OFFICIAL STATEMENT DATED JUNE 21, 2016 $19,975,000 New Hope

OFFICIAL STATEMENT DATED JUNE 21, 2016

NEW ISSUES—BOOK-ENTRY ONLY Rating: S&P: “BBB-” (See “RATING” herein)

The delivery of the Series 2016A Bonds (as defined below) is subject to the opinion of Bond Counsel to the Issuer to the effect that, assuming compliance with certain covenants and based on certain representations, interest on the Series 2016A Bonds is excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date hereof, subject to the matters described under “TAX MATTERS” herein, including the alternative minimum tax on corporations. Interest on the Series 2016B Bonds is not excludable from gross income for federal income tax purposes. See “TAX MATTERS” herein.

$19,975,000 New Hope Cultural Education Facilities Finance Corporation Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016A and $885,000 Taxable Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016B

Dated: Date of Issue Due: April 1, as shown inside

The New Hope Cultural Education Facilities Finance Corporation Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016A (the “Series 2016A Bonds”) and Taxable Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016B (the “Series 2016B Bonds” and, together with the Series 2016A Bonds, the “Series 2016 Bonds”) are being issued by the New Hope Cultural Education Facilities Finance Corporation (the “Issuer”) pursuant to a Trust Indenture dated as of June 1, 2016 (the “Indenture”) between the Issuer and Wilmington Trust, N.A., as Trustee (the “Trustee”). The proceeds of the Series 2016 Bonds are being loaned to CHF-Collegiate Housing San Antonio I, L.L.C., an Alabama limited liability company (the “Borrower”), the sole member of which is Collegiate Housing Foundation, an Alabama nonprofit corporation and an organization described under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, pursuant to a Loan Agreement between the Issuer and the Borrower dated as of June 1, 2016 (the “Loan Agreement”). The Series 2016 Bonds are being issued to provide funds for financing (i) the development, construction, furnishing and equipping of a 382-bed student housing facility and an approximately 4,250 square foot community center to be located on the campus of Texas A&M University-San Antonio (the “University”) in San Antonio, Texas on land leased by the Borrower from the Board of Regents of The Texas A&M University System (the “Board”) (collectively, the “Series 2016 Project”), (ii) the payment of capitalized interest on the Series 2016 Bonds during construction and for up to six months following the scheduled completion of construction of the Series 2016 Project (but not in excess of two years interest on the Series 2016 Bonds), (iii) the payment of certain start-up expenses (but not in excess of anticipated operating expenses during the first year of operation), (iv) the funding of the Debt Service Reserve Fund (as defined hereinafter) with respect to the Series 2016 Bonds, and (v) the payment of the costs of issuance of the Series 2016 Bonds.

The Bonds will be issued in fully registered form, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Series 2016 Bonds. Individual purchases of beneficial ownership interests in the Series 2016 Bonds will be made in book entry form only, and individual purchasers will not receive physical delivery of bond certificates. Payments of the principal of, and interest on, the Series 2016 Bonds will be made by the Trustee, to Cede & Co., as nominee for DTC, for disbursement to DTC participants and subsequent disbursement to the beneficial owners of the Series 2016 Bonds.

The Series 2016 Bonds are being issued as fully registered bonds without coupons in denominations of $5,000 and any integral multiple thereof. The Series 2016 Bonds will bear interest from their date of issue, payable semiannually on each April 1 and October 1, commencing October 1, 2016.

THE SERIES 2016 BONDS, TOGETHER WITH ALL PRINCIPAL AND INTEREST THEREON, AND PREMIUM, IF ANY, WITH RESPECT THERETO ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER SECURED BY THE INDENTURE, AND SHALL ALWAYS BE PAYABLE SOLELY FROM THE REVENUES AND INCOME DERIVED FROM THE LOAN AGREEMENT AND THE SECURITY (AS DEFINED IN THE INDENTURE), AND FROM CERTAIN FUNDS AND ACCOUNTS PLEDGED TO THE TRUSTEE UNDER THE INDENTURE AND DESCRIBED THEREIN. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE BOARD, THE TEXAS A&M UNIVERSITY SYSTEM, THE UNIVERSITY, THE STATE OF TEXAS (THE “STATE”) OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING, BUT NOT LIMITED TO, THE TOWN OF NEW HOPE, IS PLEDGED TO THE PAYMENT OF THE SERIES 2016 BONDS. THE STATE IS NOT LIABLE ON THE SERIES 2016 BONDS AND THE SERIES 2016 BONDS ARE NOT A DEBT OF THE STATE. THE ISSUER HAS NO TAXING POWER. NO OWNER OF THE SERIES 2016 BONDS SHALL HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER, IF ANY, OF THE ISSUER, THE STATE OR ANY OTHER POLITICAL SUBDIVISION THEREOF, INCLUDING, BUT NOT LIMITED TO, THE TOWN OF NEW HOPE, TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2016 BONDS. THE HOLDERS OF THE SERIES 2016 BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION. UNDER THE TERMS OF THE INDENTURE, THE ISSUER MAY ISSUE ADDITIONAL BONDS WHICH MAY BE SECURED ON A PARITY WITH THE SERIES 2016 BONDS.

The Series 2016 Bonds are subject to prior mandatory, optional, and extraordinary redemption as described herein. See “THE SERIES 2016 BONDS” herein.

SEE “CERTAIN BONDHOLDERS’ RISKS” HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES 2016 BONDS. EACH PROSPECTIVE INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE SERIES 2016 BONDS.

This cover page is for quick reference only. It is not a summary of this Official Statement. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

The Series 2016 Bonds are offered when, as, and if issued by the Issuer and received by the Underwriter and are subject to prior sale and the approval of legality by McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel, and to certain other conditions. Certain legal matters will be passed upon for the Borrower by Hand Arendall LLC, Mobile, Alabama and Shackelford, Bowen, McKinley & Norton, LLP, Dallas, Texas and for the Underwriter by Allen Boone Humphries Robinson LLP, Houston, Texas. Delivery of the Series 2016 Bonds through the facilities of DTC in New York, New York is expected on or about June 30, 2016.

SERIES 2016A BONDS

MATURITY SCHEDULE

Maturity (April 1) Amount Coupon Yield Price CUSIP** 2022 $365,000 5.000% 2.250% 114.757 64542REC1 2023 385,000 5.000 2.400 116.115 64542RED9 2024 405,000 5.000 2.560 117.055 64542REE7 2025 425,000 5.000 2.700 117.818 64542REF4 2026 445,000 5.000 2.850 118.189 64542REG2

$2,575,000 5.000% Term Bond Due April 1, 2031 Yield 3.040% Price 116.430* CUSIP No: 64542REH0 3,290,000 5.000% Term Bond Due April 1, 2036 Yield 3.260% Price 114.431* CUSIP No: 64542REJ6 12,085,000 5.000% Term Bond Due April 1, 2048 Yield 3.410% Price 113.092* CUSIP No: 64542REK3

SERIES 2016B BONDS

MATURITY SCHEDULE

$885,000 3.375% Taxable Term Bond Due April 1, 2021 Yield 3.375% CUSIP No: 64542REL1

* Priced to the first optional redemption date of April 1, 2026.

** CUSIP Numbers have been assigned to the Series 2016 Bonds by Standard & Poor’s, CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc. and are included solely for the convenience of the holders of the Series 2016 Bonds. The Issuer, the Underwriter and the Borrower are not responsible for the selection, uses or correctness (as listed above) of, or subsequent changes to, CUSIP numbers assigned to the Series 2016 Bonds. No dealer, broker, salesman, or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Issuer, the Borrower, the University or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2016 Bonds by any person in any state in which it is unlawful for such person to make such offer, solicitation, or sale.

The information set forth herein relating to the Issuer under the headings “THE ISSUER” and “LITIGATION - The Issuer” has been obtained from the Issuer. All other information herein has been obtained by the Underwriter and other sources deemed by the Underwriter to be reliable, and is not to be construed as a representation by the Issuer or the Underwriter. The Issuer has not reviewed or approved any information in this Official Statement except information relating to the Issuer under the headings “THE ISSUER” and “LITIGATION - The Issuer”. The information herein is subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Issuer or the Borrower since the date hereof. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2016 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

TABLE OF CONTENTS

Page INTRODUCTORY STATEMENT ...... 1 ESTIMATED SOURCES AND USES OF FUNDS ...... 3 THE SERIES 2016 BONDS ...... 4 ANNUAL DEBT SERVICE REQUIREMENTS ...... 14 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS ...... 14 THE ISSUER ...... 22 THE SERIES 2016 PROJECT ...... 23 THE GROUND LEASE ...... 24 THE DEVELOPER ...... 30 THE DEVELOPMENT AGREEMENT ...... 31 THE MANAGER AND THE MANAGEMENT AGREEMENT ...... 33 THE GENERAL CONTRACTOR AND THE CONSTRUCTION CONTRACT ...... 35 THE ARCHITECT ...... 35 THE BORROWER ...... 35 NONRECOURSE OBLIGATION OF THE BORROWER ...... 36 THE UNIVERSITY ...... 36 UNIVERSITY NOT LIABLE FOR SERIES 2016 BONDS ...... 41 CASH FLOW FORECAST ...... 41 MARKET STUDY ...... 42 CERTAIN BONDHOLDERS’ RISKS ...... 43 LITIGATION ...... 50 TAX MATTERS ...... 50 UNDERWRITING ...... 54 RATINGS ...... 55 LEGAL MATTERS ...... 55 RELATIONSHIP OF PARTIES ...... 55 CONTINUING DISCLOSURE ...... 56 MISCELLANEOUS ...... 56

APPENDIX A MARKET STUDY APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT APPENDIX C FORM OF OPINION OF BOND COUNSEL APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT

OFFICIAL STATEMENT

$19,975,000 NEW HOPE CULTURAL EDUCATION FACILITIES FINANCE CORPORATION STUDENT HOUSING REVENUE BONDS (CHF-COLLEGIATE HOUSING SAN ANTONIO I, L.L.C. – TEXAS A&M UNIVERSITY-SAN ANTONIO PROJECT) SERIES 2016A and $885,000 TAXABLE STUDENT HOUSING REVENUE BONDS (CHF-COLLEGIATE HOUSING SAN ANTONIO I, L.L.C. – TEXAS A&M UNIVERSITY-SAN ANTONIO PROJECT) SERIES 2016B

INTRODUCTORY STATEMENT

This Official Statement, including the cover page and the Appendices hereto, is provided to furnish certain information in connection with the issuance and sale by the New Hope Cultural Education Facilities Finance Corporation (the “Issuer”) of its $19,975,000 New Hope Cultural Education Facilities Finance Corporation Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016A (the “Series 2016A Bonds”) and $885,000 Taxable Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016B (the “Series 2016B Bonds” and, together with the Series 2016A Bonds, the “Series 2016 Bonds”), to be issued by the Issuer pursuant to a Trust Indenture dated as of June 1, 2016 (the “Indenture”) between the Issuer and Wilmington Trust, N.A., as trustee (the “Trustee”) for the purpose of providing funds to CHF-Collegiate Housing San Antonio I, L.L.C., an Alabama limited liability company (the “Borrower”), the sole member of which is Collegiate Housing Foundation, a nonprofit corporation (the “Foundation”) and an organization described under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) for (a) financing the costs of the development, construction, furnishing and equipping of a 382-bed student housing facility and an approximately 4,250 square foot community center (collectively, the “Series 2016 Project”) to be located on the campus of Texas A&M University-San Antonio (the “University”) in San Antonio, Texas, on land leased by the Borrower from the Board of Regents of The Texas A&M University System (the “Board”), (b) the payment of capitalized interest on the Series 2016 Bonds during construction and for up to six months following the scheduled completion of construction of the Series 2016 Project (but not in excess of two years interest on the Series 2016 Bonds), (c) the payment of certain start-up expenses (but not in excess of anticipated operating expenses during the first year of operation), (d) the funding of the Debt Service Reserve Fund (as defined hereinafter) with respect to the Series 2016 Bonds, and (e) the payment of the costs of issuance of the Series 2016 Bonds. Definitions of certain terms used in this Official Statement are set forth in Appendix B hereto.

The Issuer will lend the proceeds of the Series 2016 Bonds to the Borrower pursuant to a Loan Agreement dated as of June 1, 2016 (the “Loan Agreement”) between the Issuer and the Borrower. The Borrower will be obligated pursuant to the Loan Agreement to pay to the Issuer such payments as will always be sufficient to pay when due the principal of, premium, if any, and interest on the Series 2016 Bonds.

The Series 2016 Project will be constructed on land leased to the Borrower by the Board pursuant to a Ground Lease Agreement dated as of June 30, 2016 (the “Ground Lease”). The Series 2016 Project will initially be managed by ACC SC Management LLC (the “Manager”) pursuant to the Management Agreement dated as of June 30, 2016 (the “Management Agreement”) by and between the Manager and the Borrower. The Board, in its capacity as Ground Lessor, has initially committed to repair and rebuild damaged or destroyed portions of the Series 2016 Project and to make certain payments with respect to lost revenues, as the case may be, all as provided in the Ground Lease. For as long as the Board remains obligated to pay the cost of repairing and rebuilding the Series 2016 Project, and to offset loss of revenue for a period of twelve months, all as provided in the Ground Lease, the Borrower will not be required to obtain casualty and business interruption insurance. The Board may elect under certain conditions to terminate its obligation to repair and rebuild or make certain payments with respect to lost revenues, in which event the Borrower will be required to maintain casualty and business interruption insurance. See “THE GROUND LEASE-Ground Lessor Commitment to Repair and Replace the Series 2016 Project” herein. The Issuer has no responsibility for the operation, maintenance, condition or insuring of the Series 2016 Project.

To secure the Borrower’s obligations to the Issuer under the Loan Agreement and the Series 2016 Notes, the Borrower will, subject to Permitted Encumbrances, (i) grant to the Trustee a deed of trust on the Borrower’s interest in the Series 2016 Project and the land leased to the Borrower and assign and pledge to the Trustee the Borrower’s interest in the General Revenues from the Series 2016 Project and any improvements thereto or expansions thereof pursuant to a Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Leasehold Deed of Trust”) dated as of June 30, 2016 by the Borrower for the benefit of the Trustee, (ii) grant to the Trustee a first priority security interest in the accounts, documents, chattel paper, instruments and general intangibles held by the Borrower arising in any manner from the Borrower’s ownership or operation of the Series 2016 Project and any improvements thereto or expansions thereof, in the inventory, if any, located thereat or thereon and in the equipment pursuant to a Security Agreement (the “Security Agreement”) dated as of June 30, 2016 between the Borrower and the Trustee, and (iii) collaterally assign to the Trustee its rights under the Management Agreement, the Development Agreement dated as of June 30, 2016 (the “Development Agreement”) between the Borrower and ACC SC Development LLC d/b/a ACC Services Development LLC (the “Developer”), the Construction Contract (as defined herein), and the Architect’s Agreement (as defined herein) pursuant to a Borrower Collective Collateral Assignment Agreement dated as of June 30, 2016 (the “Borrower Collective Collateral Assignment Agreement”) by the Borrower in favor of the Trustee.

This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Issuer, the Borrower, the Developer, the Series 2016 Project, the Manager, The Texas A&M University System (the “System”), the University, the Series 2016 Bonds, the Loan Agreement, the Series 2016 Notes, the Ground Lease, the Leasehold Deed of Trust, the Borrower Collective Collateral Assignment Agreement, the Indenture, the Management Agreement, the Development Agreement and the Construction Contract. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Loan Agreement, the Ground Lease, the Leasehold Deed of Trust, the Borrower Collective Collateral Assignment Agreement, the Indenture, the Series 2016 Bonds, the Management Agreement, the Security Agreement, the Bond Purchase Agreement, the Series 2016 Notes, the Tax Regulatory Agreement, the Continuing Disclosure Agreement, the Development Agreement, the Construction Contract and the Architect’s Agreement (collectively, the “Bond Documents”) are qualified in their entirety by reference to such documents, and references herein to the Series 2016 Bonds are qualified in their entirety to the form thereof included in the Indenture.

The Series 2016 Bonds, together with all principal and interest thereon, and premium, if any, with respect thereto are special, limited obligations of the Issuer secured by the Indenture, and will always be payable solely from the revenues and income derived from the Loan Agreement and the Security (as defined in the Indenture), and from certain funds and accounts pledged to the Trustee under the Indenture and described therein. Neither the faith and credit nor the taxing power of the Board, the System, the University, the State of Texas (the “State”) or any political subdivision thereof including, but, not limited to, the Town of New Hope, is pledged to the payment of the Series 2016 Bonds. The State, the Board, the System and the University are not liable on the Series 2016 Bonds and the Series 2016 Bonds are not a debt of the State, the Board, the

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System or the University. The Issuer has no taxing power. No owner of the Series 2016 Bonds has the right to compel any exercise of the taxing power, if any, of the Issuer, the State or any other political subdivision thereof, including, but not limited to, the Town of New Hope, the Board, the System or the University to pay any principal of, premium, if any, or interest on any Series 2016 Bond. The Holders of the Series 2016 Bonds will not have the right to demand payment thereof out of money raised or to be raised by taxation. Under the terms of the Indenture, the Issuer may issue Additional Bonds which may be secured on a parity with the Series 2016 Bonds.

The Market Study (as defined herein) relating to the Series 2016 Project is attached hereto as Appendix A. Summaries of certain provisions of the Indenture and Loan Agreement and definitions of certain terms relating to the Series 2016 Bonds are attached hereto as Appendix B. The proposed form of opinion of Bond Counsel is attached hereto as Appendix C. The proposed form of Continuing Disclosure Agreement is attached hereto as Appendix D.

ESTIMATED SOURCES AND USES OF FUNDS

The schedule below contains the estimated sources and uses of funds resulting from the sale of the Series 2016 Bonds (exclusive of investment earnings):

Series 2016A Series 2016B Bonds Bonds Total Sources of Funds: Par Amount of Series 2016 Bonds $19,975,000.00 $885,000.00 $20,860,000.00 Original Issue Premium 2,821,666.70 0.00 2,821,666.70

Total Sources of Funds $22,796,666.70 $885,000.00 $23,681,666.70 Uses of Funds: Deposit to Construction Fund $19,504,952.08 469,500.97 $19,974,453.05 Deposit to Capitalized Interest Account1 1,584,128.48 47,375.17 1,631,503.65 Deposit to Debt Service Reserve Fund2 1,308,285.89 57,964.11 1,366,250.00 Deposit to Issuance Cost Fund3 399,300.25 310,159.75 709,460.00

Total Uses of Funds $22,796,666.70 $885,000.00 $23,681,666.70

1 Interest will be capitalized through February 1, 2018 which is approximately six months following the expected delivery of the Series 2016 Project. 2 Equal to the Debt Service Reserve Requirement for the Series 2016 Bonds. 3 Includes amounts to be paid for Trustee fees, Issuer fees, Borrower fees, rating agency fees, legal counsel fees, printing costs and other fees and expenses, including the Underwriter’s Discount (which will not be deposited into the Issuance Cost Fund).

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THE SERIES 2016 BONDS

General Description

The Series 2016 Bonds will bear interest at the rates shown on the inside of the cover page of this Official Statement payable on October 1, 2016, and semiannually thereafter on April 1 and October 1 of each year (the “Interest Payment Dates”) until paid, in an amount equal to the interest accrued from the most recent Interest Payment Date to which interest has been paid or provided for, or, if no interest has been paid, from the date of issuance of the Series 2016 Bonds, or unless, as shown by the records of the Trustee, interest on the Series 2016 Bonds is in default, in which event it will bear interest from the date to which interest has been paid in full at the Interest Rate specified on the inside front cover of this Official Statement (provided, however, that total interest may not exceed the maximum net effective interest rate under Chapter 1204, Texas Government Code).

Interest on the Series 2016 Bonds will be computed on the basis of a 360-day year comprised of twelve 30-day months. The Series 2016 Bonds will be issued as fully registered bonds without coupons in the denominations of $5,000 and any integral multiple thereof (“Authorized Denominations”).

Payment of the Series 2016 Bonds

The principal of, premium, if any, and interest on the Series 2016 Bonds are payable in any currency of the United States of America that at the time of payment is legal tender for the payment of public and private debts, and such principal and premium, if any, is payable when due at the Operations Office of the Trustee upon presentation and surrender thereof.

Payment of the interest on any Bond is required to be made to the person appearing on the Bond Register as the registered owner thereof at the close of business on the Regular Record Date and is required to be paid:

(i) by check or draft mailed to such Bondholder on the Interest Payment Date at such Bondholder’s address as it appears on the Bond Register; or

(ii) in the case of an interest payment to any owner of $500,000 in aggregate principal amount of Series 2016 Bonds of a series, at such Bondholder’s option and upon agreement of the Bondholder to pay wire transfer charges, by wire transfer to such Bondholder upon written notice from such Bondholder containing the wire transfer address to which such Bondholder wishes to have such wire directed, which written notice is filed with the Trustee prior to close of business on such Regular Record Date.

Notwithstanding the foregoing, while the Series 2016 Bonds are held in the book-entry-only system described in the following section, all principal, premium, if any, and interest will be paid by DTC (as hereinafter defined) or its nominee by wire transfer.

Book-Entry-Only System for Series 2016 Bonds

The Indenture directs the Issuer, the Trustee, the Borrower and certain other persons to deem and treat the person in whose name any Bond is registered in accordance with the Indenture on the registration books maintained pursuant to the Indenture as the Owner thereof for all purposes. Notwithstanding the prior sentence, so long as the Series 2016 Bonds are held under a book-entry system, transfers and exchanges of beneficial ownership of the Series 2016 Bonds will be effected on the books of The Depository Trust Company (“DTC”), New York, New York or its successor as securities depository for the Series 2016 Bonds, pursuant to its rules and procedures.

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The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Series 2016 Bonds, payments of principal of and premium, if any, and interest on the Series 2016 Bonds to DTC, its nominee, Direct and Indirect Participants (as defined below) or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Series 2016 Bonds and other bond-related transactions by and between DTC, Direct and Indirect Participants and Beneficial Owners is based solely on information furnished by DTC. None of the Issuer, the Trustee, the Borrower, the Board, the System, the University or the Underwriter assumes any responsibility for the accuracy or adequacy of the information included in such description.

DTC will act as securities depository for the Series 2016 Bonds. The Series 2016 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 2016 Bond will be issued for each maturity of the Series 2016 Bonds, 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 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post- trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has 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 Series 2016 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2016 Bonds on DTC’s records. The ownership interest of each actual purchaser of each Series 2016 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchases. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2016 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2016 Bonds, except in the event that use of the book-entry system for the Series 2016 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2016 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2016 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2016 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series 2016 Bonds are credited, which may or may

-5- not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2016 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2016 Bonds, such as redemptions, tenders, defaults and proposed amendments to the documents relating to the Series 2016 Bonds. For example, Beneficial Owners of the Series 2016 Bonds may wish to ascertain that the nominee holding the Series 2016 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 Trustee and request that copies of notices be provided directly to them.

Redemption notices are required to be sent to DTC. If less than all of the Series 2016 Bonds are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2016 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Series 2016 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments on the Series 2016 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or Trustee, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) are the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Series 2016 Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, if a successor depository is not obtained, Series 2016 Bond certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 2016 Bonds will be printed and delivered to DTC.

THE ISSUER AND THE TRUSTEE WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY PARTICIPANT OR ANY BENEFICIAL OWNER OF THE SERIES 2016 BONDS WITH RESPECT TO: (1) THE SERIES 2016 BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT; (3) THE PAYMENT OF ANY AMOUNT DUE TO ANY PARTICIPANT OR BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2016 BONDS; (4) THE DELIVERY BY DTC TO ANY DIRECT PARTICIPANT, OR BY ANY PARTICIPANT TO ANY BENEFICIAL OWNER OF ANY NOTICE WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE SERIES 2016 BONDS TO BE GIVEN TO BOND OWNERS; (5) THE SELECTION OF BENEFICIAL OWNERS TO RECEIVE

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PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2016 BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER.

Limited Obligations of the Issuer

THE SERIES 2016 BONDS, TOGETHER WITH INTEREST THEREON, SHALL BE SPECIAL, LIMITED AND NOT GENERAL OBLIGATIONS OF THE ISSUER GIVING RISE TO NO PECUNIARY LIABILITY OF THE ISSUER, SHALL BE PAYABLE SOLELY FROM THE SECURITY, INCLUDING THE REVENUES AND RECEIPTS DERIVED FROM OR IN CONNECTION WITH THE SERIES 2016 PROJECT, INCLUDING ALL MONEY RECEIVED UNDER THE LOAN AGREEMENT, WHICH IS REQUIRED TO BE SET APART AND TRANSFERRED TO THE BOND FUND AND THE REDEMPTION FUND, WHICH REVENUES AND RECEIPTS (EXCEPT FOR THE RESERVED RIGHTS) ARE SPECIFICALLY PLEDGED AND ASSIGNED TO THE TRUSTEE FOR THE EQUAL AND RATABLE PAYMENT OF THE SERIES 2016 BONDS AND ANY ADDITIONAL BONDS THAT MAY BE ISSUED PURSUANT TO THE INDENTURE AND SHALL BE USED FOR NO OTHER PURPOSE THAN TO PAY THE DEBT SERVICE PAYMENTS ON THE SERIES 2016 BONDS AND ANY ADDITIONAL BONDS THAT MAY BE ISSUED PURSUANT TO THE INDENTURE, EXCEPT AS MAY BE OTHERWISE EXPRESSLY AUTHORIZED IN THE INDENTURE. NO AGREEMENTS OR PROVISIONS CONTAINED IN THE INDENTURE AND NO AGREEMENT, COVENANT OR UNDERTAKING BY THE ISSUER CONTAINED IN ANY DOCUMENT EXECUTED BY THE ISSUER IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF THE SERIES 2016 BONDS SHALL GIVE RISE TO ANY PECUNIARY LIABILITY OF THE ISSUER OR A CHARGE AGAINST ITS GENERAL CREDIT, OR SHALL OBLIGATE THE ISSUER FINANCIALLY IN ANY WAY, EXCEPT WITH RESPECT TO THE FUNDS AVAILABLE UNDER THE INDENTURE AND THEIR APPLICATION AS PROVIDED IN THE INDENTURE. NO FAILURE OF THE ISSUER TO COMPLY WITH ANY TERM, COVENANT OR AGREEMENT IN THE INDENTURE OR IN ANY DOCUMENT EXECUTED BY THE ISSUER IN CONNECTION WITH THE INDENTURE, THE LOAN AGREEMENT OR THE SERIES 2016 BONDS, SHALL SUBJECT THE ISSUER TO LIABILITY FOR ANY CLAIM FOR DAMAGES, COSTS OR OTHER FINANCIAL OR PECUNIARY CHARGE EXCEPT TO THE EXTENT THAT THE SAME CAN BE PAID OR RECOVERED FROM THE FUNDS AVAILABLE UNDER THE INDENTURE. NOTHING IN THE INDENTURE SHALL PRECLUDE A PROPER PARTY IN INTEREST FROM SEEKING AND OBTAINING, TO THE EXTENT PERMITTED BY LAW, SPECIFIC PERFORMANCE AGAINST THE ISSUER FOR ANY FAILURE TO COMPLY WITH ANY TERM, CONDITION, COVENANT OR AGREEMENT IN THE INDENTURE; PROVIDED, THAT NO COSTS, EXPENSES OR OTHER MONETARY RELIEF SHALL BE RECOVERABLE FROM THE ISSUER EXCEPT AS MAY BE PAYABLE FROM THE FUNDS AVAILABLE THEREUNDER.

THE SERIES 2016 BONDS AND THE OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST THEREON, ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER, SECURED AS PROVIDED IN THE INDENTURE AND PAYABLE SOLELY OUT OF THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE SECURITY AND AS OTHERWISE PROVIDED IN THE INDENTURE AND THE LOAN AGREEMENT. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE BOARD, THE SYSTEM, THE UNIVERSITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE SERIES 2016 BONDS. THE STATE, THE BOARD, THE SYSTEM AND THE UNIVERSITY ARE NOT LIABLE ON THE SERIES 2016 BONDS

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AND THE SERIES 2016 BONDS ARE NOT A DEBT OF THE STATE, THE BOARD, THE SYSTEM OR THE UNIVERSITY. THE ISSUER HAS NO TAXING POWER. NO OWNER OF THE SERIES 2016 BONDS SHALL HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER, IF ANY, OF THE ISSUER, THE STATE, THE BOARD, THE SYSTEM, THE UNIVERSITY OR ANY POLITICAL SUBDIVISION OF THE STATE TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2016 BONDS. NEITHER THE MEMBERS OF THE ISSUER NOR ANY PERSON EXECUTING THE SERIES 2016 BONDS SHALL BE LIABLE PERSONALLY ON THE SERIES 2016 BONDS BY REASON OF THE ISSUANCE THEREOF. THE HOLDERS OF THE SERIES 2016 BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION. UNDER THE TERMS OF THE INDENTURE, THE ISSUER MAY ISSUE ADDITIONAL BONDS WHICH MAY BE SECURED ON A PARITY WITH THE SERIES 2016 BONDS.

NO RECOURSE UNDER OR UPON ANY OBLIGATION, COVENANT, OR AGREEMENT CONTAINED IN THE INDENTURE OR IN THE SERIES 2016 BONDS OR FOR ANY CLAIM BASED THEREON OR UNDER ANY JUDGMENT OBTAINED AGAINST THE ISSUER OR THE TRUSTEE, OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR OTHERWISE OR BY ANY LEGAL OR EQUITABLE PROCEEDING BY VIRTUE OF ANY CONSTITUTION, RULE OF LAW OR EQUITY, OR STATUTE OR OTHERWISE OR UNDER ANY OTHER CIRCUMSTANCES, UNDER OR INDEPENDENT HEREOF, MAY BE HAD AGAINST ANY INCORPORATOR, MEMBER OR OFFICER AS SUCH, PAST, PRESENT OR FUTURE OF THE ISSUER OR THE TRUSTEE, OR ANY INCORPORATOR, MEMBER OR OFFICER OF ANY SUCCESSOR CORPORATION, AS SUCH EITHER DIRECTLY OR THROUGH THE ISSUER OR THE TRUSTEE OR ANY SUCCESSOR CORPORATION OR OTHERWISE, FOR THE PAYMENT FOR OR TO THE ISSUER OR ANY RECEIVER THEREOF, OR FOR OR TO THE TRUSTEE AS TRUSTEE FOR THE BONDHOLDERS OR OTHERWISE, OR ANY SUM THAT MAY BE DUE AND UNPAID BY THE ISSUER UPON THE SERIES 2016 BONDS. ANY AND ALL PERSONAL LIABILITY OF EVERY NATURE WHETHER AT COMMON LAW OR IN EQUITY, OR BY STATUTE OR BY CONSTITUTION OR OTHERWISE, OF ANY SUCH INCORPORATOR, MEMBER OR OFFICER, AS SUCH, TO RESPOND BY REASON OF ANY ACT OR OMISSION ON HIS OR HER PART OR OTHERWISE, FOR THE PAYMENT FOR OR TO THE ISSUER OR ANY RECEIVER THEREOF, OR FOR OR TO THE TRUSTEE AS TRUSTEE FOR THE BONDHOLDERS OR OTHERWISE, OF ANY SUM THAT MAY REMAIN DUE AND UNPAID UPON THE BONDS, IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A CONDITION OF AND IN CONSIDERATION FOR THE EXECUTION AND THE ISSUANCE OF THE SERIES 2016 BONDS.

Additional Bonds

So long as there is no Event of Default existing under the Indenture (or so long as such Event of Default will be cured upon the issuance of the Additional Bonds), Additional Bonds may be issued pursuant to the Indenture by the Issuer upon the written request of the Borrower to provide funds to pay any one or more of the following: (i) the costs of completing the Series 2016 Project or any additional project (each, a “Project”), (ii) the costs of making such additions or alterations to a Project as the Borrower may deem necessary or desirable and as will not impair the nature of the Project as a student housing facility and as will be located on the Property, (iii) the costs of refunding any Bonds, (iv) the costs of the acquisition, equipping and construction of additional property and housing

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(including related buildings and ancillary facilities) to be utilized for the benefit of the University, including the acquisition of equipment and real property, and (v) in each such case, the costs of the issuance and sale of the Additional Bonds and capitalized or funded interest for such period and such other costs reasonably related to the financing as are agreed upon by the Borrower and the Issuer. Such Additional Bonds will be issued on a parity with the Series 2016 Bonds and any Additional Bonds theretofore or thereafter issued, will be secured by the lien and security interests granted by the Leasehold Deed of Trust relating to the Series 2016 Project and the Security Agreement relating to the Series 2016 Bonds, equally and ratably with the Series 2016 Bonds and any Additional Bonds theretofore or thereafter issued, and will be payable from the Bond Fund and the Redemption Fund. An amount equal to the Debt Service Reserve Requirement for such Additional Bonds is required to be deposited into a separate Account of the Debt Service Reserve Fund or, if provided for in a supplemental indenture, into the Account established under the Indenture for the Series 2016 Bonds, in which case, the Account is required to be a shared Account benefitting the Series 2016 Bonds and any Additional Bonds identified in such supplemental indenture.

Such Additional Bonds may be issued in such series and principal amounts, will be dated, will bear interest at such rate or rates, will be subject to redemption at such times and prices and will mature in such years as the supplemental indenture authorizing the issuance thereof will fix and determine and will be authenticated as provided in the Indenture.

Except to provide funds to pay the costs of completing a Project, no Additional Bonds may be issued pursuant to the Indenture unless and until there is furnished to the Trustee written confirmation from each Rating Agency then rating the outstanding Bonds that subsequent to the issuance of such Additional Bonds, the existing rating on any series of the outstanding Bonds will not be lowered, suspended or withdrawn.

Except to provide funds to pay the costs of completing a Project, and as specified below, the Borrower may not incur any additional Indebtedness without evidence in the form of a Financial Consultant’s report that (i) the Fixed Charges Coverage Ratio for the most recent Annual Period prior to the incurrence of such additional Indebtedness was at least 1.20, (ii) the projected Fixed Charges Coverage Ratio for the first two full Annual Periods immediately succeeding completion of the financed additions or improvements to the Project by such additional Indebtedness would be at least 1.20 (including the proposed additional Indebtedness), and (iii) to the extent applicable, the occupancy of all Projects was at least 95% in the preceding Annual Period. Notwithstanding the foregoing sentence and without regard to the historical Fixed Charges Coverage Ratio referenced in the preceding clause (i) above or the occupancy requirement referenced in the preceding clause (iii) above, the Borrower may incur additional Indebtedness securing Additional Bonds issued by the Issuer related to the acquisition, equipping and construction of additional property and housing (including related buildings and ancillary facilities) to be utilized for the benefit of the University upon the delivery of evidence in the form of a Financial Consultant’s report that the projected Fixed Charges Coverage Ratio for the first three full Annual Periods immediately succeeding completion of such additional property and housing would be at least 1.20 (including the proposed additional Indebtedness and the outstanding Indebtedness).

The Borrower may not incur any additional Indebtedness in the form of guarantees or derivatives in the form of credit default swaps or total-rate-of-return swaps or similar instruments.

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Redemption

Optional Redemption. The Series 2016A Bonds maturing on or after April 1, 2031 shall be subject to redemption in Authorized Denominations prior to maturity upon the written request of the Borrower on and after April 1, 2026, in whole or in part on any date at a Redemption Price equal to 100% of the principal amount of the Series 2016 Bonds to be redeemed, plus interest accrued to the redemption date. The Series 2016B Bonds are not subject to optional redemption.

Extraordinary Optional Redemption. The Series 2016 Bonds will also be subject to redemption upon the written request of the Borrower, in full if:

(i) the Series 2016 Project has been destroyed or damaged to such an extent that in the opinion of the Borrower and the University expressed in a certificate filed with the Trustee (A) it cannot reasonably be restored within a period of 12 months to the condition thereof immediately preceding such destruction or damage, or (B) the Borrower will thereby be prevented from carrying on its normal operations thereat for a period of 12 consecutive months, or (C) the cost of restoration or replacement would exceed the Net Proceeds of insurance payable in respect of such destruction or damage; or

(ii) title to, or the temporary use of, a substantial portion of the Series 2016 Project has been taken under the exercise of the power of eminent domain by any governmental authority or person, firm, or corporation acting under governmental authority to such an extent that in the opinion of the Borrower and the University expressed in a certificate filed with the Trustee (A) it cannot be reasonably restored or replaced within a period of twelve (12) months to substantially the condition thereof immediately preceding such taking, or (B) the Borrower will thereby be prevented from carrying on its normal operations thereat for a period of twelve (12) consecutive months, or (C) the cost of restoration or replacement would exceed the total amount of compensation for such taking.

The Series 2016 Bonds will also be subject to redemption in authorized denominations upon the written request of the Borrower, in part in the event of partial condemnation or destruction of, or partial damage to, the Series 2016 Project from the Net Proceeds received by the Borrower as a result of such taking, destruction, or damage to the extent such Net Proceeds are not used for the restoration of the Series 2016 Project or for the acquisition of substitute property suitable for the Borrower’s operations at the Series 2016 Project as such operations were conducted prior to such taking, damage, or destruction if the Borrower furnishes to Trustee and the Issuer (i) a certificate of the Borrower and the University stating (A) that the property forming a part of the Series 2016 Project that was taken, damaged, or destroyed is not essential to the Borrower’s use or occupancy of the Series 2016 Project at substantially the same revenue-producing level prior to such taking, destruction, or damage, or (B) that the Series 2016 Project has been restored to a condition substantially equivalent to its condition prior to the taking, damage, or destruction, or (C) that the Borrower has acquired improvements that are substantially equivalent to the property forming part of the Series 2016 Project that was taken, destroyed, or damaged and (ii) a written report of a Financial Consultant filed with the Trustee that the Fixed Charges Coverage Ratio for each of the two Annual Periods following the Annual Period following such taking, destruction, or damage will not be less than the lesser of (a) 1.20 and (b) the average Fixed Charges Coverage Ratio for the two most recent Annual Periods prior to such taking, destruction or damage for which Audit Reports are available.

If the Series 2016 Bonds are called for redemption upon the occurrence of any of the events described in the two immediately preceding paragraphs, the Series 2016 Bonds may be redeemed on any date for which the requisite notice of redemption can be given within 180 days of such event at a Redemption Price equal to 100% of the principal amount thereof plus interest accrued to the redemption date.

Other Redemptions at Par. The Series 2016 Bonds will also be subject to redemption prior to maturity in Authorized Denominations prior to maturity in whole or in part at any time and as expeditiously as reasonably possible upon the deposit of money in the Redemption Fund required by the Loan Agreement as set

-10- forth below in a principal amount equal to such deposit and at a Redemption Price equal to one hundred percent (100%) of such principal amount thereof plus interest accrued thereon to the redemption date:

(i) any Net Proceeds of title insurance on the Series 2016 Project paid to the Trustee to the extent such net proceeds are not used to acquire or construct replacement or substitute property; or

(ii) any Net Proceeds of insurance received by the Borrower as a result of destruction of or damage to the Series 2016 Project to the extent such net proceeds are not used to restore the Series 2016 Project and/or to acquire or construct replacement or substitute property; or

(iii) any Net Proceeds received by the Borrower as a result of the taking of the Series 2016 Project or any part thereof under the exercise of the power of eminent domain to the extent such net proceeds are not used to restore the Series 2016 Project and/or to acquire or construct replacement or substitute property.

In all instances where the Trustee is directed by the terms of the Indenture to redeem Series 2016 Bonds from money deposited into the Redemption Fund, the Trustee is required to redeem the maximum principal amount of Series 2016 Bonds that may be redeemed in accordance with the provisions of the preceding paragraph, and any excess money will remain in the Redemption Fund.

Mandatory Sinking Fund Redemption. The Series 2016A Bonds maturing on April 1, 2031, April 1, 2036, and April 1, 2048 and the Series 2016B Bonds maturing on April 1, 2021 are subject to mandatory sinking fund redemption prior to maturity in part, at a Redemption Price equal to 100% of the principal amount thereof plus interest accrued thereon to the redemption date, in the following principal amounts and on the dates set forth below:

Series 2016A Bonds Maturing on April 1, 2031 April 1 Principal of the Year Amount 2027 $465,000 2028 490,000 2029 515,000 2030 540,000 2031† 565,000

Series 2016A Bonds Maturing on April 1, 2036 April 1 Principal of the Year Amount 2032 $595,000 2033 625,000 2034 655,000 2035 690,000 2036† 725,000 ______†Final Maturity

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Series 2016A Bonds Maturing on April 1, 2048 April 1 Principal of the Year Amount 2037 $760,000 2038 795,000 2039 835,000 2040 880,000 2041 925,000 2042 970,000 2043 1,015,000 2044 1,070,000 2045 1,120,000 2046 1,180,000 2047 1,235,000 2048† 1,300,000

Series 2016B Bonds Maturing on April 1, 2021 April 1 Principal of the Year Amount 2019 $255,000 2020 295,000 2021† 335,000 ______† Final Maturity

On or before the 45th day immediately preceding any April 1 on which Series 2016 Bonds of a series are to be retired pursuant to the applicable Sinking Fund Requirement, the Borrower may (i) deliver to the Trustee for cancellation Series 2016 Bonds of a series or portions thereof in any aggregate principal amount desired, or (ii) receive a credit with respect to the Sinking Fund Requirement for any Series 2016 Bonds of such series that before said date have been purchased or redeemed (other than through mandatory sinking fund redemption) and cancelled by the Trustee and not theretofore applied as a credit against such Sinking Fund Requirement. Each such Series 2016 Bond of a series or portion thereof so delivered or previously purchased or redeemed and cancelled by the Trustee is required to be credited by the Trustee at 100% of the principal amount thereof against future Sinking Fund Requirements for the Series 2016 Bonds of such series in such order as may be selected by the Borrower, and the principal amount of the Series 2016 Bonds of such series is required to be accordingly reduced.

Selection of Series 2016 Bonds to be Redeemed. If less than all of the Series 2016 Bonds of any series or maturity are to be called for redemption, the Trustee, except as otherwise provided in the Indenture, is required to select by lot the Series 2016 Bonds of such series or maturity to be redeemed in Authorized Denominations. Notwithstanding the foregoing, if less than all of the Series 2016 Bonds of any series are called for redemption (other than through mandatory sinking fund redemption), the Borrower has the right to designate the maturity of such Series 2016 Bonds to be called for redemption and to designate the Sinking Fund Requirement to which such redemption is credited. The Trustee has no liability for the selection of Series 2016 Bonds for redemption.

If a Series 2016 Bond of any series is in an amount greater than an Authorized Denomination, a portion of such Series 2016 Bond may be redeemed, but such Series 2016 Bond may be redeemed in part only in an Authorized Denomination and only if the unredeemed portion thereof is an Authorized Denomination.

So long as all of a series of Series 2016 Bonds is maintained under a book-entry system with DTC or any other securities depository in accordance with the Indenture: (i) if fewer than all such series of Series 2016 Bonds of any one maturity is called for redemption, DTC, or such other securities depository, and not the Trustee, will select the particular accounts from which such Series 2016 Bonds or portions thereof will be

-12- redeemed in accordance with DTC’s or such other securities depository’s standard procedures for redemption of obligations such as the Series 2016 Bonds; and (ii) if part, but not all, of any Series 2016 Bond is called for redemption, the owner of such Series 2016 Bond may elect not to surrender such Series 2016 Bond in exchange for a new Series 2016 Bond in accordance with the provisions of the Indenture and such Series 2016 Bond, and in such event will be required to make a notation indicating the principal amount of such redemption and the date thereof on the payment grid attached to such Series 2016 Bond. For all purposes, the principal amount of each Series 2016 Bond outstanding at any time will be equal to the lesser of the principal sum shown on the face thereof and such principal sum reduced by the principal amount of any partial redemption of such Series 2016 Bond following which the owner thereof has elected not to surrender such Series 2016 Bond in accordance with the provisions of the Indenture and such Series 2016 Bond. The failure of the owner of a Series 2016 Bond to note the principal amount of any partial redemption on the payment grid attached thereto, or any inaccuracy therein, will not affect the payment obligation of the Issuer under such Series 2016 Bond or the Indenture. THEREFORE, IT CANNOT BE DETERMINED FROM THE FACE OF A SERIES 2016 BOND WHETHER A PART OF THE PRINCIPAL THEREOF HAS BEEN PAID.

Notice of Redemption; Cessation of Interest. If any of the Series 2016 Bonds are called for redemption, notice thereof identifying the Series 2016 Bonds or portions thereof to be redeemed is required to be given by the Trustee by mailing a copy of the redemption notice by first class mail (postage prepaid) not less than 20 days nor more than 60 days prior to the date fixed for redemption to the Owner of each Series 2016 Bond to be redeemed at the address shown on the Bond Register as of the close of business on the day preceding the date of the mailing; provided, however, that failure to give such notice by mailing to any Owner of Series 2016 Bonds, or any defect therein, will not affect the validity of any proceedings for the redemption of any other Series 2016 Bonds with respect to which no such failure or defect occurred. Each notice is required to specify the CUSIP numbers of the Series 2016 Bonds of each series being called, the numbers of the Series 2016 Bonds of each series being called, if less than all of the Series 2016 Bonds of any series are being called, the redemption date, the Redemption Price, and the place or places where amounts due upon such redemption will be payable. Such notice is required to further state that payment of the applicable Redemption Price will be made upon presentation and surrender of the Series 2016 Bonds to be redeemed and that on the redemption date, the Redemption Price will become due and payable upon each Series 2016 Bond to be redeemed and that interest thereon will cease to accrue on and after such date, provided collected funds for the redemption of the Series 2016 Bonds to be redeemed are on deposit with the Trustee at the place of, and the time for, payment, at that time. Any notice mailed as provided in the Indenture will be conclusively presumed to have been duly given, whether or not the Owner of such Series 2016 Bonds actually receives such notice.

