, modify the basis upon which its financial statements are prepared. Notice of any such modification shall include a reference to the specific federal or State law or regulation describing such accounting basis and shall be provided by the University to the Trustee, who shall promptly deliver such notice to the MSRB.

Authorized Denomination shall have meaning provided for such term in the applicable Supplemental Indenture.

Authorized Officer of the University shall mean the President, the Provost and Senior Executive Vice President, the Senior Vice President for Finance and Chief Financial Officer, and the Associate Vice President for Accounting and Treasury Management of the University or any person duly authorized under this Indenture by the University to perform specific acts or duties under the Indenture.

Bond or Bonds shall mean any bond or bonds, as the case may be, authenticated and delivered under and pursuant to the Indenture.

Bond Facility shall mean an insurance policy, surety bond or agreement, standby bond purchase agreement, line of credit, letter of credit or other credit enhancement or liquidity facility entered into for the same or similar purposes, with respect to the Bonds.

Bondholder or Holder of Bonds shall mean the registered owner of any Bond or Bonds.

Bond Index shall mean the index or interest rate as may be submitted in writing to the Trustee by a firm of investment bankers or a financial advisory firm selected by the University to whom the Trustee makes no reasonable objection, as the index or interest rate reasonably reflecting the terms and provisions of the Indebtedness in question.

Bond Proceeds Fund shall mean that fund established pursuant to the Indenture.

Business Day shall mean any day which shall not be (i) a Saturday or Sunday, (ii) legal holiday or a day on which banking institutions located in the State or any of the cities in which the principal office of the Trustee, any Paying Agent, any remarketing agent or any provider of a Bond Facility for such Series of Bonds is located, are authorized or required by law or executive order to close, or (iii) a day on which the New York Stock Exchange is closed.

Calendar Year shall mean a twelve-month period commencing January 1 and ending December 31 of any year.

Construction Account shall mean that fund established pursuant to the Indenture.

Costs of Construction, with respect to any Facility, shall mean the cost of construction, the cost of acquisition by the University of real or personal property or interests therein, the cost of demolishing or removing any buildings or structures on lands so acquired, including the cost of acquiring

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any lands to which such buildings or structures may be moved, or premiums on insurance during construction, administrative expenses, legal fees, the cost of all machinery and equipment, financing expenses, fees and expenses of the Trustee and Paying Agents, the cost of plans, specifications, surveys, estimates of cost and revenues, and any other expenses necessary or incidental to determining the feasibility or practicability of constructing such Facility, amounts, if any, required by the Indenture to be paid into the Debt Service Fund and the Debt Service Reserve Fund, if applicable, upon the issuance of any Series, and payments when due (whether at the maturity of principal or due date of interest or upon redemption) on any Indebtedness of the University (other than Bonds), incurred for such Facility, all to the extent applicable to the construction of such Facility and payable by the University, and such other expenses payable by the University not specified in this definition as may be necessary or incident to the financing or the construction of such Facility or the acquisition of land therefor and the placing of such Facility in operation.

Costs of Issuance shall mean all costs related to the proceedings under which Bonds are issued under the Indenture including but not limited to salaries, administrative expenses, insurance premiums, fees, expenses or other similar charges payable to providers of a Bond Facility, a Swap Facility, a Swap Provider, including a Termination Payment, other than Reimbursement Obligations or Swap Payments or other termination payments, auditing and legal expenses and fees and expenses incurred for professional consultants, financial advisors and fiduciaries, fees and expenses of the Trustee, fees for issuing and Paying Agents, fees and expenses of remarketing agents and dealers, fees and expenses of the underwriters if payable other than as a result of a discount on the purchase price of Bonds or Notes, fees and expenses of rating agencies, transfer or information agents, the publication of advertisements and notices, printers’ fees or charges incurred by the University to comply with applicable federal and State securities or tax laws.

Costs of Issuance Account shall mean such account established by the Indenture.

Counsel’s Opinion shall mean an opinion signed by an attorney or firm of attorneys selected by the University (who may be counsel to the University); provided, however, that for certain purposes of the Indenture, as set forth therein, such term shall mean an opinion signed by an attorney or firm of attorneys of recognized standing in the field of law relating to municipal bonds (who may be counsel to the University) selected by the University.

Debt Service Fund shall mean that fund established pursuant to the Indenture.

Debt Service Fund Requirements for any Fiscal Year shall mean, as of any date of calculation and with respect to any Series of Bonds, an amount equal to the aggregate of (i) Interest Requirements, except to the extent that such interest shall have been provided for out of Bond proceeds, and (ii) Principal Installments becoming due on all Outstanding Bonds.

Debt Service Reserve Fund shall mean that fund established pursuant to the Indenture.

Debt Service Reserve Requirement shall mean, to the extent required pursuant to the terms of a Supplemental Indenture authorizing such Series of Bonds, as of any date of calculation, an amount required pursuant to the terms of any such Supplemental Indenture. The First Supplemental Indenture does not establish a Debt Service Reserve Requirement for the 2012 Series B Bonds. The Second Supplemental Indenture does not establish a Debt Service Reserve Requirement for the 2017 Series A Bonds.

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Depositary shall mean a bank or trust company, which is a member of the Federal Deposit Insurance Corporation, selected by the University as a depositary of moneys and securities held under the provisions of the Indenture, and may include the Trustee.

Facility or Facilities shall mean any Additional Project including any structure designed for use as a dormitory or other housing facility, dining facility, student union, academic building, administrative facility, library, classroom building, research facility, faculty office facility, athletic facility, health care facility, laboratory, maintenance, storage or utility facility or other building or structure essential, necessary or useful to the University, or any multi-purpose structure designed to combine two or more of the functions performed by the types of structures enumerated above, and shall include all real and personal property, lands, improvements, driveways, roads, approaches, pedestrian access roads, rights-of-way, utilities, easements, machinery and equipment, and all other appurtenances and facilities either on, above or under the ground which are used or usable in connection with any of the aforementioned structures, and shall also include landscaping, site preparation, furniture, machinery, equipment and other similar items necessary or convenient for the operation of a particular facility or structure in the manner for which its use is intended.

Fiduciary or Fiduciaries shall mean the Trustee, the Paying Agents, the Registrar, or any or all of them, as may be appropriate.

First Supplemental Indenture shall mean the First Supplemental Indenture dated as of July 1, 2012, by and between the University and the Trustee relating to the issuance of the General Obligation Bonds, 2012 Series B (Federally Taxable).

Fiscal Year shall mean a twelve-month period commencing July 1 and ending June 30 of the next calendar year or such other period of twelve (12) consecutive months as may be adopted by the Board of Trustees.

Fund shall mean a special trust fund established under the Indenture.

Indebtedness shall mean all obligations incurred or assumed by the University for payments of principal and interest with respect to borrowed money including, without limitation, all outstanding Indebtedness of the University under the Indenture.

Interest Payment Date shall mean each date on which interest is payable on the Bonds under the Indenture or any Supplemental Indenture or in accordance with a Swap, or, if such date is not a Business Day, the immediately succeeding Business Day.

Interest Requirement shall mean, as of the date of computation with respect to a Calendar Year, an amount equivalent to the aggregate maximum amount coming due during such Calendar Year on any Interest Payment Date, of (i) interest which may be payable on Outstanding Bonds and (ii) Swap Payments, provided that interest on Variable Interest Rate Bonds or Notes or Swaps shall be calculated in accordance with the Variable Interest Rate Calculation Rate, and further provided that if the University shall have entered into one or more Swaps (that is not a Subordinated Swap) with respect to a Variable Interest Rate Bond or Note, then the Bonds or Notes of such series in a principal amount equal to the Notional Amount shall be treated for purposes of this definition as bearing interest for such period at the fixed rate payable by the University under such Swap; if the University shall have entered into one or more Swaps (that is not a Subordinated Swap) with respect to a Bond or Note that is not a Variable Interest Rate Bond or Note which calls for a Variable Interest Rate Swap Payment by the University then the Bonds or Notes of such series in a principal amount equal to the Notional Amount shall be treated for

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purposes of this definition as a Variable Interest Rate Bond or Note bearing interest for such period at the Variable Interest Rate payable by the University under such Swap.

Investment Securities shall mean and include any securities, if and to the extent the same are at the time legal for investment of the University’s funds in accordance with the Act.

Material Event shall mean any of the following events, if material, with respect to any Bonds under the Indenture:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults, if material;

(iii) unscheduled draws on debt service reserves reflecting financial difficulties;

(iv) unscheduled draws on credit enhancements reflecting financial difficulties;

(v) substitution of credit or liquidity providers, or their failure to perform;

(vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of any Bonds, or other material events affecting the tax status of any Bonds;

(vii) modifications to rights of Bondholders, if material;

(viii) Bond calls, if material, and tender offers;

(ix) defeasances;

(x) release, substitution, or sale of property securing repayment of the Bonds, if material;

(xi) Rating changes;

(xii) Bankruptcy, insolvency, receivership or similar event of the University;

(xiii) The consummation of a merger, consolidation, or acquisition involving the University or the sale of all or substantially all of the assets of the University, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(xiv) Appointment of a successor or additional Trustee for the Bonds or the change of name of the Trustee for the Bonds, if material

Material Event Notice shall mean notice of a Material Event required to be provided pursuant to the Indenture.

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MSRB shall mean the Municipal Securities Rulemaking Board and its successors and assigns.

NJEFA Bonds shall mean any bonds issued by the New Jersey Educational Facilities Authority for the benefit of the University, the proceeds of which bonds have been loaned by the New Jersey Educational Facilities Authority to the University.

Notes shall mean any obligations or other evidences of indebtedness or borrowing of the University, other than Bonds, issued for the purposes of the Act to provide funds for deposit in the Construction Fund and issued in anticipation of Bonds.

Notional Amount shall mean the non-payable or the theoretical amount with reference to which Swap Payments and Swap Receipts are calculated, as specified as such for each Swap in the documentation applicable thereto.

Official Statement shall mean the “final official statement”, as defined in paragraph (f)(3) of the Rule, relating to any Series of Bonds.

Operating Cost shall mean, as of any particular date, the University’s operating expenses and all other expenses of carrying out and administering its powers, duties and functions under the Act and shall include, without limiting the generality of the foregoing, salaries, supplies, utilities, mailing, labor, materials, office rent, maintenance, furnishings, equipment, machinery and apparatus, insurance premiums, legal, accounting, management, consulting and banking services and expenses, the fees and expenses of the Trustee, the Depositary and the Paying Agent including Costs of Issuance other than Costs of Issuance paid from proceeds of Bonds, payments to pension, retirement, health and hospitalization funds. Operating Costs may also include administrative expenses, insurance premiums, fees, expenses or other similar charges payable to providers of a Bond Facility, a Swap Facility or a Swap Provider, (including any Termination Payments but not including Reimbursement Obligations, Swap Payments or other termination payments).

Outstanding, when used with reference to Bonds, shall mean, as of any date, Bonds theretofore or thereupon being authenticated and delivered under the Indenture except:

(i) Any Bonds cancelled by the Trustee at or prior to such date;

(ii) Bonds (or portions of Bonds) for the payment or redemption of which moneys, equal to the principal amount or Redemption Price thereof, as the case may be, with interest to the date of maturity or redemption date, shall be held in trust under the Indenture and set aside for such payment or redemption (whether at or prior to the maturity or redemption date), provided that if such Bonds (or portions of Bonds) are to be redeemed, notice of such redemption shall have been given as provided in the Indenture or provision satisfactory to the Trustee shall have been made for the giving of such notice;

(iii) Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to the Indenture; and

(iv) Bonds deemed to have been paid as provided in the Indenture.

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Paying Agent shall mean any bank or trust company designated as paying agent for the Bonds of any Series, and its successor or successors hereafter appointed in the manner provided in the Indenture.

Principal shall mean the principal amount of the Bonds of a Series as due on a certain future date.

Principal Installment for any Calendar Year, means, as of any date of calculation and with respect to any Series, so long as any Bonds thereof are Outstanding,

(i) the principal amount of Bonds of said Series which mature in such Year, reduced by the aggregate principal amount of such Bonds which would be retired before such year by reason of the payment when due of, and application in accordance with the Indenture of, Sinking Fund Installments payable before such year for the retirement of such Bonds, plus

(ii) the unsatisfied balance (determined as provided in the Indenture) of the Sinking Fund Installments, if any, due during such Year for the Bonds of such Series.