Any notice of redemption may, at the direction of the Borrower, state that the redemption to be effected is conditioned upon the receipt by the Trustee on or prior to the redemption date of sufficient and legally available funds to pay the Redemption Price of the Series 2016 Bonds to be redeemed and that if such funds are not so received or are not so legally available such notice will be of no force or effect and such Series 2016 Bonds will not be required to be redeemed. If such notice contains such a condition and sufficient funds to pay the Redemption Price of such Series 2016 Bonds are not received by the Trustee on or prior to the redemption date, the redemption will not be made and the Trustee is required to give notice, in the manner in which the notice of redemption was given, that such funds were not so received and that the redemption is to be or was cancelled.

Except as provided in the Indenture, on the date fixed for redemption, notice of redemption having been given as described above, the Series 2016 Bonds or portions thereof called for redemption will be due and payable on the date fixed for redemption at the Redemption Price provided for in the Indenture. On such date, if money or defeasance obligations, or a combination of both sufficient to pay the Redemption Price of the Series 2016 Bonds or portions thereof to be redeemed are held by the Trustee in trust for the Owners of Series 2016 Bonds or portions thereof to be redeemed, interest on the Series 2016 Bonds or portions thereof called for redemption will cease to accrue; such Series 2016 Bonds or portions thereof will cease to be entitled to any benefits or security under the Indenture or to be deemed outstanding; and the Owners of such Series 2016 Bonds or portions thereof will have no rights in respect thereof except to receive payment of the Redemption Price thereof.

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ANNUAL DEBT SERVICE REQUIREMENTS

The following table is a summary of the debt service schedule for the Series 2016 Bonds. Fiscal Year Series 2016A Series 2016B Total Bond Capitalized Total Net Debt Ending Debt Service Debt Service Debt Service Interest Service 06/30/2017 751,836.81 22,484.54 774,321.35 774,321.35 06/30/2018 998,750.00 29,868.76 1,028,618.76 857,182.30 171,436.46 06/30/2019 998,750.00 284,868.76 1,283,618.76 1,283,618.76 06/30/2020 998,750.00 316,262.50 1,315,012.50 1,315,012.50 06/30/2021 998,750.00 346,306.26 1,345,056.26 1,345,056.26 06/30/2022 1,363,750.00 1,363,750.00 1,363,750.00 06/30/2023 1,365,500.00 1,365,500.00 1,365,500.00 06/30/2024 1,366,250.00 1,366,250.00 1,366,250.00 06/30/2025 1,366,000.00 1,366,000.00 1,366,000.00 06/30/2026 1,364,750.00 1,364,750.00 1,364,750.00 06/30/2027 1,362,500.00 1,362,500.00 1,362,500.00 06/30/2028 1,364,250.00 1,364,250.00 1,364,250.00 06/30/2029 1,364,750.00 1,364,750.00 1,364,750.00 06/30/2030 1,364,000.00 1,364,000.00 1,364,000.00 06/30/2031 1,362,000.00 1,362,000.00 1,362,000.00 06/30/2032 1,363,750.00 1,363,750.00 1,363,750.00 06/30/2033 1,364,000.00 1,364,000.00 1,364,000.00 06/30/2034 1,362,750.00 1,362,750.00 1,362,750.00 06/30/2035 1,365,000.00 1,365,000.00 1,365,000.00 06/30/2036 1,365,500.00 1,365,500.00 1,365,500.00 06/30/2037 1,364,250.00 1,364,250.00 1,364,250.00 06/30/2038 1,361,250.00 1,361,250.00 1,361,250.00 06/30/2039 1,361,500.00 1,361,500.00 1,361,500.00 06/30/2040 1,364,750.00 1,364,750.00 1,364,750.00 06/30/2041 1,365,750.00 1,365,750.00 1,365,750.00 06/30/2042 1,364,500.00 1,364,500.00 1,364,500.00 06/30/2043 1,361,000.00 1,361,000.00 1,361,000.00 06/30/2044 1,365,250.00 1,365,250.00 1,365,250.00 06/30/2045 1,361,750.00 1,361,750.00 1,361,750.00 06/30/2046 1,365,750.00 1,365,750.00 1,365,750.00 06/30/2047 1,361,750.00 1,361,750.00 1,361,750.00 06/30/2048 1,365,000.00 1,365,000.00 1,365,000.00 41,574,086.81 999,790.82 42,573,877.63 1,631,503.65 40,942,373.98

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS

Leasehold Deed of Trust, Security Agreement, and Borrower Collective Collateral Assignment Agreement

As security for the obligations of the Borrower to the Issuer under the Loan Agreement and the Series 2016 Notes, the Borrower will execute and deliver to the Trustee, subject to the Permitted Encumbrances, (i) the Leasehold Deed of Trust pursuant to which the Borrower will grant to the Trustee a first deed of trust lien on its interest in the Series 2016 Project and the Property and assign and pledge to the Trustee the Borrower’s interest in the General Revenues from the Series 2016 Project and any improvements thereto or expansions thereof, (ii) the Security Agreement pursuant to which the Borrower will grant to the Trustee a first priority security interest in

-14- the accounts, documents, chattel paper, instruments, and general intangibles held by the Borrower arising in any manner from the Borrower’s ownership or operation of the Series 2016 Project and any improvements thereto or expansions thereof, in the inventory, if any, located at the Series 2016 Project, and the equipment, machinery, furnishings, and other personal property included in the Series 2016 Project, and (iii) the Borrower Collective Collateral Assignment Agreement pursuant to which the Borrower will collaterally assign to the Trustee its rights under the Development Agreement, the Construction Contract, the Management Agreement, the Architect’s Agreement and other contracts relating to the design or construction of the Series 2016 Project.

The lien created by the Leasehold Deed of Trust is subject to the rights of the Ground Lessor under the Ground Lease as the fee simple owner of the Property. The Leasehold Deed of Trust does not constitute a lien on the Ground Lessor’s fee simple interest in the Property. The Leasehold Deed of Trust also does not constitute a lien on certain utility improvements that will be constructed by the Borrower. Because of certain risks associated with pledging and granting a security interest in collateral of this nature, potential investors should not rely upon such collateral as providing any significant security for the Series 2016 Bonds. The Borrower’s obligation to comply with the terms of the Ground Lease, including the requirement to pay surplus revenues to the Ground Lessor and to relinquish any claim to the Series 2016 Project upon the termination of the Ground Lease, will likely render the Series 2016 Project less valuable to prospective purchasers upon foreclosure. See “THE GROUND LEASE — Events of Default and Remedies” and “CERTAIN BONDHOLDERS’ RISKS — Risks Associated with Ground Lease” herein.

Pledge and Assignment of Trust Estate

Pursuant to the Indenture, and in order to secure the payment of the Debt Service Payments according to their tenor and effect and to secure the performance and observance by the Issuer of the covenants expressed in the Indenture and in the Series 2016 Bonds, the Issuer will pledge and assign to the Trustee its right, title, and interest in and to the following (the “Trust Estate”) which will consist of:

(i) all of the right, title, and interest of the Issuer in and to (a) the Loan Agreement (except for Reserved Rights) and any amendment thereto and any loan, financing, or similar agreement between the Issuer and the Borrower relating to Additional Bonds; and (b) the Series 2016 Notes and any Additional Notes, and all extensions, amendments, supplements, modifications and renewals of the terms thereof, if any, and all amounts encumbered thereby, including, but without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive, and make receipt for payments and other sums of money payable, receivable, or to be held thereunder, to bring any actions and proceedings thereunder or for the enforcement thereof, and to do any and all other things that the Issuer is or may become entitled to do under the foregoing;

(ii) all of the right, title, and interest of the Issuer in and to all cash proceeds and receipts arising out of or in connection with the sale of the Bonds and all of the right, title and interest of the Issuer in and to the General Revenues, including money held by the Trustee in the funds created under the Indenture (other than the Rebate Fund), including the Revenue Fund, the Bond Fund, the Redemption Fund, the Issuance Cost Fund, the Construction Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund, the Insurance Fund, the Condemnation Fund, the Operations Contingency Fund, and the Surplus Fund created thereunder, or held by the Trustee as special trust funds derived from insurance proceeds, condemnation awards, payments on contractors’ performance or payment bonds or other surety bonds, or any other source;

(iii) all of the right, title, and interest of the Issuer in and to all money and securities and interest earnings thereon from time to time delivered to and held by the Trustee under the terms of the Indenture (except money on deposit in the Rebate Fund), and all other rights of every name and nature and any and all other property from time to time by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned, or transferred as and for additional security under the Indenture by the Issuer or by anyone on its behalf or with its written consent to the Trustee; and

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(iv) all other property of every name and nature from time to time by delivery or by writing mortgaged, pledged, delivered, or hypothecated as and for additional security under the Indenture by the Issuer or by anyone on its behalf or with its written consent in favor of the Trustee.

Because of certain risks associated with pledging and assigning collateral of the nature described above, potential investors should not rely solely upon such collateral as providing security for the Series 2016 Bonds.

As defined in the Indenture, “General Revenues” means (i) the sum of (a) the gross rents, fees and receipts and operating and non-operating revenues derived by the Borrower or the Manager on behalf of the Borrower from the ownership or operation of the Project including, without limitation, business or rental interruption insurance proceeds and proceeds of condemnation, sale or other disposition of the Project or any part thereof received by or on behalf of the Borrower; and (b) Unrestricted Contributions, all as determined in accordance with GAAP, but excluding, in any event, (ii) the sum of (a) earnings on amounts that are irrevocably deposited in escrow to pay the principal of or interest on indebtedness of the Borrower related to the Project, (b) deposits received from residents of the Project and held by the Borrower or the Manager on behalf of the Borrower until such time, if any, as the Borrower or the Manager is permitted to apply such deposits to the payment of rent or to the repair and maintenance of the Project in accordance with the terms of a residency agreement, at which time such deposits will constitute General Revenues.

Revenue Fund

Under the Indenture there is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Revenue Fund.” The Borrower has agreed to deposit and/or cause the Manager to deposit all General Revenues received by it not less frequently than each Friday (or if Friday is not a Business Day, the immediately preceding Business Day) to the Trustee for deposit to the Revenue Fund. The amounts so transferred and deposited into the Revenue Fund are to be disbursed by the Trustee each month or at such other times described below in the following order:

(a) there is required to be transferred to the Bond Fund:

(i) on or before the twentieth day of each month, a sum equal to one-sixth of the amount payable on the immediately succeeding Interest Payment Date as interest on the Series 2016 Bonds, or such lesser amount that, together with amounts already on deposit in the 2016A CI Subaccount, with respect to the Series 2016A Bonds, and the 2016B CI Subaccount, with respect to the Series 2016B Bonds, of the Capitalized Interest Account of the Bond Fund and available therefor, will be sufficient to cause the amount in the Bond Fund three (3) Business Days prior to the Interest Payment Date to be sufficient to pay interest on the Series 2016 Bonds becoming due on the immediately succeeding Interest Payment Date;

(ii) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of interest on such Additional Bonds;

(iii) on or before the twentieth day of each month commencing in the month of April 2018, and on or before the twentieth day of each month thereafter, a sum equal to (A) one-twelfth of the principal due on the immediately succeeding April 1 that is a maturity date of the Series 2016 Bonds; and (B) one-twelfth of the amount required to retire Series 2016 Bonds under the mandatory sinking fund redemption requirements described above on the immediately succeeding April 1, to cause the amount in the Bond Fund three (3) Business Days prior to the Interest Payment Date to be sufficient to pay such amounts as provided in the Indenture, as the case may be;

(iv) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of the principal of such Additional Bonds (whether at maturity or

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under any mandatory sinking fund or other similar redemption requirements of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds); and

(v) on the Business Day prior to any date on which any Additional Bonds are to be redeemed pursuant to any mandatory redemption provisions of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds (other than mandatory sinking fund or other similar redemption pursuant to such supplemental indenture or indentures), an amount equal to the Redemption Price of such Additional Bonds to be redeemed (taking into account amounts then on deposit in the Bond Fund and the Redemption Fund to be used for the payment of such Additional Bonds to be redeemed).

(b) there is required to be paid to the Trustee:

(i) on an annual basis, the annual fee of the Trustee for the Ordinary Services of the Trustee payable each year plus the Ordinary Expenses of the Trustee incurred under the Indenture and under the other Bond Documents, as and when the same become due,

(ii) except as provided in (i) above, the reasonable fees and charges of any paying agents on the Bonds for acting as paying agents as provided in the Indenture, payable as and when the same become due,

(iii) the reasonable fees and charges of the Trustee for the Extraordinary Services of the Trustee rendered by it and the Extraordinary Expenses of the Trustee incurred by it under the Indenture and under the other Bond Documents, as and when the same become due; provided, that the Borrower may, without creating an Event of Default under the Indenture, contest in good faith the reasonableness of any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any such fees, charges, or expenses;

(c) there is required to be paid to the Issuer (as certified in writing to Trustee by the Issuer) on the 20th day of each month (or the immediately succeeding Business Day if the 20th day of a month is not a Business Day), an amount sufficient to reimburse the Issuer for all unpaid fees and expenses reasonably incurred by the Issuer under the Loan Agreement in connection with the Project, including, but not limited to, the reasonable fees and expenses of counsel for the Issuer and Bond Counsel;

(d) there is required to be paid to the Manager on the 20th day of each month (or the immediately succeeding Business Day if the 20th day of a month is not a Business Day) for deposit into the Operating Account an amount equal to the greater of (i) the amount budgeted in the Annual Budget for Expenses for the immediately succeeding month, or (ii) 10% of the Expenses shown in the then current Annual Budget, provided that the amount transferred may not exceed the amount, if any, resulting by subtracting (1) the amount theretofore deposited into the Operating Account pursuant to this provision for the then current Annual Period from (2) the amount budgeted in the Annual Budget for Expenses for the then current Annual Period through the last day of the immediately succeeding month;

(e) if any funds are withdrawn from the Debt Service Reserve Fund, if there is a diminution in Value of the cash and investments held in the Debt Service Reserve Fund as of any Valuation Date, or if any net losses results from the investment of amounts held in the Debt Service Reserve Fund that reduces the Value of the cash and investments in the Debt Service Reserve Fund to less than the Debt Service Reserve Requirement as of any Valuation Date, there is required to be transferred to the related Account of the Debt Service Reserve Fund, beginning on the 20th day of the month following notice from the Trustee of such withdrawal, diminution in Value or losses, and on the 20th day of each month thereafter, (i) one-fourth of the amount of such deficiency due to a diminution in Value, or such losses; or (ii) one-twelfth of the amount of such deficiency if such deficiency results from any withdrawal from the Debt Service Reserve Fund or from any other source; in each case until the amount on deposit in the Debt Service Reserve Fund equals the Debt Service Reserve Fund Requirement;

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(f) if any funds are withdrawn from the Repair and Replacement Fund to pay Debt Service Payments, there is required to be transferred to the Repair and Replacement Fund, beginning on the 20th day of the month following any such withdrawal and continuing on the 20th day of each month thereafter the greater of (i) the lesser of (A) one-twelfth of the amount of such withdrawal or (B) such amount that is necessary to reimburse the Repair and Replacement Fund for all such withdrawals, or (ii) such amount as is directed in writing by the Borrower;

(g) there is required to be transferred to the Repair and Replacement Fund, commencing on 20th day of the first month following the month in which the Series 2016 Project receives a certificate of occupancy and on the 20th day of each month thereafter, an amount in equal monthly installments necessary to equal the annual amounts (or portion thereof as applicable) set forth in a schedule attached to the Loan Agreement, and any and all additional amounts required to be deposited therein following a Periodic Project Assessment and any and all additional amounts required to be deposited therein by any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds;

(h) there is required to be transferred to the Rebate Fund on the dates that the Borrower provides any calculation of the Rebate Amount to the Trustee in accordance with the Indenture, the amounts determined by the Borrower to be equal to the excess, if any, of the Rebate Amount so calculated over the amount then in the Rebate Fund;

(i) there is required to be transferred to the appropriate fund or funds other than the Repair and Replacement Fund, the Operations Contingency Fund and the Surplus Fund, any and all additional amounts required to be deposited into such fund or funds by any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds on the date(s) specified therein;

(j) on the twentieth day of each month, there is required to be paid to the University an amount equal to all Subordinated Expenses, to the extent that funds are available therefor, that have not previously been reimbursed to the University, as reimbursement to the University for the payment of such Subordinated Expenses, provided, however, that no payments may be made under this paragraph unless (i) all payments under paragraphs (a) through (i) above that are due have been paid, and (ii) the Manager determines, and certifies to the Trustee, that, based on the Annual Budget, after payment of such Subordinated Expenses, there are sufficient funds in the Bond Fund, the Revenue Fund and the Operations Contingency Fund to pay the ensuing payments coming due under paragraph (a) above for the next succeeding six months. The amounts paid to the University as described in this paragraph (j) will be the property of the University and will no longer be subject to the lien of the Indenture; and

(k) any amounts remaining therein on the last Business Day of each month are required to be transferred to the Operations Contingency Fund.

Bond Fund

The Indenture establishes a trust fund of the Issuer with the Trustee to be designated the Bond Fund. The amounts described under the caption “- Revenue Fund” above, all Basic Loan Payments received by the Trustee from the Borrower pursuant to the Loan Agreement, and certain other money received by the Trustee under the Loan Agreement are required to be deposited into the Bond Fund. Except as otherwise provided in the Indenture, money in the Bond Fund (with the exception of the Defeasance Account) is required to be used to pay Debt Service Payments on the Bonds. Upon an Event of Default, the Trustee may use money in the Bond Fund to pay the fees and expenses of the Trustee prior to making payments to the Bondholders.

If there are insufficient funds in the Bond Fund and the Redemption Fund available to pay Debt Service Payments for a series of Series 2016 Bonds then due, the Trustee is required to transfer to the Bond Fund, or to send written notice to the Manager to transfer to the Trustee for deposit to the Bond Fund, an amount equal to the insufficiency from the following Funds in the following order of priority: the related Account of the Redemption Fund, the Surplus Fund, the Operations Contingency Fund, the Repair and

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Replacement Fund, and the related Account of the Debt Service Reserve Fund. For additional information regarding the Bond Fund, see Appendix B “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT – The Indenture – The Bond Fund.”

Redemption Fund

The Indenture establishes a trust fund of the Issuer with the Trustee to be designated the Redemption Fund. Money in the Redemption Fund may be used only to pay the principal of Bonds or that portion of the Redemption Price of Bonds corresponding to principal as specified in the Indenture. For additional information regarding the Redemption Fund, see Appendix B “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT – The Indenture – The Redemption Fund.”

Construction Fund

The Indenture establishes a trust fund of the Issuer with the Trustee to be designated the Construction Fund. The 2016 Proceeds Account and the 2016 Marketing Account are required to be established within the Construction Fund. Money in the 2016 Proceeds Account of the Construction Fund is required to be expended for Costs of the Project other than start-up costs. Money in the 2016 Marketing Account of the Construction Fund is required to be expended for start-up costs.

All proceeds of the Series 2016 Bonds and investment earnings thereon remaining in the 2016 Proceeds Account and the 2016 Marketing Account of the Construction Fund on the Series 2016 Completion Date, less amounts retained or set aside to meet costs not then due and payable or that are being contested, are required to be used for other capital expenditures related to the Series 2016 Project that are approved by the University with the consent of the Borrower, which consent may not be unreasonably withheld; provided, however, that, with respect to proceeds in the 2016 Proceeds Account, a Favorable Opinion of Bond Counsel with respect to such expenditure has been obtained. If there are no such additional capital expenditures, such excess amounts are required to be transferred (i) to the 2016A Payment Subaccount of the Bond Fund and used for the payment of principal of the Series 2016A Bonds provided the Borrower delivers to the Trustee a Favorable Opinion of Bond Counsel if amounts are being transferred from the 2016 Proceeds Account; or (ii) if the Borrower fails to deliver such an opinion, to the Redemption Fund by the Trustee and used to redeem Series 2016A Bonds on the earliest possible date for which notice may be given in accordance with the Indenture.

Upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the 2016 Proceeds Account and the 2016 Marketing Account of the Construction Fund are required to be applied to the Debt Service Payment or redemption price of the Series 2016 Bonds. For additional information regarding the Construction Fund, see Appendix B “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT – The Indenture – The Construction Fund.”

Debt Service Reserve Fund

Under the Indenture, a Debt Service Reserve Fund and a separate account designated the 2016 Account will be established with the Trustee and will be funded initially from the proceeds of the Series 2016 Bonds in an amount equal to the Debt Service Reserve Requirement for the Series 2016 Bonds on and as of the date of issuance and delivery thereof. Under the Indenture, the Trustee will be authorized to transfer to the Bond Fund amounts held in 2016 Account of the Debt Service Reserve Fund to pay the Debt Service Payments on the Series 2016 Bonds and on any Additional Bonds if authorized pursuant to a supplemental indenture in the event there should be insufficient funds for said purposes in the Bond Fund, the Redemption Fund, the Surplus Fund, the Operations Contingency Fund and the Repair and Replacement Fund (in such order of priority) available therefor on the date such Debt Service Payments are due. Any withdrawals for this purpose from the Debt Service

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Reserve Fund will be required to be restored by payments of Reserve Loan Payments by the Borrower. See Appendix B “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT – The Indenture – Debt Service Reserve Fund” and “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT – The Loan Agreement – Loan Payments and Other Amounts Payable – Reserve Loan Payments” herein. If Additional Bonds are issued, the Debt Service Reserve Fund will be required to be increased by an amount equal to the Debt Service Reserve Require- ment for such Additional Bonds. Unless otherwise provided for in a supplemental indenture, the Trustee is required to establish a separate Account within the Debt Service Reserve Fund with respect to each series of Additional Bonds issued under the Indenture (or, if more than one series of Additional Bonds is issued on the same date, with respect to each such multiple series of Additional Bonds if authorized in a supplemental indenture). If so provided for in a supplemental indenture, the 2016 Account may be a shared Account benefitting the Series 2016 Bonds and any Additional Bonds identified in such supplemental indenture.

Repair and Replacement Fund

The Repair and Replacement Fund is required to be established with the Trustee. The Trustee is required to credit or deposit any money required to be paid under the Loan Agreement for credit or transfer to the Repair and Replacement Fund. See Appendix B “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT - The Indenture – Repair and Replacement Fund” and “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT - The Loan Agreement - Loan Payments and Other Amounts Payable” herein. The Trustee is authorized under the Indenture to withdraw funds from the Repair and Replacement Fund to pay (i) the costs incurred in connection with the major maintenance, repair or replacement of Equipment or other components of the Project which would be considered “capital” in nature under GAAP or, to the extent that the Net Proceeds are insufficient for such purposes and after depleting any amounts in the Surplus Fund and the Operations Contingency Fund, to the costs of restoration or replacement of the Project (or any portion thereof) pursuant to the Loan Agreement, and (ii) the Debt Service Payments to the extent there are insufficient funds in the Bond Fund, the Redemption Fund, the Surplus Fund and the Operations Contingency Fund available therefor on the date such Debt Service Payments are due.

No amounts may be disbursed for the purpose described in item (i) above without the consent of the University, unless (i) such disbursement has been included in the then current Annual Budget, or (ii) such disbursement does not exceed $5,000 or, in the case of an emergency (which is required to be certified to the University), $10,000, or (iii) such disbursement, together with all other disbursements from the Repair and Replacement Fund during such Annual Period that were not included in the then current Annual Budget and to which the University has not consented does not exceed $15,000.

Operations Contingency Fund

The Operations Contingency Fund will be established with the Trustee. Moneys remaining in the Revenue Fund after the disbursements described in paragraphs (a) through (j) under the description of the Revenue Fund, above are required to be transferred to the Operations Contingency Fund.

Moneys in the Operations Contingency Fund may be used by the Trustee to pay Expenses of, or (following payment in full of the Alternate Services and Excess Cost Payments) to make capital expenditures or repairs and replacements in respect of the Project, which are not included in the Annual Budget, or to pay Subordinated Expenses and/or Alternate Services or Excess Cost Payments (provided, the Manager determines and certifies in writing to the Trustee, that, based on the Annual Budget, after payment of such Subordinated Expenses and/or Alternate Services and/or Excess Cost Payments, there are sufficient funds in the Bond Fund, the Revenue Fund and the Operations Contingency Fund to pay the ensuing payments coming due under clause (a) under the description of the Revenue Fund for the next succeeding six months).

Money in the Operations Contingency Fund may also be used to pay Debt Service Payments, and the Issuer authorizes and directs the Trustee to withdraw funds from the Operations Contingency Fund to make

-20- such Debt Service Payments to the extent that there are insufficient funds in the Revenue Fund, the Bond Fund, the Redemption Fund and the Surplus Fund (in such order of priority) available therefor on such date. So long as no liabilities or obligations of the Borrower, whether budgeted or unbudgeted, are then due and unpaid as of June 30 of each Annual Period, there is required to be paid to the Developer an amount equal to all Alternate Services and Excess Cost Payments, to the extent that funds are available therefor, that have not previously been reimbursed to the Developer for the payment of Unavoidable Costs as such term is defined in the Development Agreement. So long as no liabilities or obligations of the Borrower, whether budgeted or unbudgeted, are then due and unpaid as of June 30 of each Annual Period, including the payment of Alternate Services and Excess Cost Payments described above, all amounts remaining in the Operations Contingency Fund in excess of 25% of the aggregate Expenses reflected in the Annual Budget for the following Annual Period are required to be credited or transferred to the Surplus Fund on June 30 of such Annual Period.

Amounts credited to or held in the Operations Contingency Fund will be available on a monthly basis to make the monthly credits or deposits required from the Revenue Fund.

Surplus Fund

The Surplus Fund will be established with the Trustee. The Trustee is required to credit or deposit amounts to the Surplus Fund as described under the caption “Operations Contingency Fund” above.

If the Trustee has received (i) a certificate of an Authorized Borrower Representative confirming that no Event of Default has occurred and is then continuing as of the proposed release date, and (ii) the annual financial statements and Audit Report for the most recently ended Annual Period with supporting calculations that indicate a Fixed Charges Coverage Ratio of at least 1.20 for the prior Annual Period, then the Trustee at the written direction of the Borrower, is required to transfer to the Foundation any portion of the Borrower Membership Fee that has not been paid to the Foundation and to transfer the balance in the Surplus Fund, after applying any amounts required below, to the Ground Lessor as payment of rent due under the Ground Lease.

Until such time as the release test above is satisfied, amounts credited to or held in the Surplus Fund will be available on a monthly basis to make the monthly credits or deposits required from the Revenue Fund and to pay Debt Service Payments if there are insufficient funds in the Revenue Fund, the Bond Fund and the Redemption Fund (in such order of priority). Upon satisfaction of the release test above with respect to a subsequent Annual Period, the Trustee is required to transfer to the Ground Lessor the balance in the Surplus Fund, including the balance in the Surplus Fund that relates to any prior Annual Period, all after applying such amounts required by the preceding sentence.

Title and Property Insurance

A mortgagee’s title insurance policy or a commitment therefor will be delivered in the amount of not less than the original principal amount of the Bonds to insure the Trustee’s first priority deed of trust lien on the leasehold interest in the Series 2016 Project, subject only to Permitted Encumbrances and the standard exclusions from the coverage of such policy. Under such title insurance policy, the Trustee is not permitted to recover more than the fair market value of any property which is lost as a result of a title defect. The Board, in its capacity as Ground Lessor, has initially committed to repair and rebuild damaged or destroyed portions of the Series 2016 Project and provide for lost revenues with respect thereto, all as provided in the Ground Lease. See “THE GROUND LEASE-Ground Lessor Commitment to Repair and Replace the Series 2016 Project” herein.

Rate Covenant

The Borrower has covenanted to operate the Project as a revenue producing student housing facility on a non-discriminatory basis, and beginning with the Annual Period ending June 30, 2018, to the extent permitted by law and by the applicable Ground Lease, to charge such rates, fees and charges for the Project and to exercise such skill and diligence as will provide Revenue Available for Fixed Charges in each Annual Period, sufficient to

-21- produce a Fixed Charges Coverage Ratio of at least 1.20. If it is determined, based upon the annual audited financial statements of the Borrower that for any Annual Period, such Fixed Charges Coverage Ratio was not maintained, the Borrower will be required, within 30 days of receipt of such financial statements and calculation of the Fixed Charges Coverage Ratio, to engage a Financial Consultant to submit a report containing recommendations as to changes in the operating policies of the Manager of the Project designed to achieve such Fixed Charges Coverage Ratio, to cause such Financial Consultant to prepare and submit such recommendations within 60 days of the date of its engagement, and to promptly implement, within 30 days of receipt of the report, such recommendations to the extent permitted by law and by the applicable Ground Lease. If the Fixed Charges Coverage Ratio does not fall below 1.00, no Event of Default under the Loan Agreement will occur as a result of the provisions of the Loan Agreement described in this paragraph if the recommendations of the Financial Consultant are followed notwithstanding that such Fixed Charges Coverage Ratio is not subsequently reattained, but the Borrower will continue to be obligated to employ such a Financial Consultant for such purpose until such Fixed Charges Coverage Ratio is reattained.

The Borrower will also be required, from time to time as often as necessary and to the extent permitted by law and the applicable Ground Lease, to revise the rates, fees, and charges aforesaid in such manner as may be necessary or proper so that the Revenue Available for Fixed Charges will be sufficient to meet the requirements of the Loan Agreement, and further, in order to comply with provisions of the Loan Agreement, to take all action within its power to obtain approvals of any regulatory or supervisory authority to implement any rates, fees, and charges required by the Loan Agreement.

THE ISSUER

The Issuer is a public nonprofit corporation created by the Town of New Hope, Texas (the “Town”) and exists as an instrumentality of the Town pursuant to the Cultural Education Facilities Finance Corporation Act, Article 1528m, Vernon’s Texas Civil Statutes, as amended (the “Act”). The Act grants the Issuer, among others, the same powers, authority, and rights to issue revenue bonds for the purpose of aiding any accredited institutions of higher education and authorized charter schools in financing or refinancing educational facilities and housing facilities and facilities which are incidental, subordinate, or related thereto or appropriate in connection therewith that a nonprofit corporation created under Section 53.35(b), Texas Education Code, or any authority created under Section 53.11, Texas Education Code, has under Chapter 53, Texas Education Code, as amended.

All of the Issuer’s property and affairs are controlled by and all of its power is exercised through a board of directors (the “Issuer Board”), which consists of five members, each of whom has been appointed by the Town Council of the Town. Issuer Board members serve two-year terms, and each Issuer Board member may serve an unlimited number of two-year terms. Issuer Board members serve until their successors have been appointed. All vacancies on the Issuer Board are filled by the Town Council.

The officers of the Issuer consist of a president, a vice president, a secretary, and a treasurer, each selected by the Issuer Board from among its members, whose terms of office may not exceed two years and whose duties are described in the Issuer’s bylaws. All officers are subject to removal from office, with or without cause, at any time by a vote of a majority of the entire Issuer Board. Vacancies may be filled by the Issuer Board.

Neither Issuer Board members nor officers receive compensation for serving as such, but they are entitled to reimbursement for expenses incurred in performing such service.

The Issuer has no assets, property or employees. Other than legal counsel, the Issuer has not engaged any consultant or other professional. THE ISSUER HAS NO TAXING POWER.

The Issuer is receiving a fee of $25,000 in connection with the issuance of the Series 2016 Bonds, which amount, after expenses, is expected to be paid to the Town and used by the Town for any lawful purpose.

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Although the Issuer will issue the Series 2016 Bonds and has previously issued other obligations for the benefit of subsidiary entities of Collegiate Housing Foundation, the parent of the Borrower, the Issuer is not in any manner related to or affiliated with the Borrower. The Issuer has issued the Series 2016 Bonds solely to carry out the Issuer’s statutory purposes. The Borrower has agreed to indemnify the Issuer for certain matters.

The Issuer Board members are not personally liable in any way for any act or omission committed or suffered in the performance of the functions of the Issuer.

Neither the Issuer nor the Town has assumed any responsibility for the matters contained herein except, in the case of the Issuer, solely as to matters relating to the Issuer. All findings and determinations by the Issuer and the Town, respectively, are and have been made by each for its own internal uses and purposes. Notwithstanding its approval of the Series 2016 Bonds for purposes of section 147(f) of the Internal Revenue Code of 1986, as amended, the Town does not endorse in any manner, directly or indirectly, guarantee, or promise to pay the Series 2016 Bonds from any source of funds of the Town or guarantee, warrant or endorse the creditworthiness or credit standing of the Borrower, or in any manner guarantee, warrant, or endorse the investment quality or value of the Series 2016 Bonds. The Series 2016 Bonds are payable solely as described in this Official Statement and are not in any manner payable from any funds or properties otherwise belonging to the Issuer. By its issuance of the Series 2016 Bonds, the Issuer does not in any manner, directly or indirectly, guarantee, warrant or endorse the creditworthiness or credit standing of the Borrower or the investment quality or value of the Series 2016 Bonds.

The Issuer makes no warranty or representation, whether express or implied, with respect to the Series 2016 Project or the use thereof. Further, the Issuer has not prepared any material for inclusion in this Official Statement, except that material under the headings “THE ISSUER” and “LITIGATION - The Issuer”. The distribution of the information contained under the captions “THE ISSUER” and “LITIGATION - The Issuer” contained in this Official Statement has been duly approved and authorized by the Issuer. Such approval and authorization does not, however, constitute a representation or approval by the Issuer of the accuracy or sufficiency of any of the information contained herein except to the extent of the material under the headings referenced in this paragraph.

THE SERIES 2016 PROJECT

General

As proposed, the Series 2016 Project will consist of a four-story building designed as a modern residence hall on the campus of the University with 103 units (382 beds) and a 4,250 square foot community center on the ground floor that provides a housing office, resident lounge and full fitness center. The upper floors of the central community hub include an additional 5,400 square feet of amenities with a game room, social lounge and kitchen as well as multiple study spaces. The fourth floor will include a large multi-purpose study space with places for group gathering, study groups with technology-focused amenities, white boards and smart televisions. The fourth floor will also have a management-controlled outdoor balcony. The total square footage of the Series 2016 Project is approximately 104,800 square feet.

The Series 2016 Project will be the first student housing community on the University campus, is primarily intended to serve incoming freshmen students and will be permissible housing satisfying the on- campus living requirement being implemented by the University. The Series 2016 Project will also be available for all University students and other eligible tenants as provided in the Ground Lease.

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Residential Buildings

The proposed unit mix includes two bedroom/one bathroom (double occupancy) semi-suites, two bedroom/one bathroom (single occupancy) semi-suites, one bedroom/one bathroom (double occupancy) semi- suites, and two bedroom/one bathroom staff apartments. Every residential floor will offer laundry facilities and convenient elevator access. The Series 2016 Project will offer individual “by the bed” leases for an academic year covering an approximately nine month term. Currently, the development plans call for a single- stage delivery, with the planned opening of the building in time for the Fall 2017 semester.

# of # of AY 2017 -18 Unit Type Units Beds Sq. Feet/Unit Rent/Bed 2BR/1BA (Double Occupancy) Semi-Suite 88 352 697 $6,766 2BR/1BA (Single Occupancy) Semi-Suite 12 24 463 $7,826 1BR/1BA (Double Occupancy) Semi-Suite 1 2 429 $6,766 2BR/1BA Apartment (RD Unit) 1 2 802 -- 2BR/1BA Apartment (FIR Unit) 1 2 820 -- TOTALS / WEIGHTED AVERAGE 103 382 669 $6,833

All units will be fully furnished and have connections for high-speed internet access and cable television in each individual room with Wi-Fi also available throughout all residential and common areas. Each student will have his or her own twin-sized bed, desk, office chair, night stand/bookcase and stackable dresser.

The Series 2016 Project will have outdoor patios and socialization areas with benches, trellis coverings and access to the neighboring Patriots’ Casa outdoor lounge area.

THE GROUND LEASE

The following is a summary of certain provisions of the Ground Lease pursuant to which the real property underlying the Series 2016 Project will be leased to the Borrower by the Board (which is herein referred to in such capacity as the “Ground Lessor.”) This summary is not a complete recital of the terms of the Ground Lease and reference is made to the Ground Lease in its entirety. During the initial offering period, potential purchasers of the Series 2016 Bonds can obtain a copy of the Ground Lease from the Underwriter at no cost and are encouraged to review the same before investing in the Series 2016 Bonds. Following the initial offering period, potential purchasers can examine such documents at the office of the Trustee.

General Lease Terms

Pursuant to the Ground Lease, the Ground Lessor has leased the Property to the Borrower for a term of thirty-two (32) years, subject to certain termination rights provided therein and unless extended by agreement of the Ground Lessor and the Borrower to a date on which the Series 2016 Bonds and all obligations under the Leasehold Deed of Trust and any other permitted leasehold mortgage have been fully repaid and all Alternate Services and Excess Cost Payments have been paid. The annual rental payable under the Ground Lease is all net available cash flow from the Series 2016 Project which will equal the amount transferred from time to time from the Surplus Fund created under the Indenture after payment of the Borrower Membership Fee.

Limitations on Use

The Ground Lease requires that the Series 2016 Project be used solely for the operation of a student housing facility to serve enrolled students, faculty and staff of the University and people attending programs presented by the University or another organization on the University’s campus, whose presence is deemed desirable by the University to the effective provision of the University’s programs and services.

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Ground Lessor’s Commitment

The Ground Lessor and the University each agree in the Ground Lease that, whether or not the University is acting as the manager of the Series 2016 Project, the University shall:

(i) include the Series 2016 Project in all relevant information and marketing materials regarding student housing that it provides to students and prospective students, including providing information about the Series 2016 Project on the University’s website, refer students to the Series 2016 Project, and include the Series 2016 Project in any housing assignment system it holds and otherwise promote the availability of the Series 2016 Project in the same manner as its own student housing facilities;

(ii) to the extent possible, provide students residing at the Series 2016 Project the same services and access it provides to students in its own housing facilities from time to time, including, without limitation, its current student life programs, computer network and student transportation system;

(iii) not construct or otherwise sponsor any additional housing facilities for University students on or off the campus of the University (“Additional Student Housing”) beyond the replacement of the same number of beds of existing housing facilities owned or sponsored by the University, unless: (a) the University shall have first consulted with the Lessee on the need for Additional Student Housing; (b) the University shall have (1) reviewed and accepted a pro forma operating statement for the Additional Student Housing, (2) determined that there is a valid reason for the Additional Student Housing, and (3) made a determination based on reasonable evidence furnished to the Lessee that the Series 2016 Project is projected to maintain a Fixed Charges Coverage Ratio of at least 1.20 for the then-current fiscal year (to the extent the Series 2016 Project has been operational) and expects to maintain a Fixed Charges Coverage Ratio of at least 1.20 when taking into account the Additional Student Housing; and (iii) the construction of the Additional Student Housing is supported by a demand study from an independent consultant completed not more than three years prior to the projected commencement of construction concluding that sufficient demand exists for the additional number of beds to be constructed so as not to have a material adverse effect on the Series 2016 Project with respect to the Series 2016 Bonds (see “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS – Rate Covenant” herein); and (iv) no Event of Default exists under the Loan Agreement. The projections and demand study shall be prepared by nationally recognized consulting firm(s) experienced in student housing for comparably sized or larger institutions of higher education mutually agreed upon by the University and the Borrower;

(iv) not direct or assign on a priority basis students to any Additional Student Housing (as defined below) in preference over the Series 2016 Project, except under its current practices to meet special program needs, such as freshman housing or honors housing;

(v) if the Borrower is not in compliance with the requirements of the Bond Documents, cooperate with the Borrower in selecting an independent consultant and in implementing such consultant’s recommendations regarding the operation and management of the Series 2016 Project in a manner approved by the Borrower, which approval shall not be unreasonably withheld;

(vi) to the extent allowed by law and consistent with University policies, maintain and diligently enforce with respect to the Series 2016 Project the University’s then current policies regarding withholding of grades and/or registration in the event of delinquencies in the payment of rent under Resident Leases (as defined in the Ground Lease);

(vii) ensure that the Series 2016 Project and the Premises are subject, at all times during the term of the Ground Lease, to the jurisdiction of the University’s campus security force;

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(viii) assist the Borrower with its continuing disclosure obligations by providing it with such information about the University and the Series 2016 Project that the Borrower may need to comply with such obligations, including but not limited to demographic and statistical information about its enrollment, on-campus housing and general financial stability and the occupancy rates for the Series 2016 Project;

(ix) implement not later than Fall semester, 2017, and thereafter maintain throughout the term of the Ground Lease, an on-campus residency requirement as described in “THE UNIVERSITY-Overview of Current University Student Housing” herein; and

(x) if the Series 2016 Project is not being managed by the University, (i) implement procedures to assist students in applying for residence at the Series 2016 Project, (ii) assist where possible in the collection of rents, (iii) where appropriate, facilitate the use of financial aid provided to students to pay eligible housing expenses, (iv) permit the Borrower to advertise the Series 2016 Project on the University’s campus and its website and to post reasonably sized advertising literature on bulletin boards in the University’s facilities that are available for public announcements, (v) permit the Borrower to maintain space on the University’s campus at a site determined by the University for a staffed leasing display, (vi) provide to the Borrower a mailing list of the University’s students that are seeking housing to the extent such a list is maintained and the University is permitted by law to disclose such information regarding its students to the Borrower.

Policy Committee

The Ground Lease provides for the creation of a Policy Committee to govern certain policies and operating procedures of the Series 2016 Project. The Policy Committee is composed of three representatives of the University and three representatives of the Borrower. In the event of a deadlocked vote between the representatives of the University and the Borrower, the University will cast the deciding vote. The policies and operating procedures established by the Policy Committee must be consistent with the applicable provisions of the Ground Lease, Loan Agreement, Leasehold Mortgage and the Tax Regulatory Agreement. The policies and operating procedures within the jurisdiction of the Policy Committee include the conduct of student satisfaction surveys, focus groups and exit interviews, the conduct of periodic assessments of residents as to satisfaction with quality of life within the Series 2016 Project, the establishment of policies and procedures for access by University security personnel and camera surveillance of the exterior of the Series 2016 Project and the establishment of policies and procedures for providing resident contact information for use by the University in its emergency contact system.

Accommodation of the Grant of Certain Easements

If requested by the Ground Lessor, the Borrower agrees to join in the grant of easements in connection with the Ground Lessor’s development of the Campus (as defined in the Ground Lease) and to execute any and all documents, agreements, and instruments and to take all other actions in order to effectuate the same if the Borrower’s joinder is required in connection with any easements affecting any portion of the Property, provided such easements: (i) may only be located within those areas of the Property that will not interfere with the Series 2016 Project; (ii) are approved by the Borrower in its reasonable judgment as to their location and the form of the easement agreement; (iii) may only be granted as non-exclusive easements; and (iv) will not adversely affect the tax-exempt status of any outstanding Series 2016 Bonds or the tax-exempt status of the Foundation.

Failure to Provide Student Housing Facility on Schedule

If for any reason the Series 2016 Project has not achieved Substantial Completion (as defined by the Development Agreement) on or before August 13, 2017, then the Borrower shall require the Developer as provided in the Development Agreement to arrange for and coordinate use of alternative housing reasonably acceptable to the University and certain other transportation, storage and moving services and stipends for the

-26- residents who have contracted to reside in the Series 2016 Project until the applicable unit for such resident is substantially complete. The Manager shall require such residents to make all payments owed under their Resident Leases and remit the payments received from such residents to the Trustee for deposit to the Revenue Fund under the Indenture. The cost of such alternative housing and other services shall be borne by the Developer as provided in the Development Agreement; provided, however, the Developer shall be entitled to reimbursement for the actual cost incurred in connection with providing such alternative housing and other services, as a subordinated expense of the Series 2016 Project, or receive an assignment of claims of the Borrower against the General Contractor (as defined herein), the Architect (as defined herein) or other consultant in relation to the delay resulting in costs of alternative housing and other services to the extent allowed under the Development Agreement. See “THE DEVELOPMENT AGREEMENT” herein.

Failure to Provide Student Housing Facility on Budget

If for any reason the Series 2016 Project has not been completed within the amount of money required under the Development Agreement, then the Borrower shall require the Developer to the extent provided in the Development Agreement to initially fund the payment of excess costs; provided, however, the Developer shall be entitled to reimbursement for such excess costs, as a subordinated expense of the Series 2016 Project, or receive an assignment of claims of the Borrower against the General Contractor (as defined herein), the Architect (as defined herein) and other consultants in relation to the matters resulting in such excess costs to the extent provided in the Development Agreement. See “THE DEVELOPMENT AGREEMENT” herein.

Borrower and Ground Lessor Commitment to Provide Certain Utilities, Parking, Access, Pay Taxes and Provide Certain Insurance for Series 2016 Project

Under the Ground Lease, the University shall provide water (including water for domestic uses and for fire protection) required, used, or consumed at the Series 2016 Project (the “University Utility Service”), and the University shall be entitled to reimbursement of the actual cost of such University Utility Service, as an Expense, as determined by a submeter installed within the University’s utility infrastructure. The Borrower shall make application for, obtain and pay for, and be solely responsible for all utilities other than water required, used or consumed on the Series 2016 Project, including but not limited to electricity, wastewater, natural gas, cable TV, internet, telephone and garbage collection services or any similar service (the “Lessee Utility Services”). If any charge for any Lessee Utility Services supplied to the Series 2016 Project directly by the utility provider to the Borrower is not paid by the Borrower to the utility supplier when due, then the Ground Lessor may, ten days after giving written notice to the Borrower, but shall not be required to, pay such charge for and on behalf of the Borrower, with any such amount paid by the Ground Lessor being repaid by the Borrower to the Ground Lessor, as additional rent, within twenty days after demand by the Ground Lessor. Notwithstanding the foregoing, at the request of the Ground Lessor and the Borrower, the University may make application, provide or cause public utility providers to provide all or certain utility services for the Series 2016 Project. In the event that separate submeters are installed to measure Borrower’s usage, consumption or demand on the Series 2016 Project, the University will invoice the Borrower for usage by the Borrower according to the University’s submeters at the actual costs paid or incurred by the University for such services to the applicable public utility company. Any amounts the University invoices to the Borrower will be paid as an Expense and will be due within thirty (30) days after the date upon which the University delivers such invoice to the Borrower.

The University Utility Service will be provided through water infrastructure on the University campus, including improvements constructed by the Borrower with proceeds from the Series 2016 Bonds that upon completion will be owned and operated by the Ground Lessor. The Ground Lessor has agreed, at its sole cost and expense, to keep, repair, operate, replace and maintain in a good and operable condition and in compliance with applicable laws that portion of the utility infrastructure necessary to supply University Utility Service. The Ground Lessor has agreed to use commercially reasonable efforts to provide the University Utility Service to the Series 2016 Project in a consistent, uninterrupted manner and in compliance with applicable laws and to promptly respond to and remedy any outage, interruption, cessation or failure of any utility within the Ground Lessor’s control.

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The Ground Lease requires the Ground Lessor to provide access to the provider of electricity to the Series 2016 Project over and across portions of the University campus as shall be necessary for the installation of electric power service and thereafter for the operation, maintenance and repair of all improvements and equipment located within such area. The Borrower will construct certain drainage improvements that will serve the Series 2016 Project but that will not be located on the Property. The Ground Lessor has granted the Borrower the right of access to use and maintain these drainage improvements and has agreed that if the Borrower is unable to secure access to such drainage improvements for use and maintenance then the Ground Lessor will maintain such drainage facilities in a good and operable condition at its sole cost and expense. The Ground Lessor has agreed that the University will maintain storm water drainage pipes, ditches and other facilities sufficient to carry storm water drainage from the Property.

The Ground Lease requires that the University maintain throughout the term of the Ground Lease parking for the Series 2016 Project to the same extent as provided to other students and with preferences afforded on-campus residents. Parking is required to be made available and be maintained in accordance with the University’s standards and practice for provision of parking for similar facilities throughout its campus. The Ground Lease further requires that the University maintain the area of the University’s campus that provides access to the Series 2016 Project. The access area is required to be maintained in accordance with the University’s standards and practice for maintenance for similar paved areas throughout its campus.

The Borrower has agreed, to the extent assessed, to bear and pay to the public officer charged with the collection thereof, before the same becomes delinquent, any and all taxes, assessments, license fees, excises, imposts, fees, and charges of every sort, nature and kind which during the term of the Ground Lease are or might be levied, assessed, charged, or imposed upon or against the Series 2016 Project or the interest or estate of the Borrower or the Ground Lessor therein.

Except to the extent of the Ground Lessor’s initial commitment to (i) repair, reconstruct, restore and replace the Series 2016 Project, and (ii) provide for lost revenues, if the Series 2016 Project is damaged or destroyed as provided in the Ground Lease and as described below, it is the intent of the parties that all risk of loss for the Series 2016 Project be shifted to insurance to the maximum extent practicable. The Borrower has agreed to obtain and maintain insurance coverage as specified in the Ground Lease for workers compensation insurance, property, business interruption, fidelity bonds or employee dishonesty, commercial general liability, automobile, professional errors and omissions, and additional umbrella coverage. Notwithstanding the foregoing, so long as the Ground Lessor continues to be obligated to (i) repair, reconstruct, restore and replace the Series 2016 Project, and (ii) provide for lost revenues for a period of twelve months, in the event the Series 2016 Project is damaged or destroyed as provided in the Ground Lease, the Borrower will not be required to carry casualty and business interruption insurance, as provided in the Ground Lease.

Ground Lessor Commitment to Repair and Replace the Series 2016 Project

Subject to certain conditions described below, from and after the date on which coverage under the builder’s risk policy with respect to the Series 2016 Project is terminated, if all or any portion of the Series 2016 Project is damaged or destroyed by fire or any other casualty whatsoever, the Ground Lessor shall, within one hundred and eighty (180) days from the date of such damage or destruction, commence the work of repair, reconstruction, restoration, or replacement and shall prosecute the same with all reasonable dispatch, such that the buildings, other structures or improvements shall be repaired, reconstructed, or restored as nearly as practicable to the same condition as prior to such damage or destruction. In addition to its obligations described in the preceding sentence, in the event of total or partial suspension of, or interruption in, the operation of the Series 2016 Project caused by damage or destruction of the Series 2016 Project, the Ground Lessor has agreed to pay to the Borrower an amount equal to the loss of revenues or other income incurred by the Borrower from the date of such suspension or interruption and continuing for a period of twelve months.

The Ground Lessor may elect, upon not less than ninety (90) days’ notice to the Borrower and the Trustee, to terminate its obligation to repair the Series 2016 Project, upon the following conditions: (A) the Borrower shall be able to obtain insurance against the property damage and business interruption; (B) the

-28- cost of the premiums for such insurance, when added to Fixed Charges shall not cause the Fixed Charges Coverage Ratio to be less than 1.20; and (C) the Ground Lessor shall, prior to termination of this obligation, complete any repairs required under this provision as a result of any damage arising prior to the date of termination.

For any period during which the Ground Lessor is obligated to repair the Series 2016 Project it is entitled to reimbursement for (x) payment of premiums (or a prorated share thereof for any partial period covered by a premium) for insurance carried by it to insure against the costs of such repair and (y) an allocated portion of any charge for self-insurance under a program of self-insurance maintained by the Ground Lessor, in each case as and to the extent provided in the Indenture. Any allocation of charges for self-insurance is required to be determined in the same manner as the allocation of charges for other facilities of the same nature as the Series 2016 Project. The Ground Lessor has acknowledged that nothing in the preceding sentence is intended to alter its obligation to repair, reconstruct, restore or replace the Series 2016 Project, at its cost and expense, as provided in the Ground Lease and the proceeds of any insurance for casualty loss or business interruption procured by the Borrower while the Ground Lessor is obligated to repair the Series 2016 Project under the Ground Lease are intended to reimburse the Ground Lessor for any or all of its costs and expenses.

Events of Default and Remedies

The following are defined as “Events of Default” under the Ground Lease:

(i) The Borrower fails to pay the Rent at the times specified therein.

(ii) The Borrower fails to perform or cause to be performed any other term, covenant, condition, or provision in the Ground Lease, other than as referred to in (i) above, and to correct such failure within thirty (30) days after written notice specifying such is given to the Borrower and the Trustee by the Ground Lessor. In the case of any such failure that cannot with due diligence be corrected within such thirty (30) day period but can be wholly corrected within a period of time not materially detrimental to the rights of the Ground Lessor, it will not constitute an Event of Default if corrective action is instituted by the Borrower within the applicable period and diligently pursued until the failure is corrected.

(iii) The Borrower is adjudicated as bankrupt.

(iv) A permanent receiver is appointed for the Borrower’s interest in the Premises and such receiver is not removed within ninety (90) days after notice from the Ground Lessor to the Borrower to obtain such removal.

(v) The Borrower voluntarily takes advantage of any debtor relief proceedings under any present or future law whereby the Rent due under the Ground Lease or any part thereof is reduced or payment thereof deferred or becomes subject to any such involuntary proceedings and said involuntary proceedings is not dismissed within ninety (90) days after notice from the Ground Lessor to the Borrower to obtain such dismissal.

(vi) The Borrower makes a general assignment for benefit of creditors.

(vii) The Premises or the Borrower’s effects or interests therein are levied upon or attached under process against the Borrower, and the same is not satisfied or dissolved within ninety (90) days after notice from the Ground Lessor to the Borrower and the Trustee, to obtain satisfaction or dissolution thereof.

Upon the occurrence of an Event of Default, the Ground Lessor will, subject to the provisions of the Ground Lease described in the two immediately succeeding paragraphs, have the right to (i) terminate the Ground Lease immediately upon written notice thereof to the Borrower and the Trustee, and thereafter, without

-29- legal process, enter upon and take possession and control of the Premises to the complete exclusion of the Borrower; or (ii) without terminating the Ground Lease, re-let the Series 2016 Project and the Property and collect from the Borrower the reasonable costs and expenses of re-letting, repairing, and altering the Property.

Notwithstanding the foregoing termination rights of the Ground Lessor, the Trustee is entitled to extend the date of termination for a period of not more than twelve (12) months in order to allow it to acquire the Borrower’s interest in the Ground Lease by foreclosure or otherwise. If the Ground Lease is terminated due to a default by the Borrower the Trustee will have the option, but not the obligation, to enter into a lease of the Premises with the Ground Lessor at the same rent and upon the same terms and conditions contained in the Ground Lease. The Ground Lease does not require that the Ground Lessor provide for payment or defeasance of the Series 2016 Bonds if the Ground Lease is terminated, although in such event the Ground Lessor is required to continue to own and operate the Series 2016 Project so long as the Series 2016 Bonds are outstanding for a governmental purpose in a manner which would not cause the Series 2016 Bonds to become private activity bonds unless the Ground Lessor and the University provide a favorable opinion of nationally recognized bond counsel. It is possible that the Ground Lessor could terminate the Ground Lease and the Series 2016 Project could revert to the Ground Lessor even if the Series 2016 Bonds remain outstanding.

If the Ground Lessor fails to perform or cause to be performed any term, covenant, condition, or provision imposed upon it or the University under the Ground Lease, and to correct such failure within thirty (30) days after written notice (or, in the case of any such failure that cannot with due diligence be corrected within such thirty (30) day period, within a period of time not materially detrimental to the rights of the Borrower), the Borrower and any Leasehold Mortgagee have the right to: (i) perform, on behalf and at the expense of the Ground Lessor, any obligation of the Ground Lessor under the Ground Lease which the Ground Lessor has failed to perform, the cost of which is required to be deducted from rent owed under the Ground Lease; (b) cure such default in any other manner; and (c) pursue any combination of such remedies and/or any other right or remedy available to the Borrower in respect to the Ground Lessor on account of such default under the Ground Lease or at law or in equity, other than termination of the Ground Lease.

The Ground Lease will terminate at the option of the Ground Lessor, upon the payment in full of the Series 2016 Bonds and the Alternate Services and Excess Cost Payments, by Ground Lessor’s exercise of a purchase option at a zero purchase price (reflecting no outstanding indebtedness).

Leasehold Deeds of Trust

The Ground Lease permits Leasehold Deeds of Trust approved by the Ground Lessor (including those associated with the Series 2016 Bonds) and grants the holders of such mortgages the right to cure defaults by the Borrower. The Ground Lease further provides that an approved mortgagee may, upon termination of the Ground Lease by the Ground Lessor by reason of the occurrence of an Event of Default thereunder, require the Ground Lessor to enter into a new ground lease, on the same terms, with such mortgagee.

THE DEVELOPER

General

The Developer, ACC SC Development LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware and authorized to do business in the State of Texas as ACC Services Development LLC, is an indirect wholly owned subsidiary of American Campus Communities, Inc. (“ACC”) and is responsible for all third party development of ACC. ACC was founded in October of 1993 and is now a publicly traded corporation on the New York Stock Exchange which has as its business student housing. ACC became the first publicly traded student housing REIT. The company is traded on the New York Stock Exchange under the symbol “ACC”. Since 1996, ACC has developed more than $5.3 billion in properties for its own account and its university clients, and it has acquired in excess of $5.3 billion in student housing assets. As of the present date, ACC has developed or been awarded the development of 112 privatized student housing facilities, consisting of more than 73,400 student beds. Corporate headquarters are located in

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Austin, Texas. ACC has designed and programmed the full range of contemporary student communities including modern-day residence halls (traditional and full-service), and all styles of apartments and mid-and high-rise communities.

Key Personnel

A brief description of the education and professional background of the officers of ACC having primary responsibility for the development of the Series 2016 Project follows.

Bill Bayless, President / Chief Executive Officer

In a student housing career spanning almost thirty years, Bill Bayless has been involved in the development, acquisition and/or management of over one hundred student housing communities consisting of more than 90,000 beds. As the president and chief executive officer of ACC, Mr. Bayless led ACC in 2004 to become the first student housing company to consummate an Initial Public Offering. Prior to assuming the role of CEO in 2003, he served as ACC’s chief operating officer where he directed all aspects of the company’s business segments including on-campus development, off-campus development, construction management, acquisitions and management services. Under his direction, ACC has been awarded more than 79 on-campus development projects, developed more than $5.3 billion of student housing, and acquired more than $5.3 billion in student housing assets. Today ACC’s combined owned and managed portfolio consists of 200 student properties containing more than 128,100 beds. Prior to the formation of ACC, Mr. Bayless held the positions of director of operations and director of marketing and development with the student housing divisions of Century Development and Cardinal Industries respectively. He began his career in student housing with Allen & O’Hara where he held the positions of area marketing coordinator, resident manager and resident assistant. He received a B.S. in business administration from West Virginia University in 1986.

Brian Winger, Senior Vice President/ Transactions

Brian Winger serves as senior vice president for transactions. He joined ACC in March 2000 as director of on-campus development and has since served in increasing capacities. Prior to joining ACC, Mr. Winger was the chief operating officer with Aspen Gold Development Company (a private real estate developer). He also held the position of endowment development officer and also served as general counsel for Oklahoma Christian University. Mr. Winger received a J.D. from Oklahoma City University and a B.S. in history/pre-law from Oklahoma Christian University. He is a licensed attorney in Oklahoma and a real estate broker licensed to practice in Oklahoma and Colorado.

Jennifer Jones, Senior Vice President / Transactions

Jennifer Jones, senior vice president for transactions, is primarily responsible for negotiating, financing and closing development and acquisitions projects. Ms. Jones joined ACC in April 2002, and has assisted in and/or led the closing of more than 35,000 student housing beds worth approximately $2.7 billion. Prior to joining ACC, Ms. Jones was a real estate analyst with JPMorgan Chase from 1998 to 2002. Ms. Jones received her BBA in finance from The University of Texas.

THE DEVELOPMENT AGREEMENT

The Borrower and the Developer will enter into a project development agreement (the “Development Agreement”) which sets forth certain terms and conditions relating to the development of the Series 2016 Project. Pursuant to the Development Agreement, the Developer will be responsible for (i) the administration and enforcement of the Construction Contract for and on behalf of Owner and for the management of all other aspects of the development, construction and completion of the Series 2016 Project in accordance with the Development Agreement and (ii) administering and enforcing the Architect’s Agreement for an on behalf of the Borrower. The Development Agreement will obligate the Developer to use its reasonable efforts to cause the Series 2016 Project to be completed for a total cost not to exceed $19,952,914 and by a date certain

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(subject to the terms and conditions of the Development Agreement). Such figure of $19,952,914 includes the guaranteed maximum price established in the Construction Contract and all other costs of developing, designing, constructing, equipping and furnishing the Series 2016 Project set forth in the total development budget agreed to in the Development Agreement. For its services as developer, the Developer will receive a Development Fee. The Developer will also act as construction manager for the Series 2016 Project to enforce, on behalf of the Borrower, the contracts with the Architect and the General Contractor and will receive a separate Construction Management Fee.

In addition to payment of the Development Fee and Construction Management Fee, the Borrower is required to reimburse the Developer for reasonable costs or expenses paid or incurred by the Developer in connection with the Series 2016 Project in accordance with the Development Agreement, provided that such costs or expenses are included in the development and construction budget attached to the Development Agreement (the “Budget”). At the time final payment is made under the Construction Contract (as defined below), the Developer shall earn and be paid a cost savings fee equal to 25% of the difference, if any, between the estimated Cost of the Work (as defined in the Construction Contract) as set forth in the Budget and the actual Cost of the Work, to be paid by the Borrower at the same time as the General Contractor's Cost Savings Fee (as defined in the Development Agreement) is due and payable. Twenty-five percent (25%) of any project contingency remaining following completion of construction of the Series 2016 Project and following payment of all construction and development costs shall be payable to Developer.

If for any reason the Series 2016 Project has not achieved substantial completion (as defined in the Ground Lease) (“Substantial Completion”) on or before August 13, 2017 (the “Substantial Completion Deadline”), and, as a result thereof, and, regardless of whether Developer has used commercially reasonable efforts to achieve timely completion of the construction of the Series 2016 Project, prospective tenants of the Series 2016 Project are unable to take occupancy in the Series 2016 Project on the following day, then, subject to the provisions of the Development Agreement, Developer shall manage and initially fund the payment for the costs (the “Alternate Services Costs”) of providing the following services (the “Alternate Services”): (a) provide alternative housing (the “Alternate Housing”) reasonably acceptable to the University for the student residents who were to occupy the Series 2016 Project but who cannot so occupy the applicable portion of the Series 2016 Project because Substantial Completion of such applicable portion of the Series 2016 Project has not been achieved, such Alternate Housing to be provided not later than the date upon which such student residents would have been entitled to legally move into the Series 2016 Project under executed leases until Substantial Completion of such applicable portion of the Series 2016 Project occurs, (b) provide regular shuttle service to and from the Campus for any student residents residing in Alternate Housing that is more than one (1) mile from the Campus, (c) provide storage of personal belongings of each student resident residing in Alternate Housing until the date the student resident is permitted to occupy the Series 2016 Project, (d) move student residents residing in Alternate Housing from the Alternate Housing into the Series 2016 Project as units become available therein, (e) pay to each student resident residing in Alternate Housing a stipend of $25.00 per day until the date the student resident is permitted to occupy the Series 2016 Project, and (f) provide transportation and moving assistance required by applicable law to any prospective tenant residing in Alternate Housing known to have a physical disability.

If the Series 2016 Project is completed for a total cost exceeding $19,952,914 (“Excess Costs”), then, subject to the provisions of the Development Agreement, Developer shall initially fund the payment of Excess Costs. The Development Agreement obligates the Developer to cause its affiliate, American Campus Communities Operating Partnership, LP, to provide a completion guaranty to the Borrower that guarantees the Developer’s covenants, obligations and duties under the Development Agreement.

If Developer shall pay or incur Alternate Services Costs and/or Excess Costs, Borrower agrees to reimburse to Developer those Alternate Services Costs and/or Excess Costs that are Unavoidable Costs (as defined in the Development Agreement), together with interest thereon at the rate of five percent (5%) per annum from and after the date paid or incurred by the Developer, until fully reimbursed. With respect to Avoidable Costs (as defined in the Development Agreement), Borrower shall assign to Developer all of

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Borrower’s right, title and interest in and to certain rights to enforce and receive the benefit of any and all rights, benefits and protections of Borrower under the Construction Contract, Architect Agreement or other consultant agreements in relation to the matter resulting in Avoidable Costs.

THE MANAGER AND THE MANAGEMENT AGREEMENT

Management services for the Series 2016 Project will initially be provided by ACC SC Management LLC (the “Manager”). The Manager will enter into a Management Agreement dated as of June 30, 2016 with the Borrower (the “Management Agreement”) pursuant to which the Manager will manage the Series 2016 Project.

The Management Agreement shall be in effect for a period (the “Primary Term”) beginning August 1, 2017 (the “Commencement Date”), and ending five (5) years after the Commencement Date, unless otherwise terminated in accordance with the provisions of the Management Agreement, and continuing thereafter for successive one (1) year terms, unless on or before one hundred and twenty (120) days prior to the expiration of any such period or any extension thereof, either the Borrower or the Manager shall notify the other in writing that it elects to terminate the Management Agreement, in which case the Management Agreement shall be thereby terminated on the last day of such period. The parties agree that each of the Borrower and the Manager may have obligations under the Management Agreement which are required to be performed prior to the commencement of the Primary Term. Upon expiration or termination of the Management Agreement for any reason, the Borrower promptly shall give written notice of such expiration or termination to Trustee, and the Manager shall cause all funds held by the Manager relating to the Series 2016 Project, including, but not limited to, the Security Deposits (as defined in the Management Agreement), to be delivered to the Trustee, the Manager shall deliver to the Trustee copies of all records and documents in the Manager’s possession or control relating to the Series 2016 Project including, without limitation, all accounting data and records, rent rolls, originals and copies of all housing leases, service contracts and agreements, and technical data with respect to operation and maintenance of the various systems at the Series 2016 Project, and the Borrower shall pay the Manager all fees and reimbursements then due and payable and accrued through the date of termination.

Notwithstanding the foregoing, the Management Agreement is subject to termination by the mutual consent of the Borrower and the Manager as of the end of any calendar month.

Except as provided in the Management Agreement, if a petition in bankruptcy is filed by or against either of the Borrower or the Manager and such proceeding is not dismissed within ninety (90) days thereof, or in the event either makes an assignment generally for the benefit of creditors or takes advantage of any insolvency act, the other party may terminate the Management Agreement without notice to the other.

Either the Borrower or the Manager may terminate the Management Agreement by written notice to the other party if there occurs an Event of Default by the other party as defined in and under the terms of the Management Agreement. Such notice shall specify the nature and scope of the claimed Event of Default and shall provide the defaulting party with the right to cure the claimed Event of Default within thirty (30) days of the receipt thereof. If the claimed Event of Default is not cured to the satisfaction of the non-defaulting party within the thirty (30) day cure period, the Management Agreement shall terminate. The non-defaulting party shall also have the right to seek damages and exercise such other remedies as may be provided by law or in equity against the defaulting party.

The Borrower may terminate the Management Agreement, without cause or penalty (within the meaning of IRS Revenue Procedure 97-13, 1997-1 C.B. 632), upon the third (3rd) anniversary of the Commencement Date by written notice to the Manager on or before one hundred and twenty (120) days prior to the third (3rd) anniversary of the Commencement Date.

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Responsibilities of Manager

The Manager shall establish and maintain an account separate from any other account in the Borrower’s name as the “Operating Account” for the payment of the costs of operating, managing, monitoring and repairing the Series 2016 Project, all of which shall be deemed to be Expenses or Subordinated Expenses of the Series 2016 Project except as otherwise provided herein. The Manager shall timely pay all such Expenses of the Series 2016 Project out of funds deposited by the Trustee in the Operating Account unless previously paid by the Trustee. Notwithstanding anything to the contrary in the Management Agreement, nothing shall obligate the Manager to expend resources or perform any duties and obligations requiring resources beyond those made available by the Borrower under the Bond Documents and the Annual Budget or take any action requiring the approval of Borrower without such approval, and the duties and obligations of the Manager under the Management Agreement are expressly limited thereby. The Manager shall have no duty or obligation to pay or fund any sums under the Management Agreement from Manager’s own funds.

The Manager agrees in the Management Agreement to use commercially reasonable, good faith efforts to manage the Series 2016 Project in accordance with the Borrower’s responsibilities with respect to the operation, management, maintenance, repair and use of the Series 2016 Project in accordance with certain provisions of the Ground Lease, the Loan Agreement, the Leasehold Mortgage and the Tax Agreement as well as under the Resident Leases (as defined in the Management Agreement). The Manager also agrees in the Management Agreement, to the extent not inconsistent with the provisions described above, to use commercially reasonable, good faith efforts to manage the Series 2016 Project consistent with certain University policies of which the Manager is provided notice by the Borrower or University (provided such policies are enforced on a University wide basis and are not applied or enforced in a manner that discriminates or results in a prejudice to the Borrower or the Manager) and all policies and operating procedures governing residents of the Project approved from time to time by the Policy Committee and to manage the Series 2016 Project in accordance with all applicable legal and regulatory requirements.

Without limiting the generality of the foregoing, the Manager’s responsibilities under the Management Agreement include: (a) providing and supervising marketing activities of the Series 2016 Project in accordance with an Approved Marketing Plan (as defined in the Management Agreement) and the Ground Lease, (b) providing and supervising directly the on-site staff in the entering into and administering of Resident Leases, including the timely collection of Security Deposits as well as all reservation deposits and other charges considered to be General Revenues, (c) using commercially reasonable efforts to secure full compliance by each resident with the terms of his or her Resident Lease, (d) causing the Series 2016 Project to be maintained in good repair and in compliance with the Loan Agreement and the Ground Lease, (e) carrying out necessary capital improvements following completion of the Series 2016 Project, the cost of such improvements to be paid from the Repair and Replacement Fund, (f) making timely arrangements for utilities and other services, (g) maintaining accurate books and records with respect to the Series 2016 Project and (h) developing in good faith a line-item operation and capital budget for the Series 2016 Project.

Management Fee

Subject to the terms and provisions of the Management Agreement, and solely out of available General Revenues as provided under the Indenture, the Manager’s compensation for management of the Series 2016 Project shall be a fee (the “Management Fee”) for each Annual Period or partial Annual Period during the term of the Management Agreement commencing August 1, 2017 equal to 4% of all General Revenues received during such Annual Period (or partial Annual Period) payable monthly as an Expense of the Series 2016 Project.

The Borrower’s obligation to pay the Management Fee will survive the expiration or termination of the Management Agreement with respect to portions of the Management Fee earned or payable as of such expiration or termination.

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THE GENERAL CONTRACTOR AND THE CONSTRUCTION CONTRACT

The Developer, acting as agent for the Borrower, and Davis Brothers Construction, Ltd. (the “General Contractor”) will enter into a guaranteed maximum price construction contract (the “Construction Contract”) pursuant to which the General Contractor will agree to construct the Series 2016 Project for a guaranteed maximum price. The Construction Contract will obligate the General Contractor to construct the Series 2016 Project for a guaranteed maximum price subject to adjustment as provided in the Construction Contract. The General Contractor is a general construction contractor and is licensed to do business in Texas. The General Contractor was established in 1986 and is a luxury apartment builder, multi-family housing builder, student housing builder, and commercial construction company. To date, the General Contractor has completed 28 student housing projects totaling more than 13,250 beds with the Developer.

The Construction Contract requires delivery of payment and performance bonds in an amount not less than the guaranteed maximum price contract from a surety provider rated not less than A by AM Best. In addition, the Construction Contract provides for liquidated damages if certain conditions therein are not met. However, such liquidated damages are payable only to the Developer, and the Developer’s obligations in turn are limited as described under the heading “THE DEVELOPMENT AGREEMENT.”

THE ARCHITECT

The architect of record for the Series 2016 Project is Solomon, Cordwell, Buenz & Associates, Inc. (the “Architect”), which is headquartered in Chicago, Illinois. The Developer expects to enter into an agreement (the “Architect Agreement”) with the Architect relating to the Series 2016 Project before the sale of the Series 2016 Bonds. The Architect is licensed in the State of Texas and has completed more than 34,000 beds of student housing across the country. The Developer’s rights and interests under the Architect Agreement are assigned to the Borrower pursuant to an Assignment and Assumption Agreement.

THE BORROWER

General

The Borrower is a single member limited liability company duly organized and existing under the laws of the State of Alabama. The Borrower was formed for the purpose of acquiring and financing the Series 2016 Project for the exclusive benefit of the University and is not expected to have any assets other than the Series 2016 Project and any additional project financed with bonds issued on a parity with the Series 2016 Project. The Foundation is the sole member of the Borrower.

The Foundation

The Foundation is a nonprofit corporation formed in 1996 under the laws of the State of Alabama. The Foundation is also an organization that is exempt from federal income tax pursuant to §501(c)(3) of the Internal Revenue Code of 1986, as amended. It was organized and is operated exclusively for charitable and educational purposes including the purpose of assisting colleges and universities in providing housing for their enrolled students and otherwise assisting them in furtherance of their educational missions. The membership of the Foundation is comprised of those colleges and universities so assisted by the Foundation. To date, the Foundation has assisted over thirty (30) different colleges and universities with providing housing, including multiple housing facilities on some campuses. In assisting many of those colleges and universities, the Foundation has established other single member limited liability companies for the limited purpose of acquiring and financing student housing projects for such schools, none of which have any assets other than the particular project for which they were established nor any obligations beyond the acquisition and financing of such particular project. Neither the Foundation nor any limited liability company established by the Foundation other than the Borrower will have any obligation with respect to the Series 2016 Bonds or under any of the Bond Documents.

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The Foundation is governed by a Board of Directors elected by its members. The following individuals constitute the Board of Directors of the Foundation:

Name Business Affiliation Term Expires Leeman H. Covey President of the Foundation, 2016 Former Vice President of Finance, Spring Hill College, Mobile, Alabama John B. Hicks Senior Consultant, Academic Search, Inc., 2017 Former Executive Assistant to the Chancellor and Secretary of the Board of Trustees of the University of Alabama System Jack Edwards Former President Pro Tem of the Board of 2019 Trustees of the University of Alabama System John Brooks Slaughter President Emeritus, Occidental College, 2018 Former President and Chief Executive Officer, National Action Council for Minorities in Engineering, Inc. Thomas M. Daly Former Senior Vice President and Managing 2016 Director, Legg Mason Student Housing Public Finance Group Robert A. Shearer Private Consultant in Construction Management, 2019 Professor in Mitchell College of Business, University of South Alabama, Former Executive Assistant to the President of the University of South Alabama

NO RECOURSE AGAINST THE BORROWER’S MEMBER AND OFFICERS

No recourse under or upon any obligation, covenant, or agreement contained in the Loan Agreement, in any of the Bond Documents, or in any other documents delivered in connection with the issuance of the Series 2016 Bonds, or for any claim based thereon, or under any judgment obtained against the Borrower, or by the enforcement of any assessment or penalty or otherwise or by any legal or equitable proceeding by virtue of any constitution, rule of law or equity, or statute or otherwise or under any other circumstances, under or independent hereof, will be had against any incorporator, director, member, or officer, as such, past, present, or future of the Borrower or the Foundation, or any incorporator, director, member, or officer of any successor entity, as such, either directly or through the Borrower or any successor entity, or otherwise, for the payment for or to the Borrower or any receiver thereof, of any sum that may be due and unpaid by the Borrower under the Loan Agreement, any of the Bond Documents, or any other documents delivered in connection with the issuance of the Bonds.

THE UNIVERSITY

History and Overview of University

Texas A&M University-San Antonio is the first upper-division institution of higher education located in the historically underserved South San Antonio area. The University was originally known as Texas A&M University-Kingsville System Center-San Antonio and was established in 2000. In 2009, the Texas Legislature created the University as a stand-alone university within The Texas A&M University System.

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While the University’s main campus continues to grow in the South San Antonio area, the University also offers courses in northeast San Antonio at the Alamo University Center and at the Brooks City-Base Campus.

Academics and Enrollment

The University currently offers twenty-two undergraduate programs and ten graduate programs for bachelor’s and master’s degrees in three colleges: Business, Arts and Sciences, and Education and Human Development.

Total University headcount enrollment has increased every year, with the most significant growth at the undergraduate level. Undergraduate headcount grew by 14.09% between Fall 2011 and Fall 2012, 11.36% between Fall 2012 and Fall 2013, 3.74% between Fall 2013 and Fall 2014, and 5.46% between Fall 2014 and Fall 2015. The University expects additional enrollment growth as a result of the downward expansion in its undergraduate programs. Specifically, the University has begun to expand its course selection and to accept incoming freshmen into its undergraduate class. The inaugural freshman class will arrive on campus in Fall 2016. The tables below provide information regarding the University’s enrollment trends for the past seven fall semesters as well as historical application and admissions data for the past five fall semesters. Enrollment projections indicate that there will be six hundred new students for Fall 2016 (450 freshmen/150 sophomores) resulting in a total University headcount enrollment of over five thousand students. The trend for graduate students shows a decline in enrollment. The University attributes this decline to strategic decisions to improve selectivity. During the past five years, the University has increased its overall applicant pool and matriculation.

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Total University Enrollment By Level Fall 2009 Fall 2010 Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Undergraduate 1,740 2,301 2,569 2,931 3,264 3,386 3,571 Post‐Baccalaureate 17 23 35 52 52 58 63 Graduate 586 796 950 1,133 1,196 1,077 930 Total Headcount 2,343 3,120 3,554 4,116 4,512 4,521 4,564 FTE (12 / 9) 1,813.2 2,486.9 2,800.9 3,270.3 3,565.9 3,462.8 3,535.2 FTE (15 / 12) 1,428.8 1,960.4 2,203.7 2,576.0 2,809.5 2,736.2 2,795.4 Source: Fall 2015 Texas A&M University ‐ San Antonio Fact Book.

Historical Application, Admissions and Matriculation Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Undergraduate New Applicants 1,255 1,508 1,630 1,545 1,735 Admitted 1,131 1,312 1,438 1,281 1,517 % Admitted 90.1% 87.0% 88.2% 82.9% 87.4% Enrolled 771 886 1,005 923 1,038 % Enrolled 68.2% 67.5% 69.9% 72.1% 68.4% Post‐Baccalaureate New Applicants 27 34 14 2 5 Admitted 22 33 13 1 5 % Admitted 81.5% 97.1% 92.9% 50.0% 100.0% Enrolled 15 24 9 1 2 % Enrolled 68.2% 72.7% 69.2% 100.0% 40.0% Graduate New Applicants 413 499 421 356 370 Admitted 377 441 351 301 303 % Admitted 91.3% 88.4% 83.4% 84.6% 81.9% Enrolled 286 334 237 293 205 % Enrolled 75.9% 75.7% 67.5% 97.3% 67.7% Total New Applicants 1,695 2,041 2,065 1,903 2,110 Admitted 1,530 1,786 1,802 1,583 1,825 % Admitted 90.3% 87.5% 87.3% 83.2% 86.5% Enrolled 1,072 1,244 1,251 1,217 1,245 % Enrolled 70.1% 69.7% 69.4% 76.9% 68.2% Source: Fall 2015 Texas A&M University ‐ San Antonio Fact Book.

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The table below provides data relating to the applicant pool for the University’s inaugural freshman class as well as projections of applications, admittances and enrollment of first year students for the next four fall semesters. No representation or assurances can be made that such projections for applications, admittances or enrollment will be realized. See “CERTAIN BONDHOLDERS’ RISKS – Enrollment” and “—Actual Results May Vary From Market Study and Cash Flow Forecast” herein.

Freshman Application, Admissions and Matriculation Projections Fall 2016* Fall 2017 Fall 2018 Fall 2019 Fall 2020 Freshmen New Applicants 4,996 4,600 4,800 5,000 5,200 Admitted 1,845 1,840 2,200 2,450 2,750 % Admitted 37% 40% 46% 49% 53% Enrolled 450 562 702 807 887 % Enrolled 26% 31% 32% 33% 32% Source: Texas A&M University‐ San Antonio *Represents Actual Data for Applications and Admissions as of June 9, 2016

Student Life

The University’s student life includes three different types of groups: University Interest Groups, University Sponsored Organizations and University Recognized Organizations. The University Interest Groups are for those students who want to meet and use campus space but do not want to receive any college funding. These groups do not need a minimum number of students or an advisor. The Sponsored Student Organizations are created by a University department or division to support ongoing interests of the University community, such as the Student Government Association and the National Society of Leadership and Success. The University Recognized Organizations are groups that are regulated by constitutions and University policies. For University Recognized Organizations, there are a minimum of ten members, each student must meet a minimum 2.0 grade point average. These groups include the Pre-Law Society and the Biology Club. In Fall 2015, the University began to offer men’s, women’s and co-ed intramural sports, such as flag football, volleyball, soccer, basketball and kickball through the Recreational Sports Department. The University opened three recreational facilities in 2015: the Jaguar Fitness Center, the Game Room and Lounge and the Den at Patriot’s Casa.

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Tuition and Fees

For Texas residents, the 2015-16 cost of attending the University is below the median cost for member institutions within The Texas A&M University System.

Annual Tuition and Fees Undergraduate Students (15 SCH) Academic Year In‐State Resident Non‐Resident 2011‐12 $6,367 $15,757 2012‐13 6,751 17,281 2013‐14 6,751 17,371 2014‐15 7,313 17,869 2015‐16 7,454 18,709 Graduate Students (9 SCH) Academic Year In‐State Resident Non‐Resident 2011‐12 $4,903 $10,537 2012‐13 5,133 11,451 2013‐14 5,133 11,505 2014‐15 5,391 11,907 2015‐16 5,391 12,411 Source: Texas A&M University ‐ San Antonio.

Overview of Current University Student Housing

The University does not currently provide housing for its students. As such, the Series 2016 Project will represent the first opportunity for students at the University to live on campus. The Series 2016 Project is being constructed in support of the University’s master plan and the expansion of the University to grow undergraduate programs. In conjunction with the development and operation of the Series 2016 Project, the University will be implementing a policy requiring on-campus residency, subject to certain exclusions. Specifically, the policy, which will go into effect for students enrolling for the fall 2017 semester, will state that students with fewer than 30 earned semester hours will be required to reside on campus. The University will permit an exemption from this policy if one of the following criteria is met:

(1) The student is 21 years of age on or before the 12th day of class. (2) The student has earned 30 or more semester hours. An official transcript must be submitted to the residence life department for verification of hours. (3) The student plans to commute from a permanent address of parents(s) or a relative. A relative is an immediate family member (mother/father, brother/sister, aunt/uncle, or grandparent). The family member must live within 40 driving/highway miles. (4) The student or parent owns property in Bexar County. Property is defined as a residence that is attached to real property. (5) The student has custody of a child. (6) The student is married prior to the 12th day of class. (7) The student has a valid medical disability which cannot be accommodated on campus.

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Students residing in the Project will have the full conveniences associated with residing in on-campus housing, including dining options. The University is currently in a partnership with Chartwells for dining services on its campus. Currently a food-court style cafeteria and cyber café are located in the Central Academic Building. Once the Series 2016 Project is completed, dining services will be enhanced to include more extensive meal offerings and resident students will be required to choose one of the available meal plans. Meal plan levels and pricing are still under development by the University and Chartwells and will be introduced prior to the opening of the Series 2016 Project.

UNIVERSITY NOT LIABLE FOR SERIES 2016 BONDS

THE UNIVERSITY SHALL HAVE NO LIABILITY, EXPRESS OR IMPLIED, FOR THE PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2016 BONDS, AND THE UNIVERSITY SHALL NOT BE RESPONSIBLE OR LIABLE, EXPRESSLY OR IMPLICITLY, FOR ANY OTHER OBLIGATIONS OF ANY PARTY, UNDER ANY OF THE BOND DOCUMENTS, OR UNDER ANY OTHER DOCUMENTS DELIVERED IN CONNECTION WITH THE ISSUANCE OF THE SERIES 2016 BONDS OR FOR THE SERIES 2016 PROJECT.

CASH FLOW FORECAST

A Cash Flow Forecast relating to the Series 2016 Project and the Borrower’s ability to generate revenues from the operations of the Series 2016 Project sufficient to pay principal and interest on the Series 2016 Bonds for each of the fiscal years ending June 30 of the years 2018 through 2022 has been prepared by the Manager. The Trustee, the Issuer and the Underwriter make no representations as to any aspect of the Cash Flow Forecast or the ability of the Borrower to pay amounts under the Loan Agreement sufficient to satisfy the principal, premium, if any, and interest due on the Series 2016 Bonds.

The Cash Flow Forecast assumes that the Series 2016 Bonds will be issued in the aggregate principal amount of $20,860,000 with an approximate yield of 3.30% and are structured to produce approximately level debt service after an initial period of partially deferred principal through fiscal year ending June 30, 2021.

Rental Revenues estimated in the Cash Flow Forecast are based on rents for each bed presented herein under the heading “THE SERIES 2016 PROJECT.” The Cash Flow Forecast assumes a 95% annual occupancy rate for available beds at the Series 2016 Project, based on residents entering into rental agreements covering an academic term of approximately nine months. No summer occupancy has been assumed. In addition to regular estimated costs of operating a student housing facility, the Cash Flow Forecast includes an annual deposit to the Repair and Replacement Fund equal to $175 per bed per year. Earnings on the Debt Service Reserve Fund are assumed to be 0.20%. Income and expense estimates (including the annual replacement reserve deposit) are escalated at an assumed rate of 3% per annum beginning the year after such beds are available for occupancy.

IF ACTUAL INTEREST RATES, PRINCIPAL PAYMENTS AND FUNDING REQUIREMENTS DIFFER FROM THOSE ASSUMED IN THE FORECAST, THE FORECAST COULD BE ADVERSELY AFFECTED, SOME ASSUMPTIONS WHICH SERVED AS A BASIS FOR THE FINANCIAL FORECAST INEVITABLY WILL NOT MATERIALIZE AND UNANTICIPATED EVENTS AND CIRCUMSTANCES MAY OCCUR; THEREFORE, THERE WILL USUALLY BE DIFFERENCES BETWEEN FORECASTED AND ACTUAL RESULTS AND THOSE DIFFERENCES MAY BE MATERIAL.

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The following table is a summary of the Cash Flow Forecast based upon the assumptions described above.

Fiscal Year Ending June 30, 2018 2019 2020 2021 2022

Annual Rental Revenue $2,582,988 $2,660,478 $2,740,292 $2,822,501 $2,907,176 LESS: Annual Vacancies 129,149 133,024 137,015 141,125 145,359 Net Rental Revenues 2,453,839 2,527,454 2,603,277 2,681,376 2,761,817

Other Income 1 94,102 96,925 99,833 102,828 105,913 Investment Earnings on DSRF 2 448 2,733 2,733 2,733 2,733 Total Revenues $2,548,388 $2,627,111 $2,705,843 $2,786,936 $2,870,462

Salaries, Wages, Benefits $300,067 $309,069 $318,341 $327,891 $337,728 Maintenance and Turnover 113,640 117,049 120,561 124,177 127,903 Utilities 219,801 226,395 233,187 240,182 247,388 Marketing and Leasing 38,200 39,346 40,526 41,742 42,994 General and Administrative 52,660 54,240 55,867 57,543 59,269 Management Fees 101,918 104,975 108,124 111,368 114,709 Insurance 51,801 53,355 54,956 56,604 58,302 Other Expenses 6,750 6,953 7,161 7,376 7,597 Borrower Fee 25,479 26,244 27,031 27,842 28,677 Bond Related Fees / Borrower Expenses 32,500 33,475 34,479 35,514 36,579 Total Operating Expenses $942,816 $971,101 $1,000,234 $1,030,241 $1,061,148

Net Operating Income $1,605,572 $1,656,011 $1,705,609 $1,756,695 $1,809,314

Annual Debt Service 171,436 1,283,619 1,315,013 1,345,056 1,363,750 Fixed Charges Coverage Ratio 9.37 1.29 1.30 1.31 1.33 Breakeven Occupancy 39.48% 81.00% 80.75% 80.42% 79.67% Deposit to the Repair & Replacement Fund 66,850 68,856 70,921 73,049 75,240 Deposit to the Operations Contingency Fund 235,704 7,071 7,283 7,502 7,727 Surplus Cash Flow $1,131,582 $296,465 $312,392 $331,089 $362,597

(1) Includes application fees, cancellation fees, damage recoveries, late fees, legal fees, NSF fees, Resident Portal Fees, and Administrative Fees.

(2) Interest earnings on the Debt Service Reserve Fund assumed at a rate of 0.20% per year.

MARKET STUDY

A Market Study (the “Market Study”) relating to the Series 2016 Project and an analysis of the housing market in San Antonio, Texas near the campus of the University has been prepared by Alvarez & Marsal Real Estate & Environmental Services, LLC (the “Market Study Consultant”). The Market Study is dated April 15, 2016 and contemplates the Series 2016 Project being completed in Fall 2017. The Market Study should be read in its entirety. The Market Study includes information on the off-campus rental market and housing development trends in and around the area where the Series 2016 Project will be located. The Market Study identifies, among other things, demand for housing at the University, as further described therein. With permission of the Market Study Consultant, the Market Study has been included in Appendix A. The

-42- achievement of any forecast is dependent upon future events, the occurrence of which cannot be assured. See “CERTAIN BONDHOLDERS’ RISKS—Actual Results May Differ from Market Study and Cash Flow Forecast” herein. The Trustee and the Issuer make no representation as to any aspect of the Market Study or the ability of the Borrower to pay amounts under the Loan Agreement sufficient to satisfy the principal, premium, if any, and interest due on the Series 2016 Bonds.

CERTAIN BONDHOLDERS’ RISKS

General

EACH INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE SERIES 2016 BONDS. Each prospective investor should carefully examine this Official Statement and his or her own financial condition (including the diversification of his or her investment portfolio) in order to make a judgment as to whether the Series 2016 Bonds are an appropriate investment.

The Borrower has identified and summarized below certain “Bondholders’ Risks” that could adversely affect the operation of the Series 2016 Project and/or the Series 2016 Bonds which should be considered by prospective investors. The following discussion is not intended to be exhaustive, but includes certain major factors which should be considered along with other factors set forth elsewhere in this Official Statement, including the Appendices hereto.

If the Borrower is unable to generate sufficient Revenues from the operation of the Series 2016 Project to pay its operating expenses and principal of and interest on the Bonds, an Event of Default may occur under the Bond Documents. Upon an Event of Default, the Bonds may be paid before maturity or applicable redemption dates and a forfeiture of purchase premiums, if any, may result. The Borrower’s ability to generate revenues and its overall financial condition may be adversely affected by a wide variety of future events and conditions including (i) a decline in the enrollment of the University, (ii) increased competition from other schools, (iii) loss of accreditation of the University’s programs, (iv) failure of the University to meet applicable federal guidelines or some other event which results in students of the University being ineligible for federal financial aid, and (v) cost overruns in connection with the Series 2016 Project or other capital improvements.