Principal Installment Date shall mean each date on which Principal and Sinking Fund Installments, if any, are payable on the Bonds as provided in or pursuant to the Indenture (or, if such date is not a Business Day, the immediately succeeding Business Day).

Record Date shall mean the close of business on the fifteenth day preceding an Interest Payment Date, or if such day shall not be a Business Day, the immediately preceding Business Day or such other day set forth in a Supplemental Indenture.

Redemption Fund shall mean that fund established pursuant to the Indenture.

Redemption Price shall mean, with respect to any Bond, the principal amount thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or the Indenture.

Refunding Bonds shall mean all Bonds whether issued in one or more Series, authenticated and delivered on original issuance pursuant to the Indenture and thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Indenture.

Registrar shall mean the Trustee serving in such capacity as provided in the Indenture.

Reimbursement Obligation shall mean any obligation of the University to make payments to a provider of a Bond Facility in reimbursement of or as interest on (which interest may be higher than the interest rate on the related Bond) an advance or other payment made by such provider for the purpose of paying

(i) the Principal, Sinking Fund Installment, if any, or Redemption Price of, or interest on, any Bonds, or

(ii) the purchase price, plus accrued interest, if any, of any Bonds tendered pursuant to the provisions of the applicable Supplemental Indenture,

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but only to the extent the principal amortization requirements with respect to such reimbursement are equal to the amortization requirements for such related Bonds, without acceleration. Reimbursement Obligations shall not, unless otherwise provided for, include (i) any payments of any fees, expenses, or other similar obligations to any such provider, unless specifically included as a part thereof and approved as a portion of the Special Debt Service Requirement, or (ii) any payments pursuant to term-loan or other principal amortization requirements in reimbursement of any such advance that are more accelerated than the amortization requirements on such related Bonds. Reimbursement Obligations may be evidenced by Bonds designated as “Bank Bonds,” which may bear a higher interest rate than the rate borne by the Bonds to which they relate.

Rule shall mean Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934 (17 CFR Part 240, §240.15c2-12), as in effect on the date of the Indenture, including any official interpretations thereof issued either before or after such date which are applicable to the Indenture.

SEC shall mean the United States Securities and Exchange Commission or any successor agency.

Second Supplemental Indenture shall mean the Second Supplemental Indenture dated as of May 1, 2017, by and between the University and the Trustee relating to the issuance of the General Obligation Bonds, 2017 Series A (Federally Taxable).

Series or Bonds of a Series or words of similar meaning, shall mean the Series of Bonds authorized by the Indenture and a Supplemental Indenture.

Sinking Fund Installment shall mean, for any Calendar Year as of any date of calculation and with respect to any Bonds of a Series, so long as any Bonds thereof are Outstanding, the amount of money required by the Indenture or a Supplemental Indenture to be paid on a single future fixed date for the retirement of any Outstanding Bonds of said Series that mature after said future date, but does not include any amount payable by the University by reason only of the maturity of a Bond, and said fixed future date is deemed to be the date when such Sinking Fund Installment is payable and the date of such Sinking Fund Installment and said Outstanding Bonds are deemed to be the Bonds entitled to such Sinking Fund Installment.

Special Debt Service Requirements shall mean for any period, and with respect to the Bonds, subject to the Indenture and any Supplemental Indenture authorizing the issuance of the Bonds, the sum of (A) the Principal Installments and interest accruing and coming due during such period, (B) the amounts, if any, required, with respect to interest rate fluctuations on variable rate debt, (C) annual expenses of issuance and administration with respect to securities, (D) the amounts, if any, becoming due and payable under a reimbursement agreement or similar agreement entered into pursuant to authority granted under the proceedings authorizing the issuance of securities, (E) net amounts owing under interest rate agreements authorized and effective, and (F) any other annual costs or expenses necessary or proper to be paid in connection with the securities, including, without limitation, the annual cost of any Bond Facility, issued by a financial institution pursuant to an agreement approved in the financing transaction proceedings.

State shall mean the State of New Jersey.

Subordinated Swap or Subordinated Swap Payments shall mean either a financial arrangement that meets the definition of Swap or a net amount to be paid by the University under such

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financial arrangement that meets the definition of Swap Payment but does not qualify under the Indenture as a Swap or Swap Payment, respectively, and is expressly subordinated pursuant to the Indenture.

Supplemental Indenture shall mean any series or supplemental indenture entered into by the Trustee and the University pursuant to and in compliance with the provisions of the Indenture providing for the issuance of Additional Bonds or Refunding Bonds, and shall also mean any other indenture between the same parties entered into pursuant to and in compliance with the provisions of the Indenture amending or supplementing the provisions of the Indenture as originally executed or as theretofore amended or supplemented, including the First Supplemental Indenture and the Second Supplemental Indenture.

Surety shall mean any surety agreement, insurance agreement, letter of credit or other type of agreement or arrangement satisfying the provisions of the Indenture or of any applicable Supplemental Indenture authorizing a Series of Bonds, which provides for the availability, at all times required under the Indenture or under any such Supplemental Indenture, of the amount of money or the value of the Investment Obligations in lieu of which such agreement or arrangement is substituted; provided that (i) the financial institution providing such Surety shall have an outstanding, unsecured, uninsured and unguaranteed debt issue that, or (ii) the Surety, is assigned any of the three highest ratings (without regard to the addition of a plus (+) or a minus (-) to any rating) by Standard & Poor’s Ratings Group and Moody’s Investors Service, Inc. or Fitch and is then rating such financing institution or Surety; and provided further that if the financial institution providing or guaranteeing such Surety is an insurance company, the claims-paying ability of such insurance company shall be assigned any of the three highest ratings (without regard to the addition of a plus (+) or a minus (-) to any rating) by Standard & Poor’s Ratings Group and Moody’s Investors Service, Inc. or Fitch and is then rating such insurance company.

Swap shall mean any financial arrangement (i) that is entered into by the University with an entity that is a Swap Provider at the time the arrangement is entered into; (ii)(a) which provides that the University shall pay to such entity an amount based on the interest accruing at a fixed rate on the Notional Amount equal to all or part of the outstanding principal amount of a Series of Bonds issued under the Indenture, and that such entity shall pay to the University an amount based on the interest accruing on the Notional Amount at a variable rate of interest computed according to a formula set forth in such arrangement (which need not be the same as the actual rate of interest borne by such Series of Bonds) or that one (after adjustment for any cap, floor, collar or other financial arrangement referred to in (ii)(c) of this definition, with respect thereto) shall pay to the other the net amount (Swap Payment or Swap Receipt) due under such arrangement; (b) which provides that the University shall pay to such entity an amount based on the interest accruing on the Notional Amount equal to all or part of the outstanding principal amount of a Series of Bonds issued under the Indenture, at a variable rate of interest computed according to a formula set forth in such arrangement and that such entity shall pay to the University an amount based on the interest accruing at a fixed rate on the Notional Amount (which need not be the same as the actual rate of interest borne by such Series of Bonds) or that one (after adjustment for any cap, floor, collar or other financial arrangement referred to in (ii)(c) of this definition, with respect thereto) shall pay to the other the net amount (Swap Payment or Swap Receipt) due under such arrangement; or (c) which is included as part of or covered by the financial transaction described in (ii)(a) or (ii)(b) above or is separately executed and which is a cap, floor or collar, forward rate, future rate, asset, swap or index, price or market linked transaction or agreement, other exchange or rate protection transaction agreement, other similar transaction (however designated) or any combination thereof or any option with respect thereto executed by the University for the purpose of moderating interest rate fluctuations or otherwise; and (iii) which has been designated in writing to the Trustee by an Authorized Officer of the University and authenticated or otherwise registered by the Trustee under the Indenture as a Swap with respect to a Series of Bonds or Notes. “Swap” shall also include any such

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financial arrangement described in clauses (ii) and (iii) above entered into by the University with a Swap Provider, as a replacement of a Swap that has been terminated and which has been so designated in writing to the Trustee by an Authorized Officer of the University with respect to a Series of Bonds or Notes.

Swap Facility shall mean an insurance policy, surety bond, letter of credit or other credit enhancement with respect to a Swap or any similar facility entered into for the same or similar purposes and may include Investment Obligations properly pledged to the University under the Indenture pursuant to the Swap Facility or by the Swap Provider, in each case sufficient to maintain any existing rating of the University’s long term debt. Payments by the University under a Swap Facility related to a Swap shall be deemed Swap Payments under the Indenture and shall not be deemed Reimbursement Obligations and payments to the University under a Swap Facility related to a Swap shall be deemed Swap Receipts. Payment by the University under a Swap Facility applicable to any fees, expenses or similar other charges or obligations thereunder shall be a Cost of Issuance or Operating Cost, as applicable.

Swap Payment shall mean the net amount required to be paid by the University under a Swap (that is not a Subordinated Swap Payment) that is applicable to the interest rate exchange effected thereunder, but not any (a) fees, expenses or similar other charges or obligations thereunder (which shall be Costs of Issuance or Operating Expense, as applicable) or (b) any Termination Payment or other payments by the University on account of termination of the Swap.

Swap Provider shall mean a financial institution whose long term debt obligations, or whose obligations under a Swap are fully covered by a Swap Facility whose long term debt obligations are (i) rated at least in the three highest rating categories by at least two nationally recognized rating agencies or (ii) secured by a pledge of Investment Obligations in amounts sufficient to achieve the ratings described in (i) hereof, or (iii) meeting the requirements set forth in any Supplemental Indenture relating thereto.

Swap Receipt shall mean the net amount required to be paid to the University under a Swap, but shall not include any Termination Receipt.

Termination Payment shall mean, with respect to a Swap, an amount required to be paid by the University to the Swap Provider or related Swap Facility as a result of the termination of the Swap or required to be paid by the University into a collateral account as security for any termination provided, (a)(i) that such termination occurs prior to the next succeeding Interest Payment Date, and (ii) that any such required amount is not due prior to the next succeeding Interest Payment Date, and (b) that any payment by the University on account of termination of either a Swap other than as described in (a) of this definition or a Subordinated Swap shall be deemed a Subordinated Swap Payment under the Indenture.

Termination Receipt shall mean with respect to a Swap an amount required to be paid by the Swap Provider or related Swap Facility as a result of the termination of the Swap.

Unaudited Financial Statements shall have the same meaning as Audited Financial Statements, except that they shall not have been audited.

Variable Interest Base Rate shall mean with respect to any Variable Interest Rate Notes or Bonds or Swap Payments, the average interest rate borne by such series of Variable Interest Rate Notes or Bonds or Swap Payments for the twelve full calendar months (or such lesser period as such Series of Variable Interest Rate Notes or Bonds or Swap Payments shall be outstanding) preceding the date of calculation.

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Variable Interest Rate shall mean a variable interest rate to be borne by any Bond or Note within a Series of Bonds or Notes or by any Swap (whether a Swap Payment or Swap Receipt). The method of computing such variable interest rate shall be specified in the Supplemental Indenture authorizing such Series of Bonds or Notes or the Swap relating thereto. Such Supplemental Indenture or Swap shall also specify either (i) the particular period or periods of time for which such variable interest rate shall remain in effect or (ii) the time or times upon which any change in such variable interest rate shall become effective.

Variable Interest Rate Bonds or Notes or Swap Payments shall mean Bonds or Notes which bear a Variable Interest Rate or a Swap Payment which by the terms of the Swap requires and provides for a Variable Interest Rate Swap Payment by the University.

Variable Interest Rate Calculation Rate shall mean with respect to each Calendar Year (i) with respect to Variable Interest Rate Bonds or Notes or Swap Payments bearing a Variable Interest Rate, which is not capped pursuant to the Swap or a Swap Facility, and/or is for a period or periods of time ending prior to the next immediate Interest Payment Date, the interest rate thereon in effect (pursuant to the Variable Interest Rate Bonds or Notes or a Swap applicable thereto) until the next date of change (being the date of calculation referred to in the definition of Variable Interest Base Rate) and thereafter for the balance of such Calendar Year the Variable Interest Base Rate or (ii) with respect to Variable Interest Rate Bonds or Notes or Swap Payments bearing a Variable Interest Rate which, for a period of time ending prior to the next immediate Interest Payment Date, is either capped by its terms or pursuant to the Swap or a Swap Facility or is fixed, the lesser of (a) the interest rate by which the Variable Interest Rate is so capped if less than the rate calculated in (i) of this definition or (b) the Variable Interest Rate, so fixed, on the Variable Interest Rate Bonds or Notes or Swap Payments, respectively (pursuant to the Variable Interest Rate Bonds or Notes or a Swap applicable thereto).