Limited Obligations of the Issuer

The Series 2016 Bonds constitute special, limited obligations of the Issuer and have three potential sources of payment. The sources of payment are as follows:

(a) Payments Received by the Trustee From the Borrower Pursuant to the Terms of the Indenture and the Loan Agreement. The Issuer has no obligation to pay the Series 2016 Bonds except from the Trust Estate, including Loan Payments derived from the Loan Agreement. The Series 2016 Bonds and the obligation to pay principal, premium, if any, and interest thereon, are special, limited obligations of the Issuer, secured as provided in the Indenture and payable solely out of the payments made pursuant to the Loan Agreement and the Security and as otherwise provided in the Indenture and the Loan Agreement. Neither the faith and credit nor the taxing power of the Board, the System, the University, the State or any political subdivision thereof is pledged to the payment of the Series 2016 Bonds. The State is not liable on the Series 2016 Bonds and the Series 2016 Bonds are not a debt of the State. The Issuer has no taxing power. No owner of the Series 2016 Bonds has the right to compel any exercise of the taxing power, if any, of the Issuer, the State or any political subdivision thereof to pay the principal of, premium, if any, or interest on the Series 2016 Bonds. Neither the members of the Issuer nor any person executing the Series 2016 Bonds shall be liable personally on the Series 2016 Bonds by reason of the issuance thereof. Under the Loan Agreement, the Borrower will be required to make Loan Payments (the interest in which the Trustee has received by assignment from the Issuer) to the Trustee in amounts sufficient to enable the Trustee to pay the principal of, premium, if any, and interest on the Series 2016 Bonds. The Loan Payments are anticipated, however, to be derived solely

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from the operation of the Series 2016 Project, and the obligation to make Loan Payments is not a general obligation of the Borrower. Furthermore, the Borrower’s ability to meet its obligations under the Loan Agreement will depend upon achieving and maintaining certain occupancy levels at the Series 2016 Project throughout the term of the Series 2016 Bonds. No assurance can be made that the Borrower will generate sufficient revenues from the Series 2016 Project to pay maturing principal of, premium, if any, and interest on the Series 2016 Bonds after payment of operating expenses of the Series 2016 Project.

(b) Revenues Received From Operation of the Series 2016 Project by a Receiver Upon a Default Under the Indenture. It has been the experience of lenders in recent years that attempts to have a receiver appointed to take charge of properties with respect to which loans have been made are frequently met with defensive measures such as the initiation of protracted litigation and the initiation of bankruptcy proceedings. Such defensive measures can prevent the appointment of a receiver or greatly increase the expense and time involved in having a receiver appointed. See “CERTAIN BONDHOLDERS’ RISKS - Enforceability of Remedies” herein. Accordingly, prospects for uninterrupted payment of principal and interest on the Series 2016 Bonds in accordance with their terms are largely dependent upon Loan Payments from the Borrower described in the preceding paragraph, which is wholly dependent upon the success of the Borrower in the operation of the Series 2016 Project.

(c) Proceeds Realized From the Sale or Lease of the Issuer’s and the Borrower’s Interest in the Series 2016 Project to a Third Party by the Trustee at or Following Foreclosure by the Trustee of the Leasehold Deed of Trust and Proceeds Realized From the Liquidation of Other Security for the Series 2016 Bonds. Debtors frequently employ defensive measures, such as protracted litigation and bankruptcy proceedings, in response to lenders’ efforts to foreclose on real property or otherwise to realize upon collateral to satisfy indebtedness which is in default. Such defensive measures can prevent, or greatly increase the expense and time involved in achieving, such foreclosure or other realization. In addition, the Trustee could experience difficulty in selling or leasing the real and personal property portion of the Series 2016 Project upon foreclosure due to the special purpose nature of a Series 2016 Project, and the proceeds of such sale may not be sufficient to pay fully the owners of the Series 2016 Bonds. See “CERTAIN BONDHOLDERS’ RISKS - Liquidation of Security May Not Be Sufficient in the Event of a Default” herein. Accordingly, prospects for uninterrupted payment of principal and interest on the Series 2016 Bonds in accordance with their terms are largely dependent upon the Loan Payments described in paragraph (a) above, which is wholly dependent upon the success of the Series 2016 Project. Even if the Series 2016 Project is operating in an efficient manner, other factors could affect the Borrower’s ability to make Loan Payments under the Loan Agreement.

Limited Resources of the Borrower

The Borrower has no substantial revenues or assets other than the Series 2016 Project and the Series 2016 Bonds are secured only by the operations and assets of the Series 2016 Project. Therefore, timely payment of principal of, premium, if any, and interest on the Series 2016 Bonds will be dependent upon the Borrower’s ability to generate revenues from the Series 2016 Project sufficient to pay its operating expenses and Loan Payments under the Loan Agreement. If after payment of operating expenses, net revenues are insufficient to pay the debt service on the Series 2016 Bonds, the Borrower may not have money or assets other than the Series 2016 Project from which to make the payments required under the Loan Agreement, and is not obligated to use any such money or assets to make such payments. See “NONRECOURSE OBLIGATION OF THE BORROWER’S MEMBER AND OFFICERS” herein.

No Recourse Against the System or the University

The System and the University will not be liable for the payment of the principal of, premium, if any, or interest on the Series 2016 Bonds, nor will the System or the University be responsible or liable for any

-44- other obligations of the Borrower or the obligations of any other party in connection with the Series 2016 Bonds.

Liquidation of Security May Not Be Sufficient in the Event of a Default

The Series 2016 Project is located on the campus of the University, and may not be suitable for uses other than as a student housing facility. Furthermore, the Ground Lease significantly limits the uses to which the Series 2016 Project may be put. The number of entities that could be expected to purchase or lease the Borrower’s interest in the Series 2016 Project is therefore limited, and thus the ability of the Trustee to realize funds from the sale or lease of such interest upon an event of default may be limited. Such value may be also limited by actual or alleged rights of residents. Any foreclosure proceeding may be subject to substantial delays. The ability of the Trustee to receive funds sufficient to pay the Series 2016 Bonds from any sale or foreclosure of the Issuer’s interest in the Premises may be limited by a number of factors, including the limited operational use of the Series 2016 Project as a student housing facility.

Risks Associated With Ground Lease

The Borrower does not own fee title to the real property on which the Series 2016 Project is situated, and instead leases such property from the Ground Lessor pursuant to the Ground Lease. A default under the Ground Lease or failure of the Ground Lessor’s title to any such real property could result in a termination thereof, effectively depriving the Trustee of the real property security for the Series 2016 Bonds. The Ground Lease does not require that the Ground Lessor provide for payment or defeasance of the Series 2016 Bonds if the Ground Lease is terminated. It is possible that the Ground Lessor could terminate the Ground Lease and the Series 2016 Project could revert to the Ground Lessor even if the Series 2016 Bonds remain outstanding. The Trustee is granted the right to cure defaults under the Ground Lease and the right to compel the Ground Lessor to enter into a new Ground Lease (of substantially the same terms as the original) upon any termination thereof. No assurance can be given, however, that the Trustee would be willing or able to effect a cure of any such default or enter into any such replacement Ground Lease. In addition, the obligation to comply with the terms of the Ground Lease including the requirement to pay surplus revenues to the Ground Lessor and to relinquish any claim to the Series 2016 Project on termination of the Ground Lease will likely render the Series 2016 Project less valuable to prospective purchasers upon foreclosure.

Geographic Concentration

The occupancy rates in the Series 2016 Project may be adversely affected by regional and local economic conditions, competitive conditions, applicable local laws and regulations, and general real estate market conditions, including the supply and proximity of apartment communities in such area.

Insurance and Legal Proceedings

The Borrower will carry property and general liability insurance in amounts deemed adequate by management and consistent with industry practices and in compliance with the requirements of the Ground Lease and the Loan Agreement. However, for as long as the Ground Lessor remains obligated, in the event of damage or destruction by fire or other casualty to the Series 2016 Project, to pay the cost of repairing and rebuilding the Series 2016 Project and providing for loss of revenue during such time, the Borrower will not be required to obtain casualty and business interruption insurance and the sole obligor with respect to such obligations is the Ground Lessor. See “THE GROUND LEASE – Ground Lessor Commitment to Repair and Replace the Series 2016 Project” herein. There can be no assurance that any current or future claims will be covered by or will not exceed applicable insurance coverage. A claim against the Borrower not covered by, or in excess of, the Borrower’s insurance or not paid for by the Ground Lessor as provided in the Ground Lease could have a material adverse effect upon the Borrower.

-45-

Possible Increased Competition

The student housing industry is highly competitive. Such competition may inhibit the extent to which the Borrower will be able to raise charges and maintain or increase occupancy. Competing companies may offer newer or different projects or services and may thereby attract residents who are present or potential residents of the Series 2016 Project. See the Market Study attached hereto as Appendix A. The Borrower or the University may themselves acquire or develop additional student housing facilities which are competitive with the Series 2016 Project. Under the conditions provided in the Ground Lease, the University could construct or sponsor additional housing that would compete with the Series 2016 Project. Such additional housing could include one or more facilities operated by the Borrower or another entity affiliated with the Foundation.

Governmental Regulation

The housing industry is significantly regulated by the federal and local government. Regulations and conditions affecting the acquisition, development and ownership of residential real estate, including local zoning and land use issues, environmental regulations, the Americans with Disabilities Act, the Fair Housing Amendments Act of 1988 and general conditions in the multifamily residential real estate market, could increase the operating expenses of the Series 2016 Project or could otherwise have a material adverse effect on the financial condition of the Borrower or the results of its operations.

Required Occupancy Levels and Rents

In order for the Borrower to generate sufficient revenues to enable it to make the Debt Service Payments in the amounts and at the times required under the Loan Agreement, the Series 2016 Project must meet certain assumed occupancy levels and achieve certain assumed rents during each fiscal year. There can be no assurance, however, that the Series 2016 Project will be able to meet and maintain such required occupancy and rent levels during any fiscal year.

Enrollment

The Borrower’s ability to maintain the required occupancy levels depends, to a large extent, on the University’s ability to maintain student enrollment. Enrollment can be affected by a number of factors including, without limitation, (i) increased competition from other schools, (ii) changes in the demand for higher education in general or for programs offered by the University in particular, (iii) loss of accreditation of the University’s programs, (iv) failure of the University to meet applicable federal guidelines or some other event which results in students of the University being ineligible for federal financial aid, and (v) state budget cuts.

The Borrower’s ability to generate revenues and its overall financial condition may be adversely affected by a wide variety of future events and conditions including a decline in the enrollment of the University. The Ground Lease requires that the Series 2016 Project be used solely for the operation of a housing facility to serve enrolled students, faculty and staff of the University and people attending programs presented by the University or another organization on the University’s campus, whose presence is deemed desirable by the University to the effective provision of the University’s programs and services. There can be no assurance that there will be sufficient demand or enrollment at the University for the Borrower to lease all of the beds in the Series 2016 Project.

The University will not be liable for the payment of the principal of, premium, if any, or interest on the Series 2016 Bonds, nor shall the University be responsible or liable for any other obligations of the Borrower or the obligations of any other party in connection with the Series 2016 Bonds.

-46-

Risks of Construction

The cost of construction and the date of completion of the Series 2016 Project may be affected by factors beyond the control of the Borrower, including strikes, material and labor shortages, adverse weather conditions, subcontractor defaults, delays, and unknown contingencies.

Because of the exculpatory provisions contained in the Bond Documents, the Trustee will have no claim against the Borrower, beyond its interest in the Series 2016 Project and the Premises, in the event the Series 2016 Project is not completed in accordance with the plans and specifications, or otherwise not completed.

The Development Agreement obligates the Developer to enter into the Construction Contract with the General Contractor as agent for the Borrower pursuant to which the General Contractor will agree to construct the Series 2016 Project for a guaranteed maximum price subject to adjustment as provided in the Construction Contract. The Development Agreement also obligates the Developer to use commercially reasonable efforts to cause the General Contractor to perform in a manner consistent with the terms of the Construction Contract including taking corrective action to complete the Series 2016 Project by the scheduled date of substantial completion, as may be extended pursuant to the terms of the Development Agreement, in accordance with the terms of the Construction Contract. The cost of completing the Series 2016 Project may be increased, however, if there are change orders or other matters allowed under the Development Agreement or the Construction Contract. The Development Agreement requires the Developer to use commercially reasonable efforts to cause the General Contractor to comply with its obligations under the Construction Contract to furnish performance and payment bonds; however, there can be no assurance that the obligations of the surety under such bonds can be enforced without costly and time consuming litigation.

Cleanup Costs and Liens Under Environmental Statutes

The Borrower is not aware of any enforcement actions currently in process with respect to any releases of pollutants or contaminants at the site of the Series 2016 Project. However, there can be no assurance that an enforcement action or actions will not be instituted under such statutes at a future date. In the event such enforcement actions were initiated, the Borrower could be liable for the costs of removing or otherwise treating pollutants or contaminants located at the Series 2016 Project. In addition, under applicable environmental statutes, in the event an enforcement action were initiated, a lien superior to the Trustee’s lien on behalf of the Bondholders could attach to the Series 2016 Project, which would adversely affect the Trustee’s ability to realize value upon foreclosure of the Leasehold Deed of Trust. Furthermore, in determining whether to exercise any foreclosure rights with respect to the Series 2016 Project under the Indenture, the Trustee and the Bondholders would need to take into account the potential liability of any tenant of the Series 2016 Project, including a tenant by foreclosure, for clean-up costs with respect to such pollutants and contaminants.

Enforceability of Remedies

To secure the Borrower’s obligations to the Issuer under the Loan Agreement and the Series 2016 Notes, the Borrower has, subject to Permitted Encumbrances, (i) granted to the Trustee a first deed of trust lien on the Borrower’s interest in the Premises and has assigned and pledged to the Trustee the Borrower’s interest in the General Revenues from the Series 2016 Project and any improvements thereto or expansions thereof pursuant to the Leasehold Deed of Trust, (ii) granted to the Trustee a first priority security interest in the accounts, documents, chattel paper, instruments and general intangibles held by the Borrower arising in any manner from the Borrower’s ownership or operation of the Series 2016 Project and any improvements thereto or expansions thereof, in the inventory, if any, located thereat or thereon and in the Equipment pursuant to the Security Agreement, and (iii) conditionally assigned to the Trustee its rights under the Development Agreement, the Management Agreement, the Construction Contract, the Architect’s Agreement and all contracts entered into by the Developer and assigned to the Borrower relating to the design and construction of the Series 2016 Project.

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Pursuant to the Indenture, the Issuer will assign, pledge and grant a security interest in all of its right, title and interest in the Loan Agreement (except for Reserved Rights, as hereinafter defined), the Series 2016 Notes and certain funds and accounts held under the Indenture to the Trustee which, on behalf of the owners of the Series 2016 Bonds, will exercise all of the Issuer’s rights with respect thereto (except for Reserved Rights). The practical realization of value upon any default will depend upon the exercise of various remedies specified by the Bond Documents. These and other remedies may, in many respects, require judicial actions, which are often subject to discretion and delay. Under existing law (including, particularly, federal bankruptcy law), the remedies specified by the Bond Documents may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in the Bond Documents. The various legal opinions to be delivered concurrently with the delivery of the Series 2016 Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by state and federal laws, rulings, and decisions affecting remedies, including judicial discretion in the application of the principles of equity, and by bankruptcy, reorganization, or other laws affecting the enforcement of creditors’ rights generally.

Effect of Determination of Taxability

The Borrower and the Issuer each will covenant not to take any action that would cause the Series 2016A Bonds to be arbitrage bonds or that would otherwise adversely affect the federal income tax status of interest on the Series 2016A Bonds. The Borrower has also made representations with respect to certain matters within its knowledge which have been relied on by Bond Counsel and which Bond Counsel has not independently verified. Failure by the parties to the Loan Agreement, Tax Regulatory Agreement and Indenture to comply with their respective covenants thereunder could result in interest on the Series 2016A Bonds becoming includible in gross income for federal tax purposes.

It is possible that a period of time may elapse between the occurrence of the event which causes interest to become taxable and the determination that such an event has occurred. In such a case, interest previously paid on the Series 2016A Bonds could become retroactively taxable from the date of their issuance. Additionally, certain owners of Series 2016A Bonds are subject to possible adverse tax consequences. See “TAX MATTERS” herein.

Actual Results May Differ From Market Study and Cash Flow Forecast

The Market Study and its forecast of future demands included in Appendix A hereto, and the Cash Flow Forecast and its forecast of future revenues and expenses with respect to the Series 2016 Project is based upon assumptions concerning future events, circumstances, and transactions. In addition, the Cash Flow Forecast contained herein only covers the approximate five year period ending June 30, 2022, and consequently does not cover the entire period during which the Series 2016 Bonds may be outstanding. The achievement of any financial forecast is dependent upon future events, the occurrence of which cannot be assured. Realization of the results forecasted will depend on the implementation by the Borrower of policies and procedures consistent with such assumptions. Future results will also be affected by events and circumstances beyond the control of the Borrower. For the reasons described above, it is likely that the actual results of the Series 2016 Project will be different from the results forecast in the Market Study and the Cash Flow Forecast and those differences may be material and adverse.

No representation or assurances can be made that revenues will be realized by the Borrower from the operation of the Series 2016 Project in amounts sufficient to pay maturing principal and interest on the Series 2016 Bonds. Future economic and other conditions, including demand for and services offered by the Series 2016 Project and the ability of the residents of the Series 2016 Project to meet their financial obligations, increased costs, litigation, competition, lower than anticipated revenues, higher than anticipated operating expenses, changes in governmental regulation, loss of federal tax-exempt status, loss of state or local property tax exemption, changes in demographic trends, changes in the student housing industry and general economic conditions may adversely affect revenues and, consequently, payment of principal and interest. Factors such as increasing maintenance fees which could affect occupancy, differences in interest rates from those expected,

-48- competition from other institutions to host summer conferences, and construction costs are all items to which the forecast financial statements are highly sensitive.

The ability of the Borrower to pay debt service on the Series 2016 Bonds depends upon its ability to market the Series 2016 Project. The economic feasibility of the Series 2016 Project depends upon the ability of the Borrower to attract sufficient residents and to maintain substantial occupancy at projected rent levels of such Series 2016 Project throughout the term of the Series 2016 Bonds. There can be no assurance that the levels of occupancy assumed in the Cash Flow Forecast will be obtained or maintained. Uncertainty of Investment Income The investment earnings of, and accumulations in, certain funds and accounts established by the Indenture have been estimated and are based on assumed earnings’ rates. While these assumptions are believed to be reasonable in view of the rates of return presently available, there is no assurance that similar interest rates will be available on such investments in the future, nor is there any assurance that the potential accumulations assumed will be realized. Consequences of Changes in the Foundation’s Tax Status The Foundation has obtained a determination letter from the Internal Revenue Service stating that it will be treated as an exempt organization as described in Section 501(c)(3) of the Code and can reasonably be expected not to be classified as a “private foundation.” In order to maintain its exempt status and not to be considered a private foundation, the Foundation is subject to a number of requirements affecting its operation. The possible modification or repeal of certain existing federal income tax laws, the change of Internal Revenue Service policies or positions, the change of the Borrower’s or the Foundation’s method of operations, purposes or character or other factors could result in loss by the Foundation of its tax-exempt status. The Borrower will covenant to cause the Foundation to remain eligible for such tax-exempt status and to avoid operating the Series 2016 Project as an unrelated trade or business (as determined by applying Section 513(a) of the Code). Failure of the Series 2016 Project to remain so qualified or of the Borrower so to operate the Series 2016 Project could affect the funds available to the Borrower for payments under the Loan Agreement by subjecting the Borrower to federal income taxation and could result in the loss of the excludability of interest on the Series 2016A Bonds from gross income for purposes of federal income taxation. See “CERTAIN BONDHOLDERS’ RISKS - Effect of Determination of Taxability” above. State and Local Taxes The Cash Flow Forecast is based on an assumption that the Series 2016 Project will be exempt from ad valorem property taxes based on exemptions currently provided in the Texas Property Tax Code. The determination of whether such exemptions apply to the Series 2016 Project is made by the local central appraisal district, subject to review by a state district court. If the local central appraisal district determines that the property tax exemptions do not apply to the Series 2016 Project or if the property tax exemptions are repealed by the Texas Legislature, the Borrower may be required to raise the rent charged to tenants, which could negatively affect occupancy levels and thereby reduce revenues from the Series 2016 Project. Taxation of Series 2016A Bonds

An opinion of Bond Counsel has been obtained as described under “TAX MATTERS” herein. Such an opinion is not binding on the Internal Revenue Service. Application for a ruling from the Internal Revenue Service regarding the status of the interest on the Series 2016A Bonds has not been made. The opinion of Bond Counsel contains certain exceptions and is based on certain assumptions described herein under the heading “TAX MATTERS.” Failure by the parties to the Loan Agreement, Tax Regulatory Agreement and Indenture to comply with their respective covenants thereunder could result in interest on the Series 2016A Bonds becoming includible in gross income for federal tax purposes.

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LITIGATION

The Issuer

There is not now pending (as to which the Issuer has received service of process) or, to the actual knowledge of the Issuer threatened, any litigation against the Issuer restraining or enjoining the issuance or delivery of the Series 2016 Bonds or questioning or affecting the validity of the Series 2016 Bonds or the proceedings or authority under which the Series 2016 Bonds are to be issued. Neither the creation, organization or existence of the Issuer nor the title of any of the present members or other officers of the Issuer to their respective offices is being contested. There is no litigation against the Issuer pending (as to which the Issuer has received service of process) or, to the actual knowledge of the Issuer, threatened, which in any manner questions the right of the Issuer to enter into the Indenture, the Loan Agreement or the Bond Purchase Agreement or to secure the Series 2016 Bonds in the manner provided in the Indenture, the Resolution and the Act.

The Borrower

There is no action, suit or proceeding, at law or in equity before any court, public board or body pending or, to the knowledge of the Borrower, threatened (or any meritorious basis for such an action, suit, proceeding, inquiry or investigation) at the date of this Official Statement to restrain or enjoin the issuance, sale, execution or delivery of the Series 2016 Bonds or any proceedings of the Borrower taken with respect thereto, or wherein an unfavorable decision, ruling or finding (i) would adversely affect the transactions contemplated by this Official Statement or the validity or enforceability of the Series 2016 Bonds, the Indenture, the Loan Agreement or any other agreement or instrument which is used or contemplated for use in the consummation of the transactions contemplated by this Official Statement or (ii) would materially adversely affect the financial condition or operations of the Series 2016 Project. There is no litigation now pending or threatened against the Borrower, of which the Borrower has knowledge, which in any manner questions the right of the Borrower to enter into or perform its obligations under the Loan Agreement, the Ground Lease, the Leasehold Deed of Trust, the Security Agreement or the Borrower Collective Collateral Assignment Agreement.

TAX MATTERS

Certain Federal Income Tax Considerations

General. The following discussion is a summary of certain expected material federal income tax consequences of the purchase, ownership and disposition of the Series 2016 Bonds and is based on the Internal Revenue Code of 1986 (the “Code”), the regulations promulgated thereunder, published rulings and pronouncements of the Internal Revenue Service (“IRS”) and court decisions currently in effect. There can be no assurance that the IRS will not take a contrary view, and no ruling from the IRS, has been, or is expected to be, sought on the issues discussed herein. Any subsequent changes or interpretations may apply retroactively and could affect the opinion and summary of federal income tax consequences discussed herein.

The following discussion is not a complete analysis or description of all potential U.S. federal tax considerations that may be relevant to, or of the actual tax effect that any of the matters described herein will have on, particular holders of the Series 2016 Bonds and does not address U.S. federal gift or estate tax or (as otherwise stated herein) the alternative minimum tax, state, local or other tax consequences. This summary does not address special classes of taxpayers (such as partnerships, or other pass-thru entities treated as a partnerships for U.S. federal income tax purposes, S corporations, mutual funds, insurance companies, financial institutions, small business investment companies, regulated investment companies, real estate investment trusts, grantor trusts, former citizens of the U.S., broker-dealers, traders in securities and tax- exempt organizations, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who may be subject to or personal holding company provisions of the Code) that are subject to special treatment

-50- under U.S. federal income tax laws, taxpayers qualifying for the health insurance premium assistance credit, or persons that hold Series 2016 Bonds as a hedge against, or that are hedged against, currency risk or that are part of hedge, straddle, conversion or other integrated transaction, or persons whose functional currency is not the “U.S. dollar”. This summary is further limited to investors who will hold the Series 2016 Bonds as “capital assets” (generally, property held for investment) within the meaning of Section 1221 of the Code. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively.

As used herein, the term “U.S. Holder” means a beneficial owner of a Series 2016 Bond who or which is: (i) an individual citizen or resident of the United States, (ii) a corporation or partnership created or organized under the laws of the United States or any political subdivision thereof or therein, (iii) an estate, the income of which is subject to U.S. federal income tax regardless of the source; or (iv) a trust, if (a) a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) the trust validly elects to be treated as a U.S. person for U.S. federal income tax purposes. As used herein, the term “Non-U.S. Holder” means a beneficial owner of a Series 2016 Bond that is not a U.S. Holder.

THIS SUMMARY IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY AND DOES NOT DISCUSS ALL ASPECTS OF THE U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER OF SERIES 2016 BONDS IN LIGHT OF THE HOLDER’S PARTICULAR CIRCUMSTANCES AND INCOME TAX SITUATION. PROSPECTIVE HOLDERS OF THE SERIES 2016 BONDS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SERIES 2016 BONDS BEFORE DETERMINING WHETHER TO PURCHASE SERIES 2016 BONDS.

FOREIGN INVESTORS SHOULD ALSO CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES UNIQUE TO NON-U.S. HOLDERS.

Information Reporting and Backup Withholding

Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Series 2016 Bonds will be sent to each registered holder and to the IRS. Payments of interest and principal may be subject to backup withholding under Section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner's social security number or other taxpayer identification number (“TIN”), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding tax. Any amounts so withheld would be allowed as a credit against the recipient’s federal income tax. Special rules apply to partnerships, estates and trusts, and in certain circumstances, and in respect of Non- U.S. Holders, certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof.

Series 2016A Bonds

Opinion

On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Bond Counsel to the Issuer, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof (“Existing Law”), (1) for federal income tax purposes, interest on the Series 2016A Bonds will be excludable from the “gross income” of the holders thereof and (2) the Series 2016A Bonds will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Code. Except as stated above, Bond Counsel to the Issuer will express no opinion as to any other federal, state or local tax consequences of

-51- the purchase, ownership or disposition of the Bonds. See "APPENDIX C -- FORM OF OPINION OF BOND COUNSEL".

In rendering its opinion, Bond Counsel to the Issuer will rely upon (a) the opinion of Hand Arendall, LLC relating to (i) the designation of the Borrower as a “disregarded entity” for federal income tax purposes by virtue of its sole member being an organization described in section 501(c)(3) of the Code, and (ii) the status of the Foundation as an organization described in Section 501(c)(3) of the Code, (b) information furnished by the parties to the Loan Agreement and the Tax Regulatory Agreement, and particularly written representations of officers and agents of such parties with respect to certain material facts that are solely within their knowledge relating to the use of proceeds of the bonds, and (c) the Issuer's federal tax certificate. Failure of the Issuer, the Borrower or the Foundation to comply with these representations or covenants could cause the interest on the Series 2016A Bonds to become includable in gross income retroactively to the date of issuance of the Series 2016A Bonds.

The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Series 2016A Bonds in order for interest on the Series 2016A Bonds to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Series 2016A Bonds to be included in gross income retroactively to the date of issuance of the Series 2016A Bonds. The opinion of Bond Counsel to the Issuer is conditioned on compliance by the Issuer with such requirements, and Bond Counsel to the Issuer has not been retained to monitor compliance with these requirements subsequent to the issuance of the Series 2016A Bonds.

Bond Counsel's opinion regarding the Series 2016A Bonds represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel's opinion related to the Series 2016A Bonds is not a guarantee of a result. Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Series 2016A Bonds.

Federal Income Tax Accounting Treatment of Original Issue Discount

The initial public offering price to be paid for one or more maturities of the Series 2016A Bonds may be less than the principal amount thereof or one or more periods for the payment of interest on the bonds may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Bonds”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The “stated redemption price at maturity” means the sum of all payments to be made on the bonds less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year.

Under existing law, any U.S. Holder who has purchased a Series 2016A Bonds as an Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see the discussion set forth below. In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such U.S. Holder in excess of the basis of such Original Issue Discount Bond in the hands of such U.S. Holder (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income.

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Under Existing Law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each accrual period and ratably within each such accrual period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond.

All U.S. Holders of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds.

Collateral Federal Income Tax Consequences

Interest on the Series 2016A Bonds will be includable as an adjustment for "adjusted current earnings" to calculate the alternative minimum tax imposed on corporations by section 55 of the Code.

Under section 6012 of the Code, U.S. Holders of tax-exempt obligations, such as the Series 2016A Bonds, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation.

Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Series 2016A Bonds, if such obligation was acquired at a “market discount” and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to “market discount bonds” to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A “market discount bond” is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the “revised issue price” (i.e., the issue price plus accrued original issue discount). The “accrued market discount” is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date.

Series 2016B Bonds

Certain U.S. Federal Income Tax Consequences to U.S. Holders

Periodic Interest Payments and Original Issue Discount. The Series 2016B Bonds (the “Taxable Bonds”) are not obligations described in Section 103(a) of the Code. Accordingly, the stated interest paid on the Taxable Bonds or original issue discount, if any, accruing on the Taxable Bonds will be includable in “gross income” within the meaning of Section 61 of the Code of each owner thereof and be subject to federal income taxation when received or accrued, depending upon the tax accounting method applicable to such owner. Additional Payments. In certain circumstances (see “THE SERIES 2016 BONDS – Redemption”), the Issuer may make payments on the Taxable Bonds in excess of the stated interest or principal on the Taxable Bonds. The Issuer does not intend to treat such possibility as causing the Taxable Bonds to be treated as “contingent payment debt instruments”. No assurance can be given, however, that the IRS would take the same position, in which case the timing, character and amount of a U.S. Holder’s income may be different. Prospective purchasers of the offered securities are advised to consult their tax advisors concerning the tax treatment of the Taxable Bonds.

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Disposition of Bonds. An owner will recognize gain or loss on the redemption, sale, exchange or other disposition of a Bond equal to the difference between the redemption or sale price (exclusive of any amount paid for accrued interest) and the owner's tax basis in the Taxable Bonds. Generally, a U.S. Holder's tax basis in the Taxable Bonds will be the owner's initial cost, increased by income reported by such U.S. Holder, including original issue discount and market discount income, and reduced, but not below zero, by any amortized premium. Any gain or loss generally will be a capital gain or loss and either will be long-term or short-term depending on whether the Taxable Bonds has been held for more than one year.

Defeasance of the Taxable Bonds. Defeasance of any Taxable Bond may result in a reissuance thereof, for U.S. federal income tax purposes, in which event a U.S. Holder will recognize taxable gain or loss as described above.

State, Local and Other Tax Consequences. Investors should consult their own tax advisors concerning the tax implications of holding and disposing of the Taxable Bonds under applicable state or local laws, or any other tax consequence, including the application of gift and estate taxes.

Certain U.S. Federal Income Tax Consequences to Non-U.S. Holders

A Non-U.S. Holder that is not subject to U.S. federal income tax as a result of any direct or indirect connection to the U.S. in addition to its ownership of a Series 2016B Bond, will not be subject to U.S. federal income or withholding tax in respect of such Taxable Bond, provided that such Non-U.S. Holder complies, to the extent necessary, with identification requirements including delivery of a signed statement under penalties of perjury, certifying that such Non-U.S. Holder is not a U.S. person and providing the name and address of such Non-U.S. Holder. Absent such exemption, payments of interest, including any amounts paid or accrued in respect of accrued original issue discount, may be subject to withholding taxes, subject to reduction under any applicable tax treaty. Non-U.S. Holders are urged to consult their own tax advisors regarding the ownership, sale or other disposition of a Bond.

The foregoing rules will not apply to exempt a U.S. shareholder of a controlled foreign corporation from taxation on the U.S. shareholder's allocable portion of the interest income received by the controlled foreign corporation.

UNDERWRITING

RBC Capital Markets, LLC (the “Underwriter”), has entered into a Bond Purchase Agreement with the Issuer and the Borrower, to purchase the Series 2016 Bonds at a purchase price of $23,504,356.70, representing the principal amount of the Series 2016 Bonds less an Underwriter’s discount of $177,310.00, plus original issue premium in the amount of $2,821,666.70. The total compensation to the Underwriter in connection with the Series 2016 Bonds is expected to be in the form of the discount. The obligation of the Underwriter to purchase and to sell the Series 2016 Bonds will be subject to various conditions contained in the Bond Purchase Agreement, including the receipt of a rating on the Series 2016 Bonds of at least BBB- from S&P.

The Underwriter is purchasing the Series 2016 Bonds and intends to offer the Series 2016 Bonds to the original purchasers thereof at the offering prices set forth on the inside cover page of this Official Statement, which offering price may subsequently be changed without any requirement of prior notice. The Underwriter has reserved the right to permit other securities dealers who are members of the Financial Industry Regulatory Authority to assist in selling the Series 2016 Bonds. The Underwriter may offer and sell Series 2016 Bonds to certain dealers at prices lower than the public offering price or otherwise allow concessions to such dealers who may re-allow concessions to other dealers. Any discounts and/or commissions that may be received by such dealers in connection with the sale of the Series 2016 Bonds will be deducted from the Underwriter’s discount.

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The Borrower has agreed to indemnify the Underwriter against certain civil liabilities, including certain liabilities under federal securities laws. Under existing statutes, regulations, and court decisions, the enforceability of such an agreement to indemnify is uncertain.

RATING

S&P has assigned the Series 2016 Bonds a rating of BBB-. An explanation of the significance of such rating may be obtained from S&P. S&P was furnished with the information contained in a preliminary form of this Official Statement and other information. Generally, ratings agencies base their rating on such materials and information, as well as their own investigation, studies and assumptions. The rating reflects only the view of S&P and none of the Borrower, the Issuer, the Board, the System, the University or the Underwriter makes any representation as to the appropriateness of the rating. The above rating is not a recommendation to buy, sell or hold the Series 2016 Bonds, and such rating may be subject to revision or withdrawal at any time by S&P. Any downward revision or withdrawal of the above rating may have an adverse effect on the market price of the Series 2016 Bonds. Although the Borrower has previously sought and may from time to time seek a credit assessment from other rating agencies, no other rating agency is currently providing a credit rating with respect to the Series 2016 Bonds.

LEGAL MATTERS

Certain legal matters incident to the authorization, issuance and sale of the Series 2016 Bonds are subject to the approving legal opinion of McCall, Parkhurst & Horton L.L.P., as Bond Counsel (“Bond Counsel”), who has been retained by, and acts as, Bond Counsel to the Issuer. Bond Counsel has not been retained or consulted on disclosure matters and has not undertaken to review or verify the accuracy, completeness or sufficiency of this Official Statement or other offering material relating to the Series 2016 Bonds and assumes no responsibility for the statements or information contained in or incorporated by reference in this Official Statement, except that in its capacity as Bond Counsel, McCall, Parkhurst & Horton L.L.P. has, at the request of the Issuer, reviewed the information under the headings “THE SERIES 2016 BONDS” (except for under the subcaption “ — Book-Entry-Only System for Series 2016 Bonds”), “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS (except for under the subcaptions “Leasehold Deed of Trust, Security Agreement, and Assignment of Agreements and Documents” and “Title and Property Insurance”),” “TAX MATTERS,” and APPENDIX B - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT” and has supplied a form of its proposed opinion in APPENDIX C hereto. This review was undertaken solely at the request and for the benefit of the Issuer and did not include any obligation to establish or confirm factual matters set forth herein.

Certain legal matters will also be passed on for the Issuer by Gay, McCall, Isaacks, Gordon & Roberts, P.C., Plano, Texas, for the Borrower by its counsel, Hand Arendall LLC, Mobile, Alabama and Shackelford, Bowen, McKinley & Norton, LLP, Dallas, Texas, and for the Underwriter by its counsel, Allen Boone Humphries Robinson LLP, Houston, Texas.

RELATIONSHIP OF PARTIES

In the ordinary course of business, the Underwriter, its parent the Royal Bank of Canada, and certain of their affiliates may from time to time provide other investment banking services, commercial banking services or financial products to the Board, the System, University, the Issuer, the Borrower and the Foundation. The Underwriter and its respective affiliates are full-service financial institutions engaged in various activities that may include securities trading, commercial and investment banking, municipal advisory, brokerage, and asset management. In the ordinary course of business, the Underwriter and its respective affiliates may actively trade debt and, if applicable, equity securities (or related derivative securities) and provide financial instruments (which may include bank loans, credit support or interest rate swaps). The Underwriter and its respective affiliates may engage in transactions for their own accounts involving the securities and instruments made the subject of this securities offering or other offering of the Board, the System, the University, the Issuer, the Borrower and the Foundation. The Underwriter and its respective

-55- affiliates may make a market in credit default swaps with respect to municipal securities in the future. The Underwriter and its respective affiliates may also communicate independent investment recommendations, market color or trading ideas and publish independent research views in respect of this securities offering or other offerings of the Board, the System, the University, the Issuer, the Borrower and the Foundation.

CONTINUING DISCLOSURE

The Issuer has determined that no financial or operating data concerning the Issuer is material to any decision to purchase, hold or sell the Series 2016 Bonds, and the Issuer will not provide any such information. The Borrower has undertaken all responsibilities for any continuing disclosure to Bondholders as described below, and the Issuer has no liability to Bondholders or any other person with respect to such disclosures.

The Borrower will undertake in a Continuing Disclosure Agreement dated as of June 1, 2016 (the “Continuing Disclosure Agreement”) by and between the Borrower, the Issuer and the Trustee, as Trustee and dissemination agent, to comply with the provisions of Rule 15c2-12 as amended from time to time (the “Rule”), promulgated by the Securities and Exchange Commission (the “SEC”), by providing certain annual financial information and operating data and event notices required by the Rule. Such information is to be filed with the Electronic Municipal Market Access (“EMMA”) system of the Municipal Securities Rulemaking Board. Such undertaking requires the Borrower to provide only limited information at specified times.

Upon any failure of the Borrower to provide the required continuing disclosure, any bondholder may bring an action seeking specific performance of the Borrower’s obligations to provide continuing disclosure. No assurance can be given as to the outcome of any such proceeding.

Failure by the Borrower to comply with the continuing disclosure obligations in the Continuing Disclosure Agreement will not be an “Event of Default” under the Leasehold Deed of Trust, the Loan Agreement, the Indenture or under any other Bond Document, and the sole and exclusive remedy for such failure shall be an action brought by or on behalf of the holders of the Series 2016 Bonds to compel specific performance of the Borrower’s continuing disclosure obligations, as described above. The Borrower has not previously entered into a continuing disclosure undertaking pursuant to the Rule.

The proposed form of Continuing Disclosure Agreement is attached hereto as Appendix D.

MISCELLANEOUS

Any statements herein involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact.

The foregoing references to and summaries or descriptions of provisions of the Series 2016 Bonds, the Loan Agreement, the Indenture, the Ground Lease, the other Bond Documents, and all references to other materials not stated to be quoted in full are only brief outlines of some of the provisions thereof and do not purport to summarize or describe all of the provisions thereof.

The information set forth in this Official Statement and in the Appendices hereto should not be construed as representing all of the conditions affecting the Issuer, the Borrower, the System, the University, the Underwriter or the Series 2016 Bonds.

At closing of the issuance and sale of the Series 2016 Bonds, the Issuer and the Borrower will each deliver to the Underwriter a certificate that no litigation is pending or threatened against it which would have a material effect on the issuance of the Series 2016 Bonds or performance under the Bond Documents. In addition, the Borrower will represent to the Underwriter and the Issuer in the Bond Purchase Agreement that the information contained in this Official Statement relating to itself does not contain any misrepresentation of a material fact and does not omit to state any material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading.

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The Borrower has furnished the information contained in this Official Statement relating to itself. The Issuer has furnished only the information contained in this Official Statement relating to itself under the headings “THE ISSUER” and “LITIGATION - The Issuer”. The Underwriter has furnished the information contained in this Official Statement under the heading “UNDERWRITING” and has furnished the information with respect to the public offering prices of the Series 2016 Bonds contained on the cover page of this Official Statement.

Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the owners of the Series 2016 Bonds.

The distribution of this Official Statement has been duly authorized by the Issuer and the Borrower. The Issuer has not assisted in the preparation of this Official Statement, except for the statements pertaining to the Issuer under the captions “THE ISSUER” and “LITIGATION - The Issuer” herein and, except as aforesaid, the Issuer is not responsible for any statements made in this Official Statement. Except for the execution and delivery of documents required to effect the issuance of the Series 2016 Bonds, the Issuer has not otherwise assisted in the public offer, sale or distribution of the Series 2016 Bonds. Accordingly, except as aforesaid, the Issuer assumes no responsibility for the disclosures set forth in this Official Statement.

[Remainder of Page Intentionally Left Blank]

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Borrower’s Signature Page to Official Statement

CHF-COLLEGIATE HOUSING SAN ANTONIO I, L.L.C.

By: Collegiate Housing Foundation, its sole member, doing business in the State of Texas as CHF- Collegiate Housing Foundation

By: ______Leeman H. Covey President

APPENDIX A

MARKET STUDY

The Market Study includes forecasts as to the demographic, socioeconomic and housing development trends in and around the area where the Series 2016 Project will be located. The achievement of any financial forecasts is dependent on future events, the occurrence of which cannot be assured. Therefore, the actual results achieved may vary from the forecasts. Such variation could be material. See “CERTAIN BONDHOLDERS’ RISKS – Actual Results May Differ from Market Study and Cash Flow Forecast.”

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Real Estate & Environmental Services

American Campus Communities Texas A&M University – San Antonio Student Housing Market Study

April 2016

Submitted To: Submitted By: Jay Bates Alvarez & Marsal Real Estate & American Campus Communities Envrionmental Services, LLC 12700 Hill Country Boulevard 700 Louisiana Street Suite T - 200 Suite 900 Austin, TX 78738 Houston, TX 77002

This report is intended solely for your information and assistance for the function stated above, and should not be relied upon for any other purpose. Any third party recipient (“Recipient”) of this report is being provided a copy of the report for information purposes in connection with the Recipient's overall due diligence efforts. The Recipient acknowledges that (i) it is either an "Institutional Accredited Investor", a "Qualified Institutional Buyer" or other prudent sophisticated institutional investor, and (ii) it will not be relying exclusively on the report or information conveyed during discussions with Alvarez and Marsal Real Estate & Environmental Services ("A&M” or “Alvarez & Marsal”), if any, but rather it will be performing its own independent due diligence, consistent with its customary practices with respect to similar investments, including inspections, analyses, report reviews, and evaluations of all relevant facts and circumstances. The Recipient understands that Alvarez and Marsal makes no representations or warranties regarding the accuracy of the conclusions contained in the report or conveyed during discussions relating to the report, other than that Alvarez and Marsal exercised its professional judgment in reaching such conclusions and that the report shall remain subject to each of the conditions, limitations and assumptions stated within the report.

The Recipient agrees that Alvarez and Marsal shall under no circumstances be liable to the Recipient and any persons or entities by reason of the report or discussions relating to the report any monetary amount.

[ THIS PAGE INTENTIONALLY LEFT BLANK ] Dfas Alvarez & Marsal Real Estate & Environmental Services 700 Louisiana Street Suite 900 Houston, TX 77002 Phone: 713 571 2400 Fax : 713 547 3697

April 15, 2016

Mr. Jay Bates American Campus Communities 12700 Hill County Boulevard Suite T-200 Austin, TX 78738

Re: Market Study and Survey related to the Development of a Student Housing Project for Students at Texas A&M San Antonio (San Antonio, TX)

Dear Mr. Bates,

Per our engagement letter dated February 2, 2016, the following report summarizes A&M’s observations and conclusions for the above referenced property. The report is presented in the format identified below.

I. Executive Summary II. Introduction III. Off-Campus Market Analysis IV. Demand Analysis

The accompanying analyses are based on estimates and assumptions developed in connection with the market study. However, some assumptions inevitably will not materialize and unanticipated events and circumstances may occur; therefore, actual results achieved will vary from our estimates and the variations may be material.

the report or conveyed during discussions relating to the report, other than that Alvarez and Marsal exercised its professional judgment in reaching such conclusions and that the report shall remain subject to each of the conditions, limitations and assumptions stated within the report.

Respectfully submitted,

Alvarez and Marsal Real Estate & Environmental Services

Executive Summary

Proposed Student Housing Development American Campus Communities A&M University - SA

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I. Executive Summary

OVERVIEW

Alvarez and Marsal Real Estate and Environmental Services (“Alvarez and Marsal”) was engaged by American Campus Communities (“ACC”) to complete a Student Housing Market Study. Texas A&M University – San Antonio (“A&M - SA” or “University”) has proposed the development of a student housing community that will be located on the University’s campus, southeast of the Verano Parkway and University Way intersection. This report is intended to analyze potential demand for the Subject which has a projected delivery of fall 2017.

SUMMARY OF FINDINGS

Student Housing

 A&M – SA does not currently have any on- campus housing available for current students. The Subject Property when constructed in fall 2017 will be first- generation student housing for the University.  There are no off-campus rental options available to A&M - SA students in proximity to the campus. The large majority of students who reside off campus live at home with their parents or own their own home. Many of these students commute more than ten miles to campus each way.

Enrollment

 Total enrollment at A&M - SA has grown at an average annual rate of 8.0% since 2011; however, growth in the past two years has been relatively flat averaging 0.75% annually. The flat growth can be attributed to declining graduate student growth as undergraduate growth has been positive averaging 4.9% the past two years.  A&M – SA will introduce its first freshman class in fall 2016, one year prior to the completion of the Subject Property. Currently, the University predominately caters to upperclassman and graduate students.  With the addition of freshmen to the University, on-campus housing, and new academic programs, A&M – SA is anticipated to have strong positive enrollment growth over the next five years as the University gradually transforms into a more traditional campus.

Proposed Student Housing Development American Campus Communities Page | 1 A&M University - SA

I. Executive Summary

Potential Demand

 At the proforma rental rates, the demand analysis indicates maximum potential demand figures of 320 beds from fall 2017 entering freshman (primary potential demand) and 256 beds from fall 2016 entering freshmen (secondary potential demand) for a total of 576 students.  While there are risks associated with first-generation university housing; much of this risk is mitigated by the housing policy implemented by A&M – SA requiring students with less than 30 credit hours to reside on campus. Additionally, while the Subject will be targeted to incoming freshmen, the housing will be available to all students should additional space be available.

Proposed Student Housing Development American Campus Communities Page | 2 A&M University - SA

Introduction

Proposed Student Housing Development American Campus Communities A&M University - SA

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II. Introduction

Methodology

This report presents an analysis of the San Antonio Metropolitan Statistical Area followed by the City of San Antonio, and Texas A&M – San Antonio (“A&M – SA”). Following this is Alvarez and Marsal’s analysis for potential demand for student housing at A&M - SA.

In addition to this analysis, Alvarez and Marsal conducted focus groups and student surveys. The focus groups were designed to gain qualitative information regarding student housing preferences and gauge interest for new on-campus housing. The focus groups, conducted on March 2, 2016, included 21 student participants from the following three groups: o Current students (juniors and seniors) o Prospective/committed students from the incoming freshman class o Students attending various community colleges

The online student surveys were conducted from March 29nd through April 8th. Two different surveys were administered to two groups of students, prospective students and current students. All current and prospective students received an email with the respective survey link encouraging them to complete the survey. The purpose of the survey was to gain quantitative information regarding students housing preferences. There were a total of 254 prospective student responses (with 105 of these respondents indicating that they will attend A&M – SA1) and a total of 105 current student respondents. Both surveys have a level of respondents sufficient for a 95% confidence level with a +/- 10% confidence interval. While the main focus for this analysis was on the prospective students who will attend A&M – SA, frequency tables for all survey responses are presented in Attachment A.

1 Prospective students to enter as college freshmen (does not include transfer students).

Proposed Student Housing Development American Campus Communities Page | 3 A&M University – SA

II. Introduction

Subject Description

A&M - SA is considering the development of a leased by-the-bed student housing project (“Subject Property” or “Subject”) by American Campus Communities (“ACC”). The Subject will be positioned southeast of the Verano Parkway and University Way intersection, specifically, east of the Madla Building, past the existing parking lot. Location Map 1 displays the location of the Subject on the A&M - SA campus.

Location Map 1 – Subject Site

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II. Introduction

The Subject Property has a planned construction completion of fall 2017 and will consist of 378. The units will be housed in one four-story "L" shaped building with a fitness center and community center.

Table II.1 A&M - SA Subject Program

Unit Size Unit Type # Units % of M i x # of Beds % of Beds (SF) 2BR/1BA Single 12 11.9% 24 6.3% 463 2BR/1BA Double 88 87.1% 352 93.1% 697 1BR/1BA Double 1 1.0% 2 0.5% 429 Totals/Averages 101 100% 378 100% 667

Note: The Subject development will also include two faculty and staff units provided for in 2BR/1BA apartment accomodations.

Source: ACC

The Subject will be first generation housing as the University does not currently have any on-campus housing. The Subject will target incoming freshman, but will be open to all students to the extent available. The Subject will offer academic year leases and include all utilities. Additional amenities include:

- Full furnishings - Fitness center - Community center - Patio/outdoor gathering area - In unit bathrooms

Proposed Student Housing Development American Campus Communities Page | 5 A&M University – SA

II. Introduction

Market Overview

San Antonio – New Braunfels, TX Metropolitan Division

San Antonio is located in the San Antonio – New Braunfels, TX Metropolitan Statistical Area (“MSA”). The Office of Management and Budget defines the MSA as eight counties: Atascosa County, Bandera County, Bexar County, Comal County, Guadalupe County, Kendall County, Medina County, and Wilson County. According to ESRI, the MSA’s population was approximately 2.3 million in 2015. This represents an 8.2% increase since 2010. Population projections indicate that total population in the Metro Area will reach approximately 2.5 million by year 2020, a total increase of 8.9%.

According to the Bureau of Labor Statistics, the total non-farm employment in the Metro Area was approximately 994,300 as of year-end 2015, which is an increase of 3.5% over year-end 2014. Since 2005, employment growth ranged from a high of 3.5% in 2015 to a low of -1.5% in 2009. Total employment has averaged 2.2% per year from 2000 to 2015. According to Economy.com, San Antonio’s economy has accelerated in the past several months and total employment growth is double the national average for the past 12 months. The construction, professional services, and hospitality sectors have had the most growth, with most industries experiencing positive growth.

According to the most recent data from the Bureau of Labor Statistics (February 20162), the Metro Area’s total labor force was 1,115,644 with an unemployment rate of 3.5%, or 30 basis points lower than the previous year and below the State of Texas at 4.4%. San Antonio is performing better than the nation as a whole with the nation’s unemployment equaling 5.0% in February 2016.

The Economy.com Précis Metro Report highlighted the following strengths in the MSA’s economy:  Tourism related to such attractions as the Alamo and River Walk and proximity to Mexico.  Strategic location for expanding trade and distribution industries in the Southwest.

2 December 2015 figures reported by the BLS for the Metropolitan Division and State are preliminary.

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II. Introduction

The Economy.com’s Précis Metro Report highlighted the following weaknesses in the MSA’s economy:  Some exposure to volatility of energy industry because of proximity to Eagle Ford.  Limit on growth due to high concentration of military in a time of fiscal austerity.

San Antonio, TX

San Antonio is located in central Texas within the “Texas Triangle” region. It is approximately 75 miles southwest of Austin, 190 miles west of Houston, and 250 miles south of the Dallas–Fort Worth area. Established in 1718, the City serves as the seat for Bexar County. The principal highways include Interstate 10, Interstate 35, Interstate 37, Interstate 410, US 90, US 281, State Highway 151, and State Loop 1604. Rail service is provided by Amtrak operating Texas Eagle and Sunset Limited. San Antonio is also serviced by VIA Metropolitan Transit which provides bus services around the city. The major airport is San Antonio International Airport located north of downtown.

San Antonio has one of the largest concentrations of military bases in the country. It was nicknamed the “Military City” as it is includes Lackland Air Force Base, Brooke Army Medical Center, Randolph Air Force Base, and Fort Sam Houston.

San Antonio also has many tourism attractions such as the Spanish colonial missions, the Alamo, the River Walk, the Tower of the Americas, the Alamo Bowl, and Marriage Island. Commercial entertainment includes SeaWorld and Six Flags Fiesta Texas theme parks.

The San Antonio Economic Development Foundation identifies the following major employers in San Antonio.

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II. Introduction

Table II.2 San Antonio Major Employers

Major Employers # of Employees H-E-B 20,000 USAA 17,000 Cullen / Frost Bankers 3,982 Valero Energy 3,700 Bill Miller Bar-B-Q 3,540 Rackspace 3,300 CPS Energy 3,022 Toyota Motoring Manufacturing 2,900 Clear Channel Communications, Inc. 2,800 Southwest Research Institute 2,715 Harland Clarke 1,500 KCI 1,400 Tesoro 1,300 HVHC 1,200 Security Service Federal Credit Union 1,111 SWBC 1,009 NuStar Energy 550

Source: San Antonio Economic Development Foundation

In addition to A&M - SA several colleges and universities have a presence in San Antonio including University of Texas – San Antonio, University of Texas Health Science Center – San Antonio, University of the Incarnate Word, Trinity University, St. Mary’s University – Texas, Our Lady of the Lake University, Northwest Vista College, San Antonio College, Palo Alto College, St. Phillip’s College, Northeast Lakeview College, Career Point College, Baptist Health System School of Health Professions, Hallmark University, The Art Institute of San Antonio, Oblate School of Theology, Baptist University of the Americas, Kaplan College San Antonio, Glen College of Nursing – San Antonio, Paul Mitchell the School – San Antonio, Hallmark College of Technology, Career Quest Lamson Institute, South Texas Vocational Technical Institute, International Bible College, Mims Classic Beauty College, Everest Institute of Cosmetology, International Academy of Design and Technology, Brown Mackie

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II. Introduction

College-San Antonio, University of Phoenix – San Antonio, Sanford-Brown College – San Antonio, Concorde Career Institute – San Antonio, San Antonio Beauty College 3 & 4, SW School of Business and Technical Career, Southwest School of Business and Technical Careers, ITT Technical Institute – San Antonio, Milan Institute, The Academy of Health Care Professions, and Kaplan Career Institute – San Antonio.

San Antonio Multifamily Overview

According to the San Antonio Review from ALN Apartment Data, Inc. (“ALN”), occupancy for multifamily was 89.5% in February 2016. This represents an annual increase of 0.6%. The average asking rent was $916 (5.0% increase from the previous year); while the average effective rent totaled $896 (4.9% increase from the previous year).

The following table displays a breakdown of the floor plans of apartment units in San Antonio.

TABLE II.3 San Antonio Apartment Market Floorplan Analysis

Av g. Av g. Av g. Market Eff. T ype Market SF Rent/Mo. Rent/Mo. Efficiency 3.6% 470 $619 $608 1BR 46.4% 676 $787 $770 1BR Den 1.6% 873 $915 $900 2BR 38.4% 994 $999 $980 2BR Den 1.0% 1,175 $1,190 $1,165 3BR 7.6% 1,249 $1,187 $1,169 >3 BR 1.4% 1,531 $1,760 $1,745

Source: ALN Apartment Data, Inc

Characteristic of conventional apartment markets, the San Antonio apartment market is dominated by one and two bedroom units. On the contrary, student housing is generally dominated by two, three and four+ bedroom apartments.

Proposed Student Housing Development American Campus Communities Page | 9 A&M University – SA

II. Introduction

Supply Trends

Changes in supply affect the share of demand that is likely to be captured by a specific property. Therefore, construction trends, vacancy patterns and absorption trends, along with rent trends are important factors in measuring the competitive position of a potential development. According to ESRI, there are approximately 232,123 renter- occupied units in San Antonio as of 2015. This is an increase of 11.3% in renter occupied units from 2010. Renter-occupied units are projected to reach 249,278 by 2020 (a total increase of 7.4%).

Our research reveals multiple new developments under construction or planned in or near San Antonio. The following table presents future multifamily developments in San Antonio.

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II. Introduction

Table II.4 New Multifamily Construction Corpus Christi

Number Of Construction Construction Project Name Project Address City Units Product Type Prop Type Start Date Lease Date Aviator at Brooks City Base 8010 Aeromedical Rd San Antonio 280 Conversion Garden 2014/11 2016/01 (Est) Rolling Courts 519 Roosevelt Ave San Antonio 28 Townhomes Garden 2015/06 (Est) 2016/01 (Est) Twin Creeks at Alamo Ranch I Loop 1604 and Culebra Road San Antonio 300 Multi-Family Garden 2015/01 2016/01 (Est) Vantage at Alamo Ranch 8631 Alamo Pkwy San Antonio 288 Multi-Family Garden 2015/01 2016/02 (Est) Big Tex 1420 S Alamo St San Antonio 336 Conversion rden, Urban, Mixed U2014/05 2016/02 (Est) Lookout at Comanche Hill 14720 Nacogdoches Road San Antonio 150 Multi-Family Garden 2015/08 2016/02 (Est) Navona at Live Oak 13101 E Loop 1604 N San Antonio 104 Conversion Garden 2016/03 2016/03 Southtown Flats 111 Probandt St San Antonio 229 Multi-Family Mid-rise 2014/12 2016/03 (Est) Westover Hills 4626 Wiseman Blvd San Antonio 343 Mixed Use Garden 2015/03 (Est) 2016/03 (Est) Preserve at Medina River Hwy 16 Watson San Antonio 360 Mixed Use Garden 2015/04 (Est) 2016/03 (Est) Wholelife Cibolo Canyons 23909 Resort Pkwy San Antonio 156 Multi-Family Garden 2015/03 2016/03 (Est) Cellars at Pearl 312 Pearl Pkwy San Antonio 124 Mixed Use/High Rise Hi-rise 2015/02 2016/04 (Est) Abbey at Dominion Crossing 21626 Stonewall Pkwy San Antonio 325 Multi-Family Garden 2015/01 2016/05 (Est) NorTex Farms Schwab Road and Green Valley Road Schertz 200 Mixed Use Garden 2015/05 (Est) 2016/05 (Est) Agora Palms Loop 1604 & US 281 San Antonio 312 Multi-Family Garden 2015/06 2016/07 (Est) 7938 City Base Landing 7938 City Base Landing San Antonio 288 Multi-Family Garden 2015/10 2016/08 (Est) Blue Star Arts Complex Renovation 1414 S Alamo and 125 Blue Star San Antonio 25 Mixed Use Mid-rise 2015/10 (Est) 2016/08 (Est) Fairhaven Facility 8639 Fairhaven St San Antonio 245 Multi-Family Mid-rise 2015/08 (Est) 2016/08 (Est) Broadstone at the Med Center 7401 Wurzbach Rd San Antonio 284 Multi-Family Garden 2015/09 (Est) 2016/09 (Est) McCullough Lofts 402 McCullough Ave San Antonio 107 Multi-Family Mid-rise 2015/09 (Est) 2016/09 (Est) Cayetano Villas of La Vernia 400 FM 1346 La Vernia 48 Multi-Family Garden 2016/01 (Est) 2016/09 (Est) Dwyer Avenue 307 Dwyer Ave San Antonio 272 Mixed Use Garden 2015/10 (Est) 2016/10 (Est) Brooks City Li 7144 Dave Erwin Dr San Antonio 304 Multi-Family Garden 2015/10 (Est) 2016/10 (Est) Mission Road 1515 Mission Rd San Antonio 100 Multi-Family Garden 2015/10 (Est) 2016/10 (Est) Legacy Flats 1604 Shaenfield Rd San Antonio 310 Mixed Use Garden 2015/07 2016/10 (Est) Vitre 700 W Commerce St San Antonio 242 Mixed Use Mid-rise 2015/09 2016/11 (Est) Alamo Manhattan Riverwalk 111 W Jones Ave San Antonio 191 Multi-Family Mid-rise 2015/10 2016/11 (Est) Longhorn Quarry 4906 Wurzbach Pkwy San Antonio 300 Multi-Family Garden 2015/12 (Est) 2016/11 (Est) Palo Alto Somerset Rd & Hwy 16 San Antonio 322 Multi-Family Garden 2015/08 2016/11 (Est) 120 Ninth Street 120 9th St San Antonio 220 Multi-Family Mid-rise 2015/10 (Est) 2016/11 (Est) 815 Avenue B 815 Ave B San Antonio 305 Mixed Use Mid-rise 2015/10 (Est) 2016/12 (Est) Residences at La Cantera II 6107 Via La Cantera San Antonio 300 Multi-Family Garden 2015/05 2016/12 (Est) Merchant's Ice Lofts 1305 E Houston St San Antonio 262 Conversion Garden 2015/11 (Est) 2017/01 (Est) St. John's Seminary E Mitchell St and Felisa St San Antonio 250 Mixed Use Garden 2016/01 (Est) 2017/01 (Est) Vista Pointe at Wild Pine 11580 Wild Pine San Antonio 108 Multi-Family Garden 2016/02 (Est) 2017/01 (Est) Barcelona Lofts II 6201 Grissom Rd San Antonio 252 Multi-Family Garden 2015/12 (Est) 2017/01 (Est) Cliffs at Crownridge 7602 Luskey Blvd San Antonio 290 Multi-Family Garden, Mixed Use 2015/06 (Est) 2017/01 (Est) Aztec Theatre Residential Redevelopment 104 N St Mary's St San Antonio 41 Conversion Mid-rise 2016/02 (Est) 2017/02 (Est) Rim 5818 Worth Pkwy San Antonio 380 Mixed Use Mid-rise 2015/10 (Est) 2017/02 (Est) WaterWalk Sea World 8731 Texas 151 San Antonio 130 Mixed Living Garden 2016/05 (Est) 2017/02 (Est) WaterWalk Top Golf 5385 North Loop 1604 W San Antonio 130 Mixed Living Garden 2016/05 (Est) 2017/02 (Est) Residences at La Cantera III Via La Cantera San Antonio 100 Multi-Family Garden 2016/03 (Est) 2017/03 (Est) Alamo Heights Broadway & Ausin Hwy San Antonio 150 Mixed Use Mid-rise 2016/04 (Est) 2017/04 (Est) US 90 Community US 90 & TX 211 San Antonio 900 Mixed Use Garden 2016/07 (Est) 2017/05 (Est) Crockett Street Lofts 239, 241 and 243 Center St San Antonio 271 Multi-Family Mid-rise 2016/01 (Est) 2017/05 (Est) Hemisfair Project S Alamo St San Antonio 163 Mixed Affordable Garden 2016/06 (Est) 2017/06 (Est) MELA Mission Rd San Antonio 360 Multi-Family Mid-rise 2016/06 (Est) 2017/06 (Est) Wheatley Courts Redevelopment III 906 N Mittman St San Antonio 117 Multi-Family Garden 2016/06 (Est) 2017/07 (Est) A&M - SA On Campus Housing A&M - SA Campus San Antonio 94 Student Housing Mid-rise 2016/05 (Est) 2017/08 (Est) Hemisfair Redevelopment 300 E Market St San Antonio 200 Mixed Use Garden 2016/08 (Est) 2017/08 (Est) Villita Tower 112-120 Villita St San Antonio 201 High-Rise Hi-rise 2016/06 (Est) 2018/01 (Est) Lone Star Brewery Redevelopment 600 Lone Star Blvd San Antonio 200 Mixed Use Garden 2016/04 (Est) 2018/04 (Est) Frost Bank Redevelopment W Commerce San Antonio 265 Conversion Garden 2016/09 (Est) 2018/04 (Est) Friedrich Complex 1617 E Commerce San Antonio 300 Mixed Use Garden 2018/10 (Est) 2019/10 (Est)

Source: ALN San Antonio Construction Report

While there are numerous new apartment complexes planned in San Antonio, with the exception of the Subject Property, none of the planned developments appear to be purposed student housing. Based on conversations with market participants, due to the location and amenity offerings of these developments, they will likely not have a high concentration of A&M - SA students and will therefore not be direct competitors of the Subject Property.

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II. Introduction

Demographic Overview

Using the geographic information tools available with ESRI’s Business Analyst Online, A&M analyzed demographics using the “Demographic and Income Profile” report. A&M analyzed the one, three and five mile rings around the Subject and compared these areas to San Antonio, Bexar County, and the State of Texas as a whole. This data is driven by the U. S. Census Bureau’s “2010 Census of Population and Housing” with ESRI statistical forecasts for 2015 and 2020.

Table II.5 presents the demographic analysis for the immediate area surrounding the Subject site as well as San Antonio, Bexar County and the State of Texas.

Table II.5 Demographic Comparison 1, 3, and 5 Mile Rings, San Antonio, Bexar County, State of Texas

Bexar San Antonio 2015 Estimates 1 Mile 3 Miles 5 Miles County Texas Population Growth 2015 Population 518 43,609 110,693 1,380,401 1,840,280 26,178,866 2020 Population 579 46,672 116,708 1,454,724 1,989,338 28,178,989 2015-2020 Growth 11.8% 7.0% 5.4% 5.4% 8.1% 7.6% Household Growth 2015 Population 125 12,889 34,300 502,859 656,792 9,283,206 2020 Population 140 13,833 36,333 532,587 712,240 10,003,062 2015-2020 Growth 12.0% 7.3% 5.9% 5.9% 8.4% 7.8% Demographics Average Household Size 3.83 3.35 3.20 2.69 2.74 2.76 Owner Occupied Housing 52.6% 66.7% 59.7% 53.8% 58.5% 63.0% Renter Occupied Housing 47.4% 33.3% 40.3% 46.2% 41.5% 37.0% Per Capita Income $14,691 $13,373 $12,603 $23,717 $25,582 $25,680 Median Household Income $41,233 $36,215 $31,685 $44,671 $50,719 $50,573 Age Cohorts 0-14 28.3% 24.2% 24.2% 21.3% 21.7% 21.6% 15-24 17.5% 16.3% 15.5% 15.3% 15.0% 13.7% 25-54 37.6% 37.8% 37.5% 40.7% 40.8% 40.0% 55 or Older 16.6% 21.6% 22.9% 22.8% 22.4% 24.6% Median Age 27.1 32.9 32.2 33.5 35.3 34.0

Source: ESRI Demographic and Income Profile

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II. Introduction

The demographics closest to the University are not reflective of typical areas that surround traditional Universities. Some key observations from Table II.5 include:  The one, three, and five mile rings have a high percentage of residents in the 25- 54 age group followed by the 0 to 14 age group. This implies that these areas are home to young families;  The majority of the households in each geographic area are owner occupied indicating that home ownership is valued. This is especially true in the within the three mile ring with approximately two-thirds living in owner-occupied households;  The median household income is lowest in the rings and gradually increases in the City, County, and State indicating that the area immediately surrounding the University is a low income area; and  The level of population and households is low in the one mile ring. This was expected as Alvarez and Marsal observed a rural setting with large amounts of vacant land surrounding the University.

Texas A&M - San Antonio

A&M – SA was established as a stand-alone university in 2009. The University is a part of the Texas A&M University system which includes a network of 11 universities, seven state agencies, two service units, and a comprehensive health science center. This system is one of the largest systems of higher education in the United States with 140,000 students serviced each year.

The University currently offers three colleges including the College of Business, College of Education & Human Development, and College of Arts & Sciences. This University currently offers 22 undergraduate programs and ten graduate degree programs.

The University will welcome its first freshmen class in fall 2016. As such, when the Subject opens in fall 2017, the school will have freshmen through graduate students in attendence.

A&M - SA Master Plan

The University has pointed plans to grow the University, with the goal of providing higher education to an underserved lower socioeconomic population group. Over the course of 20 years, the development plan follows enrollment milestones versus typical

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II. Introduction

year to year plans. The University has a specific guide for additions to the campus with the following enrollment milestones: 5,000, 10,000, 20,000, and 25,000 students. This growth will be supported with academic buildings, student housing, athletic facilities, landscaping, and green space.

Enrollment Phase 5,000: Addition of two academic buildings will be added to Main Campus in this phase.

Enrollment exceeds 10,000 students: Addition of a stand-alone library, student center, and residential facilities.

Enrollment surpasses 25,000 students: This is considered to be the “final” phase. There will be nine academic buildings and the residential area in the northeast corner of campus will be finalized. The campus will also add a separate dining hall and general use building along with Fine Arts and Administration buildings. At this point, the campus will feature full athletic facilities, including a baseball diamond and football field, and there will be numerous parking lots, and study and recreational areas.

Conclusion

A&M’s research reveals that San Antonio’s economy is steady with positive population and employment growth. This growth is spurring apartment development in the area as A&M found numerous new apartment complexes currently under construction or planned to be built in the next few years.

As planned, the Subject Property will be located on the A&M - SA campus, east of the Madla Building. The Subject Property has a planned construction completion of fall 2017 and will consist of 378 beds. The Subject will target incoming freshmen, but will be open to other student groups.

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Off- Campus Analysis

Proposed Student Housing Development American Campus Communities A&M University - SA

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III. Off-Campus Market Analysis

OBJECTIVE

The objective of the off-campus housing analysis is to gain an understanding of what type of housing is available to students off campus.

Off-Campus Housing Market Overview

There is a limited supply of housing in direct proximity to the University. Moreover, much of the multifamily housing available is low income housing or older complexes in poor condition. It is unlikely that students living in these properties will relocate to the proposed development due to budgetary constraints and/or are classified as non- traditional students (i.e. students living ith parents, students who are married, have children, own their own home, or are older).

This demographic data is confirmed by the survey which indicates that 42.9% of current students currently live at home with their parents and 31.4% own their own home. This was also validated by interviews with school officials who stated that many of the students live with their parents or relatives for various reasons. One of the main reasons is to save money; however, another reason could be attributed to the lack of housing currently available to students.

Due to the large number of non-traditional A&M – SA students, a student-oriented off- campus housing market is not available. However, with the projected growth of the school, including the introduction of its first freshman class in fall 2017, in the coming years, off campus housing may be developed near the campus.

While there are no purpose-built student housing communities available near the University; there are two apartment communities that are officially recognized by the University as viable off-campus housing options (as noted on the University website). This includes Villa Espanda Apartment Homes and Tobin Lofts at San Antonio College.

Villa Espanda

This community is a conventional multifamily complex located seven miles east of the A&M – SA campus near State Highway 281. Villa Espanda is a new community constructed in 2015. They have 240 units in one, two, and three bedroom unit

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III. Off-Campus Market Analysis

configurations. This garden-style complex is managed by Greystar and is currenty in the lease-up phase. Current occupancy is 50%.

Tobin Lofts

This community is a student housing complex located 11.5 miles from A&M – SA, north of Interstate 35, just east of San Antonio College near downtown San Antonio. Tobin Lofts is a relatively new community constructed in 2013. They have 225 units in studio, one, two, and four bedroom unit configurations. This is community is managed by Campus Advantage and mainly serves students attending San Antonio College. Tobin Lofts leases by the bed and is currently 91.6% occupied. The current rental rates for this student property are presented below.

Table III.1 Fall 2015-Spring 2016 Rental Rates Tobin Lofts

Rent per Rent per Unit Type Sq Ft Month Semester* Studio 500 $925 $4,625 1BD/1BA 648 $995 $4,975 2BD/2BA 1,050 $800 $4,000 2BD/2BA 901 $750 $3,750 4BD/4BA 1,301 $610 $3,050 4BD/4BA 1,215 $530 $2,650 4BD/4BA 1,315 $590 $2,950

*Assumes a 10 month academic year

Source: Tobin Lofts

The Subject’s proposed rents1 of $3,383 for the two bedroom double and $3,913 for the two bedroom single are below the studio, one, and largest two bedroom (1,050 square feet) units and above the four bedroom units. The rental rate for the smaller two bedroom unit (901 square feet) falls between the single and double occupany rental rates at the Subject. These two housing offerings are very different as the Subject will

1 Proposed rents are for Academic year 2017.

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III. Off-Campus Market Analysis

be traditional student housing and Tobin Lofts is apartment-style student housing. This analysis is only meant to provide a general comparison of what is available to students when considering on-campus student housing versus off-campus student housing.

Location Map III.1

Tobin Lofts

A&M SA Villa Espada

SUMMARY

The large majority of students who reside off campus live at home with their parents or own their own home. Many of these students commute more than ten miles to campus each way. There are no off-campus rental options available to A&M - SA students in proximity to the campus. However, there are two “University approved” communities where students can reside, Villa Espanda and Tobin Lofts.

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Demand Analysis

Proposed Student Housing Development American Campus Communities A&M University - SA

IV. Demand Analysis

OBJECTIVE

The objective of this analysis is to evaluate potential demand for the proposed housing development at A&M - SA.

STUDENT ENROLLMENT

Enrollment Status

Demand for student housing is derived from enrollment, as such, it is important to analyze both historical and future enrollment. The following table presents the enrollment statistics from fall 2009 through fall 2015 broken down by classification and enrollment status (full-time or part-time).

Table IV.1 Enrollment Statistics A&M - SA

Headcount Enrollment Fall Semester 2009 2010 2011 2012 2013 2014 2015 Grand Total 2,304 3,054 3,462 4,003 4,384 4,408 4,454 % change n/a 32.6% 13.4% 15.6% 9.5% 0.5% 1.0% Freshman 9 18 16 16 6 8 8 Sophomore 35 43 57 45 74 79 139 Junior 355 486 541 669 807 862 1,005 Senior 1,292 1,714 1,898 2,119 2,300 2,375 2,353 Post-Bacc 27 25 31 52 47 52 58 Master's 586 768 919 1,102 1,150 1,032 891 Full Time 1,026 1,315 1,451 1,720 1,818 1,697 1,755 Part Time 1,278 1,739 2,011 2,283 2,566 2,711 2,699

Source: A&M - SA

A&M notes the following enrollment observations:  Total enrollment at A&M - SA has grown at an average annual rate of 8.0% since 2011; however, growth in the past two years has been relatively flat averaging 0.75% annually. The flat growth can be attributed to declining graduate student growth as undergraduate growth has been positive averaging 4.9% the past two years.

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IV. Demand Analysis

 The level of juniors has increased each year showing an increase in transfer students and a growing acceptance of the institution as an emerging university.  The large number of seniors indicates there are likely a large amount of second year seniors at this University.

Population Projections

A&M has analyzed the annual change in population for the age cohorts 14 to 17 years old plus the age cohorts 18 to 24 years old for the State of Texas. This allows us to analyze the potential impact of state demographic trends on future enrollment at A&M – SA as they prepare to intake its first freshmen class.

Chart IV.2 illustrates the data provided by the Texas State Data Center and the Bureau of Census. These projections indicate that high school and college-aged population groups in Texas increased by an average of 1.7% per year from 2000 to 2005 and 1.5% per year from 2005 to 2010. For the five-year period ending 2015, growth slowed with an average of 0.4% annual rate for the high school and college-aged population. Going forward, growth is projected to be relatively flat to moderate through 2030 for these age groups.

Chart IV.2 Total population Select Age Groups State of Texas

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0 2000 2005 2010 2015 2020 2025 2030

14 to 17 years 18 to 24 years

Source: U.S. Census Bureau

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IV. Demand Analysis

Enrollment Model

Typically, enrollment models can be developed based on changes in population within a school’s primary drawing area (Texas in this case). However, the analysis is complicated by the lack of traditional students at the University (older, married, students with children, etc.) and the current lack of student housing. Additionally, the school plans to admit its first freshman class in fall 2016, which will begin to grow enrollment as it caters to an additional cohort of students. As a result, there are no meaningful correlations between population trends and historical enrollment at A&M – SA, and an enrollment model based solely off these factors would not accurately reflect future enrollment expectations for the University.

Due to this, A&M relied on enrollment projections provided by A&M – SA as a basis for future enrollment growth. They projected enrollment with the following assumptions/considerations:

1. Spring to fall five year historical average for continuing student persistence is 72%. For enrollment projection purposes, this was applied to spring 2016 to fall 2016. This percentage was increased to 76% for subsequent years due to the anticipation of more traditional freshmen attending the school starting in fall 2016. 2. Fall to spring five year historical average for continuing student persistence is 78%. This percentage was increased to 81% for the same reasons discussed in the previous assumption. 3. A residence hall will be built and ready for occupancy in fall 2017. 4. New undergraduate/graduate degree programs will be developed over next 3 to five years. These programs include: a. Water Resources (undergraduate and graduate) b. Healthcare Management (undergraduate) c. BioInformatics (undergraduate and graduate) d. Supply Chain Management (undergraduate and graduate) e. Project Management (undergraduate and graduate) f. Multidisciplinary Engineering (undergraduate) g. Criminology (graduate) h. Human Services (undergraduate and graduate) i. Hospitality Management (undergraduate)

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IV. Demand Analysis

Additionally, there is consultation with The College Board Office in Austin, who has student program demand for well over one million high school juniors and seniors. 5. Freshman enrollment is modeled to grow by 25% from fall 2016 to fall 2018 and then between 10-15% beyond. 6. Transfer student enrollment is modeled to grow by 5% annually and graduate at 15%.

Additionally the University expects the school to grow due to the following:

 Statewide and Regional Populations Growth;  Limited Capacity at Local Public Institutions of Higher Education;  State of Texas Initiatives to Increase Educational Attainment; and  Creation of Degree Programs that Align with Regional Workforce Needs (specific programs were previously noted).

The aforementioned factors will spur growth at the University in the near term future. The results of the projections are modeled in the following chart.

Chart IV.3 Historical and Projected Full-Time Enrollment A&M - SA

9,000 Projected 8,000 Historical 7,000

6,000

5,000

4,000

3,000

2,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: A&M - SA

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IV. Demand Analysis

As displayed in Chart IV.3, the rate of growth is slightly more aggressive in the projection period than the historical period. This is considered reasonable due to the implementation of the freshman classes and the construction of the Subject (as well as additional student housing anticipated, according to the University Master Plan). The enrollment projections are presented by classification in the following table.

Chart IV.4 Projected Total Enrollment A&M - SA

Fall Semester 2016 2017 2018 2019 2020 Continuing 3,209 3,813 4,367 4,914 5,443 Freshman 450 562 702 807 887 Transfer 1,100 1,155 1,212 1,272 1,335 Graduate 250 287 330 379 435 Total 5,009 5,817 6,611 7,372 8,100

Source: A&M - SA

These projections include a starting freshman class of 450 in fall 2016, with positive freshman class growth in subsequent years. This assumption is considered reasonable as the addition of new programs, sports teams, and housing will attract potential students to the University. Overall enrollment projects for the University appear to be reasonable and attainable for A&M – SA. Nonetheless, they are projections based on assumptions that have no track record as their basis, and therefore it is reasonable to expect some variation.

As a reasonableness check, A&M researched the historical enrollment growth at Texas A&M Corpus Christi (“A&M - CC”). A&M - CC started similar to A&M – SA and has since added housing, sports teams, additional academic programs, and buildings. A&M analyzed the institutional timeline and historical growth experienced at A&M - CC as a “reasonableness check” for the projected growth at A&M – SA. The following table displays the results of this analysis.

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IV. Demand Analysis

Table IV.5 Historical Timeline A&M - CC University

Additional Fall Total % On-Campus Semester Enrollment Growth Housing Institutional Events/Notes 1990 3,814 n/a 1991 3,831 0.4% 1992 4,425 15.5% University instituted its first doctoral program 1993 4,489 1.4% Name changed to Texas A&M Corpus Christi University 1994 5,152 14.8% 360 Becomes a four year institution 1995 5,545 7.6% 1996 5,671 2.3% 228 1997 6,025 6.2% Intercollegiate athletics program is revived 1998 6,335 5.1% 148 1999 6,621 4.5% 2000 6,823 3.1% 151 2001 7,369 8.0% 2002 7,607 3.2% 201 2003 7,861 3.3% 2004 8,227 4.7% 252 2005 8,364 1.7% College of Nursing Opens 2006 8,585 2.6% 2007 8,563 -0.3% 2008 9,007 5.2% 2009 9,468 5.1% 75 Mechanical engineering programs begins 2010 10,033 6.0% 75 2011 10,162 1.3% 2012 10,508 3.4% 150 2013 10,914 3.9% 150 2014 11,234 2.9% 150 2015 11,661 3.8% 482 Momentum Village Opens

Source: A&M - CC As presented, A&M – SA is projected to grow at a pace consistent with how A&M – CC did over the past 20 years. This includes becoming a four year institution (1994), the introduction of intercollegiate athletics (1997), the addition of new programs (including nursing and engineering), and the construction of housing intermittently throughout the growth process. Overall, since A&M – CC became a four year institution; total enrollment growth has averaged 4.5% annually. This growth has spawned the need for additional housing as it transformed into a more traditional University.

The first five years after A&M – CC became a four year institution; annual growth averaged 7.2%, with the strongest growth in the first two years. In comparison, A&M – SA projects that total enrollment will grow 12.7% annually over the next five years (fall 2016 – when it admits the first freshman class, through fall 2020). The projections for A&M – SA appear to be aggressive compared to A&M – CC; however, they do not appear to be unattainable or unreasonable. As previously presented, the implementation of new degree programs is heighted over the next three years, which

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IV. Demand Analysis

support the higher growth projections (five to ten new undergraduate/graduate degree programs). Additionally, it is not uncommon for the number of transfer students to increase as universities transition into traditional four-year institutions (which is modeled in the University’s enrollment projection analysis).

Potential Demand for Student Housing

In order to analyze potential demand for the Subject, A&M utilized the results of the student survey1 and the enrollment projects previously discussed. The following table displays the results of this analysis.

Table IV.6 Potential Demand of Student Housing Depth of Demand Analysis

PRIMARY SECONDARY Fall 2017 Entering Fall 2016 Entering Freshman Freshman TOTAL Projected Entering Freshman 562 450 1,012 Less: Students not require to live on-campus due to housing policy -434 -347 -781 Students Required to Live On Campus 128 103 231 Add: Students not required to live on campus, but interested in living on 241 193 434 campus at the Subject Property Projected number of students to live on-campus (Potential Demand) 369 296 665 Students who ultimately did not select a unit -49 -40 -89 Maximum Potential Demand 320 256 576

Source: A&M

The specific steps utilized in this analysis are as follows:

 As discussed later in this section, the University’s housing policy indicates that students must have 30 or more completed semester hours to be exempt from on- campus housing. This generally includes entering freshman and second year freshman students (students who have not completed 30 credit hours). As a result, when the Subject is complete in fall 2017, two different cohorts of students will be required to live on campus: fall 2017 entering freshmen and second year freshman who have not completed 30 credit hours. Discussions with the University and the developer indicate that priority will be given to fall 2017

1 For this analysis, A&M utilized survey data from prospective students who will attend A&M – SA. Complete survey data can be referenced in Attachment A.

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IV. Demand Analysis

entering freshmen. As such, for the purposes of this analysis, potential demand was split into two categories, primary and secondary potential demand.  The estimated entering freshmen figures for each cohort was adjusted to exclude students who will not be required to live on campus due to the University’s housing policy (due to their permanent residence location - students who indicated they live within 50 driving miles of the University2). It should be noted that some of the fall 2016 entering freshman will have 30 completed hours and therefore, the secondary demand is likely less than the indicated figure.  These enrollment figures were then readjusted to include students who are not required to live on campus, but are interested in living on campus at the Subject Property as indicated by their survey responses (55.6% of students not required to live on campus indicated they would be interested in living at the Subject property).

 This resulted in potential demand figures of 369 fall 2017 entering freshman and 296 fall 2016 entering freshmen for a total of 665 students. These demand figures do not account for pricing. As presented in the following pricing analysis, when pricing for the Subject is taken into account, 13.3% of the students ultimately did not select a unit (selected “none of the above”) when presented with the Subject’s unit types at the proforma rental rates (Scenario 2). The large majority of these students indicated the “pricing was too high” as the reason for not selecting a unit. As such, it is reasonable to assume that these students will ultimately choose not to live in the Subject Property or ultimately select a different school to attend.

Removing the 13.3% who did not select a unit type at the proforma rental rates resulted in maximum potential demand of 320 fall 2017 entering freshmen (primary demand) and 256 fall 2016 entering freshman (secondary demand) for a total maximum potential demand of 576 beds.

It is also important to note that while many of the students who are not required to live on campus indicated they had some interest in new student housing, it in no way

2 The survey asked respondents if they lived within a driving distance of 50-miles. Note that since the survey was performed, the school’s housing policy was adjusted to exempt students within a 40 mile radius.

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IV. Demand Analysis

guarantees that they will in fact elect to reside on campus. Considering this, the potential demand analysis should be viewed as the maximum potential demand that could be achieved with the understanding that the actual demand may likely be something less.

Pricing

While the above analysis indicates the maximum potential demand, it is important to consider the pricing of the proposed housing. Simply put, while some students desire to live in on-campus housing, they may not be able to afford to do so. For this analysis, A&M observed the response to the Subject Property (as described in the survey)3. This provided insight on student preferences for floor plans and pricing sensitives. The following table presents preferences related to the proposed development at various pricing scenarios. In each scenario, the respondents were asked to select their preferred unit type at the various pricing structures. The respondents were asked to assume that the rent will include electric, water and sewer, trash, high-speed internet, and furniture.

Note: The rental rates and square footage of the tested units was based on information provided by ACC. In Scenario 1, the rental rates tested are $200 below current proforma rents. In Scenario 2, the rental rates reflect current proforma rates. In the final scenario, rental rates were reduced by $200 from the rates tested in Scenario 1. Note that rental rates were tested by-the-bed per semester.

TABLE IV.7 Rent Scenarios - Prospective students Who Will Attend A&M - SA A&M - SA

Scenario 1 Scenario 2 Scenario 3 Proforma Rent1 (High +$200) (Low -$200) Unit Type Rent per Semester Percent Rent per Semester Percent Rent per Semester Percent 2 bedroom/1 bath Double $3,183 40.0% $3,383 46.7% $2,983 60.0% 2 bedroom/1 bath Single $3,713 46.7% $3,913 40.0% $3,513 33.3% None of the above N/A 13.3% N/A 13.3% N/A 6.7% Total 100.0% 100.0% 100.0%

Source: A&M Survey (04/16)

3 For this analysis A&M utilized the responses from the “target market” (i.e. – the students in the Potential Demand figure as displayed in Table IV.6)

Proposed On-Campus Residence Hall American Campus Communities Page | 26 A&M University - SA

IV. Demand Analysis

Overall, the pricing scenarios indicate slight pricing sensitivity within the responses. This is evident in the favorable selections of the double units in Scenario 2 (up from 40.0% in Scenario 1 – proforma rental rates). However, the overall pricing sensitivity appears not to be a major factor as “none of the above” responses in all three scenarios are within a tight range (with scenarios 1 and 2 being equal) indicating that students who were interested in the Subject development selected a unit regardless of the price.

Additionally, A&M compared the proposed housing rates to peer institutions in order to gain an understanding of the pricing position. These peer institutions were selected with the assistance of A&M – SA officials. The results are presented below.

TABLE IV.8 Comparable Residence Halls Comparable Institutions

Subject U. of Illinois Unit Type A&M - SA A&M - CC U. of Houston Springfield UTSA 2 bedroom/1 bath Double $3,383 $2,906 $2,793 - $3,087 $3,793 n/a 2 bedroom/1 bath Single $3,913 $3,427 $3,698 - $4,016 $5,125 $3,338

Tuition and Fees (AY 2016) $6,356 $7,656 $5,978 $8,509 $9,677

Note: Rental rates for the comparable institutions were provided in fall 2016 figures. These rental rates were grown 2.5% to reflect fall 2017 figures. 2.5% was derived by observing the typical rate changes from A&M - CC and UTSA (between 2% and 3%).

Source: A&M and ACC

As presented, the proposed rental rates are within the range of the peer institutions for both the double and single occupancy unit. Additionally, the tuition at A&M – SA is on the lower end of the range when compared to these institutions; as such, when comparing overall cost (tuition, fees, and housing) A&M – SA appears to be an affordable option to prospective students.

Lease-Up Analysis

Typically, the leasing season for student housing is short as students move-in during the fall or spring with little activity in between. However, when first-generation housing is offered, it can take longer to reach a stabilized occupancy. This is typically created by a lack of understanding of how the housing works and how the higher quoted rents are required due to the inclusion of utilities and furniture. When the university is involved in

Proposed On-Campus Residence Hall American Campus Communities Page | 27 A&M University - SA

IV. Demand Analysis

the project leasing, it is typically easier. However, an aggressive marketing approach aimed at educating the students is recommended well before the property is opened for occupancy. Even with this, it is possible initial leasing will be challenging until the students can physically see what they will be leasing. Much of this risk is mitigated in this instance due to the housing requirement to be implemented once the Subject Property is built. According to the University, the housing requirement will be as follows:

Students attending Texas A&M University-San Antonio who have earned fewer than 30 semester hours are required to reside in student housing if facilities are available. A student with fewer than 30 earned semester hours who wishes to reside off-campus may receive an off-campus permit provided one of the following criteria is met:

1. The student must be 21 years of age on or before the 12th class day. Proof of age will be required. 2. The student has earned 30 or more semester hours. An official transcript must be submitted to the residence life department for verification of hours. 3. The student plans to commute from permanent address of parents(s) or relative. A relative is an immediate family member (mother/father, brother/sister, aunt/uncle, or grandparent) relations will need to be proven upon request. The family member must live within 40 driving/highway miles. 4. The student or parent owns property in Bexar County. The student may be given a permit to live at that address. Property is defined as a residence that is attached to real property. Proof of property and residence will be required. 5. The student has custody of a child and can provide the Residence Life Department with an original birth certificate of the child or custody documentation. 6. The student is married prior to the 12th class day. Proof of marriage will be required. 7. The student has a valid medical disability which cannot be accommodated on campus. Physicians’ documentation will be required. The Director of Resident Life will make the final decision regarding this situation.

With the expectation of adding freshmen in fall 2016 and 2017, the ability to realize a stabilized occupancy within the first year is possible. While there will inevitably be students who will be exempt from housing due to one or more of the aforementioned

Proposed On-Campus Residence Hall American Campus Communities Page | 28 A&M University - SA

IV. Demand Analysis

housing policies, the University is willing to take additional steps to ensure the Subject is stabilized. In the case that the Subject is not fully occupied, it will be opened to other student cohorts, including upperclassmen and graduate students. The University also indicated that they would open leasing to nearby community colleges if absolutely necessary. While the last two strategies may not be required, they provide additional leasing assurance.

Conclusion

The demand analysis indicates maximum potential demand figures of 320 beds from fall 2017 entering freshman (primary potential demand) and 256 beds from fall 2016 entering freshmen (secondary potential demand) for a total of 576 students. Based on these figures there appears to be enough potential demand to fill the Subject Property. While there are risks associated with first-generation university housing; much of this risk is mitigated by the housing policy implemented by A&M – SA.

Proposed On-Campus Residence Hall American Campus Communities Page | 29 A&M University - SA

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Attachment A – Prospective Student Survey & Current Student Survey

Proposed Student Housing Development American Campus Communities A&M University - SA

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RENTAL HOUSING SURVEY Texas A&M University – San Antonio – Prospective Students

Alvarez & Marsal is conducting research to determine what type of rental housing is needed to meet the needs of the growing Texas A&M University – San Antonio student population. We need your help! This is a comprehensive questionnaire and is of great importance in planning and designing the next generation of rental housing. Please be assured that your responses will remain anonymous.

To show our appreciation for you taking the time to complete the survey, upon completion you will be entered into a drawing TO WIN A MACBOOK PRO! Be sure to fill out your contact information at the end of the completed survey to ensure you are entered into the drawing. The on-line survey will not be active for long, so logon to the website to give us your feedback as soon as possible.

Note: In order to be eligible for the reward, you must complete the survey in its entirety and be sure to enter your contact information in the section provided for this purpose. Note that your contact information will ONLY be used for reward distribution. Please complete only one response per PERSON as multiple responses from the same individual will be discarded. If you have questions regarding this survey, please contact: [email protected].

Part I. Please tell us about yourself.