Except where the context otherwise requires, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include firms, partnerships, associations and corporations.

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Authorization of Bonds; General Obligations. Under the Indenture, Bonds issued and authenticated are direct and general obligations of the University, and the University hereby pledges its full faith and credit for the payment of the principal and Redemption Price of and interest on all of the Bonds (provided, however, there shall be excluded from the pledge of the Indenture any revenues, moneys, securities or funds heretofore or hereafter specially pledged by the University for the payment of other bonds, notes or other indebtedness), together with all amounts and investment earnings thereon held by the Trustee in the Funds established under the Indenture (other than any amounts held in any funds or accounts established under the applicable Supplemental Indenture and intended to be excluded from the pledge of the Indenture). The aggregate principal amount of the Bonds which may be executed, authenticated and delivered under the Indenture is not limited except as is or may hereafter be provided in the Indenture or as may be limited by law.

Bonds issued under the Indenture shall not be deemed to constitute a debt or liability of the State or any municipality thereof or a pledge of the faith and credit of the State or of any such municipality and the Bonds, Notes, Swaps, Subordinated Swaps, obligations of the University under a Swap Facility or Bond Facility, Reimbursement Obligations, Swap Payments and Termination Payments or other similar obligations of or payments by the University issued or incurred shall not constitute a debt or liability issued or guaranteed by or otherwise of the State.

(Indenture, Section 2.1)

General Provisions for Issuance of Bonds. The Supplemental Indenture authorizing the issuance of Bonds must specify or provide for all of the following matters: the authorized principal amount of said Series of Bonds; the purposes for which such Series of Bonds are being issued, which shall be one or more of the purposes of the Act; the date or dates of issue, maturity date or dates and amounts of each maturity of the Bonds of said Series; the interest rate or rates, or the manner of determining such rate or rates of the Bonds of said Series, and the interest payment dates (thereafter each an Interest Payment Date) therefor; the denomination or denominations of, and the manner of numbering and lettering, the Bonds of such Series; the Paying Agent and, subject to the provisions of the Indenture, the place or places of payment of the principal, Sinking Fund Installments, if any, and Redemption Price, if any, of and interest on the Bonds of such Series; the Redemption Price or Redemption Prices, if any, and, subject to the redemption provisions of the Indenture, the redemption terms, if any, for the Bonds of such Series; the form or forms of the Bonds of such Series (including whether such Bonds shall be issued in book-entry only form or definitive form) and the Trustee’s certificate of authentication; directions for the application of the proceeds of the Bonds of such Series; any other provisions determined to be necessary, convenient or desirable to better secure the Bonds or to make the Bonds more marketable and which are in the best interests of the University and not in conflict with the provisions of the Act and the Indenture, including but not limited to the funding of a Debt Service Reserve Fund with respect to such Series; and the provisions relating to a Swap, if any, or Swap Facility for the purpose of moderating interest rate fluctuations in connection with the issuance of the Bonds of such Series provided, however, in connection with the execution of a Swap related to a Series of Outstanding Bonds or a portion thereof, a Supplemental Indenture authorizing such Swap and identifying such Bonds of such Series to which the Swap relates and otherwise setting forth the applicable provisions under this Heading shall be adopted.

(Indenture, Section 2.2)

Conditions Precedent to Delivery of Bonds. All Bonds issued under the Indenture and Supplemental Indentures hereto shall be executed by the University for the original issuance and delivered to the Trustee and thereupon shall be authenticated by the Trustee and delivered to the

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University or upon its order, but only upon receipt by the Trustee of: a copy of the Indenture and any such Supplemental Indentures, certified by an Authorized Officer of the University; a copy, certified by an Authorized Officer of the University, of the resolution or resolutions of the appropriate board or boards of the University authorizing and providing the terms of such Bonds and providing for the sale or exchange thereof, and if the authority to make determinations as to sale or exchange of such Bonds shall be delegated or vested in an Authorized Officer of the University, a certificate of such Officer as to such sale or exchange; the written order of the University as to the delivery of such Bonds signed by an Authorized Officer of the University describing such Bonds to be authenticated and delivered, designating the purchaser or purchasers to whom such Bonds are to be delivered, and stating the purchase price of such Bonds; a Counsel’s Opinion dated as of the date of such delivery by the Trustee to the effect that (i) the Indenture and the Supplemental Indenture authorizing the issuance of such Bonds, if any, have been duly and lawfully entered into by the University, are in full force and effect and are valid and binding upon the University and enforceable in accordance with their terms, (ii) the Indenture creates the valid pledge which it purports to create of the moneys, securities and funds held or set aside under the Indenture, subject to the application thereof to the purposes and on the conditions permitted by the Indenture; and (iii) upon the execution, authentication and delivery thereof, such Bonds will be duly and validly issued and will constitute valid and binding general obligations of the University entitled to the benefits of the Indenture and such applicable Supplemental Indenture; except in the case of Refunding Bonds, a Certificate of an Authorized Officer of the University stating that the University is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Indenture; and such further documents, opinions, moneys and securities as are required by the provisions of the Act, the provisions under this heading, the provisions under the immediately succeeding heading, the provisions of the Indenture regarding Events of Default and remedies of bondholders, or any Supplemental Indenture adopted pursuant to the provisions of the Indenture regarding Supplemental Indentures.

(Indenture, Section 2.3)

Additional Bonds for Additional Projects and Other Purposes. One or more Series of Additional Bonds may be issued under and secured by the Indenture for the purpose of providing funds for each Additional Project (including for the purpose of completing any Project or the funding of any deficiency in the Debt Service Reserve Fund if required pursuant to the respective Supplemental Indenture). The Bonds of each such Series shall be authenticated and delivered by the Trustee only upon receipt by it of, among other things, a certificate of an Authorized Officer of the University, stating that the University is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Indenture.

(Indenture, Section 2.4)

Refunding Bonds. One or more series of Refunding Bonds may be authenticated and delivered to refund any (i) Outstanding Bonds, or (ii) outstanding NJEFA Bonds. Refunding Bonds shall be issued in a principal amount sufficient, together with other moneys available therefor, to accomplish such refunding and to make such deposits as are required by the provisions of the Act and the Indenture.

A series of Refunding Bonds issued for the purpose of refunding any Outstanding Bonds may be authenticated and delivered upon original issuance only upon receipt by the Trustee (in addition to the receipt by it of the documents required under the preceding heading) of:

(i) Irrevocable instructions to the Trustee, satisfactory to it, to give due notice of redemption of all the Bonds to be refunded on the redemption date, if any, specified in such instructions;

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(ii) Irrevocable instructions to the Trustee, satisfactory to it, to give the notice provided for in the provision of the Indenture regarding submission of Annual Financial Information (if applicable) to the Holders of the Bonds being refunded;

(iii) One of the following:

(a) moneys in an amount sufficient to effect payment at the applicable Redemption Price of the Bonds to be refunded, together with accrued interest on such Bonds to the redemption date, which moneys shall be held by the Trustee or any one or more of the Paying Agents in a separate account irrevocably in trust for and assigned to the respective Holders of the Bonds to be refunded, or

(b) Investment Obligations of the type described in the Indenture, in such principal amounts, of such maturities, bearing such interest, and otherwise having such terms and qualifications, as shall be necessary to provide moneys in an amount sufficient to effect payment at the applicable Redemption Price of the Bonds to be refunded, together with accrued interest on such Bonds to the Redemption Date, which money or Investment Obligations shall be held by the Trustee or any one or more of the Paying Agents in a separate account in trust under the Indenture, or

(iv) A Certificate of an Authorized Officer containing such additional statements as may be reasonably necessary to show compliance with the requirements of subsections (a), (b), and (c) of this paragraph.

A series of Refunding Bonds issued for the purpose of refunding any outstanding NJEFA Bonds may be authenticated and delivered upon original issuance only upon receipt by the Trustee (in addition to the receipt by it of the documents required by Section 2.4) of:

(i) A certificate of an Authorized Officer certifying to the effect that all conditions precedent to the defeasance of such NJEFA Bonds to be refunded have been satisfied, together with copies of any escrow deposit agreement, letter or instruction or such other document or documents pursuant to which the refunding of such NJEFA Bonds is effectuated.

Any balance of the proceeds of the Bonds of each such Series shall be deposited in such Funds or Accounts as shall be specified in the Supplemental Indenture authorizing such series of Refunding Bonds.

(Indenture, Section 2.5)

Application of Bond Proceeds. Except as otherwise expressly provided in the Indenture, proceeds of Bonds, upon their issuance, sale and delivery, shall be deposited in the Funds, Accounts or sub-accounts of the University in accordance with the provisions of the Supplemental Indenture authorizing the issuance of such Bonds and shall be expended solely for the purposes for which amounts in said Funds, Accounts or sub-accounts, respectively, may be expended in accordance with the provisions of the Indenture.

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Accrued interest, if any, received upon the delivery of any Bonds and the amount received as a net premium over the principal amount of such Bonds, if any, upon delivery of such Bonds shall be deposited in the Costs of Issuance Account or otherwise, as set forth in the Supplemental Indenture.

The proceeds of sale of the Bonds of a series of Refunding Bonds shall be deposited in the Redemption Fund or shall be applied as otherwise provided in the Supplemental Indenture authorizing the issuance of such Bonds.

(Indenture, Section 4.1)

Establishment of Funds. The University hereby establishes and creates the following funds and accounts to be held by the Treasurer, the University or the Trustee as set forth opposite such Fund or Account:

(a) Bond Proceeds Fund to be held by the University.

(i) Construction Account.

(ii) Costs of Issuance Account.

(b) Debt Service Fund to be held by the Trustee.

(c) Debt Service Reserve Fund (if required pursuant to the Supplemental Indenture authorizing such Series of Bonds) to be held by the Trustee.

(d) Redemption Fund to be held by the Trustee.

The University reserves the right and power, subject to the Indenture, to establish additional funds, accounts and sub-accounts under the Indenture. All funds, accounts and sub-accounts created under the Indenture, in addition to other funds, accounts or sub-accounts from time to time established under the Indenture, shall be held and maintained by the Trustee or the University in accordance with the terms of the Indenture.

(Indenture, Section 5.1)

Bond Proceeds Fund.

Amounts in each separate account established for the Facilities and any such Additional Project shall be applied to the payment of Costs of Construction, including the purpose or purposes specified in the Supplemental Indenture authorizing the Bonds issued with respect to the Facilities and any such Additional Project, as the case may be, and pending such application such amounts shall be subject to a lien and charge in favor of the Holders of the Bonds and shall be held for the further security of such Holders until applied as provided in the Indenture.

Amounts in the Construction Account, in the discretion of the University, may be invested in Investment Securities maturing in such amounts and at such times as may be necessary to provide funds when needed to pay the costs to which such moneys are applicable. Upon the filing of a certificate by an Authorized Officer of the University evidencing completion of construction of any Additional Project, any balance in the separate sub-account of the Construction Account established for such Additional Project in excess of the amount, if any, stated in such certificate

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shall be paid over to the Trustee for deposit in the Debt Service Reserve Fund, if and to the extent necessary to make the amount in such Fund equal to the Debt Service Reserve Requirement with respect to such Series of Bonds, if applicable, and any remaining balance in said separate sub-account of the Construction Account shall, upon written direction of the University, be applied to the Costs of Construction of any other Additional Project or be deposited in the Redemption Fund and applied to the purchase or redemption of Bonds pursuant to provision regarding the Redemption Fund.

Within the Bond Proceeds Fund the University shall maintain a separate account designated “Costs of Issuance Account”. There shall be deposited in the Costs of Issuance Account (i) all moneys required to be deposited therein both pursuant to the Indenture and pursuant to a Supplemental Indenture under which Bonds are issued and (ii) all other moneys of the University available therefore, as determined by the University. The University shall apply amounts in the Costs of Issuance Account to pay the Costs of Issuance incurred in connection with the authorization, issuance and delivery of the corresponding Bonds.

After payment of all Costs of Issuance on the Bonds, any interest earnings in the Bond Proceeds Fund remaining shall be remaining amounts and credited for deposit in the Debt Service Reserve Fund, if and to the extent necessary to make the amount in such Fund equal to the Debt Service Reserve Requirement with respect to such Series of Bonds, if applicable, and any remaining balance in said separate account in the Costs of Issuance Account shall, upon written direction of the University, be applied to the Costs of Construction of any other Additional Project or be deposited in the Redemption Fund and applied to the purchase or redemption of Bonds pursuant to the Indenture.

(Indenture, Section 5.2)

Payments. Except as otherwise provided in the applicable Supplemental Indenture, the University shall pay at least three days before each Interest Payment Date from legally available funds of the University to the Trustee sufficient funds, such that:

(c) on each Interest Payment Date, the Trustee shall pay out of the Debt Service Fund to the respective Paying Agents for any Bonds, (i) the amounts required for the payment of interest on Outstanding Bonds and Swap Payments due on such date and (ii) on or before the Redemption Date or date of purchase, the amounts required for the payment of accrued interest on Bonds redeemed or purchased for retirement, unless the payment of such accrued interest shall be otherwise provided for, and in each such case, such amounts shall be applied by such Paying Agents to such payments.

(d) on each Principal Installment Payment Date, the Trustee shall pay out of the Debt Service Fund to the respective Paying Agents the amounts required for the payment of principal due on Outstanding Bonds on such date and such amounts shall be applied by the Paying Agents to such payments.

(e) whenever the amount in a Debt Service Reserve Account of the Debt Service Reserve Fund shall be less than the Debt Service Reserve Requirement for such Series, one-twelfth of the original amount of such deficiency for deposit in such Account on the fifteenth day of each month commencing in the calendar month immediately succeeding the creation of such deficiency.

(Indenture, Section 5.3)

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Application of Certain Funds

Debt Service Fund. The Trustee shall pay out of the Debt Service Fund to the respective Paying Agents (i) prior to each Interest Payment Date for any of the Bonds, the amount required for the interest payable and Swap Payments on such date, and (ii) prior to each Principal Installment Date of any of the Bonds, the amount required for the principal of such Bonds payable on such Principal Installment Date. Such amounts shall be applied to the payment of such Interest Requirement and Principal Installment by the Paying Agents in accordance with the tenor of the Bonds.

Amounts accumulated in the Debt Service Fund with respect to any Sinking Fund Installments shall be set aside in said Fund for each such Sinking Fund Installment pro rata according to the amounts of the Sinking Fund Installments. The amount so set aside for each Sinking Fund Installment shall be applied as directed by the University (together with amounts accumulated therein with respect to interest on the Bonds for which such Sinking Fund Installment was established) by the Trustee prior to the 45th day preceding the due date of such Sinking Fund Installment to (i) the purchase at the written direction of the University of Bonds of the Series and maturity for which such Sinking Fund Installment was established, at prices not exceeding the applicable sinking fund Redemption Price, such purchases to be made in such manner (whether through direct negotiated purchases or otherwise) as the Trustee shall determine, or (ii) the redemption of such Bonds, if then redeemable by their terms. As soon as practicable after the 45th day preceding the due date of any such Sinking Fund Installment, the Trustee shall proceed to call for redemption on such due date Bonds of the Series and maturity for which such Sinking Fund Installment was established (except in the case of Bonds maturing on a Sinking Fund Installment due date) in such amount as shall be necessary to complete the retirement of the principal amount, specified for such Sinking Fund Installment, of the Bonds of such Series and maturity. The Trustee shall so call such Bonds for redemption whether or not it then has moneys in the Debt Service Fund sufficient to pay the applicable Redemption Price thereof together with interest thereon to the redemption date. The Trustee shall pay out of the Debt Service Fund to the appropriate Paying Agents, prior to such redemption date, the amount required for the redemption of the Bonds so called for redemption, and such amount shall be applied by such Paying Agents to such redemption.

Debt Service Reserve Fund. The Trustee shall establish in the Debt Service Reserve Fund a separate series account for the Bonds of any Series for which a Debt Service Reserve Account of the Debt Service Reserve Fund as shall be required in the applicable Supplemental Indenture securing such Series of Bonds.

If three (3) days prior to any Interest Payment Date, or as otherwise provided in the applicable Supplemental Indenture, there shall not have been deposited in the Debt Service Fund the amount required to pay interest and principal or if the amount in the Debt Service Fund shall not be sufficient to pay the Interest Requirement and Principal Installment Requirement with respect to such Series of Bonds for which the Debt Service Reserve Account of the Debt Service Reserve Fund was established, as the same shall become due, the Trustee shall apply amounts from the applicable Debt Service Reserve Account of the Debt Service Reserve Fund to the extent necessary to fund such deficiency.

Amounts in the Debt Service Reserve Account of the Debt Service Reserve Fund in excess of the applicable Debt Service Reserve Requirement with respect such Series of Bonds shall be transferred by the Trustee at the direction of an Authorized Officer of the University, either to the Construction Account and applied to the Costs of Construction of such Facility as shall be designated by such Authorized Officer of the University, to the Debt Service Fund or to the Redemption Fund.

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Redemption Fund. The Trustee shall establish in the Redemption Fund a separate Series account for the Bonds of each series.

Any moneys which are required or permitted to be deposited into a Series account established as aforesaid, of the Redemption Fund pursuant to the Indenture shall be set aside in such sub- account. Upon deposit of such moneys in any such Series account or within thirty (30) days thereafter, the University may give written direction to the Trustee signed by an Authorized Officer, of the Redemption Date, of the maturity or maturities of the Bonds of such Series to be purchased or redeemed and of the principal amounts of each maturity or maturities to be purchased or redeemed, subject to any limitations with respect thereto contained in the Indenture and the Supplemental Indenture authorizing such Series.

Moneys so held in each such separate account by the Trustee shall be applied to the purchase or retirement of Bonds of the Series in respect of which such account was created as follows:

(i) The Trustee shall promptly apply such moneys to the purchase of Bonds of such maturity or maturities of the Series in respect of which such account was created, as may be directed by an Authorized Officer in the manner provided in this paragraph and in such order or priority and subject to any limitations and permissions with respect thereto contained in this paragraph or the applicable Supplemental Indenture at the most advantageous price obtainable with reasonable diligence, whether or not such Bonds shall then be subject to redemption, such price, however, not to exceed the Redemption Price applicable by operation of the Redemption Fund which would be payable on the next ensuing Redemption Date on which Bonds of the Series so purchased are redeemable according to their terms. Unless otherwise directed by an Authorized Officer as aforesaid and subject to the other limitations set forth in the preceding sentence, the Trustee may purchase any Bonds of such Series. The Trustee shall pay the interest accrued on Bonds so purchased to the date of delivery thereof from the Debt Service Fund and the balance of the purchase price from the applicable account established within the Redemption Fund, as provided above, to the Trustee, but no such purchase shall be made by the Trustee within the period of forty-five (45) days next preceding a date on which such Bonds are subject to redemption under the provisions of the Supplemental Indenture authorizing the issuance thereof.

(ii) In the event the Trustee is able to purchase a principal amount equivalent to the sum of the deposits in the account, as provided in this paragraph, of Bonds for such Account in accordance with and under the foregoing provisions of this paragraph at a purchase price less than the sum of such deposits in such account, excluding the applicable transfers from the Debt Service Fund, upon the payment by the Trustee of the purchase price of such Bonds, the University shall direct the Trustee to transfer the balance of moneys remaining in such account to, and deposit the same in the Debt Service Fund.

In the event the Trustee is unable to purchase Bonds of a Series in accordance with and under the provisions of the preceding paragraph, and there is $100,000 or more in the account established for such Series of Bonds, the Trustee shall call for redemption on the next ensuing Redemption Date such amount of Bonds of such maturity or maturities of the Series in respect of which such account was created as may be directed by an Authorized Officer in the manner provided in the Indenture and in such order or priority and subject to any limitations and permissions with respect thereto contained in this paragraph or the applicable Supplemental Indenture, at the Redemption Price applicable by operation of the Redemption Fund in the next ensuing Redemption Date, as will exhaust said Account as nearly as may be

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possible. Unless otherwise directed by an Authorized Officer as aforesaid and subject to the other limitations set forth in the preceding sentence, the Trustee shall redeem Bonds of such Series in inverse order of their maturities and by lot within a maturity. Such redemption shall be made pursuant to the provisions of the Indenture. The Trustee shall pay the interest accrued on the Bonds so redeemed to the date of redemption from the Debt Service Fund and the Redemption Price from the applicable account.

Except as otherwise required above, and subject to the provisions of any Supplemental Indenture directing or permitting the application of any part of the moneys in the Redemption Fund to the purchase or redemption of Bonds of any particular Series, and to the redemption provisions of the Bonds, amounts in the Redemption Fund shall be applied by the Trustee to the purchase or redemption of Bonds (accrued interest on such Bonds to be provided out of the Debt Service Fund), provided, however, the University shall direct the selection of the Bonds to be purchased and the purchase price thereof, within the limits provided by law, and the amount and date of redemption of the Bonds to be redeemed, so as to apply amounts in said Sub-Account to such purposes as rapidly as in its judgment is reasonably practicable. Such purchases shall be made in such manner as the Trustee shall determine and such redemption shall be made in the manner provided in the Indenture.

The University may, from time to time, by written instruction direct the Trustee to make purchases under clauses (i) and (ii) of paragraph (c) above only after receipt of tenders after published notice. The University may specify the length of notice to be given and the dates on which tenders are to be accepted. All such tenders shall be sealed proposals and no tenders shall be considered or accepted at any price exceeding the price specified under clauses (i) and (ii) of paragraph (c) above for the purchase of Bonds. The Trustee shall accept bids with the lowest price and if the moneys available for purchase pursuant to such tenders are not sufficient to permit acceptance of all tenders and there shall be tenders at an equal price above the amount of moneys available for purchase then the Trustee shall select by lot, in such manner as the Trustee shall determine in its discretion, the Bonds tendered which shall be purchased. No purchase of Bonds, either on tenders or otherwise, shall be made by the Trustee within the period of forty-five (45) days next preceding any date on which such Bonds are subject to redemption.

Upon any purchase or redemption of Bonds of any Series and maturity for which Sinking Fund Installments shall have been established other than by application of Sinking Fund Installments, an amount equal to the applicable Redemption Prices thereof (as specified below) shall be credited toward a part or all of any one or more of such Sinking Fund Installments, as directed by the University, or, failing such direction by the 15th day of the second month preceding the date of the applicable Sinking Fund Installment, toward such Sinking Fund Installments in inverse order of their due dates. Such applicable Redemption Prices shall be the respective Redemption Prices which would be applicable upon the redemption of such Bonds from the respective Sinking Fund Installments on the due dates thereof. The portion of any such Sinking Fund Installment remaining after the deduction of any such amounts credited toward the same (or the original amount of any such Sinking Fund Installment if no such amounts shall have been credited toward the same) shall constitute the unsatisfied balance of such Sinking Fund Installment for the purpose of the calculation of Principal Installments due on a future date.

Amounts in the Redemption Fund may, and at the direction of the University shall, be invested in Investment Obligations maturing not later than five (5) days prior to the date when such moneys must be applied to the purchase or redemption of Bonds in accordance with the redemption provisions of the Indenture.

(Indenture, Sections 5.4, 5.5, and 5.6)

Pledge Effected by the Indenture. All the moneys, securities, and funds held or set aside by the Trustee under the Indenture (other than amounts held in any funds or accounts established under

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the applicable Supplemental Indenture and intended to be excluded from the pledge of the Indenture) are hereby pledged to secure payment of the principal and Redemption Price of, interest on, and Sinking Fund Installments for, the Bonds in accordance with their terms, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture. The pledge created by the Indenture shall be valid and binding from and after the time made against all parties having claims of any kind in tort, contract or otherwise against the University.

(Indenture, Section 5.9)

Investment of Certain Funds. Moneys held in the Debt Service Fund, the Debt Service Reserve Fund, the Bond Proceeds Fund and the Redemption Fund shall be invested and reinvested by the Trustee, upon receipt of written instructions from an Authorized Officer of the University, in Investment Securities, which obligations shall mature not later than such times as shall be necessary to provide moneys when needed for payments to be made from such Funds. The University shall provide to the Trustee such information as the Trustee may reasonably request to confirm that a proposed investment constitutes Investment Securities under the Indenture.

Unless otherwise provided in the Indenture, any income or interest earned and gains realized in excess of any losses suffered as a result of investment of moneys on deposit to the credit of any Fund or Account pursuant to this heading shall be credited to such Fund or Account.

(Indenture, Section 6.3)

Valuation and Sale of Investments. Obligations purchased as an investment of moneys in any Fund created under the provisions of the Indenture shall be deemed at all times to be a part of such Fund and any income realized from the liquidation of such investment shall be credited to such Fund and any loss resulting from the liquidation of such investment shall be charged to the respective Fund.