1. Are you male or female?  Female  Male

2. What is your age?  Under 17  17  18  19  20  21  Over 21

3. Which of the following best describes you?  High school student – will definitely attend A&M - SA after graduation  High school student – considering attending A&M - SA  High school student – will not attend A&M - SA

4. What school do you currently attend? ______

5. What is your class standing for the 2015-2016 school year?  Sophomore  Junior  Senior  Other ______

6. If given the option, do you prefer to live on campus or off campus while attending a college/university?  Prefer on campus  Prefer off campus

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7. If identical student housing properties were located on campus and off campus, how much more, per month (if any) would you be willing to pay to live on campus?

Please answer the following series of questions assuming you choose to live on or near campus while attending a college or university.

8. How much extra per month would you pay for a 10 month lease versus a 12 month lease?

9. What will be the primary source of funds you use to pay your rent? (Select all that apply)  Money from parents/parental guardian  I work and pay for rent out of my earnings  Financial aid  Academic scholarship  Other______

10. Will you: (Select all that apply)  receive need-based financial aid or grants  receive academic scholarships  pay for my education with support from my parents  pay for my education with earnings from a full-time job

11. Will you have a car at school?  Yes  No If no, go to NEXT, “Yes” go to #13 Is your perm…?”

12. Why won’t you have a vehicle?  Not enough parking  Do not own one  Do not need one  Cannot afford one  Security of car  Prefer to use public transportation  Too expensive to park  Parents said “no”

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13. Is your permanent residence within 50 driving miles of the A&M - SA? Please use the map below for reference.  Yes  No

14. If newly constructed student housing was available on A&M - SA’s campus, would you consider living on campus?  Yes, I would consider moving on campus at A&M - SA  No, I would not consider moving on campus at A&M - SA

15. When living in on-campus housing, how frequently would you use the following common area features/common areas:

Never Occasionally Often Very Often Fitness center:     Community game room     Video gaming lounge     Study rooms     Student lounge     Bike Rack     Outdoor patio     Computer center located in     residence hall

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16. Please give us your opinion on how important the following is to you:

Important Neutral Not Important

Onsite parking    Proximity to classes    All bills paid    Mini Refrigerator included    Microwave included    Ability to have a private bedroom    Ability to have a private bathroom    Fully furnished unit   

17. Without considering of price, which student housing unit style do you prefer?  Dorm-style housing (Unit includes bedrooms, in-unit bathroom, and no kitchen)  Suite-style housing (Unit includes bedrooms, in-unit bathroom/s, kitchenette and small living room)  Apartment-style housing (Unit includes bedrooms, in-unit bathroom/s, full kitchen and living room)

4 | Page Thank you for completing our survey. We appreciate your time and value your responses. RENTAL HOUSING SURVEY Texas A&M University – San Antonio – Prospective Students

Part II. Please tell us about your future housing preferences.

In this portion of the survey, we would like to measure your interest in a new on-campus student housing community to be located on A&M - SA’s campus. It will be located east of the Madla building, just east of the existing parking lot. The community will feature approximately 350 beds and has a projected opening of fall 2017.

Community Features Will Include:  Fully Furnished  All bills paid  Fitness center  Community center  Patio/outdoor lounging area  Student lounge  Study rooms  ADA compliant  Controlled access throughout buildings and amenity areas (keycard access)

Unit Features Will Include:  Private bedrooms in select units  Fully furnished  All utilities included (inclusive of cable & high speed internet)  Individual leases

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18. Would you consider living in the development described above?

 Yes  No

The following pictures represent proposed floor plans.

19. Without considering price, which type of unit would you prefer?  Unit 1 – 2 bedroom/1 bath with shared bedrooms  Unit 2 – 2 bedroom/1 bath with private bedrooms  None of the above

If “None of the above” go to NEXT, if not go to #21 Scenario questions

20. You selected “None of the above,” why?  Don’t like any of the unit types  Other______

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The following questions present three different pricing scenarios for the previously described student housing development. Given the pricing, which unit type would you select in each of the following scenarios? Please keep in mind that the rents are for a Project opening in fall 2017, with academic year (10 month) lease terms. Note that the rents are listed per bed per semester.

21. Which type of floor plan would you prefer to rent in the newly designed student housing community? Scenario 1:

 Unit 1 – 2 bedroom/1 bath with shared bedrooms for $3,183 per bed per semester  Unit 2 – 2 bedroom/1 bath with private bedrooms for $3,713 per bed per semester  None of the above If “None of the above” go to NEXT, all others go to #23

22. You selected “none of the above,” please tell us why?  Prices are too high  Don’t like any of the unit types  Other______

23. Scenario 2:  Unit 1 – 2 bedroom/1 bath with shared bedrooms for $3,383 per bed per semester  Unit 2 – 2 bedroom/1 bath with private bedrooms for $3,913 per bed per semester  None of the above If “None of the above” go to NEXT, all others go to #25

24. You selected “none of the above,” please tell us why?  Prices are too high  Don’t like any of the unit types  Other______

25. Scenario 3  Unit 1 – 2 bedroom/1 bath with shared bedrooms for $2,983 per bed per semester  Unit 2 – 2 bedroom/1 bath with private bedrooms for $3,513 per bed per semester  None of the above If “None of the above” go to NEXT, all others go to #27

26. You selected “none of the above,” please tell us why?  Prices are too high  Don’t like any of the unit types  Other______

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Please respond to the following questions on a per person basis (i.e. what would YOU pay).

27. Please tell us how much the following amenities are worth to you on a monthly basis.

Clubhouse Amenities $0 $5 $10 $15 $20 $25 $30 $40 $50 Game room with billiards/foosball          Computer Lab          Laundry room          Resident lounge with flat panel televisions          Gaming center with Xbox and Playstation          Fitness Center          Controlled access buildings          Building security cameras          Wifi in common areas          Individually keyed bedrooms          Individual lease (not responsible for          roommates rent) Bike storage          Community kitchen         

To enter your name into the drawing, please fill out the following information. Please note, this information will be kept strictly confidential and will only be used for this purpose.

Name:______

Mailing Address:______

Email Address:______

Would you be willing to answer any follow-up questions we might have via email?  Yes, please contact me via email with any follow-up questions  No, I do not wish to answer any follow-up questions

8 | Page Thank you for completing our survey. We appreciate your time and value your responses. Frequency Table Total Population Future A&M-SA Students

Are you male or female? Frequency Percent Frequency Percent

Female 185 72.8 84 80.0

Male 69 27.2 21 20.0

Total 254 100.0 105 100.0

What is your age? Frequency Percent Frequency Percent

Under 17 2 0.8

17 88 34.6 45 42.9

18 105 41.3 55 52.4

19 17 6.7 3 2.9

20 7 2.8

21 9 3.5 1 1.0

Over 21 26 10.2 1 1.0

Total 254 100.0 105 100.0

Which of the following best describes you? Frequency Percent Frequency Percent

High school student - will not attend A&M - SA 4 1.6

High school student – considering attending A&M - SA 100 39.4

High school student – will definitely attend A&M - SA after graduation 105 41.3 105 100.0

Transfer Student 45 17.7

Total 254 100.0 105 100.0

What school do you currently attend? Frequency Percent Frequency Percent

Akins Hs 1 0.4

Alamo colleges 1 0.4

Alamo Colleges 1 0.4

ALAMO community college 1 0.4

Alamo Heights 1 0.4

Alief taylor high school 1 0.4

Antonian College Preparartory 1 0.4

Armorel High School 1 0.4 1 1.0

Athlos leadership academy 1 0.4

Bandera High School 1 0.4 1 1.0

Benton High School 1 0.4

Blaine High School 1 0.4 1 1.0

Blinn College 1 0.4

Boerne High School 1 0.4

Brackenridge High School 1 0.4

Brennan 1 0.4 1 1.0

Brownsville Early College High School / UTRGV 1 0.4

Bryan Collegiate High School 1 0.4

Business careers high school 2 0.8 2 1.9

Business Education Technology academy 1 0.4

Carl Wunshce Sr. High School 1 0.4

Carthage High School 1 0.4 1 1.0

Castle Hills First Baptist School 1 0.4 1 1.0

Challenge Early College High School 1 0.4 1 1.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Chugiak High school 1 0.4 1 1.0

Churchill highschool 1 0.4 1 1.0

Clark 1 0.4 1 1.0

Connell 1 0.4

Cotulla High School 1 0.4 1 1.0

Crowley High school 1 0.4

Culver City Highschool 1 0.4 1 1.0

Dallas Can Academy 1 0.4

DATA at Roosevelt High School 1 0.4

Devine High School 1 0.4 1 1.0

Dillard McCollum 1 0.4 1 1.0

Earl Warren High School 4 1.6 3 2.9

East Central High School 4 1.6 3 2.9

East Early College High School 4 1.6 4 3.8

Economedes high school 1 0.4

Edison High School 2 0.8 1 1.0

El Dorado High School 2 0.8 1 1.0

Excelsior College 1 0.4

Fabens High School 1 0.4

Falfurrias high school 1 0.4 1 1.0

Floresville High School 1 0.4 1 1.0

Fort Stockton high school 1 0.4 1 1.0

G.W. Brackenridge high school 1 0.4 1 1.0

George Bush High School 1 0.4

Gladys Porter High School 1 0.4

Harlandale High School 6 2.4 4 3.8

Harlingen High School 2 0.8 1 1.0

Harmony school of Nature 1 0.4

Hays High School 1 0.4

Health Careers High School 3 1.2 2 1.9

HFA 1 0.4

Highlands High School 2 0.8

Hitchcock High School 1 0.4 1 1.0

Holmes 1 0.4

Holmes High School 1 0.4

Holy Cross of San Antonio 1 0.4 1 1.0

Homer Hanna High School 1 0.4 1 1.0

Homeschooled 1 0.4

Houston Academy for International Studies Early College High School 1 0.4

Instituto Cesare 1 0.4 1 1.0

International Community School of Addis Ababa 1 0.4

James Madison High School 3 1.2 1 1.0

James Pace Early College High School 1 0.4

Jeff Davis 1 0.4

John F. Kennedy 2 0.8 2 1.9

John Jay High School 1 0.4

John Paul Stevens HS 1 0.4 1 1.0

Johnny Economedes High School 1 0.4

Johnson High School 2 0.8

Jourdanton H S 2 0.8 1 1.0

Judson Early College Academy 5 2.0 3 2.9

Judson High School 2 0.8

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Jw Nixon high school 1 0.4 1 1.0

Kerr Highschool 1 0.4 1 1.0

KIPP Generations Collegiate 1 0.4

KIPP University Prep. 3 1.2 2 1.9

Klein High 1 0.4

La Vernia Highschool 1 0.4

Lanier HS 2 0.8

Lee High School 1 0.4 1 1.0

Lindbergh High School 1 0.4 1 1.0

Lone Star College 1 0.4

Los Fresnos High School 2 0.8

Luther Burbank High School 3 1.2 2 1.9

Lytle High School 3 1.2 2 1.9

MacArthur High School 2 0.8 1 1.0

Madison High School 1 0.4 1 1.0

Marfa high school 1 0.4 1 1.0

McAllen High School 1 0.4 1 1.0

McCollum High School 6 2.4 4 3.8

McDowell High School 1 0.4

Medina valley hs 2 0.8 2 1.9

Montwood High School 1 0.4

Morton Ranch high school 1 0.4

N/A 3 1.2 1 1.0

Nimitz high school 1 0.4 1 1.0

None 2 0.8

North Dallas high school 1 0.4 1 1.0

Northwest vista 1 0.4

Northwest Vista 1 0.4

northwest vista college 1 0.4

Northwest Vista College 5 2.0

Not a high school student. 1 0.4

odessa college 1 0.4

Oliver Wendell Holmes high school 2 0.8 1 1.0

Palo Alto College 9 3.5

Pleasanton High School 3 1.2 1 1.0

Polytechnic 1 0.4

Poteet High School 4 1.6

Reagan High School 1 0.4

Rivera High Schoool 1 0.4

Riverside 1 0.4

Robert E. Lee High School 1 0.4

Robert Vela High School 1 0.4 1 1.0

SAC 3 1.2

Samuel Clemens high school 1 0.4

San Antonio can highschool 1 0.4

San Antonio College 4 1.6

San Marcos High School 4 1.6 1 1.0

Sandra Day O'connor High School 1 0.4

Santa Maria High School 1 0.4 1 1.0

Seguin High School 1 0.4 1 1.0

sharyland high school 1 0.4

Sharyland High School 1 0.4

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Sidney Lanier high school 1 0.4

Skyline highschool 2 0.8 1 1.0

Somerset High School 3 1.2 2 1.9

South San Antonio High School 7 2.8 5 4.8

South Texas College 1 0.4

South West High School 1 0.4 1 1.0

South west texas junior college 1 0.4

Southside Highschool 4 1.6 2 1.9

Southwest High School 6 2.4 4 3.8

St Anthony Catholic High School 2 0.8 2 1.9

St. Philip's College 1 0.4

St.Philip's College 1 0.4

Steele H S 1 0.4

Stevens HS 1 0.4 1 1.0

Sunset High School 1 0.4

T.S. Stem echs 1 0.4

Taft high school 1 0.4 1 1.0

Texas Online Preparatory School 1 0.4

Thomas Jefferson High School 3 1.2 3 2.9

Travis Early College High School 3 1.2 2 1.9

Veterans Memorial HS 1 0.4

W.B Ray High School 1 0.4 1 1.0

William Howard Taft Highschool 1 0.4

William J. Brennan 1 0.4

Wilner-hutchins High 1 0.4

Winston churchill high School 1 0.4

Woodrow Wilson high school 1 0.4

WW-P High School South 1 0.4

Yes Prep Gulfton 1 0.4

Total 254 100.0 105 100.0

What is your class standing for the 2015-2016 school year? Frequency Percent Frequency Percent

Freshman 2.8

Sophomore 27 10.6 1 1.0

Junior 9 3.5

Senior 201 79.1 104 99.0

Other 15 5.9

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Other:What is your class standing for the 2015-2016 school year? Frequency Percent Frequency Percent

College 1 6.7

College freshman 1 6.7

COLLEGE GRADUATE 1 6.7

College Sophmore 3 20.0

College transfer with associates 1 6.7

FINISHING AT PALO ALTO 1 6.7

Freshman 2 13.3

Graduate 1 6.7

Graduate student 1 6.7

High school graduate. 1 6.7 I am a Transfer student with 60 hrs from ACCD / Graduated high school in 1 6.7 2010 None 1 6.7

Total 15 100.0

If given the option, do you prefer to live on campus or off campus while attending a college/university? Frequency Percent Frequency Percent

Prefer off campus 70 27.6 26 24.8

Prefer on campus 184 72.4 79 75.2

Total 254 100.0 105 100.0

If identical student housing properties were located on campus and off campus, how much more, per month (if any) would you be willing to pay to live on campus?

Frequency Percent Frequency Percent

I see no added value to living on campus 61 24.0 23 21.9

50 46 18.1 22 21.0

100 35 13.8 13 12.4

150 28 11.0 10 9.5

200 21 8.3 4 3.8

250 14 5.5 9 8.6

300 23 9.1 11 10.5

350 7 2.8 3 2.9

400 7 2.8 2 1.9

450 1 0.4 1 1.0

500 11 4.3 7 6.7

Total 254 100.0 105 100.0

How much extra per month would you pay for a 10 month lease versus a 12 month lease? Frequency Percent Frequency Percent

$0 - I would not pay extra 103 40.6 31 29.5

25 41 16.1 24 22.9

50 42 16.5 21 20.0

75 16 6.3 6 5.7

100 27 10.6 13 12.4

125 5 2.0 2 1.9

150 5 2.0 4 3.8

175 4 1.6 1 1.0

9 200 11 4.3 3 2.9

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

What will be the primary source of funds you use to pay your rent? (Select all that apply) Frequency Percent Frequency Percent

Money from parents/parental guardian 108 42.5 49 46.7

I work and pay for rent out of my earnings 183 72.0 78 74.3

Financial aid 163 64.2 63 60.0

Academic scholarship 85 33.5 29 27.6

Other (required) 8 3.1 3 2.9

Other:What will be the primary source of funds you use to pay your rent? (Select all that apply) Frequency Percent Frequency Percent

529 account 1 12.5 Any other way needed just to pay what I have to pay, borrow from friends if 1 12.5 needed Gi bill 1 12.5 1 33.3

Grants 1 12.5 1 33.3

I currently receive SSDI 1 12.5

military rotc program 1 12.5

Social security 1 12.5

YVA 1 12.5 1 33.3

Total 8 100.0 3 100.0

Will you: (Select all that apply) Frequency Percent Frequency Percent

receive need-based financial aid or grants 202 79.5 83 79.0

receive academic scholarships 104 40.9 37 35.2

pay for my education with support from my parents 120 47.2 52 49.5

pay for my education with earnings from a full-time job 128 50.4 58 55.2

Will you have a car at school? Frequency Percent Frequency Percent

Yes 210 82.7 87 82.9

No 44 17.3 18 17.1

Total 254 100.0 105 100.0

Why won't you have a vehicle? Frequency Percent Frequency Percent

Cannot afford one 19 43.2 8 44.4

Do not need one 1 2.3

Do not own one 18 40.9 8 44.4

Parents said "no" 2 4.5 2 11.1

Prefer to use public transportation 1 2.3

Too expensive to park 3 6.8

Total 44 100.0 18 100.0

Is your permanent residence within 50 driving miles of the A&M - SA?Â Please use the map below for reference.

Frequency Percent Frequency Percent

Yes 185 72.8 81 77.1

No 69 27.2 24 22.9

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

If newly constructed student housing was available on A&M - SAâ€™s campus, would you consider living on campus?

Frequency Percent Frequency Percent

Yes 222 87.4 100 95.2

No 32 12.6 5 4.8

Total 254 100.0 105 100.0

Fitness center::When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 103 40.6 55 52.4

Often 85 33.5 29 27.6

Occasionally 63 24.8 20 19.0

Never 3 1.2 1 1.0

Total 254 100.0 105 100.0

Community game room:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 35 13.8 17 16.2

Often 68 26.8 33 31.4

Occasionally 125 49.2 45 42.9

Never 26 10.2 10 9.5

Total 254 100.0 105 100.0

Video gaming lounge:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 32 12.6 13 12.4

Often 44 17.3 16 15.2

Occasionally 121 47.6 54 51.4

Never 57 22.4 22 21.0

Total 254 100.0 105 100.0

Study rooms:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 131 51.6 56 53.3

Often 97 38.2 39 37.1

Occasionally 25 9.8 9 8.6

Never 1 .4 1 1.0

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Student lounge:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 94 37.0 41 39.0

Often 106 41.7 41 39.0

Occasionally 50 19.7 22 21.0

Never 4 1.6 1 1.0

Total 254 100.0 105 100.0

Bike Rack:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 24 9.4 10 9.5

Often 46 18.1 19 18.1

Occasionally 76 29.9 38 36.2

Never 108 42.5 38 36.2

Total 254 100.0 105 100.0

Outdoor patio:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 66 26.0 35 33.3

Often 93 36.6 45 42.9

Occasionally 90 35.4 23 21.9

Never 5 2.0 2 1.9

Total 254 100.0 105 100.0

Computer center located in residence hall:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent Frequency Percent

Very Often 110 43.3 47 44.8

Often 94 37.0 42 40.0

Occasionally 42 16.5 13 12.4

Never 8 3.1 3 2.9

Total 254 100.0 105 100.0

Onsite parking:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 212 83.5 94 89.5

Neutral 32 12.6 9 8.6

Not Important 10 3.9 2 1.9

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Proximity to classes:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 209 82.3 84 80.0

Neutral 44 17.3 21 20.0

Not Important 1 0.4

Total 254 100.0 105 100.0

All bills paid:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 226 89.0 95 90.5

Neutral 26 10.2 10 9.5

Not Important 2 0.8

Total 254 100.0 105 100.0

Mini Refrigerator included:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 147 57.9 66 62.9

Neutral 90 35.4 36 34.3

Not Important 17 6.7 3 2.9

Total 254 100.0 105 100.0

Microwave included:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 175 68.9 72 68.6

Neutral 69 27.2 31 29.5

Not Important 10 3.9 2 1.9

Total 254 100.0 105 100.0

Ability to have a private bedroom:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 180 70.9 77 73.3

Neutral 63 24.8 26 24.8

Not Important 11 4.3 2 1.9

Total 254 100.0 105 100.0

Ability to have a private bathroom:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 186 73.2 76 72.4

Neutral 61 24.0 27 25.7

Not Important 7 2.8 2 1.9

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Fully furnished unit:Please give us your opinion on how important the following is to you: Frequency Percent Frequency Percent

Important 143 56.3 61 58.1

Neutral 102 40.2 40 38.1

Not Important 9 3.5 4 3.8

Total 254 100.0 105 100.0

Without considering price, which student housing unit style do you prefer? Frequency Percent Frequency Percent Apartment-style housing (Unit includes bedrooms, in-unit bathroom/s, full 117 46.1 52 49.5 kitchen and living room) Dorm-style housing (Unit includes bedrooms, in-unit bathroom, and no 25 9.8 10 9.5 kitchen) Suite-style housing (Unit includes bedrooms, in-unit bathroom/s, kitchenette 112 44.1 43 41.0 and small living room) Total 254 100.0 105 100.0

Would you consider living in the development described above? Frequency Percent Frequency Percent

No 14 5.5 4 3.8

Yes 240 94.5 101 96.2

Total 254 100.0 105 100.0

Without considering price, which type of unit would you prefer? Frequency Percent Frequency Percent

Unit 1 - 2 bedroom/1 bath with shared bedrooms 44 17.3 18 17.1

Unit 2 - 2 bedroom/1 bath with private bedrooms 187 73.6 79 75.2

None of the above 23 9.1 8 7.6

Total 254 100.0 105 100.0

You selected, "None of the above," why? Frequency Percent Frequency Percent

231 90.9 97 92.4

Don't like any of the unit types 13 5.1 5 4.8

Other - Write In (Required) 10 3.9 3 2.9

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Other - Write In (Required):You selected, "None of the above," why? Frequency Percent Frequency Percent

Each room should have own bathroom 1 10.0 1 33.3 First of all, student housing should be just that, for all students that are in need of their own place. It shouldn\'t be limited to just incoming freshmen. I am a transfer student, and would love to live in my very own place, where I don\'t have to share anything with anyone, especially a stranger, and have to worry about my stuff getting stolen. I would prefer my very own apartment style student housing with everything included, and the rent based off my 1 10.0 income. This is the best way for students to be successful and tobe helped out. There is not that much, or any help for student housing that charges rent based off of income, and that are not traditional dorms, where you get all the problems. TAMUSA should be different and don\'t follow what everyone else is doing. FYI, this survey needs work, because I am typing over the instruction words I am more interested in a real apartment with the privacy plus I have pets. 1 10.0

i bed with 1 bath 1 10.0

I don\'t care about student housing. 1 10.0

I want s bathroom for myself 1 10.0

I\'m married 1 10.0 Unit 2 would be perfect if there was two seperate bathrooms, a living room, 1 10.0 and a kitchen area. Want 2 bed 2 bath 1 10.0 1 33.3

Would want a private bathroom 1 10.0 1 33.3

Total 10 100.0 3 100.0

Which type of floor plan would you prefer to rent in the newly designed student housing community?Â Scenario 1: Frequency Percent Frequency Percent Unit 1 - 2 bedroom/1 bath with shared bedrooms for $3,183 per bed per semester 99 39.0 42 40.0 Unit 2 - 2 bedroom/1 bath with private bedrooms for $3,713 per bed per semester 112 44.1 45 42.9

None of the above 43 16.9 18 17.1

Total 254 100.0 105 100.0

You selected "none of the above", please tell us why? Frequency Percent Frequency Percent

Don't like any of the unit types 7 16.3 2 11.1

Prices are too high 32 74.4 14 77.8

Other - Write In (Required) 4 9.3 2 11.1

Total 43 100.0 18 100.0

Other - Write In (Required):You selected "none of the above", please tell us why? Frequency Percent Frequency Percent

I want 2 bed 2 bath 1 25.0 1 50.0

I\'m married 1 25.0

Living off campus 1 25.0 1 50.0

Prices are too high and I do not like any of the unit types. 1 25.0

Total 4 100.0 2 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Scenario 2 Frequency Percent Frequency Percent Unit 1 - 2 bedroom/1 bath with shared bedrooms for $3,383 per bed per semester 105 41.3 47 44.8 Unit 2 - 2 bedroom/1 bath with private bedrooms for $3,913 per bed per semester 96 37.8 40 38.1

None of the above 53 20.9 18 17.1

Total 254 100.0 105 100.0

You selected "none of the above", please tell us why? Frequency Percent Frequency Percent

Don't like any of the unit types 7 13.2 4 22.2

Prices are too high 43 81.1 14 77.8

Other - Write In (Required) 3 5.7

Total 53 100.0 18 100.0

Other - Write In (Required):You selected "none of the above", please tell us why? Frequency Percent Frequency Percent

I accidentally tap that option and it wouldn\'t let me go back 1 33.3

I\'m married 1 33.3

Prices are too high and I do not like any of the unit types. 1 33.3

Total 3 100.0

Scenario 3 Frequency Percent Frequency Percent Unit 1 - 2 bedroom/1 bath with shared bedrooms for $2,983 per bed per 124 48.8 56 53.3 semester Unit 2 - 2 bedroom/1 bath with private bedrooms for $3,513 per bed per 86 33.9 33 31.4 semester None of the above 44 17.3 16 15.2

Total 254 100.0 105 100.0

You selected "none of the above", please tell us why? Frequency Percent Frequency Percent

Don't like any of the unit types 9 20.5 4 25.0

Prices are too high 33 75.0 12 75.0

Other - Write In (Required) 2 4.5

Total 44 100.0 16 100.0

Other - Write In (Required):You selected "none of the above", please tell us why? Frequency Percent Frequency Percent

Prefer to live at home. 1 50.0

Prices are too high and I do not like any of the unit types. 1 50.0

Total 2 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Game room with billiards/foosball:Clubhouse Amenities Frequency Percent Frequency Percent

0 122 48.0 45 42.9

5 47 18.5 19 18.1

10 27 10.6 14 13.3

15 21 8.3 10 9.5

20 21 8.3 9 8.6

25 8 3.1 3 2.9

30 4 1.6 3 2.9

40 2 0.8 1 1.0

50 2 0.8 1 1.0

Total 254 100.0 105 100.0

Computer Lab:Clubhouse Amenities Frequency Percent Frequency Percent

0 48 18.9 16 15.2

5 47 18.5 24 22.9

10 47 18.5 19 18.1

15 22 8.7 8 7.6

20 35 13.8 15 14.3

25 9 3.5 3 2.9

30 15 5.9 8 7.6

40 10 3.9 4 3.8

50 21 8.3 8 7.6

Total 254 100.0 105 100.0

Laundry room:Clubhouse Amenities Frequency Percent Frequency Percent

0 37 14.6 14 13.3

5 33 13.0 15 14.3

10 58 22.8 20 19.0

15 34 13.4 14 13.3

20 39 15.4 17 16.2

25 12 4.7 5 4.8

30 20 7.9 10 9.5

40 12 4.7 5 4.8

50 9 3.5 5 4.8

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Resident lounge with flat panel televisions:Clubhouse Amenities Frequency Percent Frequency Percent

0 64 25.2 22 21.0

5 50 19.7 19 18.1

10 36 14.2 14 13.3

15 33 13.0 11 10.5

20 36 14.2 22 21.0

25 12 4.7 7 6.7

30 14 5.5 6 5.7

40 4 1.6 1 1.0

50 5 2.0 3 2.9

Total 254 100.0 105 100.0

Gaming center with Xbox and Playstation:Clubhouse Amenities Frequency Percent Frequency Percent

0 125 49.2 48 45.7

5 35 13.8 15 14.3

10 30 11.8 12 11.4

15 23 9.1 7 6.7

20 17 6.7 11 10.5

25 8 3.1 5 4.8

30 5 2.0 2 1.9

40 6 2.4 3 2.9

50 5 2.0 2 1.9

Total 254 100.0 105 100.0

Fitness Center:Clubhouse Amenities Frequency Percent Frequency Percent

0 34 13.4 13 12.4

5 32 12.6 10 9.5

10 49 19.3 21 20.0

15 41 16.1 12 11.4

20 41 16.1 19 18.1

25 14 5.5 7 6.7

30 17 6.7 10 9.5

40 11 4.3 7 6.7

50 15 5.9 6 5.7

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Pet grooming area:Clubhouse Amenities Frequency Percent Frequency Percent

0 124 48.8 41 39.0

5 33 13.0 17 16.2

10 40 15.7 21 20.0

15 20 7.9 10 9.5

20 11 4.3 4 3.8

25 7 2.8 4 3.8

30 10 3.9 6 5.7

40 5 2.0

50 4 1.6 2 1.9

Total 254 100.0 105 100.0

Controlled access buildings:Clubhouse Amenities Frequency Percent Frequency Percent

0 51 20.1 19 18.1

5 42 16.5 20 19.0

10 47 18.5 17 16.2

15 36 14.2 14 13.3

20 33 13.0 14 13.3

25 9 3.5 7 6.7

30 9 3.5 2 1.9

40 10 3.9 4 3.8

50 17 6.7 8 7.6

Total 254 100.0 105 100.0

Building security cameras:Clubhouse Amenities Frequency Percent Frequency Percent

0 43 16.9 18 17.1

5 32 12.6 11 10.5

10 32 12.6 12 11.4

15 29 11.4 12 11.4

20 35 13.8 14 13.3

25 15 5.9 9 8.6

30 15 5.9 7 6.7

40 21 8.3 7 6.7

50 32 12.6 15 14.3

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Wifi in common areas:Clubhouse Amenities Frequency Percent Frequency Percent

0 33 13.0 9 8.6

5 26 10.2 8 7.6

10 36 14.2 16 15.2

15 29 11.4 8 7.6

20 37 14.6 21 20.0

25 26 10.2 11 10.5

30 22 8.7 10 9.5

40 21 8.3 9 8.6

50 24 9.4 13 12.4

Total 254 100.0 105 100.0

Individually keyed bedrooms:Clubhouse Amenities Frequency Percent Frequency Percent

0 34 13.4 11 10.5

5 32 12.6 9 8.6

10 34 13.4 15 14.3

15 29 11.4 13 12.4

20 41 16.1 19 18.1

25 21 8.3 9 8.6

30 20 7.9 6 5.7

40 15 5.9 10 9.5

50 28 11.0 13 12.4

Total 254 100.0 105 100.0

Individual lease (not responsible for roommates rent):Clubhouse Amenities Frequency Percent Frequency Percent

0 40 15.7 13 12.4

5 26 10.2 8 7.6

10 35 13.8 14 13.3

15 18 7.1 7 6.7

20 29 11.4 13 12.4

25 22 8.7 7 6.7

30 18 7.1 7 6.7

40 20 7.9 12 11.4

50 46 18.1 24 22.9

Total 254 100.0 105 100.0

Prospective Student Survey Results Frequency Table Total Population Future A&M-SA Students

Bike storage:Clubhouse Amenities Frequency Percent Frequency Percent

0 155 61.0 64 61.0

5 43 16.9 17 16.2

10 30 11.8 14 13.3

15 16 6.3 6 5.7

20 5 2.0 3 2.9

25 2 0.8

40 1 0.4

50 2 0.8 1 1.0

Total 254 100.0 105 100.0

Community kitchen:Clubhouse Amenities Frequency Percent Frequency Percent

0 82 32.3 30 28.6

5 39 15.4 15 14.3

10 51 20.1 24 22.9

15 26 10.2 10 9.5

20 22 8.7 9 8.6

25 14 5.5 7 6.7

30 12 4.7 8 7.6

40 4 1.6

50 4 1.6 2 1.9

Total 254 100.0 105 100.0

Prospective Student Survey Results

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RENTAL HOUSING SURVEY Texas A&M University – San Antonio – Current Students

Part I. Please tell us about yourself.

1. Are you male or female?  Female  Male

2. What is your age?  Under 18  23 to 25  18  26 to 30  19  31 to 35  20  36 to 40  21  41 to 45  22  Over 46

3. Are you currently a student at Texas A&M University – San Antonio (“A&M - SA”)?  Yes, I currently attend A&M - SA  No, I do not currently attend A&M – SA

If “Not a current student” then go to “Thank you for attempting to take this survey, but this Survey is intended for A&M – SA students”

4. What is your class standing for the 2015-2016 school year?  Sophomore  Non-degree seeking  Junior  Other ______ Senior  Masters program

5. What is your enrollment status? Note: Full-time =12 or more hours for undergraduate students and 9 or more hours for graduate students; Part-time = less than 12 hours for undergraduate students and less than 9 hours for graduate students.  Full-time  Part-time

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6. Do you work?  Full-time (more than 32 hours per week)  Part-time (less than 32 hours per week)  Don’t work

7. If given the option, do you prefer to live on campus or off campus while attending a college/university?  Prefer on campus  Prefer off campus

8. If identical student housing properties were located on campus and off campus, how much more, per month (if any) would you be willing to pay to live on campus?

9. Currently, do you:  Live with parents or relatives  Own a single-family home  Rent an apartment off campus  Own a townhome/duplex/condominium  Rent a single family  Other______home/townhome/duplex/condominium

If “Live with parents or relatives go to #30 “Why don’t you live…?” If Rent an apartment off campus, go to #10 “What is the name of your community?” If rent a single family home/townhome/duplex/condominium or “other” go to #11 “What is the total …?” If “own a single family home” or “own a townhome/duplex/condominium” go to # 31 “If newly constructed student housing…?”

10. What is the name of your community? ______

11. What is the TOTAL monthly payment for your residence not including utilities? Please include total amount of rent per unit not just your portion.  Less than $300  $1,500 to $1,599  $300 to $399  $1,600 to $1,699  $400 to $499  $1,700 to $1,799  $500 to $599  $1,800 to $1,899  $600 to $699  $1,900 to $1,999  $700 to $799  $2,000 to $2,099  $800 to $899  $2,100 to $2,199  $900 to $999  $2,200 to $2,299  $1,000 to $1,099  $2,300 to $2,399  $1,100 to $1,199  $2,400 to $2,499  $1,200 to $1,299  $2,500 or more  I don’t know

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12. What utilities, if any, are currently included in your rent? Select all that apply.  Water/Sewer  Trash  Electric  Cable  Gas  Local phone  None

13. How much do you pay each month for each of the following utilities in addition to your monthly rent? For the TOTAL unit, not just your portion. $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 Electricity              Cable              High Speed Internet              Water/Sewer              Trash              Gas             

14. If given the option, do you prefer to have utilities (water/sewer, gas, electricity, trash) included in the rent payment?  Yes  No

15. Please tell us how many bedrooms are in your residence.  One  Two  Three  Four or more

16. Please tell us how many bathrooms are in your residence.  One  One and one-half  Two  Two and one-half  Three  Four or more

17. Which category best describes your household?  Roommates  Couple with children living at home  One-adult household living alone  One-adult household with children living at home  Married or living with significant other  Couple caring for adult parent  One-adult household caring for adult parent If Roommates go to NEXT All other go to # 24 “What is YOUR PORTION …”

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18. How many roommates do you currently live with?  1 other  4 others  2 others  5 others  3 others  6 or more others

19. In your current living situation, do you share a bedroom with a roommate?  Yes  No If No, go to #23 “Do you share a bathroom with a roommate?”

20. Why do you share a bedroom?  Lower rent  Live with boyfriend/girlfriend  Want to live with friends  Could not find housing with a private room

21. How much do you save per month by sharing a bedroom?

22. Do you share a bathroom with a roommate?  Yes  No

23. What is your ideal living situation? Drop down (Living alone, one roommate-private bedrooms, one roommate – shared bedroom, two roommates-private bedrooms, three roommates-private bedrooms)

24. What is YOUR PORTION of the rent payment per month?  Less than $200  $900 to $999  $200 to $299  $1,000 to $1,099  $300 to $399  $1,100 to $1,199  $400 to $499  $1,200 to 1,299  $500 to $599  $1,300 to 1,399  $600 to $699  $1,400 to 1,499  $700 to $799  $1,500 or more  $800 to $899

25. What is your home state?

26. How did you find your current residence?  Locator or realtor  Drive by  Newspaper  University Website  Referral from a friend  Internet  Other ______

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27. How long is the term of your current lease?  12 months  Month-to-month  9 months  One semester  6 months  Full academic year  3 months  More than 12 months  Do not have a lease

28. How much extra per month would you pay for a 10 month lease versus a 12 month lease?

29. What is the primary source of funds do you use to pay your rent? (Select all that apply)  Money from parents/parental guardian  I work and pay for rent out of my earnings  Financial aid  Academic scholarship  Other______Go to #32 “Do you:…?”

30. Why don’t you live in an apartment near campus?  I am currently a high school student  I don’t like the quality of housing near campus  My parents said “no”  I live with my parents/relatives to save money  Not enough housing near campus  Other ______

31. If newly constructed student housing was available on A&M - SA’s campus, would you consider moving on campus?  Yes, I would consider moving on campus at A&M - SA  No, I would not consider moving on campus at A&M - SA

32. Do you: (Select all that apply)  receive need-based financial aid or grants  receive academic scholarships  pay for my education with support from my parents  pay for my education with earnings from a full-time job

33. How do you get to classes/school activities?  Drive car  Walk  Do not commute, distance learning  Carpool with roommate  Ride bike  Carpool with friend  Motorcycle/Scooter  Other ______ City bus

34. Do you have a car?  Yes  No If no, go to NEXT if “yes” go to #36 “Is you permanent…?”

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35. Why don’t you have a vehicle?  Not enough parking  Cannot afford one  Do not need one  Prefer to use public transportation  Security of car  Parents said “no”  Too expensive to park

36. Is your permanent residence within 50 driving miles of the A&M - SA? Please use the map below for reference.  Yes  No

37. Approximately how far do you commute to school?  Less than 1 mile  1 mile to 5 miles  6 miles to 10 miles  11 miles to 15 miles  Over 20 miles

38. Approximately how long does it take you to commute to school?  Less than 5 minutes  6 minutes to 10 minutes  11 minutes to 20 minutes  21 minutes to 30 minutes  Over 30 minutes

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39. When living in on-campus housing, how frequently would you use the following common area features/common areas:

40. Please give us your opinion on how important the following is to you:

Important Neutral Not Important

41. Without considering price, which student housing unit style do you prefer?  Dorm-style housing (Unit includes bedrooms, in-unit bathroom, and no kitchen)  Suite-style housing (Unit includes bedrooms, in-unit bathroom/s, kitchenette and small living room)  Apartment-style housing (Unit includes bedrooms, in-unit bathroom/s, full kitchen and living room)

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Part III. Please tell us about your future housing preferences.

Unit Features Will Include:  Private bedrooms in select units  Fully furnished  All utilities included (inclusive of cable & high speed internet)  Individual leases

Please respond to the following series of questions assuming the development (described above) was available during your enrollment as an A&M student.

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42. Would you consider living in the development described above?

 Yes  No

The following pictures represent proposed floor plans.

43. Without considering price, which type of unit would you prefer?  Unit 1 – 2 bedroom/1 bath with shared bedrooms  Unit 2 – 2 bedroom/1 bath with private bedrooms  None of the above

If “None of the above” go to NEXT, if not go to # 49 Scenario Questions

44. You selected “None of the above,” why?  Don’t like any of the unit types  Other______

9 | Page Thank you for completing our survey. We appreciate your time and value your responses. RENTAL HOUSING SURVEY Texas A&M University – San Antonio – Current Students

The following questions present three different pricing scenarios for the previously described student housing development. Given the pricing, which unit type would you select in each of the following scenarios? Please keep in mind that the rents are for a Project opening in Fall 2017, with academic year (10 month) lease terms. Note that the rents are listed per bed per semester.

45. Which type of floor plan would you prefer to rent in the newly designed student housing community? Scenario 1:

46. You selected “none of the above,” please tell us why?  Prices are too high  Don’t like any of the unit types  Other______

47. Scenario 2:  Unit 1 – 2 bedroom/1 bath with shared bedrooms for $3,383 per bed per semester  Unit 2 – 2 bedroom/1 bath with private bedrooms for $3,913 per bed per semester  None of the above If “None of the above” go to NEXT, all others go to #53

48. You selected “none of the above,” please tell us why?  Prices are too high  Don’t like any of the unit types  Other______

49. Scenario 3  Unit 1 – 2 bedroom/1 bath with shared bedrooms for $2,983 per bed per semester  Unit 2 – 2 bedroom/1 bath with private bedrooms for $3,513 per bed per semester  None of the above If “None of the above” go to NEXT, all others go to #55

50. You selected “none of the above,” please tell us why?  Prices are too high  Don’t like any of the unit types  Other______

10 | Page Thank you for completing our survey. We appreciate your time and value your responses. RENTAL HOUSING SURVEY Texas A&M University – San Antonio – Current Students

Please respond to the following questions on a per person basis (i.e. what would YOU pay).

51. Please tell us how much the following amenities are worth to you on a monthly basis.

To enter your name into the drawing, please fill out the following information. Please note, this information will be kept strictly confidential and will only be used for this purpose.

Name:______

Mailing Address:______

Email Address:______

11 | Page Thank you for completing our survey. We appreciate your time and value your responses. Frequency Table Current Students

Are you male or female? Frequency Percent

Female 81 77.1

Male 24 22.9

Total 105 100.0

What is your age? Frequency Percent

20 4 3.8

21 7 6.7

22 6 5.7

23 to 25 26 24.8

26 to 30 25 23.8

31 to 35 15 14.3

36 to 40 10 9.5

41 to 45 6 5.7

Over 46 6 5.7

Total 105 100.0

Are you currently a student at Texas A&M University â€“ San Antonio (â€œA&M - SAâ€) Frequency Percent

Yes, I currently attend A&M - SA 105 100.0

What is your class standing for the 2015-2016 school year? Frequency Percent

Sophomore 1 1.0

Junior 35 33.3

Senior 45 42.9

Masters program 23 21.9

Other 1 1.0

Total 105 100.0

Other:What is your class standing for the 2015-2016 school year? Frequency Percent

faculty 1 100.0

Total 1 100.0

Current Student Survey Results What is your enrollment status? Full-time = 12 or more hours for undergradutate students and 9 or more hours for graduate students Part- time = less than 12 hours for undergraduate students and less than 9 hours for graduate students. Â

Frequency Percent

Full-time 66 62.9

Part-time 39 37.1

Total 105 100.0

Do you work? Frequency Percent

Full-time (more than 32 hours per week) 39 37.1

Part-time (less than 32 hours per week) 41 39.0

Don't work 25 23.8

Total 105 100.0

If given the option, do you prefer to live on campus or off campus while attending a college/university? Frequency Percent

Prefer off campus 63 60.0

Prefer on campus 42 40.0

Total 105 100.0

If identical student housing properties were located on campus and off campus, how much more, per month (if any) would you be willing to pay to live on campus?

Frequency Percent

I see no added value to living on campus 31 29.5

50 14 13.3

100 20 19.0

150 4 3.8

200 13 12.4

250 5 4.8

300 3 2.9

350 3 2.9

400 5 4.8

450 4 3.8

500 3 2.9

Total 105 100.0

Currently, do you: Frequency Percent

Live with parents or relatives 45 42.9

Own a single-family home 33 31.4

Rent a single-family home/townhome/duplex/condominium 11 10.5

Rent an apartment off campus 15 14.3

Other 1 1.0

Total 105 100.0

Current Student Survey Results Other:Currently, do you: Frequency Percent

living in pool house of family members home 1 100.0

Total 1 100.0

What is the name of your community? Frequency Percent

Alamo heights 1 6.7

bexar county, San Antonio TEXAS 1 6.7

Bronco Apartments 1 6.7

Brooks City Base 1 6.7

Costa Dorada 1 6.7

hill country place 1 6.7

Legacy Brooks Resort Apartments 1 6.7

Parq on the Blvd 1 6.7

Rancho Sierra Apartments 1 6.7

Republic Woodlake 1 6.7

The falls 1 6.7

The landings at brooks city base apartments 1 6.7

Verdant Westover Hills 1 6.7

Vizcaya Apartments 1 6.7

windsor house 1 6.7

Total 15 100.0

What is the TOTAL monthly payment for your residence not including utilities? Please include total amount of rent per unit not just your portion.

Frequency Percent

$300 to $399 2 7.4

$500 to $599 4 14.8

$600 to $699 3 11.1

$700 to $799 1 3.7

$800 to $899 5 18.5

$900 to $999 3 11.1

$1,000 to $1,099 2 7.4

$1,100 to $1,199 2 7.4

$1,200 to $1,299 1 3.7

$1,300 to $1,399 2 7.4

$1,500 to $1,599 1 3.7

I don't know 1 3.7

Total 27 100.0

Current Student Survey Results What utilities, if any, are currently included in your rent? (Select all that apply) Frequency Percent

Water/Sewer 15 55.6

Trash 17 63.0

Electric 9 33.3

Cable 8 29.6

Gas 6 22.2

None 7 25.9

Electricity:How much do you pay each month for each of the following utilities in addition to your monthly rent? Please indicate the TOTAL amount per unit, not just your portion. Frequency Percent

0 1 3.7

15 1 3.7

25 1 3.7

35 1 3.7

40 1 3.7

45 1 3.7

50 1 3.7

60 2 7.4

70 1 3.7

75 2 7.4

80 3 11.1

85 3 11.1

90 2 7.4

$100 + 7 25.9

Total 27 100.0

Cable:How much do you pay each month for each of the following utilities in addition to your monthly rent? Please indicate the TOTAL amount per unit, not just your portion. Frequency Percent

0 15 55.6

35 1 3.7

50 2 7.4

65 1 3.7

75 2 7.4

$100 + 6 22.2

Total 27 100.0

Current Student Survey Results High Speed Internet:How much do you pay each month for each of the following utilities in addition to your monthly rent? Please indicate the TOTAL amount per unit, not just your portion. Frequency Percent

0 5 18.5

15 1 3.7

30 1 3.7

35 1 3.7

40 1 3.7

45 1 3.7

50 7 25.9

55 1 3.7

65 3 11.1

70 1 3.7

75 1 3.7

80 1 3.7

90 1 3.7

$100 + 2 7.4

Total 27 100.0

Water/Sewer:How much do you pay each month for each of the following utilities in addition to your monthly rent? Please indicate the TOTAL amount per unit, not just your portion. Frequency Percent

0 8 29.6

5 1 3.7

10 2 7.4

15 1 3.7

20 4 14.8

30 1 3.7

35 2 7.4

40 1 3.7

45 1 3.7

50 4 14.8

55 1 3.7

75 1 3.7

Total 27 100.0

Trash:How much do you pay each month for each of the following utilities in addition to your monthly rent? Please indicate the TOTAL amount per unit, not just your portion. Frequency Percent

0 12 44.4

5 2 7.4

10 4 14.8

15 2 7.4

20 3 11.1

25 3 11.1

35 1 3.7

Total 27 100.0

Current Student Survey Results Gas:How much do you pay each month for each of the following utilities in addition to your monthly rent? Please indicate the TOTAL amount per unit, not just your portion. Frequency Percent

0 20 74.1

15 1 3.7

20 3 11.1

25 1 3.7

35 1 3.7

55 1 3.7

Total 27 100.0

If given the option, do you prefer to have utilities (water/sewer, gas, electricity, trash) included in the rent payment?