In computing the amount in any Fund created under the provisions of the Indenture for any purpose provided in the Indenture, obligations purchased as an investment of moneys therein shall be valued at cost or the principal amount thereof, whichever is lower, exclusive of accrued interest.

(Indenture, Section 6.4)

Payment of Bonds. The University covenants with the Holders of the Bonds that it will pay or cause to be paid promptly the principal and Redemption Price of and the interest on the Bonds at the places, on the dates and in the manner provided in the Indenture and in the Bonds, according to the true intent and meaning thereof, and shall duly and punctually satisfy all Sinking Fund Installments which may be established for any Series. The Holders of all Bonds shall have a valid and enforceable lien on all moneys, securities or funds pledged under the Indenture (other than for amounts held in any funds or accounts established under the applicable Supplemental Indenture and intended to be excluded from the pledge of the Indenture) until all of the Bonds and the interest thereon shall have been paid in the manner provided in the Indenture.

(Indenture, Section 7.1)

Extension of Payment of Bonds. The University shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of interest or claims for interest by the purchase or funding of such Bonds, interest or claims for interest or by any other arrangement and in case the maturity of any of the Bonds or the time for payment of any such interest or claims for interest shall be extended, such Bonds, interest or claims for interest shall not be entitled, in

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case of any default under the Indenture, to the benefit of the Indenture or to any payment out of Funds established by the Indenture, including the investments, if any, thereof, pledged under the Indenture or the moneys (except moneys held in trust for the payment of particular Bonds, interest or claims for interest pursuant to the Indenture) held by the Trustee or Paying Agents, except subject to the prior payment of the principal of all Bonds Outstanding the maturity of which has not been extended and of such portion of the accrued interest on the Bonds as shall not be represented by claims for interest. Nothing in the Indenture shall be deemed to limit the right of the University to issue Refunding Bonds and such issuance shall not be deemed to constitute an extension of maturity of Bonds.

(Indenture, Section 7.2)

Construction of Facility. The University covenants that it will promptly proceed with the construction of any Additional Project to be financed in whole or in part by the issuance of Bonds in conformity with law and all requirements of the governmental authorities having jurisdiction thereover and that it will complete such construction with all expedition possible.

(Indenture, Section 7.3)

Creation of Liens. The University covenants that it will not issue any bonds or other evidences of indebtedness, other than the Bonds, secured by a pledge of the moneys, securities or funds held or set aside by the University or by the Trustee under the Indenture and shall not create or cause to be created any lien or charge on such moneys, securities or funds; provided, however, that nothing contained in the Indenture shall prevent the University from issuing evidences of indebtedness payable out of, or secured by a pledge of the University’s general obligation or general revenues or any other sources available to the University.

(Indenture, Section 7.4)

Further Assurances. The University covenants that it will, at any and all times so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming all and singular the rights and other moneys, securities and funds pledged or assigned under the Indenture, or intended so to be, or which the University may hereafter become bound to pledge or assign. The University further covenants that it will comply with all valid acts, rules and regulations, orders and directions of any legislative, executive, administrative or judicial body, applicable to the University.

(Indenture, Section 7.5)

Payment of Obligations. The University shall at all times charge and collect tuition, fees, rents, charges and other revenues which, together with other legally available funds, shall be sufficient to make all payments as the same become due of principal, interest and Sinking Fund Installments with respect to any and all Indebtedness of the University and to meet all other obligations of the University, provided that this Heading shall not require the payment or performance of any debt, claim or obligation so long as the validity of the same shall be contested in good faith by the University.

(Indenture, Section 7.6)

Sale and Lease of Facilities. The University may, from time to time, sell, exchange or otherwise dispose of any Facility or any part thereof or any machinery, fixtures, apparatus, tools, instruments or other movable property acquired by it from the proceeds of Bonds or otherwise, if it shall

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determine that such articles are no longer needed or are no longer useful in connection with the needs of the University and the proceeds thereof shall be applied by the University to any of its legally authorized purposes. Notwithstanding the foregoing sentence or anything otherwise in the Master Indenture to the contrary, the University may, from time to time, sell, exchange or otherwise dispose of any Facility or any part thereof or any machinery, fixtures, apparatus, tools, instruments or other movable property acquired by it from the proceeds of Bonds or otherwise, if there shall be delivered to the Trustee a Counsel’s Opinion to the effect that any such any such sale, exchange or disposition will not violate the provisions of the Act. The University may from time to time sell, exchange or otherwise dispose of any real property or release, relinquish or extinguish any interest therein as the University shall determine is not needed or serves no useful purpose in connection with the needs of the University. The proceeds thereof, if any, shall be applied as hereinabove provided for the proceeds of the sale or disposal of movable property.

(Indenture, Section 7.7)

Documents Available for Inspection. The reports, certificates, statements and other documents required to he filed with the Trustee or the University pursuant to the Indenture shall be available for the inspection of Bondholders at reasonable times at the offices of the Trustee and the University, respectively.

(Indenture, Section 7.9)

Events of Default. Each of the following events is declared to be an “Event of Default” under the Indenture, that is to say:

(a) Default in the payment of the principal or Redemption Price of any Bond when the same shall become due and payable whether at maturity or by call for redemption, or otherwise;

(b) Default in the payment of any installment of interest on any Bond when the same shall become due and payable, and continuance of such default for a period of thirty (30) days;

(d) The University shall (i) apply for or consent to the appointment of or the taking of possession by a receiver, liquidator, custodian or trustee of itself or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (vi) fail to controvert in a timely or appropriate manner, or acquiesce in writing to, any petition filed against itself in an involuntary case under such Bankruptcy Code, or (vii) take any action for the purpose of effecting any of the foregoing;

(e) The University shall default in the performance or observance of any other of the covenants, agreements or conditions on its part in the Indenture or in the Bonds contained, and such default shall continue for a period of sixty (60) days after written notice thereof to the University by the Trustee or to the University and to the Trustee by the Holders of not less than 10% in aggregate principal amount of the Bonds Outstanding; and

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(f) An Event of Default, as defined in a Supplemental Indenture.

(Indenture, Section 8.1)

Acceleration of Due Date. Upon the happening and continuance of any Event of Default, unless the principal of all of the Bonds shall have already become due and payable, either the Trustee (by notice in writing to the University), or the Holders of not less than 25% in aggregate principal amount of the Bonds Outstanding (by notice in writing to the University and the Trustee), may declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and be immediately due and payable, anything in the Indenture or in any of the Bonds contained to the contrary notwithstanding. The right of the Trustee or of the Holders of not less than 25% in aggregate principal amount of the Bonds Outstanding to make any such declaration as aforesaid, however, is subject to the condition that if, at any time after such declaration, but before the Bonds shall have matured by their terms, all overdue installments of interest upon the Bonds, together with the reasonable and proper charges, expenses and liabilities of the Trustee, and all other sums then payable by the University under the Indenture (except the principal of, and interest accrued since the next preceding interest payment date on, the Bonds due and payable solely by virtue of such declaration) shall either be paid by or for the account of the University or provision satisfactory to the Trustee shall be made for such payment, and all defaults under the Bonds or under the Indenture (other than the payment of principal and interest due and payable solely by reason of such declaration) shall be made good or be secured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall be made therefor, then and in every such case the Holders of a majority in aggregate principal amount of the Bonds Outstanding, by written notice to the University and to the Trustee, may rescind such declaration and annul such default in its entirety, or, if the Trustee shall have acted without a direction from the Holders of a majority in aggregate principal amount of the Bonds Outstanding, and if there shall not have been theretofore delivered to the Trustee written direction to the contrary by the Holders of a majority in aggregate principal amount of the Bonds then Outstanding, then any such default and its consequences shall ipso facto be deemed to be annulled, but no such rescission and annulment shall extend to or affect any subsequent default or impair or exhaust any right or power consequent thereon.

(Indenture, Section 8.2)

Enforcement of Remedies. Upon the happening and continuance of any Event of Default, then and in every such case the Trustee may proceed, and upon the written request of the Holders of not less than 25% in aggregate principal amount of the Bonds Outstanding shall proceed (subject to the provisions of the Indenture regarding the Indemnity of Fiduciaries) to protect and enforce its rights and the rights of the Bondholders under the law and under the Indenture forthwith by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board or officer having jurisdiction, whether for the specific performance of any covenant or agreement contained in the Indenture or in aid of the execution of any power granted therein or in the law or for the enforcement of any legal or equitable rights or remedies as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights or to perform any of its duties under the Indenture.

In the enforcement of any right or remedy under the Indenture or under the law, the Trustee shall be entitled to sue for, enforce payment on and receive any or all amounts then or during any default becoming, and any time remaining, due from the University, for principal, Redemption Price, interest or otherwise under any of the provisions of the Indenture or of the Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified in the Bonds, together with any and all costs and expenses of collection and of all proceedings under the Indenture and under the Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and

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enforce judgment or decree against the University, but solely as provided in the Indenture and in the Bonds, for any portion of such amounts remaining unpaid, with interest, costs, and expenses, and to collect in any manner provided by law, the moneys adjudged or decreed to be payable.

Regardless of the happening of an Event of Default, the Trustee shall have the power to, but unless requested in writing by the Holders of 25% in aggregate principal amount of the Bonds then Outstanding, and furnished with reasonable security and indemnity, shall be under no obligation to, institute and maintain such suits and proceedings as it may be advised shall be necessary or expedient to prevent any impairment of the security under the Indenture by any acts which may be unlawful or in violation of the Indenture or of any resolution authorizing Bonds, and such suits and proceedings as the Trustee may be advised shall be necessary or expedient to preserve or protect its interests and the interests of the Bondholders.

All remedies conferred upon or reserved to the Holders of Bonds under the Indenture may also be conferred upon and reserved to the provider of a related Bond Facility, a Swap Provider or the provider of a Swap Facility authorized by a Supplemental Indenture and may be cumulative as provided in the subheading below entitled “Remedies not Exclusive.” Nothing in the Indenture shall preclude the University from providing in an applicable Supplemental Indenture or in any Bond Facility, any Swap or any related Swap Facility authorized thereby, that the exercise of any remedy under the Indenture or the waiver of any event of default under the Indenture by the Trustee or the Holder of any such Bond shall be subject to the prior written consent of the provider of any related Bond Facility, any Swap Provider or the provider of a related Swap Facility. Such Supplemental Indenture or related Bond Facility or related Swap Facility may provide that any and all notices required to be given under the provisions of the Indenture regarding events of default and remedies of Bondholders by the University or the Trustee to the Holder of any Bond shall also be given to the provider of any related Bond Facility, any Swap Provider or the provider of a related Swap Facility.

(Indenture, Section 8.3)

Application of Revenues and Other Moneys after Default. If at any time the moneys in the Debt Service Fund, the Debt Service Reserve Fund and the Redemption Fund shall be insufficient for the payment of interest and principal or Redemption Price, then due on the Bonds, the Trustee shall apply such moneys and any other moneys held, received or collected by the Fiduciaries (other than moneys held for the payment or redemption of particular Bonds which have theretofore become due at maturity or by call for redemption), for the payment of the charges and expenses and liabilities incurred and advances made by the Fiduciaries in the performance of their duties under the Indenture, and then as follows:

(a) Unless the principal of all the Bonds shall have become or have been declared due and payable,

First: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, together with accrued and unpaid interest on Bonds theretofore called for redemption, and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installments, to the persons entitled thereto, without any discrimination or preference;

Second: To the payment to the persons entitled thereto of the unpaid principal or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the order of their due dates and, if the amount available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof

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ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, without any discrimination or preference; and

Third: To the payment to other persons entitled to payment under the Indenture or under the applicable Supplemental Indenture.

(b) If the principal of all of the Bonds shall have become or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds.

Whenever moneys are to be applied by the Trustee pursuant to the provisions under this heading, such moneys shall be applied by the Trustee at such times, and from time to time, as the Trustee in its sole discretion shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional money becoming available for such application in the future; the deposit of such moneys with the Paying Agents, or otherwise setting aside such moneys in trust for the proper purpose, shall constitute proper application by the Trustee; and the Trustee shall incur no liability whatsoever to the University, to any Bondholder or to any other person for any delay in applying any such moneys, so long as the Trustee acts with reasonable diligence, having due regard for the circumstances, and ultimately applies the same in accordance with such provisions of the Indenture as may be applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such moneys, it shall fix the date (which shall be an Interest Payment Date unless the Trustee shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate for the fixing of any such date. Unless otherwise required by the book-entry system for the Bonds, the Trustee shall not be required to make payment to the Holder of any unpaid interest or any Bond unless such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

(Indenture, Section 8.4)

Effect of Discontinuance of Proceedings. In case any proceeding taken by the Trustee on account of any Event of Default shall have been discontinued or abandoned for any reason, then and in every such case the University, the Trustee and the Bondholders shall be restored, respectively, to their former positions and rights under the Indenture, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken.

(Indenture, Section 8.5)

Majority Bondholders Control Proceedings. The Holders of a majority in aggregate principal amount of the Bonds Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all remedial proceedings to be taken by the Trustee under the Indenture, provided that such direction shall not be unreasonably burdensome to the Trustee or otherwise than in accordance with law or the provisions of the Indenture.

(Indenture, Section 8.6)

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Individual Bondholder Action Restricted. No Holder of any of the Bonds shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law for the execution of any trust under the Indenture, or the protection or enforcement of any right under the Indenture, or any right under the laws of the State of New Jersey, unless such Holder shall have given to the Trustee written notice of the Event of Default or breach of trust or duty on account of which such suit, action or proceeding is to be taken, and unless the Holders of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall have made written request of the Trustee and shall have afforded the Trustee a reasonable opportunity either to exercise the powers granted in the Indenture or granted by the laws of the State of New Jersey, or to institute such action, suit or proceeding in its or their name, and unless, also, there shall have been offered to the Trustee adequate security and indemnity against the cost, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time. It is understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatever by his, its or their action to affect, disturb or prejudice the security of the Indenture, or to enforce any right under the Indenture or under the laws of the State of New Jersey with respect to the Bonds or the Indenture, except in the manner provided in the Indenture, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided in the Indenture and for the equal benefit of all Holders of the Bonds.

Nothing in the Indenture or in the Bonds contained shall affect or impair the obligation of the University, which is absolute and unconditional, to pay at the respective dates of maturity or redemption the principal or Redemption Price of and interest on the Bonds to the respective Holders thereof, or affect or impair the right of action, which is also absolute and unconditional, of any Holder to enforce such payment of his Bond.

(Indenture, Section 8.7)

Remedies Not Exclusive. No remedy by the terms of the Indenture conferred upon or reserved to the Trustee or to the Holders of the Bonds is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute.

(Indenture, Section 8.9

Delay or Omission and Waiver of Default. No delay or omission of the Trustee or of any Holder of the Bonds to exercise any right or power arising upon any default shall impair any right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by the Indenture to the Trustee and the Holders of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient by the Trustee or by the Bondholders.

Prior to the declaration of maturity of the Bonds as provided in heading above entitled “Acceleration of Due Date,” the Holders of not less than 50% in aggregate principal amount of the Bonds at the time Outstanding, or their attorneys-in-fact duly authorized, may on behalf of the Holders of all of the Bonds waive any past default under the Indenture and its consequences, except a default in the payment of interest on or principal or Sinking Fund Installments or Redemption Price of any of the Bonds. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

(Indenture, Section 8.10)

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Resignation of Trustee. The Trustee may resign and thereby become discharged from the trusts created under the Indenture, by notice in writing to be given to the University and by notice mailed by first class mail to the University and the Holders of all Bonds not less than sixty (60) days before such resignation is to take effect, but such resignation shall not take effect until the appointment and acceptance of a successor Trustee.

(Indenture, Section 9.8)

Removal of Trustee. During any period in which no Event of Default shall have occurred or be continuing, the Trustee may be removed for any reason, with or without cause (i) by the University, by written instrument delivered to the Trustee without consent of the Bondholders, or (ii) by the holders of at least 25% of the Outstanding Bonds, by written instrument or concurrent instruments in writing signed and acknowledged by such holders or by their attorneys-in-fact and delivered to the University and the Trustee.

During any period in which any Event of Default shall have occurred or be continuing, the Trustee may be removed (i) by the University, with cause, by written instrument delivered to the Trustee, or (ii) by the holders of at least 25% of the Outstanding Bonds, with cause, by written instrument or concurrent written instruments signed and acknowledged by such holders or by their attorneys-in-fact and delivered to the University and the Trustee. Notwithstanding the foregoing, holders of at least 25% of the Outstanding Bonds may cancel or overturn any removal of the Trustee undertaken by the University pursuant to this paragraph (2) by written instrument or concurrent written instruments signed and acknowledged by such holders or their attorneys-in-fact and delivered to the University and the Trustee prior to the date of removal of the Trustee. The Trustee may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provision of the Indenture with respect to the duties and obligations of the Trustee by any court of competent jurisdiction upon the application of the University or of the holders of not less than ten percent of the Outstanding Bonds.

The removal of the Trustee will not relieve the Trustee of liability for (i) any action or omission to act in breach of its fiduciary duties under the Indenture that occurred prior to the date of removal, or (ii) acting or proceeding in violation of, or failing to act or proceed in accordance with, any provision of the Indenture with respect to the duties and obligations of the Trustee that occurred prior to the date of removal.

(Indenture, Section 9.9)

Successor Trustee. If at any time the Trustee shall resign, or shall be removed, be dissolved or otherwise become incapable of acting or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator thereof, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee, or of its property or affairs, the position of Trustee shall thereupon become vacant. If the position of Trustee shall become vacant for any of the foregoing reasons or for any other reason, the University shall proceed with diligence to appoint and accept a successor Trustee to fill such vacancy within twenty (20) days after such appointment, the University shall cause notice of such appointment to be mailed by first class mail to the Holders of the Bonds, with a copy to any nationally recognized rating agency then rating the Bonds.

At any time within one year after any such vacancy shall have occurred, the Holders of a majority in aggregate principal amount of the Bonds then Outstanding, by an instrument or concurrent instruments in writing, signed by such Bondholders or their attorneys-in-fact thereunto duly authorized and filed with the University, may appoint a successor Trustee, which shall, immediately and without

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further act, supersede any Trustee theretofore appointed by the University. Photostatic copies of each such instrument shall be delivered promptly by the University to the predecessor Trustee, and to the Trustee so appointed by the Bondholders.

If no appointment of a successor Trustee shall be made pursuant to the foregoing provisions under this Heading, the Holder of any Bond then Outstanding, or any retiring Trustee, may apply to any court of competent jurisdiction to appoint a successor Trustee. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee.

Any Trustee appointed under the provisions under this Heading in succession to the Trustee shall be a bank or trust company organized and existing under and by virtue of the laws of the State of New Jersey or a national banking association, doing business in the State of New Jersey, and having capital stock and surplus aggregating at least $100,000,000, if there be such a bank or trust company or national banking association willing and able to accept the office on reasonable and customary terms and authorized by law and its charter to perform all the duties imposed upon it by the Indenture.

(Indenture, Section 9.10)

Supplemental Indentures Without Bondholders’ Consent. The University and the Trustee may, from time to time and at any time, make and enter into indentures supplemental to the Indenture without consent of the Bondholders, the provider of either a Bond Facility, or a Swap Facility or Swap Provider, as follows: (i) to provide for the issuance of Bonds or Notes or Swaps pursuant to the provisions of the Indenture and to prescribe the terms and conditions pursuant to which such Bonds or Notes or Swaps may be issued, paid or redeemed; (ii) to cure (y) any formal defect or omission in the Indenture, or (z) any ambiguity therein if such action is not adverse to the interests of the Bondholders; (iii) to grant to or confer upon the Trustee for the benefit of the holders of the Bonds or Notes or Swaps, any additional rights, remedies, powers, authority or security which may lawfully be granted or conferred and which are not contrary to or inconsistent with the Indenture as theretofore in effect; (iv) to close the Indenture against, or provide limitations and restrictions in addition to the limitations and restrictions contained in the Indenture on, the authentication and delivery of Bonds, Notes or Swaps or the issuance of other evidences of indebtedness;(v) to add to the covenants and agreements of the University in the Indenture, other covenants and agreements to be observed by the University which are not contrary to or inconsistent with the Indenture as theretofore in effect; (vi) to add to the limitations and restrictions in the Indenture, other limitations and restrictions to be observed by the University which are not contrary to or inconsistent with the Indenture as theretofore in effect; (vii) to confirm, as further assurance, any pledge under, and the subjection to any lien or pledge created or to be created by, the Indenture, any other moneys, securities or funds; (viii) to modify any of the provisions of the Indenture in any respect whatever, provided that (y) such modification shall be, and be expressed to be, effective only after all Bonds of any Series Outstanding at the date of the execution of such Supplemental Indenture shall cease to be Outstanding and (z) such Supplemental Indenture shall be specifically referred to in the text of all Bonds of any Series authenticated and delivered after the date of the execution of such Supplemental Indenture and of Bonds issued in exchange therefor or in place thereof; and (ix) to make any other change which, in the judgment of the Trustee, does not materially adversely affect the interests of Bondholders.

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Before the Trustee shall execute any Supplemental Indenture pursuant to the provisions under this Heading, there shall have been filed with the Trustee an opinion of counsel for the University stating that such Supplemental Indenture has been duly authorized by the University, that it is authorized or permitted by the Indenture and complies with its terms, and that upon execution and delivery it will be valid and binding upon the University in accordance with its terms.

(Indenture, Section 11.2)

Supplemental Indentures With Bondholders’ Consent. Subject to the terms and provisions contained under this Heading, and not otherwise, (i) the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, and (ii) in case less than all of the several Series of Bonds then Outstanding are affected, the Holders of not less than a majority in aggregate principal amount of the Bonds of each Series so affected and Outstanding shall have the right, from time to time, to consent to and approve the execution by the University and the Trustee of any Supplemental Indenture as shall be deemed necessary or desirable by the University for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in the Indenture; provided, however, that nothing contained in the Indenture shall permit, or be construed as permitting, (x) a change in the terms of redemption or maturity of the principal of or the interest on any Outstanding Bond, or a reduction in the principal amount or Redemption Price of any Outstanding Bond or the rate of interest thereon, without the consent of the Holder of such Bond, or (y) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (z) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture. Nothing contained in the Indenture, however, shall be construed as making necessary the approval by Bondholders of the execution of any supplemental Indenture as authorized in the provisions of the Indenture regarding Supplemental Indentures without Bondholder’s consent.

If at any time the University shall request the Trustee to enter into any Supplemental Indenture for any of the purposes set forth under this Heading, the Trustee shall, at the expense of the University, cause notice of the proposed execution of such supplemental Indenture to be mailed, by first class mail, postage prepaid, to all owners of registered Bonds then Outstanding at their addresses as they appear on the registration books provided therefor, and to any nationally recognized rating agency then rating the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the office of each Fiduciary for inspection by all Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of any error in or its failure to mail the notice required by the provisions under this Heading, and any such error or failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided in the Indenture.

Within one year after the date of the mailing of such notice, the Trustee may execute such Supplemental Indenture in substantially the form described in such notice only if there shall have first been filed with the Trustee (a) the written consents of the Holders of not less than 51% in aggregate principal amount of the Bonds then Outstanding, and in case less than all of the several Series of Bonds then Outstanding are affected, the Holders of not less than 51% in aggregate principal amount of the Bonds of each Series so affected and Outstanding, and (b) an opinion of counsel to the University stating that such Supplemental Indenture has been duly and lawfully authorized by the University, that it is authorized or permitted by the Indenture and complies with its terms, and that upon execution and delivery it will be valid and binding upon the University in accordance with its terms. Each such consent shall be effective only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by the Indenture. A certificate or certificates by the Trustee filed with the University that it has examined such proof and that such proof is sufficient in accordance with the Indenture shall be conclusive that the consents have been

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given by the Holders of the Bonds described in such certificate or certificates. Any such consent shall be binding upon the Holder of the Bonds giving such consent and upon any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor (whether or not such subsequent Holder thereof has notice thereof), unless such consent is revoked in writing by the Holder of such Bonds giving such consent or a subsequent Holder thereof by filing such revocation with the Trustee prior to the execution of the Supplemental Indenture.

If the Holders of not less than the percentage of Bonds required by the Indenture shall have consented to and approved the execution thereof as provided in the Indenture, no Holder of any Bond shall have any right to object to the execution of such Supplemental Indenture, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the University from executing the same or from taking any action pursuant to the provisions thereof.