Frequency Percent

Yes 25 92.6

No 2 7.4

Total 27 100.0

Please tell us how many bedrooms are in your residence. Frequency Percent

One 10 37.0

Two 10 37.0

Three 5 18.5

Four or more 2 7.4

Total 27 100.0

Please tell us how many bathrooms are in your residence. Frequency Percent

One 15 55.6

One and one-half 1 3.7

Two 8 29.6

Two and one-half 2 7.4

Three 1 3.7

Total 27 100.0

Which category best describes your household? Frequency Percent

Couple caring for adult parent 1 3.7

Couple with children living at home 3 11.1

Married or living with significant other 13 48.1

One-adult household living alone 5 18.5

One-adult household with children living at home 2 7.4

Roommates 3 11.1

Total 27 100.0

Current Student Survey Results How many roommates do you currently live with? Frequency Percent

1 2 66.7

5 1 33.3

Total 3 100.0

In your current living situation, do you share a bedroom with a roommate? Frequency Percent

Yes 1 33.3

No 2 66.7

Total 3 100.0

Why do you share a bedroom? Frequency Percent

Live with boyfriend/girlfriend 1 100.0

Total 1 100.0

How much do you save per month by sharing a bedroom? Frequency Percent

0 1 100.0

Total 1 100.0

Do you share a bathroom with a roommate? Frequency Percent

Yes 2 66.7

No 1 33.3

Total 3 100.0

What is your ideal living situation? Frequency Percent

Living alone 1 33.3

One roommate â€“ shared bedroom 1 33.3

One roommate-private bedrooms 1 33.3

Total 3 100.0

Current Student Survey Results What is YOUR PORTION of the rent payment per month? Frequency Percent

Less than $200 4 14.8

$200 to $299 2 7.4

$300 to $399 4 14.8

$400 to $499 2 7.4

$500 to $599 4 14.8

$600 to $699 3 11.1

$700 to $799 2 7.4

$800 to $899 2 7.4

$900 to $999 2 7.4

$1,000 to $1,099 1 3.7

$1,300 to $1,399 1 3.7

Total 27 100.0

What is your home state? Frequency Percent

Nevada 1 3.7

Texas 26 96.3

Total 27 100.0

How did you find your current residence? Frequency Percent

Drive by 15 55.6

Internet 4 14.8

Locator or realtor 1 3.7

Referral from a friend 4 14.8

Other (required) 3 11.1

Total 27 100.0

Other:How did you find your current residence? Frequency Percent

Family 2 66.7

Realtor.com App 1 33.3

Total 3 100.0

How long is the term of your current lease? Frequency Percent

12 months 22 81.5

Do not have a lease 4 14.8

More than 12 months 1 3.7

Total 27 100.0

Current Student Survey Results How much extra per month would you pay for a 10 month lease versus a 12 month lease? Frequency Percent

$0 - I would not pay extra 20 74.1

50 4 14.8

100 2 7.4

150 1 3.7

Total 27 100.0

What is the primary source of funds do you use to pay your rent? (Select all that apply) Frequency Percent

Money from parents/parental guardian 3 11.1

I work and pay for rent out of my earnings 21 77.8

Financial aid 4 14.8

Other (required) 4 14.8

Other:What is the primary source of funds do you use to pay your rent? (Select all that apply) Frequency Percent

GI BILL 2 50.0

my boyfriend provides for me 1 25.0

Spouse 1 25.0

Total 4 100.0

Why don't you live in an apartment near campus? Frequency Percent

I don't like the quality of housing near campus 3 6.7

I live with my parents/relatives to save money 31 68.9

My parents said "no" 1 2.2

Not enough housing near campus 7 15.6

Other 3 6.7

Total 45 100.0

Other:Why don't you live in an apartment near campus? Frequency Percent

Costs too high for location & inconvenience of stores 1 33.3

Due to childcare 1 33.3

Not enough housing, can not afford housing 1 33.3

Total 3 100.0

If newly constructed student housing was available on A&M - SA's campus, would you consider moving on campus? Frequency Percent

Yes, I would consider moving on campus at A&M - SA 39 50.0

No, I would not consider moving on campus at A&M - SA 39 50.0

Total 78 100.0

Current Student Survey Results Do you: (Select all that apply) Frequency Percent

receive need-based financial aid or grants 72 68.6

receive academic scholarships 27 25.7

pay for my education with support from my parents 29 27.6

pay for my education with earnings from a full-time job 43 41.0

How do you get to classes/school activities? Frequency Percent

Carpool with friend 3 2.9

City bus 6 5.7

Drive car 94 89.5

Other 2 1.9

Total 105 100.0

Other:How do you get to classes/school activities? Frequency Percent

boyfriend drops me off, I do not drive 1 50.0

I get dropped off 1 50.0

Total 2 100.0

Do you have a car? Frequency Percent

1 Yes 95 90.5

2 No 10 9.5

Total 105 100.0

Why don't you have a vehicle? Frequency Percent

Cannot afford one 5 50.0

Do not need one 2 20.0

Prefer to use public transportation 3 30.0

Total 10 100.0

Is your permanent residence within 50 driving miles of the A&M - SA?Â Please use the map below for reference. Frequency Percent

Yes 104 99.0

No 1 1.0

Total 105 100.0

Current Student Survey Results Approximately how far do you commute to school? Frequency Percent

1 mile to 5 miles 9 8.6

6 miles to 10 miles 12 11.4

11 miles to 15 miles 43 41.0

Over 20 miles 41 39.0

Total 105 100.0

Approximately how long does it take you to commute to school? Frequency Percent

Less than 5 minutes 1 1.0

6 minutes to 10 minutes 3 2.9

11 minutes to 20 minutes 28 26.7

21 minutes to 30 minutes 44 41.9

Over 30 minutes 29 27.6

Total 105 100.0

Fitness center::When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 49 46.7

Often 31 29.5

Occasionally 18 17.1

Never 7 6.7

Total 105 100.0

Community game room:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 17 16.2

Often 21 20.0

Occasionally 52 49.5

Never 15 14.3

Total 105 100.0

Video gaming lounge:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 13 12.4

Often 14 13.3

Occasionally 39 37.1

Never 39 37.1

Total 105 100

Current Student Survey Results Study rooms:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 44 41.9

Often 33 31.4

Occasionally 21 20.0

Never 7 6.7

Total 105 100.0

Student lounge:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 24 22.9

Often 40 38.1

Occasionally 36 34.3

Never 5 4.8

Total 105 100.0

Bike Rack:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 15 14.3

Often 20 19.0

Occasionally 22 21.0

Never 48 45.7

Total 105 100.0

Outdoor patio:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 38 36.2

Often 33 31.4

Occasionally 31 29.5

Never 3 2.9

Total 105 100.0

Computer center located in residence hall:When living in on-campus housing, how frequently would you use the following common area features/common areas:

Frequency Percent

Very Often 38 36.2

Often 35 33.3

Occasionally 22 21.0

Never 10 9.5

Total 105 100.0

Current Student Survey Results Onsite parking:Please give us your opinion on how important the following is to you: Frequency Percent

Important 94 89.5

Neutral 10 9.5

Not Important 1 1.0

Total 105 100.0

Proximity to classes:Please give us your opinion on how important the following is to you: Frequency Percent

Important 82 78.1

Neutral 21 20.0

Not Important 2 1.9

Total 105 100.0

All bills paid:Please give us your opinion on how important the following is to you: Frequency Percent

Important 87 82.9

Neutral 15 14.3

Not Important 3 2.9

Total 105 100.0

Mini Refrigerator included:Please give us your opinion on how important the following is to you: Frequency Percent

Important 78 74.3

Neutral 20 19.0

Not Important 7 6.7

Total 105 100.0

Microwave included:Please give us your opinion on how important the following is to you: Frequency Percent

Important 79 75.2

Neutral 19 18.1

Not Important 7 6.7

Total 105 100.0

Ability to have a private bedroom:Please give us your opinion on how important the following is to you: Frequency Percent

Important 90 85.7

Neutral 11 10.5

Not Important 4 3.8

Total 105 100.0

Current Student Survey Results Ability to have a private bathroom:Please give us your opinion on how important the following is to you: Frequency Percent

Important 87 82.9

Neutral 16 15.2

Not Important 2 1.9

Total 105 100.0

Fully furnished unit:Please give us your opinion on how important the following is to you: Frequency Percent

Important 54 51.4

Neutral 40 38.1

Not Important 11 10.5

Total 105 100.0

Without considering price, which student housing unit style do you prefer? Frequency Percent

Apartment-style housing (Unit includes bedrooms, in-unit bathroom/s, full kitchen and living room) 66 62.9

Dorm-style housing (Unit includes bedrooms, in-unit bathroom, and no kitchen) 8 7.6

Suite-style housing (Unit includes bedrooms, in-unit bathroom/s, kitchenette and small living room) 31 29.5

Total 105 100.0

Would you consider living in the development described above? Â Frequency Percent

Yes 86 81.9

No 19 18.1

Total 105 100.0

Without considering price, which type of unit would you prefer? Frequency Percent

Unit 1 - 2 bedroom/1 bath with shared bedrooms 11 10.5

Unit 2 - 2 bedroom/1 bath with private bedrooms 77 73.3

None of the above 17 16.2

Total 105 100.0

You selected, "None of the above," why? Frequency Percent

Don't like any of the unit types 7 41.2

Other - Write In (Required) 10 58.8

Total 17 100.0

Current Student Survey Results Other - Write In (Required):You selected, "None of the above," why? Frequency Percent

Don\'t like that the square footage is much less for private bedrooms versus shared bedrooms. 1 10.0

Don\'t like the shared bathroom 1 10.0 like unit 2; trade sink for private toilet. It\'s more essential, there should be a kitchen anyway down the hall. 1 10.0

need my privacy 1 10.0

Need non-traditional student housing 1 10.0

Own Home, Live with Spouse and Family 1 10.0

Personally, I am not comfortable with the sharing of the bedrooms, the room, or the bathroom. 1 10.0

Private Bathrooms MUST 1 10.0

Private bedroom and bathroom 1 10.0

They don\'t need dorms they need to move the school of business from brooks to the main campus 1 10.0

Total 10 100.0

Which type of floor plan would you prefer to rent in the newly designed student housing community? Scenario 1: Frequency Percent

Unit 1 - 2 bedroom/1 bath with shared bedrooms for $3,183 per bed per semester 20 19.0

Unit 2 - 2 bedroom/1 bath with private bedrooms for $3,713 per bed per semester 62 59.0

None of the above 23 21.9

Total 105 100.0

You selected "none of the above", please tell us why? Frequency Percent

Don't like any of the unit types 3 13.0

Prices are too high 12 52.2

Other - Write In (Required) 8 34.8

Total 23 100.0

Other - Write In (Required):You selected "none of the above", please tell us why? Frequency Percent

$600+ a month for a room that I would have to share with two to four people is excessive. 1 12.5 both on top. Remember most students are 1st generation students; what the university has been targeting. 1 12.5

I don\'t think the campus needs dorms 1 12.5

No private bath 1 12.5

Own Home-Live with Spouse and Family 1 12.5

own my own home but I believe scenario 2 is the best 1 12.5

Prices are too high, that\'s how much a full-time semester at the university costs. 1 12.5

Would consider paying Unit 2 price if unit came with private bathroom. 1 12.5

Total 8 100.0

Current Student Survey Results Scenario 2 Frequency Percent

Unit 1 - 2 bedroom/1 bath with shared bedrooms for $3,383 per bed per semester 26 24.8

Unit 2 - 2 bedroom/1 bath with private bedrooms for $3,913 per bed per semester 44 41.9

None of the above 35 33.3

Total 105 100.0

You selected "none of the above", please tell us why? Frequency Percent

Don't like any of the unit types 4 11.4

Prices are too high 25 71.4

Other - Write In (Required) 6 17.1

Total 35 100.0

Other - Write In (Required):You selected "none of the above", please tell us why? Frequency Percent

I don\'t think the campus needs dorms 1 16.7

Is that per student? 1 16.7

Own Home-Live with Spouse and Family 1 16.7

own my own home, but unit 2 1 16.7

Price is too high for a shared bathroom. 1 16.7

Prices are high, same as tuition cost of one semester at the university. 1 16.7

Total 6 100.0

Scenario 3 Frequency Percent

Unit 1 - 2 bedroom/1 bath with shared bedrooms for $2,983 per bed per semester 26 24.8

Unit 2 - 2 bedroom/1 bath with private bedrooms for $3,513 per bed per semester 53 50.5

None of the above 26 24.8

Total 105 100.0

You selected "none of the above", please tell us why? Frequency Percent

Don't like any of the unit types 8 30.8

Prices are too high 12 46.2

Other - Write In (Required) 6 23.1

Total 26 100.0

Current Student Survey Results Other - Write In (Required):You selected "none of the above", please tell us why? Frequency Percent

Apartment rent is cheaper and has more privacy for one person. 1 16.7

I don\'t think the campus needs dorms. 1 16.7

if cost is per person that is too high 1 16.7

Own Home-Live with Spouse and Family 1 16.7

own my home 1 16.7

You can rent a one bedroom apt or studio for less 1 16.7

Total 6 100.0

Game room with billiards/foosball:Clubhouse Amenities Frequency Percent

0 54 51.4

5 20 19.0

10 19 18.1

15 3 2.9

20 3 2.9

25 2 1.9

30 4 3.8

Total 105 100.0

Computer Lab:Clubhouse Amenities Frequency Percent

0 26 24.8

5 13 12.4

10 22 21.0

15 9 8.6

20 14 13.3

25 4 3.8

30 3 2.9

40 5 4.8

50 9 8.6

Total 105 100.0

Laundry room:Clubhouse Amenities Frequency Percent

0 16 15.2

5 15 14.3

10 25 23.8

15 9 8.6

20 13 12.4

25 9 8.6

30 7 6.7

40 2 1.9

50 9 8.6

Total 105 100.0

Current Student Survey Results Resident lounge with flat panel televisions:Clubhouse Amenities Frequency Percent

0 37 35.2

5 15 14.3

10 22 21.0

15 6 5.7

20 10 9.5

25 6 5.7

30 3 2.9

40 2 1.9

50 4 3.8

Total 105 100.0

Gaming center with Xbox and Playstation:Clubhouse Amenities Frequency Percent

0 58 55.2

5 12 11.4

10 12 11.4

15 9 8.6

20 5 4.8

25 4 3.8

30 2 1.9

40 2 1.9

50 1 1.0

Total 105 100.0

Fitness Center:Clubhouse Amenities Frequency Percent

0 14 13.3

5 11 10.5

10 31 29.5

15 9 8.6

20 16 15.2

25 3 2.9

30 5 4.8

40 5 4.8

50 11 10.5

Total 105 100.0

Current Student Survey Results Pet grooming area:Clubhouse Amenities Frequency Percent

0 61 58.1

5 7 6.7

10 16 15.2

15 6 5.7

20 6 5.7

25 2 1.9

40 1 1.0

50 6 5.7

Total 105 100.0

Controlled access buildings:Clubhouse Amenities Frequency Percent

0 22 21.0

5 10 9.5

10 17 16.2

15 13 12.4

20 14 13.3

25 6 5.7

30 9 8.6

40 4 3.8

50 10 9.5

Total 105 100.0

Building security cameras:Clubhouse Amenities Frequency Percent

0 17 16.2

5 11 10.5

10 16 15.2

15 11 10.5

20 7 6.7

25 8 7.6

30 9 8.6

40 8 7.6

50 18 17.1

Total 105 100.0

Current Student Survey Results Wifi in common areas:Clubhouse Amenities Frequency Percent

0 19 18.1

5 10 9.5

10 17 16.2

15 11 10.5

20 18 17.1

25 3 2.9

30 4 3.8

40 10 9.5

50 13 12.4

Total 105 100.0

Individually keyed bedrooms:Clubhouse Amenities Frequency Percent

0 19 18.1

5 15 14.3

10 9 8.6

15 15 14.3

20 15 14.3

25 4 3.8

30 1 1.0

40 7 6.7

50 20 19.0

Total 105 100.0

Individual lease (not responsible for roommates rent):Clubhouse Amenities Frequency Percent

0 20 19.0

5 7 6.7

10 18 17.1

15 6 5.7

20 12 11.4

25 7 6.7

30 5 4.8

40 7 6.7

50 23 21.9

Total 105 100.0

Current Student Survey Results Bike storage:Clubhouse Amenities Frequency Percent

0 59 56.2

5 13 12.4

10 16 15.2

15 5 4.8

20 8 7.6

30 2 1.9

40 1 1.0

50 1 1.0

Total 105 100.0

Community kitchen:Clubhouse Amenities Frequency Percent

0 43 41.0

5 14 13.3

10 13 12.4

15 9 8.6

20 9 8.6

25 10 9.5

30 2 1.9

40 2 1.9

50 3 2.9

Total 105 100.0

Current Student Survey Results APPENDIX B

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT

TABLE OF CONTENTS

DEFINITIONS OF CERTAIN TERMS ...... 1 THE INDENTURE ...... 19 TRANSFER OF GENERAL REVENUES ...... 19 BOND FUND ...... 21 REDEMPTION FUND ...... 23 ISSUANCE COST FUND ...... 23 CONSTRUCTION FUND ...... 24 DEBT SERVICE RESERVE FUND ...... 24 REPAIR AND REPLACEMENT FUND ...... 25 INSURANCE AND CONDEMNATION FUNDS ...... 26 OPERATIONS CONTINGENCY FUND ...... 27 SURPLUS FUND ...... 27 REBATE FUND ...... 28 INVESTMENT OF FUNDS AND ACCOUNTS ...... 28 ALLOCATION OF INCOME FROM INVESTMENTS ...... 29 MONEY TO BE HELD IN TRUST ...... 30 EVENTS OF DEFAULT AND REMEDIES ...... 31 AMENDMENTS TO INDENTURE AND SUPPLEMENTAL INDENTURES ...... 34 AMENDMENTS TO OTHER BOND DOCUMENTS ...... 36 DISCHARGE; RELEASE OF THE INDENTURE ...... 37 THE LOAN AGREEMENT ...... 38 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST ...... 38 SECURITY FOR PAYMENTS UNDER THE BONDS ...... 38 COMPLIANCE WITH LAWS ...... 39 OPERATION OF PROJECT ...... 39 CONSTRUCTION, FURNISHING, AND EQUIPPING OF THE SERIES 2016 PROJECT ...... 39 CONSTRUCTION FUND ...... 41 ESTABLISHMENT OF COMPLETION DATE FOR THE SERIES 2016 PROJECT ...... 41 INVESTMENT OF FUNDS AND ACCOUNTS ...... 41 SPECIAL INVESTMENT COVENANTS ...... 42 BORROWER AND FOUNDATION TO MAINTAIN STATUS; CONDITIONS UNDER WHICH EXCEPTIONS PERMITTED ...... 42 FINANCIAL STATEMENTS ...... 43 AGREEMENT TERM ...... 43 LOAN PAYMENTS AND OTHER AMOUNTS PAYABLE ...... 44 AGREEMENT TO DEPOSIT GENERAL REVENUES ...... 46 MAINTENANCE AND MODIFICATION OF PROJECT BY THE BORROWER ...... 47 REMOVAL OF EQUIPMENT ...... 48 TAXES, OTHER GOVERNMENTAL CHARGES, AND UTILITY CHARGES ...... 49 INSURANCE REQUIRED ...... 49 APPLICATION OF NET PROCEEDS OF INSURANCE ...... 51 ADDITIONAL PROVISIONS RESPECTING INSURANCE ...... 51 REVIEW BY INSURANCE CONSULTANT; INSURANCE CERTIFICATION ...... 52 DESTRUCTION AND DAMAGE ...... 52 CONDEMNATION ...... 54 CONDEMNATION OF PROPERTY NOT INCLUDED IN PROJECT ...... 55 INVESTMENT OF NET PROCEEDS ...... 55 ANNUAL BUDGET ...... 55 COVENANT REGARDING MANAGER ...... 56 TAX-EXEMPT STATUS ...... 56 ASSIGNMENT AND SUBLEASING ...... 57 RESTRICTIONS ON SALE, ENCUMBRANCE, OR CONVEYANCE OF THE PROJECT BY THE BORROWER ...... 58 EVENTS OF DEFAULT AND REMEDIES ...... 59 GENERAL OPTIONS TO TERMINATE LOAN AGREEMENT ...... 61 OPTION TO PREPAY LOAN UPON THE OCCURRENCE OF CERTAIN EXTRAORDINARY EVENTS ...... 61 OPTION TO PREPAY LOAN IN CONNECTION WITH OPTIONAL REDEMPTION OF THE BONDS ...... 63 INCONSISTENT PROVISIONS ...... 63

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APPENDIX B

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND LOAN AGREEMENT

The following are summaries of certain provisions of the Indenture and the Loan Agreement. The provisions of the Indenture are summarized below under “THE INDENTURE.” The provisions of the Loan Agreement are summarized below under “THE LOAN AGREEMENT.” The definitions of certain words and terms used in these summaries and in the Indenture and the Loan Agreement are set forth below in this APPENDIX B under “DEFINITIONS OF CERTAIN TERMS.” Reference is hereby made to the Indenture and the Loan Agreement for the definition of any capitalized term not defined herein.

DEFINITIONS OF CERTAIN TERMS

“2016A CI Subaccount” means the Account of the Bond Fund by that name created in the Indenture.

“2016A Defeasance Subaccount” means the Account of the Bond Fund by that name created in the Indenture.

“2016A Payment Subaccount” means the Account of the Bond Fund by that name created in the Indenture.

“2016B CI Subaccount” means the Account of the Bond Fund by that name created in the Indenture.

“2016B Defeasance Subaccount” means the Account of the Bond Fund by that name created in the Indenture.

“2016B Payment Subaccount” means the Account of the Bond Fund by that name created in the Indenture.

“2016 Proceeds Accounts” means, collectively (a) the Account within the Issuance Cost Fund by that name created pursuant to the Indenture and (b) the Account within the Construction Fund by that name created pursuant to the Indenture (each, a “2016 Proceeds Account”).

“Accountant” means initially Wilkins Miller LLC, and thereafter an independent certified public accountant or firm of independent certified public accountants (which may be the accountant or firm of accountants retained by the Borrower).

“Accounts” means, collectively, all of the accounts and subaccounts within the Funds created pursuant to the Indenture (each, an “Account”).

“Act” means the Cultural Education Facilities Finance Corporation Act, Article 1528m, Vernon’s Revised Civil Statutes, as amended.

“Additional Bonds” means any additional parity Bonds authorized to be issued by the Issuer pursuant to the terms and conditions of the Indenture.

“Additional Loan Payments” means the Loan Payments payable by the Borrower to the Issuer pursuant to the Loan Agreement that are described in the Original Loan Agreement.

“Additional Notes” means any promissory notes issued by the Borrower in connection with Additional Bonds.

“Additions” or “Alterations” means modifications, repairs, renewals, improvements, replacements, alterations, additions, enlargements or expansions in, on or to the Project, including any and all machinery, furnishings and equipment therefor.

“Affiliate” means any Person (a) directly or indirectly controlling, controlled by or under common control with the Borrower; or (b) a majority of the members of the Directing Body (defined below) of which are members of

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the Directing Body of the Borrower. For purposes of this definition, control means with respect to: (i) a corporation having stock, the ownership, directly or indirectly, of more than 50% of the securities (as defined in §2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the directors of such corporation; (ii) a nonprofit corporation not having stock, having the power to elect or appoint, directly or indirectly, a majority of the members of the Directing Body of such corporation; or (iii) any other entity, the power to direct the management of such entity through the ownership of at least a majority of its voting securities or the right to designate or elect at least a majority of the members of its Directing Body, by contract or otherwise. For the purposes of this definition, “Directing Body” means with respect to: (A) a corporation having stock, such corporation’s board of directors and owners, directly or indirectly, of more than 50% of the securities (as defined in §2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the directors of such corporation (both of which groups are considered a Directing Body); (B) a nonprofit corporation not having stock, such corporation’s members if the members have complete discretion to elect the corporation’s directors, or the corporation’s directors if the corporation’s members do not have such discretion; or (C) any other entity, its governing body or board. For the purposes of this definition, all references to directors and members are deemed to include all entities performing the function of directors or members however denominated.

“Agreement Term” means the duration of the Loan Agreement as specified in the Loan Agreement.

“Alternate Services and Excess Cost Payments” means with respect to the Series 2016 Project, all reimbursements due to the Series 2016 Developer for Unavoidable Alternate Services Costs and/or Unavoidable Excess Costs (as those terms are defined in the Development Agreement related to the Series 2016 Project), together with interest thereon.

“Annual Budget” means the annual budget of the Borrower required by the Loan Agreement.

“Annual Debt Service” means the amount required to pay all principal of and interest on a series of Bonds in any Bond Year. For purposes of calculating the Annual Debt Service on a series of Bonds where the interest rate borne by such series of Bonds is not fixed to the maturity thereof on any date, such series of Bonds will be treated as if it bears interest at the 25-year Revenue Bond Index as published by The Bond Buyer on the date of determination.

“Annual Period” means the 12-month period commencing on July 1 of each calendar year and ending on June 30 of the immediately succeeding calendar year.

“Architect” means the Series 2016 Architect and/or any other architect or architectural firm at the time employed by the Borrower that is designated by written certificate furnished to the Trustee, containing the signature of such person or the signature of a partner or officer of such firm, and signed on behalf of the Borrower by the Authorized Borrower Representative. The Architect is required to be registered and qualified to practice under the laws of the State and may not be a full-time employee of the Issuer, the Borrower or the Ground Lessor.

“Architect’s Agreement” means, with respect to the Series 2016 Project, the Series 2016 Architect’s Agreement, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Assignment of Agreements and Documents” means, (a) with respect to the Series 2016 Bonds, the Borrower Collective Collateral Assignment Agreement by the Borrower in favor of the Trustee, as the same may be amended and/or supplemented from time to time as permitted by the Indenture (including to provide for the issuance of Additional Bonds) and by the Assignment of Agreements and Documents, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Audit Report” means an unqualified audit report resulting from an audit conducted by an Accountant in conformity with generally accepted auditing standards prepared in accordance with GAAP.

“Authorized Borrower Representative” means any person at the time designated to act on behalf of the Borrower by written certificate furnished to the Issuer and the Trustee, containing the specimen signature of such

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person and signed on behalf of the Borrower by the President of the Foundation. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates.

“Authorized Developer Representative” means any person at the time designated to act on behalf of a Developer by written certificate furnished to the Borrower and the Trustee, containing the title and specimen signature of such person and signed on behalf of a Developer by its Secretary or Assistant Secretary. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates.

“Authorized Manager Representative” means any person at the time designated to act on behalf of the Manager by written certificate furnished to the Borrower and the Trustee, containing the specimen signature of such person and signed on behalf of the Manager by a duly authorized officer of the Manager. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates.

“Basic Loan Payments” means the Loan Payments payable by the Borrower to the Issuer pursuant to the Loan Agreement that are described below under “THE LOAN AGREEMENT—Loan Payments and Other Amounts Payable—Basic Loan Payments.”

“Board” means The Board of Regents of The Texas A&M University System.

“Bond Counsel” means the attorney or firm of attorneys nationally recognized as experienced in matters related to Tax-Exempt Bonds serving as the Issuer’s bond counsel with respect to the Bonds at the time in question and reasonably acceptable to the Borrower.

“Bond Documents” means, (a) with respect to the Series 2016 Bonds, collectively, the Indenture, the Series 2016 Bonds, the Loan Agreement, the Series 2016 Notes, the Tax Regulatory Agreement relating to the Series 2016 Bonds, the Leasehold Deed of Trust relating to the Series 2016 Project, the Security Agreement relating to the Series 2016 Bonds, the Assignment of Agreements and Documents relating to the Series 2016 Bonds, the Bond Purchase Agreement relating to the Series 2016 Bonds, the Ground Lease relating to the Series 2016 Project, the Series 2016 Development Agreement, the Series 2016 Guaranteed Maximum Price Contract, the Continuing Disclosure Agreement relating to the Series 2016 Bonds and the Financing Statements relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Bond Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Bond Fund” and below under “THE INDENTURE—Bond Fund.”

“Bond Payment Dates” means, collectively, the Interest Payment Dates and all dates on which Debt Service Payments are payable on or in respect of any of the Bonds according to their terms and the terms of the Indenture, including without limitation, scheduled mandatory sinking fund redemption dates, dates of acceleration of the Bonds pursuant to the Indenture, optional redemption dates, extraordinary optional redemption dates and stated maturity dates, so long as any Bonds are Outstanding (each, a “Bond Payment Date”).

“Bond Purchase Agreement” means, (a) with respect to the Series 2016 Bonds, the Bond Purchase Agreement among the Issuer, the Borrower and the Underwriter, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Bond Register” means the books for the registration of the Bonds and for the registration of the transfer of the Bonds kept and maintained by the Trustee as bond registrar.

“Bond Year” means, with respect to any series of Bonds, the 12-month period beginning and ending on the dates specified in the Tax Regulatory Agreement related to such series of Bonds.

“Bondholders,” “Bondowners,” or “Owners” means the Persons in whose names any of the Bonds are registered on the Bond Register.

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“Bonds” means the Series 2016 Bonds and all Additional Bonds.

“Borrower” means CHF – Collegiate Housing San Antonio I, L.L.C., a limited liability company duly organized and validly existing under the laws of the State of Alabama and whose sole member is the Foundation, and its successors and assigns, to the extent permitted by the Original Loan Agreement.

“Borrower Acquisition Fee” means, (a) with respect to the Series 2016 Bonds, the fee to be paid to the Foundation out of the proceeds of the Series 2016B Bonds in an amount equal to ¼ of 1% of the principal amount of the Series 2016 Bonds to compensate the Foundation for the responsibilities assigned to the Borrower under the applicable Bond Documents relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Borrower Collective Collateral Assignment Agreement” means, (a) with respect to the Series 2016 Project, the Borrower Collective Collateral Assignment Agreement by the Borrower in favor of the Trustee, as the same may be amended and/or supplemented from time to time as permitted by the Indenture (including to provide for the issuance of Additional Bonds) and by the Borrower Collective Collateral Assignment Agreement, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Borrower Documents” means, (a) with respect to the Series 2016 Bonds, the Loan Agreement, the Series 2016 Notes, the Tax Regulatory Agreement relating to the Series 2016 Bonds, the Leasehold Deed of Trust relating to the Series 2016 Project, the Security Agreement relating to the Series 2016 Bonds, the Development Agreement relating to the Series 2016 Bonds, the Borrower Collective Collateral Assignment Agreement relating to the Series 2016 Bonds, the Bond Purchase Agreement relating to the Series 2016 Bonds, the Ground Lease relating to the Series 2016 Project, the Construction Contracts relating to the Series 2016 Project to which the Borrower is a party, the Management Agreement relating to the Series 2016 Project, the Continuing Disclosure Agreement relating to the Series 2016 Bonds and the Financing Statement(s) relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Borrower Membership Fee” means, (a) with respect to the Series 2016 Project, the amount payable to the Foundation pursuant to the Ground Lease relating to the Series 2016 Project for each Annual Period, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Builder” means, (a) with respect to the Series 2016 Project, the Series 2016 Builder, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Building” means, (a) with respect to the Series 2016 Project, those certain buildings, improvements, structures and all other related facilities and improvements constituting part of the Series 2016 Project, and improvements thereto, and not constituting part of the Equipment for the Series 2016 Project that are or will be located on the Property described in the Indenture, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Business Day” means any day other than a Saturday or a Sunday on which (a) the Trustee is open for the purposes of commercial banking business, (b) the New York Stock Exchange is open for trading and (c) the Federal Reserve is open for business.

“Calculation Date” means, with respect to any series of Bonds, the second Bond Year following the Closing Date for such series of Bonds and thereafter, the last day of each Bond Year and the date upon which such series of Bonds is Discharged.

“Capitalized Interest” means amounts derived from the proceeds of Bonds and deposited in the Capitalized Interest Account of the Bond Fund to pay interest on Bonds and interest earned on such amounts to the extent that such interest earned is required to be applied to pay interest on Bonds.

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“Capitalized Interest Account” means the Account of the Bond Fund by that name created in the Indenture.

“Change Order” means any order, direction, authorization or amendment, whether written or verbal, which authorizes, directs or approves a change, after the date of the Loan Agreement in any Plans and Specifications, the Guaranteed Maximum Price Contract, or any other Construction Contract.

“Closing Date” means, (a) with respect to the Series 2016 Bonds, the Series 2016 Closing Date, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Code” means the Internal Revenue Code of 1986, as amended. Reference in Indenture to any specific provision of the Code are deemed to include a reference to any successor provision or provisions to such provision and to any Regulations issued or proposed under or with respect to such provision or under or with respect to any predecessor provision of the Internal Revenue Code of 1954, as amended, to the extent any of the foregoing is applicable to the Bonds.

“Completion Date” means, (a) with respect to the Series 2016 Project, the date of substantial completion of the Series 2016 Project, as certified by the Borrower as provided in the Loan Agreement, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Condemnation Fund” means the Fund of that name created in the Indenture and described below under “THE INDENTURE—Insurance and Condemnation Funds.”

“Construction Contracts” means, (a) with respect to the Series 2016 Project, the Series 2016 Development Agreement, the Series 2016 Guaranteed Maximum Price Contract, and the other contracts, if any, relating to the design and construction thereof between the Series 2016 Developer, the Series 2016 Builder or the Borrower and construction professionals or suppliers of materials and Equipment for the Series 2016 Project, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Construction Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Construction Fund” and below under “THE INDENTURE—Construction Fund.”

“Construction Period” means, (a) with respect to the Series 2016 Project, the period between the beginning of construction thereof or the date on which Series 2016 Bonds are first delivered to the Underwriter (whichever is earlier) and the Series 2016 Completion Date for the Series 2016 Project, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Continuing Disclosure Agreement” means, (a) with respect to the Series 2016 Bonds, the Continuing Disclosure Agreement among the Borrower and the Dissemination Agent, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Costs” means, with respect to a Project, those costs and expenses in connection with the acquisition, construction, furnishing and equipping thereof permitted by the Act to be paid or reimbursed from the proceeds of the Bonds including, but not limited to, the following:

(a) (i) the cost of the preparation of Plans and Specifications (including any preliminary study or planning thereof or any aspect thereof); (ii) the cost of site preparation and the cost of acquisition and construction of the Project and all construction, acquisition and installation expenses required to provide utility services or other facilities and all real or personal properties deemed necessary in connection therewith (including development, architectural, engineering and supervisory services with respect to any of the foregoing); (iii) interest on the Bonds during the applicable Construction Period and for such additional

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period as the Borrower reasonably determines to be necessary for placing the Project in operation (but in no event more than two years); and (iv) any other costs and expenses relating to the acquisition, construction and placing in service thereof, including start-up costs (which start-up costs may only be paid from the 2016 Marketing Account of the Construction Fund);

(b) the purchase price of the Equipment in connection therewith, including all costs incident thereto, payment for labor, services, materials and supplies used or furnished in site improvement and in the construction thereof, including all costs incident thereto, payment for the cost of the construction, acquisition and installation of utility services or other facilities in connection therewith, payment for all real and personal property deemed necessary in connection therewith, payment of consulting and development fees in connection therewith, and payment for the miscellaneous expenses incidental to any of the foregoing items including the premium on any surety bond;

(c) the fees or out-of-pocket expenses, if any, of those providing services with respect thereto, including, but not limited to, architectural, engineering, development and supervisory services;

(d) any other costs and expenses relating to the Project that constitute costs or expenses for which the Issuer may expend Bond proceeds under the Act, other than Issuance Costs of the related Bonds, including, but not limited to, during the Construction Period, Rating Agency fees and expenses, Trustee fees and expenses and Issuer fees and expenses; and

(e) reimbursement to the Borrower for any costs described above paid by it, whether before or after the execution of the Loan Agreement; provided, however, that reimbursement for any expenditures made prior to the execution of the Loan Agreement from the Construction Fund may only be permitted for expenditures meeting the requirements of the Regulations, including but not limited to, §1.150-2 of the Regulations.

“Debt Service Payment” means, with respect to any series of Bonds on any Bond Payment Date: (a) the interest payable thereon on such Bond Payment Date; (b) the principal or Redemption Price, if any, payable in respect thereof on such Bond Payment Date; and (c) the Sinking Fund Requirement, if any, with respect to such Bond Payment Date (collectively, the “Debt Service Payments”).

“Debt Service Reserve Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Debt Service Reserve Fund” and below under “THE INDENTURE—Debt Service Reserve Fund.”

“Debt Service Reserve Requirement” means, (a) with respect to the Series 2016 Bonds, the least of (i) 10% of the stated principal amount of the Series 2016 Bonds (less any original issue discount that exceeds a de minimis amount); (ii) 125% of the average Annual Debt Service on the Series 2016 Bonds from the date of calculation to the final maturity thereof; (iii) the Maximum Annual Debt Service on the Series 2016 Bonds; or (iv) such lesser sum as is required by the Code and the Regulations to ensure the exclusion of the interest on Tax-Exempt Bonds from the gross income of the Owners thereof for federal income tax purposes; provided, however, that the amount of principal due in any Bond Year is required to be determined, in the case of Series 2016 Bonds subject to mandatory sinking fund redemption pursuant to the Indenture and similar provisions in any supplemental indenture, by the principal amount of Bonds to be redeemed by mandatory sinking fund redemption in such Bond Year, provided, however, if Additional Bonds are issued and it is provided in a supplemental indenture that the 2016 Account is to be a shared Account benefitting such Additional Bonds, the Debt Service Reserve Requirement is required to be calculated as specified in clause (a) of this definition, but calculated with respect to all Bonds entitled to the benefit of the 2016 Account; and (b) except as provided above, with respect to each series of Additional Bonds, the meaning set forth in a supplemental indenture.

“Defaulted Interest” means any interest on any Bond that is due and payable, but that is not punctually paid or duly provided for on any Interest Payment Date.

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“Defeasance Account” means the Account of the Bond Fund by that name created in the Indenture and described below under “THE INDENTURE—Bond Fund.”

“Defeasance Obligations” means (a) cash (insured at all times by the Federal Deposit Insurance Corporation), (b) non-callable direct obligations of (including obligations issued or held in book-entry form on the books of) the Department of the Treasury of the United States of America (“Treasuries”), (c) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (d) pre-funded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively, or (e) securities eligible for “AAA” defeasance under then existing criteria of S&P or any combination thereof.

“Developer” means (a) with respect to the Series 2016 Project, the Series 2016 Developer, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Development Agreement” means, (a) with respect to the Series 2016 Project, the Series 2016 Development Agreement, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Discharged” means, with respect to a series of Bonds, that all amounts due thereunder are actually and unconditionally due, if cash is available at the place of payment and no interest accrues thereafter with respect to such series of Bonds.

“Dissemination Agent” means, (a) with respect to the Series 2016 Bonds, Wilmington Trust, National Association, in its capacity as dissemination agent under the Continuing Disclosure Agreement and its successors and assigns, and the dissemination agent under any successor agreement, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“DTC” means The Depository Trust Company, New York, New York, or any successor securities depository.

“Equipment” means (a) with respect to the Series 2016 Project, the materials, equipment, machinery, furnishings, fixtures and other personal property acquired with the proceeds of the Series 2016 Bonds and described in Exhibit A attached to the Original Loan Agreement, and all replacements, substitutions and additions thereto, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Event of Default” means, with respect to the Indenture, an event of default specified below under “THE INDENTURE—Events of Default and Remedies” and, with respect to the Loan Agreement, an event of default specified below under “THE LOAN AGREEMENT—Events of Default and Remedies.”

“Event of Taxability” means, with respect to any series of Tax-Exempt Bonds, the existence or absence of any circumstances that causes the interest thereon or on any portion thereof to become includable in the gross income of the Owner thereof for federal income tax purposes.

“Expenses” means, with respect to the Project, for any period, the aggregate of all expenses in connection with the management (including the Management Fee and reimbursable expenses under the Management Agreement), operation and maintenance of the Project as recognized in accordance with GAAP, including, without limitation, the Borrower Membership Fee, Issuer fees, Trustee fees, Rating Agency fees and all expenses incurred by the Borrower for inspection of the Project; the calculation and payment of the Rebate Amount relating to the Bonds as required by federal law; enforcement of the obligations of other parties to the Bond Documents; and the performance of any other obligations of the Borrower, the Insurance Consultant, the Independent Engineer and any Accountants under the Bond Documents directly related to the Project, but excluding (a) principal and interest on the Notes; (b) any allowance for depreciation or amortization; (c) replacement of capital assets of the Project; (d) amortization of financing costs or

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any intangible assets or items; (e) any extraordinary expenses (including without limitation losses on the sale of assets other than in the ordinary course of business and losses on the extinguishment of debt or termination of pension plans); (f) any expenses paid with proceeds of the Bonds; (g) losses resulting from any reappraisal, revaluation or write-down of assets; (h) payments made to the Ground Lessor under the Ground Lease; (i) any unrealized loss resulting from changes in the value of investment securities; and (j) Subordinated Expenses.

“Extraordinary Services of the Trustee” and “Extraordinary Expenses of the Trustee” means all reasonable services rendered, and all advances made and reasonable expenses incurred by the Trustee (in its capacity as Trustee and in its capacity as dissemination agent, payment agent and as registrar, as applicable) under the Bond Documents in connection with the execution thereof and the exercise and performance of its powers and duties thereunder, including, without limitation, disbursements, advances to and reasonable fees and expenses of independent appraisers, accountants, consultants, counsel, agents and attorneys or other experts employed by it in the exercise and performance of its powers and duties thereunder or otherwise, and all amounts specifically described in the Indenture, but does not include Ordinary Services of the Trustee and Ordinary Expenses of the Trustee.

“Favorable Opinion of Bond Counsel” means an opinion of Bond Counsel addressed to the Issuer, the Borrower and the Trustee to the effect that the action proposed to be taken is not prohibited by the laws of the State or the Indenture and will not adversely affect any exclusion from gross income for federal income tax purposes of interest on any Tax-Exempt Bonds. Any such opinion may be in such form and contain such disclosures as may be required so that such opinion will not be treated as a covered opinion or a state or local bond opinion for purposes of Treasury Department regulations governing practice before the Internal Revenue Service (Circular 230) 31 C.F.R. pt. 10.

“Financial Consultant” means a firm of Accountants and/or professional management, marketing or financial consultants having the skill and experience necessary to render the particular report required that is acceptable to the Trustee. Such firm(s) may not be, and no member, stockholder, director, officer or employee of which may be, an officer or employee of the Issuer, the Borrower, the Developer, the University or the Board. The reports of the Financial Consultant showing forecast financial performances may be in the form of a forecast of the management of the Borrower that is accompanied by a statement of a Financial Consultant to the effect that such Financial Consultant has reviewed the underlying assumptions and procedures used by management and that such assumptions provide a reasonable basis for the forecast of management.

“Financing Statements” means, (a) with respect to the Series 2016 Bonds, the UCC-1 Financing Statement(s) filed under or in connection with the Indenture, the Leasehold Deed of Trust relating to the Series 2016 Project, the Security Agreement relating to the Series 2016 Bonds, and the Assignment of Agreements and Documents relating to the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Fixed Charges” means, for any period, the sum of all cash outflows related to the Project that the Borrower cannot avoid without violating long-term contractual or legal obligations (those obligations which extend for a period greater than one year), including, but not limited to, (a) interest on Indebtedness other than Short-Term Indebtedness, and (b) scheduled payments of principal on Indebtedness other than Short-Term Indebtedness. “Fixed Charges” do not include payments made to the Ground Lessor under the Ground Lease or any amounts payable in respect of any Indebtedness to the extent that such amounts are payable from the proceeds of such Indebtedness.

“Fixed Charges Coverage Ratio” means, for any period, the ratio of Revenue Available for Fixed Charges to Fixed Charges.

“Foundation” means Collegiate Housing Foundation, a nonprofit corporation duly organized and existing under the laws of the State of Alabama, and doing business in the State as CHF – Collegiate Housing Foundation, and its successors and assigns.

“Funds” means, collectively, all of the funds created pursuant to the Indenture (each, a “Fund”).

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“GAAP” means those principles of accounting set forth in pronouncements of the Financial Accounting Standards Board and its predecessors or pronouncements of the American Institute of Certified Public Accountants or those principles of accounting that have other substantial authoritative support and are applicable in the circumstances as of the date of application, as such principles are from time to time supplemented and amended.