Upon the execution of any Supplemental Indenture pursuant to the provisions under this Heading, the Indenture shall be and be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under the Indenture of the University, the Trustee and all Holders of Bonds then Outstanding shall thereafter be determined exercised and enforced under the Indenture, subject in all respects to such modifications and amendments.

(Indenture, Section 11.3)

Modifications by Unanimous Consent. The rights and obligations of the University and of the Holders of the Bonds, and the terms and provisions of the Bonds, and the Indenture, may be modified or altered in any respect with the consent of the University and the consent of the Holders of all of the Bonds then Outstanding.

(Indenture, Section 11.6)

Consent of Bond Facility Provider. For purposes of the provisions of the Indenture regarding Supplemental Indentures, subject to the terms of such Bond Facility and only so long as the provider of a Bond Facility has not defaulted on its obligations under the Bond Facility, the provider of a Bond Facility shall be considered the sole Holder of all Bonds to which such Bond Facility relates, except as otherwise provided in an applicable Supplemental Indenture.

(Indenture, Section 11.7)

Defeasance. If the University shall pay or cause to be paid, or there shall otherwise be paid, to the Holders of all Bonds, the principal or Redemption Price, if applicable, and interest due or to become due thereon, including all Reimbursement Obligations then due and payable, at the times and in the manner stipulated therein and in the Indenture and shall terminate any existing Bond Facility to the extent required in accordance with its terms, then the pledge of any revenues, moneys and securities pledged under the Indenture and all covenants, agreements and other obligations of the University to the Bondholders shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall cause an accounting for such period or periods as shall be requested in writing by the University to be prepared and filed with the University, and upon the written request of the University shall execute and deliver to the University all such instruments as may be desirable to evidence such discharge and satisfaction, and the Fiduciaries shall pay over or deliver to the University all moneys or securities held by them pursuant to the Indenture which are not required for payment of principal or Redemption Price, if applicable, including all Reimbursement Obligations then due and payable, on Bonds not theretofore surrendered for such payment or redemption. If the University shall pay or cause to

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be paid, or there shall otherwise be paid, to the Holders of all Outstanding Bonds of a particular Series the principal or Redemption Price, if applicable, and interest due or to become due thereon, at the times and in the manner stipulated therein and in the Indenture, such Bonds shall cease to be entitled to any lien, benefit or security under the Indenture, and all covenants, agreements and obligations of the University to the Holders of such Bonds shall thereupon cease, terminate and become void and be discharged and satisfied.

Bonds or interest installments for the payment or redemption of which moneys shall have been set aside and shall be held in trust by the Paying Agents (through deposit by the University of funds for such payment or redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed above. Any Outstanding Bonds of any Series shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed above if (i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the University shall have given to the Trustee in form satisfactory to it irrevocable written instructions to mail notice of redemption on said date of such Bonds, (ii) there shall have been deposited with the Trustee either moneys in an amount which shall be sufficient, or Investment Securities the principal of and the interest on which when due will provide moneys which together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient, to pay when due the principal or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as the case may be, and (iii) in the event said Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the University shall have given the Trustee in form satisfactory to it irrevocable written instructions to mail by first class mail, as soon as practicable, notice to the Holders of such Bonds that the deposit required by (ii) above has been made with the Trustee and that said Bonds and interest thereon are deemed to have been paid in accordance with the provisions above and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price, if applicable, on said Bonds. Neither Investment Securities or moneys deposited with the Trustee pursuant to the provisions under this Heading nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or Redemption Price, if applicable, and interest on said Bonds; provided that any cash received from such principal or interest payments on such Investment Securities deposited with the Trustee, if not then needed for such purpose, shall to the extent determined in writing by the University, be reinvested in Investment Securities maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if applicable, and interest to become due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestments shall be paid over to the University, as received by the Trustee, free and clear of any trust, lien or pledge. For the purposes of this Heading, Investment Securities shall mean and include only those securities listed below and which shall not be subject to redemption prior to their maturity:

(i) any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any of the federal agencies set forth in clause (iii) below to the extent unconditionally guaranteed by the United States of America;

(ii) any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local government unit of any such state (A) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (B) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character

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described in clause (i) above, the corpus or the corpus and the earnings on which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subclause (A) of this clause (ii), as appropriate, and (C) as to which the principal of and interest on the bonds and obligations of the character described in clause (i) above which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and premium, if any, on the bonds or other obligations described in this clause (ii) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (A) of this clause (ii), as appropriate;

(iii) bonds, debentures, or other evidences of indebtedness issued or guaranteed by any agency or corporation which has been or may hereafter be created pursuant to an Act of Congress as an agency or instrumentality of the United States of America;

(iv) New Housing Authority Bonds issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States of America; or project notes issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America;

(v) direct and general obligations of any state of the United States of America, to the payment of the principal of and interest on which the full faith and credit of such state is pledged, provided that at the time of their purchase under the Indenture such obligations are rated in either of the two highest rating categories by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Group; and

(vi) obligations of any state of the United States of America or any political subdivision thereof or any agency or instrumentality of any state or political subdivision which shall be rated in the highest category by Moody’s Investors Service, Inc. and by Standard & Poor’s Ratings Group.

(Indenture, Section 12.1)

Continuing Disclosure Undertaking

Purpose.

The provisions of the Indenture regarding the continuing disclosure undertaking shall constitute the written undertaking for the benefit of the Holders of the Bonds required by Section (b)(5)(i) of the Rule, and shall apply to all Bonds of the University under the Indenture.

Submission of Annual Financial Information Statements.

The University shall, while any Bonds are Outstanding, provide to the Trustee, when completed, Annual Financial Information with respect to each Fiscal Year of the University beginning with the Fiscal Year ending June 30, 2012, which Annual Financial Information is expected to be completed within 180 days of the end of such Fiscal Year (the “Submission Date”). Annual Financial Information may be provided in one document or multiple documents, and at one time or in part from

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time to time. The University shall include with each such submission of Annual Financial Information a written representation addressed to the Trustee to the effect that the Annual Financial Information so submitted is the Annual Financial Information required pursuant to this sub-heading, and that such Annual Financial Information complies with the applicable requirements of the Indenture regarding the continuing disclosure undertaking. The Trustee shall provide to the MSRB such Annual Financial Information on or before ten (10) Business Days following the Submission Date (the “Report Date”) while any Bonds are Outstanding or, if not received by the Trustee by the Submission Date, then within five (5) Business Days of its receipt by the Trustee.

It shall be sufficient if the University provides to the Trustee and the Trustee provides to the MSRB the Annual Financial Information by specific reference to documents previously provided to the MSRB, or filed with the Securities and Exchange Commission and, if such a document is an Official Statement, available from the MSRB.

Submission of Audited Financial Statements.

The University shall submit to the Trustee Audited Financial Statements for each Fiscal Year beginning with the Fiscal Year ending June 30, 2012, when and if available (but not later than the Submission Date) while any Bonds are Outstanding, whether as part of the Annual Financial Information or separately, which Audited Financial Statements the Trustee shall then provide to the MSRB by the Report Date. If Audited Financial Statements for any Fiscal Year are not so provided to the Trustee by the Submission Date, the University shall provide to the Trustee (i) by the Submission Date, Unaudited Financial Statements for such Fiscal Year as part of the Annual Financial Information required to be delivered pursuant to the immediately preceding sub-heading, and (ii) when available, Audited Financial Statements for such Fiscal Year, which Audited Financial Statements the Trustee shall provide to the MSRB within three (3) Business Days of its receipt thereof.

Material Event Notices.

If a Material Event occurs while any Bonds are Outstanding, the University shall provide a Material Event Notice to the Trustee in a timely manner, but in no event in excess of ten (10) business days after the occurrence of any such event, and the Trustee shall promptly provide to the MSRB, such Material Event Notice. Each Material Event Notice shall be so captioned and shall prominently state the date, title and CUSIP numbers of the applicable Bonds.

The Trustee shall promptly advise the University whenever, in the course of performing its duties as Trustee under the Indenture, the Trustee identifies an occurrence which, if material, would require the University to provide a Material Event Notice under the Indenture; provided, however, that the failure of the Trustee so to advise the University shall not constitute a breach by the Trustee of any of its duties and responsibilities under the Indenture.

Notification by Trustee of Failure by the University to File Annual Financial Information.

The Trustee shall, while any Bonds are Outstanding, provide, in a timely manner, notice of any failure of the University to provide the Annual Financial Information by the date specified under the sub-heading “Submission of Annual Financial Information Statements” above to the Trustee. Upon receipt of such notice, the Trustee shall provide, in a timely manner, notice of such failure of the University to provide the Annual Financial Information by such date to the MSRB.

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The Trustee shall, while any Bonds are Outstanding and without any direction or instruction from the University, provide on the Report Date to the MSRB, notice of any failure to provide to the MSRB Annual Financial Information on or before the Report Date (whether caused by failure of the University to provide such information to the Trustee by the Submission Date or for any other reason). For the purposes of determining whether information received from the University is Annual Financial Information, the Trustee shall be entitled conclusively to rely on the University’s written representation made pursuant to paragraph (a) of the sub-heading “Submission of Annual Financial Information Statements” above.

Additional Information.

Nothing in the provisions of the Indenture regarding the continuing disclosure undertaking shall be deemed to prevent the University from disseminating any other information, using the means of dissemination set forth in the provisions of the Indenture regarding the continuing disclosure undertaking or any other means of communication, or including any such other information in any Annual Financial Information or Material Event Notice, in addition to that required hereby. If the University should so disseminate or include any such additional information, the University shall have no obligation under the provisions of the Indenture regarding the continuing disclosure undertaking to update, provide or include such additional information in any future materials disseminated pursuant to the provisions of the Indenture regarding the continuing disclosure undertaking or otherwise.

If the University provides to the Trustee additional information as described in paragraph (a) above, and such additional information is not included in any Annual Financial Information or Material Event Notice, the University may direct the Trustee to provide such additional information to the MSRB, upon which direction the Trustee shall provide such additional information in a timely manner to the MSRB.

Reference to Other Documents.

Any or all of the items which must be included in the Annual Financial Information may be incorporated by reference from other documents, including official statements delivered in connection with other financings issued on behalf of the University or other related public entities which are available to the public on the MSRB’s Internet Web site or filed with the SEC. If the document incorporated by specific reference is a final official statement, it must be available from the MSRB. The University shall clearly identify each such other document so incorporated by reference.

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Transmission of Information and Notices.

Unless otherwise required by law and, in the University’s sole determination, subject to technical and economic feasibility, the University and the Trustee shall employ such methods of information and notice transmission as shall be requested or recommended by the recipients designated in the Indenture of the information and notices required to be delivered pursuant to the provisions of the Indenture regarding the continuing disclosure undertaking. Notwithstanding the foregoing, any notice, documents or other information required to be filed by the University with the MSRB in accordance with the provisions of the Indenture regarding the continuing disclosure undertaking shall be filed with the MSRB in an electronic format as shall be prescribed by MSRB Rule G-32, and shall be accompanied by such identifying information as shall be prescribed by MSRB Rule G-32.

Change in Fiscal Year, Submission Date and Report Date.

The University may adjust the Submission Date and the Report Date if the University changes its Fiscal Year by providing written notice of such change in Fiscal Year and the new Submission Date and Report Date to the Trustee, which written notice the Trustee shall then promptly deliver to MSRB; provided, however, that the new Submission Date shall be no more than 180 days after the end of such new Fiscal Year and the new Report Date shall be no more than four (4) Business Days following the new Submission Date, and provided further that the period between the final Report Date relating to the former Fiscal Year and the initial Report Date relating to the new Fiscal Year shall not exceed one year in duration.

Termination.

The University’s and the Trustee’s obligations under the provisions of the Indenture regarding the continuing disclosure undertaking shall terminate immediately once the Bonds are no longer Outstanding.

The provisions of the Indenture regarding the continuing disclosure undertaking, or any provision thereof, shall be null and void in the event that the University delivers to the Trustee a Counsel’s Opinion, addressed to the University and the Trustee, to the effect that those portions of the Rule which require the provisions of the Indenture regarding the continuing disclosure undertaking, or any of such provisions, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, or otherwise, as shall be specified in such opinion. The Trustee shall, upon receipt of such opinion, promptly provide copies thereof to MSRB.

Amendment.

The provisions of the Indenture regarding the continuing disclosure undertaking may be amended, by written agreement of the parties, without the consent of the Holders of the Bonds (except to the extent required under clause (A)(ii) below), if all of the following conditions are satisfied: (i) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of the University or the type of business conducted thereby; (ii) the provisions of the Indenture regarding the continuing disclosure undertaking, as so amended would have complied with the requirements of the Rule as of the date of the Indenture, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (A) either (i) the University shall have delivered to the Trustee a Counsel’s Opinion, addressed to the University and the Trustee, which opinion states that the amendment does not materially impair the interests of the Holders of the Bonds, or (ii) the Holders of the Bonds consent to the

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amendment to the provisions of the Indenture regarding the continuing disclosure undertaking pursuant to the same procedures as are required for amendments to the Indenture with consent of Holders of Bonds pursuant to the provisions of the Indenture regarding the continuing disclosure undertaking as in effect on the date of the Indenture. In the event the University delivers to the Trustee a Counsel’s Opinion pursuant to sub-paragraph (A)(i) above, the Trustee shall promptly deliver copies of such opinion and amendment to the MSRB.

In addition to the preceding paragraph, the provisions of the Indenture regarding the continuing disclosure undertaking may be amended and any of the provisions of the Indenture regarding the continuing disclosure undertaking may be waived, by written agreement of the parties, without the consent of the Holders of the Bonds, if all of the following conditions are satisfied: (i) an amendment to the Rule is adopted, or a new or modified official interpretation of the Rule is issued, after the effective date of the Indenture which is applicable to the provisions of the Indenture regarding the continuing disclosure undertaking and (ii) the University shall have delivered to the Trustee a Counsel’s Opinion, addressed to the University and the Trustee, to the effect that performance by the University and Trustee under the provisions of the Indenture regarding the continuing disclosure undertaking as so amended or giving effect to such waiver, as the case may be, will not result in a violation of the Rule. Upon receipt by the Trustee of such Opinion, the Trustee shall promptly deliver copies of such Opinion and amendment to the MSRB.

In the event of any amendment respecting the type of operating data or financial information contained in the University’s Annual Financial Information, the University shall, in accordance with the Rule or any interpretation thereof by the SEC, provide in the first Annual Financial Information provided thereafter a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

In the event of any amendment specifying the accounting principles to be followed in preparing financial statements, the Annual Financial Information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a qualitative and, to the extent reasonably feasible, quantitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information. In the event of any such change in accounting principles, the University shall deliver notice of such change in a timely manner to the Trustee, upon receipt of which the Trustee shall promptly deliver such notice to the MSRB.

Benefit; Third-Party Beneficiaries; Enforcement.

The provisions of the Indenture regarding the continuing disclosure undertaking shall inure solely to the benefit of the Holders from time to time of the Bonds, except that beneficial owners of Bonds shall be third-party beneficiaries of the provisions of the Indenture regarding the continuing disclosure undertaking.

Except as provided in this paragraph, the provisions of the Indenture regarding the continuing disclosure undertaking shall create no rights in any person or entity. The obligations of the University to comply with the provisions of the Indenture regarding the continuing disclosure undertaking shall be enforceable (i) in the case of enforcement of obligations to provide Audited Financial Statements, Annual Financial Information, operating data and notices, by any Holder of Outstanding Bonds, or by the Trustee on behalf of the Holders of Outstanding Bonds, or (ii), in the case of challenges to the adequacy of the financial statements, financial information and operating data so provided, by the Trustee on behalf of the Holders of Outstanding Bonds; provided, however, that the Trustee shall not be required to take

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any enforcement action except at the direction of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding who shall have provided the Trustee with adequate security and indemnity. The Holders’ and Trustee’s rights to enforce the provisions of the Indenture regarding the continuing disclosure undertaking shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the University’s obligations under the provisions of the Indenture regarding the continuing disclosure undertaking. In consideration of the third-party beneficiary status of beneficial owners of Bonds pursuant to the preceding paragraph under this sub-heading, beneficial owners shall be deemed to be Holders of Bonds for purposes of this paragraph. Without limiting the generality of the foregoing and except as otherwise provided in the Indenture with respect to the Trustee, neither the commencement nor the successful completion of an action to compel performance under the provisions of the Indenture regarding the continuing disclosure undertaking shall entitle the Trustee or any other person to attorney’s fees, financial damages of any sort or any other relief other than an order or injunction compelling performance.

Any failure by the University or the Trustee to perform in accordance with the provisions of the Indenture regarding the continuing disclosure undertaking shall not constitute a default or an Event of Default under the Indenture or any Supplemental Indenture, and the rights and remedies provided by the Indenture or any Supplemental Indenture upon the occurrence of a default or an Event of Default shall not apply to any such failure.

The provisions of the Indenture regarding the continuing disclosure undertaking shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of the provisions of the Indenture regarding the continuing disclosure undertaking shall be instituted in a court of competent jurisdiction in the State; provided, however, that to the extent any provision of the Indenture regarding the continuing disclosure undertaking addresses matters of federal securities laws, including the Rule, such provision of the Indenture regarding the continuing disclosure undertaking shall be construed in accordance with such federal securities laws and official interpretations thereof.

Duties, Immunities and Liabilities of Trustee.

The Trustee shall have only such duties under the provisions of the Indenture regarding the continuing disclosure undertaking as are specifically set forth therein, and the University agrees to indemnify and save the Trustee, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties under this sub-heading, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Trustee’s gross negligence or willful misconduct in the performance of its duties under this sub-heading. Such indemnity shall be separate from and in addition to that provided to the Trustee under the Indenture. The obligations of the University under this sub-heading shall survive resignation or removal of the Trustee and payment of the Bonds.

(Indenture, Sections 13.1 through 13.13)

Successorship of University. All of the covenants, stipulations, obligations and agreements contained in the Indenture by or on behalf of the University shall bind or inure to the benefit of the successor or successors of the University from time to time, and any officer, board, commission, authority, agency, or instrumentality to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law.

(Indenture, Section 14.1)

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Rights Under Indenture. Nothing in the Indenture expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties hereto and the Holders of the Bonds any right, remedy or claim, legal or equitable, under or by reason of the Indenture or any Supplemental Indenture or any provision thereof, the Indenture or any Supplemental Indenture and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto, the Holders from time to time of the Bonds, any provider of a Bond Facility, a Swap Provider or the provider of a related Swap Facility.

(Indenture, Section 14.3)

Partial Invalidity. In case any one or more of the provisions of the Indenture or of the Bonds shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of the Indenture or of the Bonds, but the Indenture, any Supplemental Indenture and the Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained therein. In case any covenant, stipulation, obligation or agreement of the University contained in the Bonds or in the Indenture or any Supplemental Indenture shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the University to the full extent permitted by law.

(Indenture, Section 14.6)

Effect of Covenants. All covenants, stipulations, obligations and agreements of the University contained in the Indenture shall be deemed to be covenants, stipulations, obligations and agreements of the University to the full extent authorized by the laws and the Constitution of the State of New Jersey. No covenant, stipulation, obligation or agreement contained therein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, trustee, officer, agent or employee of the University in his individual capacity, and neither the members, trustees or officers of the University nor any official executing the Bonds, the Notes, a Swap Facility or a Bond Facility shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

(Indenture, Section 14.7)

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APPENDIX D

PROPOSED FORM OF OPINION OF MCCARTER & ENGLISH, LLP, BOND COUNSEL TO NJIT

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APPENDIX D

PROPOSED FORM OF OPINION OF McCARTER & ENGLISH, LLP, BOND COUNSEL TO NJIT

[Date of Closing]

New Jersey Institute of Technology Newark, New Jersey 07102

Re: New Jersey Institute of Technology General Obligation Bonds, 2017 Series A (Federally Taxable)

Ladies and Gentlemen:

We have served as Bond Counsel to New Jersey Institute of Technology (the “University”) in connection with the issuance by the University of its General Obligation Bonds, 2017 Series A (Federally Taxable) in an original principal amount of $______(the “Bonds”). The Bonds are dated, mature, bear interest and are subject to redemption prior to maturity upon the terms and conditions stated therein, in the Indenture (as hereinafter defined) and the Certificate of Determination of the University dated May __, 2017 (the “Certificate of Determination”). All capitalized terms used herein and not defined herein shall have the meanings ascribed to such terms in the hereinafter-defined Indenture.

The Bonds are being issued pursuant to: (i) the New Jersey Institute of Technology Act of 1995, constituting Chapter 64E of Title 18A of the New Jersey Statutes Annotated (the “Act”); (ii) a resolution adopted by the Board of Trustees of the University April 13, 2017 (the “Resolution”); and (iii) an Indenture of Trust dated as of July 1, 2012, as previously amended and supplemented (the “Master Indenture”), as supplemented by the Second Supplemental Indenture of Trust dated as of May 1, 2017 (the “Second Supplemental Indenture”, and together with the Master Indenture, the “Indenture”), each by and between the University and U.S. Bank National Association (successor to Deutsche Bank National Trust Company) (the “Trustee”).

Pursuant to the Indenture, the proceeds from the sale of the Bonds are being used by the University, together with other funds, for the purpose of: (i) financing certain capital projects; (ii) financing the refunding of the Bonds to be Refunded (as more fully described in the Second Supplemental Indenture) and (iii) financing certain administrative, legal, financing and incidental expenses relating to the issuance of the Bonds.

Pursuant to the terms of the Indenture, the University is obligated to make payments to the Trustee in amounts and at times sufficient to amortize the payment of the principal and redemption price, if any, of and interest on the Bonds.

In our capacity as Bond Counsel to the University, we have examined the Act and the proceedings relating to the authorization and issuance of the Bonds, including, among other things: (i) a certified copy of the Resolution; (ii) an executed Bond; (iii) the executed Master Indenture and Second Supplemental Indenture; (iv) the opinion of Holly C. Stern, Esq., General

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Counsel to the University, upon which we have relied, with your permission, as to the matters set forth therein; (v) the Certificate of Determination; and (vi) such other documents, records and instruments as we have deemed necessary to enable us to express the opinions set forth below.

Based upon and subject to the foregoing and, with your permission, the further assumptions and qualifications set forth below, it is our opinion that:

1. The University is validly existing under the Act, and it is authorized to issue the Bonds and to enter into the Second Supplemental Indenture.

2. The Master Indenture and the Second Supplemental Indenture have been duly authorized, executed and delivered by the University, and assuming the due authorization, execution and delivery by the other parties thereto, are in full force and effect and constitute the valid and binding agreements of the University, enforceable against the University in accordance with their respective terms.

3. The Indenture creates the valid pledge which it purports to create in the moneys, securities, and funds held or set aside by the Trustee under the Indenture, subject only to the provision of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture.

4. The Bonds have been duly authorized and issued under the provisions of the Act, the Resolution and the Indenture, constitute valid, binding, direct and general obligations of the University, and are entitled to the benefit and security of the Indenture, to the extend provided therein.

5. Under existing law, interest on the Bonds and net gains from the sale thereof are exempt from the tax imposed by the New Jersey Gross Income Tax Act.

The foregoing opinions are qualified to the extent that the enforceability of the Bonds and the Indenture may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors’ rights generally and the application of general principles of equity.

The opinions expressed herein are based upon and limited to the laws, exclusive of conflicts of law provisions, and judicial decisions of the State of New Jersey and the federal laws and judicial decisions of the United States as of the date hereof and are subject to any amendment, repeal or other modification of the applicable laws or judicial decisions that served as the basis for our opinion, or laws or judicial decisions hereafter enacted or rendered. Our engagement by the University with respect to the opinions expressed herein does not require, and shall not be construed to constitute, a continuing obligation on our part to notify or otherwise inform the addressee hereof of the amendment, repeal or other modification of the applicable laws or judicial decisions that served as the basis for this opinion letter or of laws or judicial decisions hereafter enacted or rendered which impact on this opinion letter.

We have examined one of the Bonds as executed by the University and authenticated by the Trustee, and, in our opinion, its form, execution and authentication are regular and proper. We have assumed that all of the Bonds have been so executed and authenticated.

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This opinion letter is being furnished solely to the party to whom it is addressed and may not be relied upon by any other person or quoted in whole or in part or otherwise referred to, except as required by law, without our prior written consent. This is only an opinion letter and not a warranty or guaranty of the matters discussed herein.

Very truly yours,

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APPENDIX E

SUMMARY OF BONDS TO BE REFUNDED

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NEW JERSEY INSTITUTE OF TECHNOLOGY • General Obligation Bonds, 2017 Series A (Federally Taxable)