“General Revenues” means (a) the sum of (i) the gross rents, fees, receipts and operating and non-operating revenues derived by the Borrower or the Manager on behalf of the Borrower from the ownership or operation of the Project including, without limitation, business or rental interruption insurance proceeds and proceeds of condemnation, sale or other disposition of the Project or any part thereof received by or on behalf of the Borrower; and (ii) Unrestricted Contributions, all as determined in accordance with GAAP, but excluding, in any event, (b) the sum of (i) earnings on amounts that are irrevocably deposited in escrow to pay the principal of or interest on indebtedness of the Borrower related to the Project; and (ii) deposits received from residents of the Project and held by the Borrower or the Manager on behalf of the Borrower until such time, if any, as the Borrower or Manager are permitted to apply such deposits to the payment of rent or to the repair and maintenance of the Project in accordance with the terms of a residency agreement, in which case such deposits will constitute General Revenues.

“Ground Lease” means, (a) with respect to the Series 2016 Project, the Ground Lease Agreement between the Ground Lessor and the Borrower, as the same may be amended from time to time in accordance with the provisions thereof and of the Indenture (including to provide for the issuance of Additional Bonds and the addition of additional property), and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Ground Lessor” means the Board.

“Guaranteed Maximum Price Contract” means, (a) with respect to the Series 2016 Project, the Series 2016 Guaranteed Maximum Price Contract, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Indebtedness” means, but only to the extent incurred in connection with the Project or secured by a lien on the Project or the General Revenues; (a) all indebtedness, whether or not represented by bonds, debentures, notes or other securities, for the repayment of money borrowed; (b) all deferred indebtedness for the payment of the purchase price of properties or assets purchased; (c) all guaranties, endorsements (other than endorsements in the ordinary course of business), assumptions and other contingent obligations in respect of, or to purchase or to otherwise acquire, indebtedness of others; (d) all indebtedness secured by mortgage, pledge, security interest or lien existing on property owned that is subject to such mortgage, pledge, security interest or lien, whether or not the indebtedness secured thereby has been assumed; (e) swap or hedging obligations or other similar derivative or investment agreements that, under certain circumstances, require a payment upon termination; and (f) all capitalized lease obligations; provided, however, that for the purpose of computing Indebtedness, there is required to be excluded any particular Indebtedness if, upon or prior to the maturity thereof, there has been irrevocably deposited with the proper depository in trust the necessary funds (or direct obligations of the United States of America not redeemable by the issuer thereof) for the payment, redemption or satisfaction of such Indebtedness, and thereafter such funds and such direct obligations of the United States of America so deposited will not be included in any computation of the assets of the Borrower and the income derived from such funds and such direct obligations of the United States of America so deposited will not be included in any computation of the income of the Borrower.

“Independent Counsel” means an attorney or firm of attorneys duly admitted to practice law before the highest court of any state of the United States of America or the District of Columbia and not in the full-time employment of the Issuer, the Borrower or the Trustee.

“Independent Engineer” means an engineer or firm of engineers duly admitted to practice engineering in the State retained by or on behalf of the Borrower and reasonably acceptable to the Trustee with the requisite expertise in property management, maintenance and reporting to periodically evaluate the adequacy of the funding of the Repair and Replacement Fund, and not in the full-time employment of the Issuer, the Borrower, the Developer, the University or the Board.

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“Insurance Consultant” means any Person that is not the Issuer, the Borrower, or an Affiliate, appointed by the Borrower that is acceptable to the Trustee and the University, and that is qualified to survey risks and to recommend insurance coverage for student housing facilities and organizations engaged in like operations as that of the Project in the State, and that has a favorable reputation for skill and experience in such surveys and such recommendations and who may be a broker or agent with whom the Issuer or the Borrower transacts business.

“Insurance Fund” means the Fund of that name created in the Indenture and described below under “THE INDENTURE—Insurance and Condemnation Funds.”

“Interest Payment Dates” means (a) with respect to the Series 2016 Bonds, April 1 and October 1 of each year, commencing October 1, 2016, and (b) with respect to any series of Additional Bonds, the meaning set forth in supplemental indenture relating to such Additional Bonds.

“IRS” means the United States Internal Revenue Service or any successor agency or department.

“Issuance Cost Fund” means the Fund of that name created in the Indenture and described below under “THE INDENTURE—Issuance Cost Fund.”

“Issuance Costs” means, with respect to any series of Bonds:

(a) the initial or acceptance fee of the Trustee (which includes the administration fee for the first year), the fees and taxes for recording and filing the Leasehold Deed of Trust, the Security Agreement, the Assignment of Agreements and Documents, UCC-1 Financing Statements and any curative documents reasonably deemed desirable to file for record in order to perfect or protect the leasehold interest of the Borrower in the Project or the lien or security interest created or granted by the Leasehold Deed of Trust, the Security Agreement or the Assignment of Agreements and Documents and the reasonable fees and expenses in connection with any actions or proceedings deemed desirable to perfect or protect the lien or security interest created or granted by the Leasehold Deed of Trust, the Security Agreement or the Assignment of Agreements and Documents in connection with the issuance thereof;

(b) legal fees and expenses, underwriter’s spread, underwriting fees, financing costs, Issuer’s fees and expenses (including Issuer counsel’s fees and expenses), financial advisor’s fees, rating agency fees, accounting fees and expenses, consulting fees, Trustee’s fees and expenses (including Trustee’s counsel fees and expenses), paying agent and certifying and authenticating agent fees, Dissemination Agent’s fees, publication costs, title insurance premiums, and printing and engraving costs incurred in connection with the authorization, sale, issuance and carrying of the series of Bonds and the preparation of the applicable Bond Documents and all other documents in connection therewith; and

(c) other costs in connection with the issuance of the series of Bonds permitted by the Act to be paid or reimbursed from Bond proceeds.

“Issuer” means the New Hope Cultural Education Facilities Finance Corporation, a non-profit corporation organized under the laws of the State, and its successors and assigns.

“Issuer’s Agents” means any elected or appointed official, director, member, officer, employee, representative or agent of the Issuer.

“Leasehold Deed of Trust” means, (a) with respect to the Series 2016 Project, the Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by the Borrower for the benefit of the Trustee, as the same may be amended and/or supplemented from time to time as permitted by the Indenture (including to provide for the issuance of Additional Bonds), and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Loan” means the loan or loans by the Issuer to the Borrower of the proceeds of the Bonds pursuant to the Loan Agreement and which is evidenced by the Notes.

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“Loan Agreement” means the Loan Agreement between the Issuer and the Borrower, as the same may be amended and/or supplemented from time to time in accordance with the provisions of the Indenture (including to provide for the issuance of Additional Bonds).

“Loan Payments” means the Basic Loan Payments, the Additional Loan Payments, the Repair and Replacement Loan Payments and the Reserve Loan Payments.

“Majority of the Bondholders” means the Owners of more than 50% in aggregate principal amount of the Bonds then Outstanding, or if such provision applies only to a series of Bonds, the Owners of more than 50% in aggregate principal amount of the Bonds of such series then Outstanding.

“Management Agreement” means, (a) with respect to the Series 2016 Project, (i) the Management Agreement between the Borrower and the Manager, as the same may be amended and/or supplemented from time to time as permitted by the Indenture (including to provide for the issuance of Additional Bonds) and thereby; and (ii) any management or similar agreement between the Borrower and any successor Manager relating to the management of the Series 2016 Project, as the same may be amended and/or supplemented from time to time as permitted thereby, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Management Fee” has the meaning set forth in the Management Agreement.

“Manager” means, initially, ACC SC Management LLC, a Delaware limited liability company, and thereafter, any other entity or management company employed by the Borrower to manage the Project with the written consent of the Ground Lessor, which consent may not be unreasonably withheld.

“Maximum Annual Debt Service” means, with respect to a series of Bonds, the maximum Annual Debt Service thereon in the then current Bond Year or in any future Bond Year, whether at maturity or subject to mandatory sinking fund redemption.

“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and if such corporation for any reason no longer performs the functions of a securities rating agency, “Moody’s” will be deemed to refer to any other nationally recognized securities rating agency designated by the Borrower, by notice to the Issuer and the Trustee, and not objected to by the Issuer. Whenever rating categories of Moody’s are specified in the Indenture, such categories will be irrespective of gradations within a category.

“Net Proceeds” means, when used with respect to any insurance or condemnation award paid to the Borrower or the Trustee, with respect to the sale or other disposition of a portion of the Project, or with respect to any other recovery on a contractual claim or claim for damage to or for taking of property, the gross proceeds from the insurance or condemnation award, sale or other disposition, or recovery remaining after payment of all expenses (including reasonable attorneys’ fees and any Extraordinary Expenses of the Trustee) incurred in the collection of such gross proceeds.

“Notes” means the Series 2016 Notes and any Additional Notes.

“Office of the Trustee” means the corporate trust office of the Trustee currently located at 505 North 20th Street, Suite 350, Birmingham, Alabama 35203, Attn: Corporate Trust Department, or at such other office as may be designated by the Trustee to the Issuer and the Borrower in writing.

“Operating Account” means the deposit account maintained by the Manager into which money transferred by the Trustee from the Revenue Fund to the Manager for payment of regular operating Expenses are to be deposited.

“Operations Contingency Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS— Operations Contingency Fund” and below under “THE INDENTURE—Operations Contingency Fund.”

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“Operations Office of the Trustee” the corporate trust office of the Trustee currently located at 505 North 20th Street, Suite 350, Birmingham, Alabama 35203, Attn: Corporate Trust Department, or at such other office as may be designated by the Trustee to the Issuer and the Borrower in writing.

“Opinion of Bond Counsel” means an opinion of Bond Counsel addressed to the Issuer, the Borrower and the Trustee. Any such opinion is required to be in such form and contain such disclosures as may be required so that such opinion will not be treated as a covered opinion or a state or local bond opinion for purposes of Treasury Department regulations governing practice before the Internal Revenue Service (Circular 230) 31 C.F.R. pt. 10.

“Ordinary Services of the Trustee” and “Ordinary Expenses of the Trustee” mean those reasonable services rendered, and all advances made and reasonable expenses incurred by the Trustee (in its capacity as Trustee and in its capacity as dissemination agent, paying agent and as registrar, as applicable) under the Bond Documents, in connection with the execution thereof and the exercise and performance of its powers and duties thereunder or otherwise of the type ordinarily performed by corporate trustees, dissemination agents, paying agents, or registrars, as applicable, under like documents, including, without limitation, disbursements, advances to and reasonable fees and expenses of independent appraisers, accountants, consultants, counsel, agents and attorneys or other experts employed by it in the exercise and performance of its powers and duties thereunder. Notwithstanding the foregoing, Ordinary Services of the Trustee will only include such services of the Trustee in such capacities which are included without additional cost as part of the annual fee for acting in each such capacity, with all other services provided in such capacities being considered Extraordinary Services of the Trustee.

“Original Loan Agreement” means the Loan Agreement dated as of June 1, 2016, excluding any amendments thereto.

“Outstanding Bonds” or “Bonds Outstanding” means all Bonds that have been duly authenticated and delivered by the Trustee under the Indenture, except:

(a) Bonds theretofore canceled or required to be canceled by the Trustee;

(b) Bonds that are deemed to have been paid in accordance with the Indenture; and

If the Indenture is discharged pursuant to its terms, no Bonds will be deemed to be Outstanding within the meaning of this definition.

“Payment and Performance Bonds” means separate performance and labor and material payment bonds with respect to the applicable Construction Contracts, as more fully described below under “THE LOAN AGREEMENT—Acquisition, Construction, Furnishing, and Equipping of the Series 2016 Project—Payment and Performance Bonds.”

“Periodic Project Assessment” means, (a) with respect to the Series 2016 Project, the review of the adequacy of the amounts for the Repair and Replacement Fund Requirement relating to the Series 2016 Project (not less than every five (5) years following the Completion Date for the Series 2016 Project) by an Independent Engineer retained by or on behalf of the Borrower to conduct a physical needs reserve analysis with respect to the then-current condition of the Series 2016 Project, the then-current balance in the Repair and Replacement Fund and for all amounts expected to be expended over the next succeeding five Annual Periods for major maintenance, repair and replacement (“MRR”) at the Series 2016 Project and to be reserved for longer dated MRR at the Series 2016 Project up to and including the stated final maturity of the Series 2016 Bonds; provided, however, that if the University hires, retains or engages an engineer or firm of engineers duly admitted to practice engineering in the State with expertise in property management, maintenance and reporting to perform an assessment on its buildings, it includes the Series 2016 Project in such assessment, and such assessment contains the foregoing information with respect to the Series 2016 Project, such assessment with respect to the Series 2016 Project will constitute a Periodic Project Assessment and will be sufficient in lieu of engaging an Independent Engineer, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

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“Permitted Encumbrances” means, as of any particular time; (a) liens for ad valorem taxes, special assessments and other charges not then delinquent or for taxes, assessments and other charges being contested in accordance with the Original Loan Agreement; (b) any lien on the Project obtained through the Bond Documents; (c) currently existing utility, access and other easements and rights of way, restrictions and exceptions described in the title policy required by the Original Loan Agreement; (d) inchoate mechanics’ and materialmen’s liens that arise by operation of law, but that have not been perfected by the required filing of record, for work done or materials delivered after the date of recording the Leasehold Deed of Trust in connection with Additions or Alterations; (e) the mechanics’ and materialmen’s liens permitted by the Original Loan Agreement; (f) utility, drainage, access and other easements, conveyances or rights of use which do not adversely impact the intended use of the Project; and (g) liens or encumbrances securing Additional Bonds.

“Permitted Investments” means any of the following securities:

(a) direct or general obligations of or obligations guaranteed by, and representing a pledge of the full faith and credit of, the United States of America;

(b) obligations, debentures, notes or other evidences of indebtedness issued or guaranteed by any of the following: Banks for Cooperatives; Central Bank for Cooperatives; Federal Intermediate Credit Banks; Federal Home Loan Bank System; Export Import Bank of the United States; Federal Land Bank; FNMA (excluding securities representing only interest payments); FHLMC (but only to the extent timely payment of principal and interest is guaranteed); FmHA; Tennessee Valley Authority; Federal Financing Bank; or GNMA;

(c) to the extent (at the time of such investment) they do not adversely affect the rating quality on the Outstanding Bonds, securities representing an undivided beneficial interest in identified payments to be made on an obligation listed in clause (a) or (b) (other than mutual funds unless the written consent of the Rating Agencies which then have current ratings on the Bonds has been obtained);

(d) to the extent (at the time of such investment) they do not adversely affect the rating quality on the Outstanding Bonds, certificates of deposit issued by, or time deposits with, or other interest bearing deposits of, the Trustee, any bank or trust company organized under the laws of the State, any national banking association which is a member of the Federal Reserve System or any savings and loan association which is a member of the Federal Deposit Insurance Corporation; provided that any such entity has capital stock, surplus and undivided profits aggregating at least $1,000,000; and provided further that such time deposits or certificates of deposit or other interest bearing deposits, to the extent not insured, are fully secured by obligations of the type specified in clause (a) or (b) above or municipal obligations rated “A” or better by S&P which have a market value, exclusive of accrued interest, at least equal to the amount of such deposits plus interest accrued thereon;

(e) general obligations of any state of the United States of America to the payment of which the full faith and credit of such state is pledged and which at the time of purchase are rated not lower than the rating quality of the applicable series of Bonds by the Rating Agency, if in each case such Rating Agency then has a current rating on the Bonds, and other obligations issued by any such state or by any agency, instrumentality or local governmental unit of any such state which at the time of purchase are rated not lower than the rating of the applicable series of Bonds by the Rating Agency if in each case such Rating Agency then has a current rating on the series of Bonds, and general obligations of or obligations fully guaranteed by the State;

(f) shares of a diversified open end management investment company, as defined in the Investment Company Act of 1940, which is a money market fund and which at the time of purchase is rated at least “AAA” by S&P, if such Rating Agency then has a current rating on the series of Bonds and if such Investment will not adversely affect the ratings on the Outstanding Bonds at the time of such investment;

(g) bonds, debentures, notes, commercial paper, certificates of deposit, interest bearing accounts (in financial institutions selected without regard for relative participation as qualified mortgage lenders in Issuer programs, and which may include the Trustee), repurchase agreements and other investment

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agreements which are in each case issued or fully guaranteed by a person having unsecured debt obligations rated at the time of purchase not lower than the rating of the applicable series of Bonds by S&P, if such Rating Agency then has a current rating on such series of the Bonds, or any investment agreement described in the applicable supplemental indenture or approved by each Rating Agency having a current rating on such series of Bonds; or

(h) any other security or obligation or combination thereof permitted under the Public Funds Investment Act, Chapter 2256, Texas Government Code (the “Public Funds Investment Act”), as it may be amended from time to time.

It is expressly understood that the definition of Permitted Investments will be, and be deemed to be, expanded, or new definitions and related provisions will be added to this Indenture by a supplemental indenture, thus permitting investments with different characteristics from those permitted above which the Issuer deems from time to time to be in the interest of the Issuer to include as Permitted Investments if at the time of inclusion such inclusion will not, in and of itself, adversely affect the rating quality on the Outstanding Bonds, provided, however, that in no event will the term Permitted Investments include any investment that is not authorized pursuant to the Public Funds Investment Act. In determining whether a particular investment would adversely affect the rating quality on the Outstanding Bonds of a series, the Borrower may rely upon the most recent credit publications of the applicable Rating Agency, or written or oral determinations thereof; provided that if oral the Borrower is required to maintain a written summarization of the results of such oral communication.

“Person” means natural persons, firms, joint ventures, associations, trusts, partnerships, corporations, limited liability companies, public bodies and similar entities.

“Plans and Specifications” means, (a) with respect to the Series 2016 Project, the detailed plans and specifications for the construction thereof, prepared by the Series 2016 Architect or architects and consultants engaged by the Series 2016 Architect, as amended from time to time by the Borrower, a copy of which is or will be on file with the Trustee, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Premises” means, collectively, the Property and the Project.

“Project” means the Series 2016 Project and any additional project acquired, constructed, furnished and equipped with the proceeds of Additional Bonds.

“Property” means the land described in Exhibit A attached to the Indenture and in any indenture supplemental thereto.

“Rating Agency” means, at any point in time, any nationally recognized securities rating agency or service then rating a series of Bonds (collectively, the “Rating Agencies”).

“Rebate Amount” means, as of any Calculation Date, the amount that would have been required to be paid to the United States of America under §148(f) of the Code with respect to all Outstanding Bonds had all of such Bonds had been Discharged on and as of such Calculation Date.

“Rebate Fund” means the Fund of that name created in the Indenture and described below under “THE INDENTURE—Rebate Fund.”

“Redemption Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Redemption Fund” and below under “THE INDENTURE—Redemption Fund.”

“Redemption Price” means, with respect to Bonds or a portion thereof, the principal amount of such Bonds or portion thereof plus accrued interest, if any, plus the applicable premium, if any, payable on redemption thereof in the manner contemplated in accordance with its terms and the Indenture.

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“Regular Record Date” means (a) with respect to the Series 2016 Bonds, the fifteenth day of the month (whether or not such day is a Business Day) immediately preceding each Interest Payment Date, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Regulations” means the applicable treasury regulations promulgated under the Code or under §103 of the Internal Revenue Code of 1954, as amended, whether at the time proposed, temporary, final, or otherwise. Reference in the Indenture to any specific provision of the Regulations will be deemed to include a reference to any successor provision or provisions to such provision.

“Repair and Replacement Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Repair and Replacement Fund” and below under “THE INDENTURE—Repair and Replacement Fund.”

“Repair and Replacement Fund Requirement” means, (a) with respect to the Series 2016 Project, the amount of money specified in Exhibit D to the Loan Agreement to be deposited in each Annual Period to the Repair and Replacement Fund in accordance with the Indenture; provided, however, that the Repair and Replacement Fund Requirement is required to be adjusted upwards or downwards by the amounts recommended in the latest Periodic Project Assessment for the Series 2016 Project, and (b) with respect to any other Project, the meaning set forth in an amendment to the Loan Agreement entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Repair and Replacement Loan Payments” means the Loan Payments to be made by the Borrower into the Repair and Replacement Fund in accordance with the Original Loan Agreement.

“Requisite Number of Bondholders” means the Owners of not less than two-thirds in aggregate principal amount of the Bonds then Outstanding or, if such provision applies only to a series of Bonds, the Owners of not less than two-thirds in aggregate principal amount of the Bonds of such series then Outstanding.

“Reserve Loan Payments” means the Loan Payments payable by or on behalf of the Borrower to the Issuer pursuant to the Loan Agreement that are described below under “THE LOAN AGREEMENT—Loan Payments and Other Amounts Payable—Reserve Loan Payments.”

“Reserved Approval Rights” means the rights of the Issuer under the Indenture and the Loan Agreement to receive notices and to give approvals and consents and to make determinations, and to execute and deliver supplements to and amendments of the Loan Agreement pursuant to the Loan Agreement.

“Reserved Indemnity Rights” means the rights of the Issuer and the Issuer’s Agents to indemnification pursuant to the provisions of the Indenture and the Loan Agreement.

“Reserved Payment Rights” means the rights of the Issuer, the Issuer’s Agents and the Issuer’s Bond Counsel under the Indenture and the Loan Agreement to have the Borrower pay the reasonable fees and expenses incurred by the Issuer, the Issuer’s Agents and the Issuer’s Bond Counsel in connection with the issuance and sale of the Bonds and the performance of the Issuer’s duties, and the exercise of the Issuer’s rights, under the Indenture and the Loan Agreement.

“Reserved Rights” means, collectively, the Reserved Approval Rights, the Reserved Indemnity Rights and the Reserved Payment Rights.

“Revenue Available for Fixed Charges” means, for any period, the excess of Revenues over Expenses.

“Revenue Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Revenue Fund” and below under “THE INDENTURE—Transfer of General Revenues.”

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“Revenues” means, for any period, (a) General Revenues (other than Unrestricted Contributions) that have been deposited or credited to the Revenue Fund during such period all as determined in accordance with GAAP, but excluding in any event (b) the sum of (i) any gains on the sale or other disposition of investments or fixed or capital assets not in the ordinary course of business; (ii) earnings on amounts that are irrevocably deposited in escrow to pay the principal of or interest on indebtedness of the Borrower related to the Project; (iii) earnings or gains resulting from any reappraisal, revaluation or write-up of assets; (iv) contributions from any Affiliate; (v) deposits received from residents of the Project and held by the Manager on behalf of the Borrower until such time, if any, as the Manager is permitted to apply such deposits to the payment of rent or to the repair and maintenance of the Project in accordance with the terms of a residency agreement; (vi) any unrealized gain resulting from changes in the value of investment securities or an interest rate hedge or protection agreement; (vii) insurance proceeds other than business or rental interruption insurance; and (viii) proceeds of condemnation, sale or other disposition of the Project or any part thereof received by or on behalf of the Borrower.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, and if such corporation for any reason no longer performs the functions of a securities rating agency, “S&P” will be deemed to refer to any other nationally recognized securities rating agency designated by the Borrower, by written notice to the Issuer and the Trustee, and not objected to by the Issuer. Whenever rating categories of S&P are specified in the Indenture, such categories are irrespective of gradations within a category.

“Securities Depository” means DTC or any other recognized securities depository selected by the Issuer at the request of the Borrower, which maintains a book-entry system in respect of such Bonds and agrees to follow the procedures required to be followed under the Indenture by a Securities Depository, and include any substitute for or successor to the securities depository initially acting as Securities Depository.

“Security” means any of the property subject to the operation of the granting clauses contained in the Security Documents.

“Security Agreement” means, (a) with respect to the Series 2016 Bonds, the Security Agreement between the Borrower and the Trustee, as the same may be amended and/or supplemented from time to time as permitted by the Indenture (including to provide for the issuance of Additional Bonds), and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Security Documents” means, (a) with respect to the Series 2016 Bonds, collectively, the Indenture, the Leasehold Deed of Trust relating to the Series 2016 Project, the Security Agreement relating to the Series 2016 Bonds, the Assignment of Agreements and Documents relating to the Series 2016 Project and the Loan Agreement (each, a “Security Document”), and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Series 2016 Architect” means Solomon Cordwell Buenz & Associates, Inc., a corporation licensed to do business in the State.

“Series 2016 Architect’s Agreement” means the Standard Form of Agreement between Owner and Architect between the Series 2016 Architect and the Series 2016 Developer and assigned to the Borrower, as the same may be amended and modified from time to time as permitted hereby and thereby.

“Series 2016 Bonds” means the Series 2016A Bonds and the Series 2016B Bonds.

“Series 2016 Builder” means Davis Brothers Construction, Ltd., a limited partnership under the laws of the State of Texas licensed to do business in the State, and its successors and assigns.

“Series 2016 Closing Date” means the date on which authenticated Series 2016 Bonds are delivered to or upon the order of the Underwriter and payment is received therefor by the Trustee on behalf of the Issuer.

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“Series 2016 Developer” means ACC SC Development, LLC, a limited liability company organized under the laws of the State of Delaware, authorized to do business in the State as ACC Services Development LLC, and its successors and assigns.

“Series 2016 Development Agreement” means the Project Development Agreement between the Borrower and the Series 2016 Developer, as the same may be amended from time to time as permitted by the Indenture (including to provide for the issuance of Additional Bonds) and thereby.

“Series 2016 Guaranteed Maximum Price Contract” means the Standard Form of Agreement between Owner and Contractor, as the same may be amended or modified from time to time as permitted by the Series 2016 Guaranteed Maximum Price Contract and by the Indenture (including to provide for the issuance of Additional Bonds), pursuant to which the Series 2016 Builder has agreed to construct the Series 2016 Project.

“Series 2016 Loan” means the loan by the Issuer to the Borrower of the proceeds of the Series 2016 Bonds pursuant to the Loan Agreement and which is evidenced by the Series 2016 Notes.

“Series 2016 Project” means the development, construction, furnishing and equipping of an approximately 560-bed student housing facility and an approximately 3,800 square foot community center, along with associated site development and various related amenities and improvements owned by the Borrower to be located on the campus of the University, consisting of the Building and the Equipment to be financed with proceeds of the Series 2016 Bonds.

“Series 2016A Bonds” means the revenue bonds designated “New Hope Cultural Education Facilities Finance Corporation Student Housing Revenue Bonds (CHF – Collegiate Housing San Antonio I, L.L.C. – Texas A&M University–San Antonio Project) Series 2016A” in the aggregate principal amount of $19,975,000 to be issued pursuant to the Indenture.

“Series 2016A Note” means the Series 2016A Promissory Note of the Borrower dated as of the Series 2016 Closing Date, in an original principal amount equal to the original principal amount of the Series 2016A Bonds, payable to the Issuer, given to evidence the obligation of the Borrower to repay the portion of the Series 2016 Loan relating to the Series 2016A Bonds.

“Series 2016B Bonds” means the revenue bonds designated “New Hope Cultural Education Facilities Finance Corporation Taxable Student Housing Revenue Bonds (CHF – Collegiate Housing San Antonio I, L.L.C. – Texas A&M University–San Antonio Project) Series 2016B” in the aggregate principal amount of $885,000 to be issued pursuant to the Indenture.

“Series 2016B Note” means the Series 2016B Promissory Note of the Borrower dated as of the Series 2016 Closing Date, in an original principal amount equal to the original principal amount of the Series 2016B Bonds, payable to the Issuer, given to evidence the obligation of the Borrower to repay the portion of the Series 2016 Loan relating to the Series 2016B Bonds.

“Short-Term Indebtedness” means any Indebtedness maturing not more than 365 days after it is incurred or that is payable on demand, except for any such Indebtedness that is renewable or extendable at the sole option of the debtor to a date more than 365 days after it is incurred, or any such Indebtedness that, although payable within 365 days, constitutes payments required to be made on account of Indebtedness expressed to mature more than 365 days after it was incurred.

“Sinking Fund Requirement” means, (a) with respect to the Series 2016 Bonds, the principal amount established under the Indenture for the retirement thereof by purchase or redemption on April 1 of such Bond Year, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“State” means the State of Texas. “Subordinated Expenses” means, (a) with respect to the Series 2016 Project, any insurance premiums paid by the Board or the University for insurance that the Board requests the Borrower obtain while the Board is obligated

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to repair the Series 2016 Project, as further described in the Ground Lease, and (b) with respect to any other Project, the meaning set forth in a supplemental indenture entered into in conjunction with the issuance of Additional Bonds relating to such Project.

“Surplus Fund” means the Fund of that name created in the Indenture and described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Surplus Fund” and below under “THE INDENTURE—Surplus Fund.”

“Tax-Exempt Bonds” means any Bonds the interest on which is intended to be excluded from the gross income of the Owners thereof for federal income tax purposes.

“Tax-Exempt Organization” means a Person organized under the laws of the United States of America or any state thereof (a) that is an organization described in §501(c)(3) of the Code; (b) that is exempt from federal income taxes under §501(a) of the Code; and (c) that is not a “private foundation,” within the meaning of §509(a) of the Code, unless there is delivered to the Issuer and the Trustee an Opinion of Bond Counsel to the effect that the status of such Person as a private foundation will not bring about an Event of Taxability.

“Tax Regulatory Agreement” means, (a) with respect to the Series 2016 Bonds, the Tax Regulatory Agreement and all attachments thereto, dated as of the date of issuance of the Series 2016 Bonds, and (b) with respect to any series of Additional Bonds, the meaning set forth in a supplemental indenture relating to such Additional Bonds.

“Trustee” means the trustee and any co-trustee at the time serving as such under the Indenture. Wilmington Trust, National Association is the initial Trustee.

“Trust Estate” means any and all property subject to the operation of the granting clauses the Indenture.

“Underwriter” means RBC Capital Markets, LLC, and its successors and assigns.

“University” means the Texas A&M University–San Antonio.

“Unrestricted Contributions” means contributions to the Borrower from any Person or any governmental entity that are not restricted in any way that would prevent their application to the payment of debt service on Indebtedness of the Borrower related to the Project, excluding payments made by the Board to the Trustee under Section 21(e)(ii) of the Ground Lease (which payments are considered General Revenues).

“Valuation Dates” means, collectively, the dates on which the Trustee is required to determine the Value of the cash and investments in the Debt Service Reserve Fund, which dates, prior to a determination that such Value is less than the Debt Service Reserve Requirement (a “Deficiency Determination”), will be June 30 and December 31 of each year and, after a Deficiency Determination, will be the last day of each month until the Value of the cash and investments in each Account of the Debt Service Reserve Fund again equals or exceeds the Debt Service Reserve Requirement for each series of Bonds; provided, however, if any such day is not a Business Day the Trustee is required to make such determination as of the immediately succeeding Business Day (each, a “Valuation Date”).

“Value” means, with respect to Permitted Investments, (a) as to investments the value of which is established by the pricing service utilized by Trustee in its ordinary course of business, the value most recently listed for such investments by such pricing service; (b) as to investments the value of which is not established by the pricing service utilized by Trustee, the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investment so published on or most recently prior to such time of determination; (c) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: the average bid price at such price and at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Trustee in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; (d) with respect to certificates of deposit and bankers’ acceptances, means the face amount thereof, plus accrued interest; (e) with respect to guaranteed investment contracts that permit the Borrower to withdraw amounts invested thereunder at any time without penalty for which repayment

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obligation the other party thereto has pledged collateral acceptable to the Trustee, the amount available to be withdrawn therefrom; and (f) with respect to any investment not specified above, means the value thereof established by prior agreement between the Trustee and the Borrower.

THE INDENTURE

The following is a summary of certain provisions of the Indenture. Reference is made to the Indenture for the complete text thereof. The discussion in the Indenture is qualified by such reference.

Transfer of General Revenues

There is required to be created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Revenue Fund.” The Borrower has agreed to deposit or cause to be deposited all General Revenues to the Revenue Fund not less frequently than each Friday (or if Friday is not a Business Day, the immediately preceding Business Day); provided, however, that if an Event of Default has occurred and is continuing, the Borrower has agreed in the Loan Agreement to deliver all such General Revenues daily. The amounts so transferred and deposited into the Revenue Fund maintained by the Trustee is required to be disbursed by the Trustee each month or at such other times described below in the following order:

(a) there is required to be transferred to the Bond Fund:

(ii) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth in the Loan Agreement to be paid by the Borrower in respect of interest on such Additional Bonds;

(iii) on or before the twentieth day of each month commencing in the month of April 2018, and on or before the twentieth day of each month thereafter, a sum equal to (A) one-twelfth of the principal due on the immediately succeeding April 1 that is a maturity date of the Series 2016 Bonds; and (B) one-twelfth of the amount required to retire Series 2016 Bonds under the mandatory sinking fund redemption requirements of the Indenture on the immediately succeeding April 1, to cause the amount in the Bond Fund three (3) Business Days prior to the Interest Payment Date to be sufficient to pay such amounts as provided therein, as the case may be;

(iv) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth in the Indenture to be paid by the Borrower in respect of the principal of such Additional Bonds (whether at maturity or under any mandatory sinking fund or other similar redemption requirements of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds);

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amounts then on deposit in the Bond Fund and the Redemption Fund to be used for the payment of such Additional Bonds to be redeemed);

(b) there is required to be paid to the Trustee:

(i) on an annual basis, the annual fee of the Trustee for the Ordinary Services of the Trustee payable each year, plus the Ordinary Expenses of the Trustee incurred under the Indenture and under the other Bond Documents, as and when the same become due;

(ii) except as included in clause (i) above, the reasonable fees and charges of any paying agents on the Bonds for acting as paying agents as provided in the Indenture, payable as and when the same become due;

(iii) the reasonable fees and charges of the Trustee for the Extraordinary Services of the Trustee rendered by it and the Extraordinary Expenses of the Trustee incurred by it under the Bond Documents, as and when the same become due; provided, that the Borrower may, without creating an Event of Default under the Indenture, contest in good faith the reasonableness of any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any such fees, charges, or expenses;

(c) there is required to be paid to the Issuer (as certified in writing to the Trustee by the Issuer) on the twentieth day of each month (or the immediately succeeding Business Day if the twentieth day of a month is not a Business Day), an amount sufficient to reimburse the Issuer for all unpaid fees and expenses reasonably incurred by the Issuer under the Loan Agreement in connection with the Project, including, but not limited to, the reasonable fees and expenses of counsel for the Issuer and Bond Counsel;

(d) there is required to be paid to the Manager on the twentieth day of each month (or the immediately succeeding Business Day if the twentieth day of a month is not a Business Day) for deposit into the Operating Account an amount equal to the greater of (i) the amount budgeted in the Annual Budget for Expenses for the immediately succeeding month, or (ii) 10% of the Expenses shown in the then current Annual Budget; provided that the amount transferred may not exceed the amount, if any, resulting by subtracting (1) the amount theretofore deposited into the Operating Account pursuant to this clause (d) for the then current Annual Period; from (2) the amount budgeted in the Annual Budget for Expenses for the then current Annual Period through the last day of the immediately succeeding month;

(e) if any funds are withdrawn from the Debt Service Reserve Fund, if there is a diminution in Value of the cash and investments held in the Debt Service Reserve Fund as of any Valuation Date, or if any net losses result from the investment of amounts held in the Debt Service Reserve Fund, in each case resulting in a reduction of the Value of the cash and investments in the Debt Service Reserve Fund to less than the Debt Service Reserve Requirement for any one or more series of Bonds as of any Valuation Date, there is required to be transferred to the related Account of the Debt Service Reserve Fund, beginning on the twentieth day of the month following notice from the Trustee of such withdrawal, diminution in Value or losses, and on the twentieth day of each month thereafter, (i) 1/4th of the amount of such deficiency due to a diminution in Value, or such losses; or (ii) 1/12th of the amount of such deficiency if such deficiency results from any withdrawal from the Debt Service Reserve Fund or from any other source; in each case until the amount on deposit in the Debt Service Reserve Fund equals the Debt Service Reserve Fund Requirement;

(f) if any funds are withdrawn from the Repair and Replacement Fund to pay Debt Service Payments in accordance with the Indenture as described in clause (ii) of paragraph (b) under “THE INDENTURE—Repair and Replacement Fund,” there is required to be transferred to the Repair and Replacement Fund, beginning on the twentieth day of the month following any such withdrawal and continuing on the twentieth day of each month thereafter the greater of (i) the lesser of (A) one-twelfth of the amount of such withdrawal or (B) such amount that is necessary to reimburse the Repair and Replacement Fund for all such withdrawals, or (ii) such amount as directed in writing by the Borrower;

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(g) there is required to be transferred to the Repair and Replacement Fund, commencing on the twentieth day of the first month following the month in which the Project receives a certificate of occupancy and on the twentieth day of each month thereafter, an amount in equal monthly installments necessary to equal the annual amounts (or portion thereof for the partial Fiscal Year in which the Project is completed) set forth on Exhibit D attached to the Loan Agreement and any and all additional amounts required to be deposited therein following a Periodic Project Assessment in accordance with the Indenture or by any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds;

(h) there is required to be transferred to the Rebate Fund on the dates that the Borrower provides any calculation of the Rebate Amount to the Trustee in accordance with the provisions of the Indenture described below in paragraph (b) under “THE INDENTURE—Rebate Fund,” the amounts determined by the Borrower to be equal to the excess, if any, of the Rebate Amount so calculated over the amount then in the Rebate Fund;

(i) there is required be transferred to the appropriate fund or funds other than the Repair and Replacement Fund, the Operations Contingency Fund and the Surplus Fund, any and all additional amounts required to be deposited into such fund or funds by any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds on the date(s) specified in the Indenture;

(j) on the twentieth day of each month, there is required to be paid to the University an amount equal to all Subordinated Expenses, to the extent that funds are available therefor, that have not previously been reimbursed to the University, as reimbursement to the University for the payment of such Subordinated Expenses, provided, however, that no payments will be made under this clause (j) unless (i) all payments under clauses (a) through (i) above that are due have been paid, and (ii) the Manager determines, and certifies to the Trustee, that, based on the Annual Budget, after payment of such Subordinated Expenses, there are sufficient funds in the Bond Fund, the Revenue Fund and the Operations Contingency Fund to pay the ensuing payments coming due under clause (a) above for the next succeeding six months (amounts paid to the University in accordance with this clause (j) will be the property of the University and will no longer be subject to the lien of the Indenture); and

(k) any amounts remaining therein on the last Business Day of each month are required to be transferred or credited to the Operations Contingency Fund.

Bond Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Bond Fund.” There is required to be deposited into the Bond Fund from the Revenue Fund all amounts specified in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Revenue Fund” and above under “THE INDENTURE—Transfer of General Revenues,” all Basic Loan Payments received by the Trustee from the Borrower pursuant to the Original Loan Agreement, and all other money received by the Trustee under and pursuant to any of the provisions of the Loan Agreement when accompanied by written directions from the Manager or the Borrower that such money is to be paid into the Bond Fund. Except as provided in paragraph (d) of this caption and in the Indenture, money in the Bond Fund (with the exception of the Defeasance Account) is required to be used solely to pay the Debt Service Payments on the Bonds. Not later than 12:00 noon Central Time on any date Debt Service Payments are due (other than principal of Bonds to be paid from money in the Redemption Fund pursuant to the provisions of the Indenture described below under “THE INDENTURE—Redemption Fund”), the Trustee is required to withdraw money from the Bond Fund sufficient to make such Debt Service Payment and is required to make such Debt Service Payment to the Owner of such Bonds entitled thereto.

(b) There are created by the Issuer and ordered established with the Trustee three accounts within the Bond Fund, to be designated respectively, the “Capitalized Interest Account,” the “Defeasance Account” and the “Payment Account.” In connection with the issuance of the Series 2016 Bonds, there are also created by the Issuer and ordered established with the Trustee two separate subaccounts within the Capitalized Interest Account designated the “2016A CI Subaccount” and the “2016B CI Subaccount,” two separate subaccounts within the Defeasance

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Account designated the “2016A Defeasance Subaccount” and the “2016B Defeasance Subaccount” and two separate subaccounts within the Payment Subaccount designated the “2016A Payment Subaccount” and the 2016B Payment Subaccount.” The Trustee is required to also establish separate subaccounts within the Capitalized Interest Account, the Defeasance Account and the Payment Account with respect to each series of Additional Bonds.

(c) There is required to be deposited into the 2016A CI Subaccount of the Capitalized Interest Account the amounts set forth in the Indenture. There is required to be deposited into the 2016B CI Subaccount of the Capitalized Interest Account the amounts set forth in the Indenture. On each date that transfers to the Bond Fund are required by the provisions of the Indenture described in clauses (i) and (iii) of paragraph (a) in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Revenue Fund” and herein under “THE INDENTURE—Transfer of General Revenues” while there are funds on deposit in the Capitalized Interest Account of the Bond Fund, the Trustee is required to transfer (i) from the 2016A CI Subaccount to the 2016A Payment Subaccount of the Bond Fund the lesser of (A) an amount equal to any such transfer required in respect of the Series 2016A Bonds on that date, or (B) the amount remaining in the 2016A CI Subaccount, (ii) from the 2016B CI Subaccount to the 2016B Payment Subaccount of the Bond Fund the lesser of (A) an amount equal to any such transfer required in respect of the Series 2016B Bonds on that date, or (B) the amount remaining in the 2016B CI Subaccount and (iii) from any other subaccount of the Capitalized Interest Account created in respect of a series of Additional Bonds to the Bond Fund the lesser of (A) an amount equal to any such transfer required in respect of such series of Bonds on that date, or (B) the amount remaining in such subaccount. After a Project is placed in service, the Borrower may direct in writing that the amounts held in the related subaccount of the Capitalized Interest Account is required to be transferred to the related subaccount of the Payment Account of the Bond Fund or to the Redemption Fund and used to redeem the related series of Bonds as provided therein.

(d) There is required to be deposited into the subaccounts of the Defeasance Account all amounts deposited to pay and discharge a particular series of the Bonds pursuant to the provisions of the Indenture described below under “THE INDENTURE—Discharge; Release of the Indenture,” including proceeds of any refunding Bonds, which subaccounts may hold no other money. Money in the subaccounts of the Defeasance Account is required to be used solely to pay the purchase price of, and the Debt Service Payments on, the series of Bonds with respect to which such subaccount has been established.

(e) There is required to be deposited into the subaccounts of the Payment Account all other payments made in respect of the related Note and Loan Agreement for the payment of Debt Service Payments on the related series of Bonds.

(f) Upon the occurrence of an Event of Default, the Trustee may use money in the Bond Fund to pay the fees and expenses of the Trustee prior to the making of any payments to the Bondholders. Except as provided in the Indenture or any indenture supplemental thereto, no part of the Basic Loan Payments in the Bond Fund may be used to redeem, prior to maturity, a part of the Bonds Outstanding; provided, that whenever the amount in the Bond Fund from any source whatsoever is sufficient to redeem all of the Bonds Outstanding under the Indenture, to pay interest to accrue thereon to such redemption date, and to pay all costs and expenses accrued and to accrue to such redemption date, if so directed by the Borrower pursuant to the Loan Agreement, the Issuer covenants and agrees to take and cause to be taken the necessary steps to redeem all of said Bonds on the immediately succeeding redemption date for which the required redemption notice may be given.

(g) The Trustee is required to withdraw sufficient funds from the Payment Accounts of the Bond Fund to pay Debt Service Payments on the related series of Bonds as the same become due and payable and to make said funds so withdrawn available to the paying agent or agents, if any, for the purpose of paying said Debt Service Payments.

(h) If on any Bond Payment Date there are insufficient funds in the Bond Fund and the Redemption Fund available therefor to pay Debt Service Payments for a series of Bonds then due, the Trustee is required to transfer to the Bond Fund, or is required to send written notice to the Manager to transfer to the Trustee for deposit to the Bond Fund, an amount equal to such insufficiency from the following Funds in the following order of priority: first, the related Account of the Redemption Fund, second, the Surplus Fund, third, the Operations Contingency Fund, fourth, the Repair and Replacement Fund, and fifth, the related Account of the Debt Service Reserve Fund.

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Redemption Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Redemption Fund.” There is required to be deposited into the Redemption Fund all money required to be transferred thereto or deposited in the Indenture pursuant to the provisions of the Indenture described below under “THE INDENTURE—Construction Fund,” the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Removal of Equipment,” “—Destruction and Damage” and “—Condemnation” and the Leasehold Deed of Trust and pursuant to the provisions of any amendment to the Loan Agreement. Money in the Redemption Fund is required to be used only to pay the principal of Bonds or that portion of the Redemption Price of Bonds corresponding to principal in the manner specified in this caption and in the Indenture (or in such corresponding provisions contained in a supplemental indenture). Not later than 12:00 noon (Central) on any date principal or Redemption Price of any Bond is due, the Trustee is required to withdraw money from the Redemption Fund sufficient to make such payment and to make such payment to the Owner of such Bonds entitled thereto.

(b) The Trustee is required to establish a separate Account within the Redemption Fund (i) with respect to each series of Bonds; and (ii) if more than one series of Bonds is issued on the same date, with respect to each such multiple series of Bonds, (iii) with respect to any amounts transferred to the Redemption Fund from the 2016 Proceeds Account of the Construction Fund pursuant to the provisions of the Indenture described below in paragraph (c) under “THE INDENTURE—Construction Fund,” and (iv) with respect to any other amounts transferred to the Redemption Fund in accordance with the terms of any supplemental indenture. Subject to the provisions of paragraph (c) of this caption, but notwithstanding anything else contained in the Indenture to the contrary, any amounts required to be deposited in the Redemption Fund for the redemption of a particular series or multiple series of Bonds in accordance with any of the Bond Documents are required to be deposited in the applicable Account or Accounts thereof, and, prior to the occurrence of an Event of Default, any amounts in an Account of the Redemption Fund may be used only to make payments on the series of Bonds in respect of which such Account was established.

(c) All amounts transferred to the Redemption Fund from the Capitalized Interest Account of the Bond Fund or the 2016 Proceeds Account of the Construction Fund pursuant to the provisions of the Indenture described below in paragraph (c) under “THE INDENTURE—Construction Fund” to redeem Bonds are required to be used to redeem only the principal portion thereof.

(d) When (i) the amount of the remaining Debt Service Payments on the Outstanding Bonds is equal to or less than the sum of the balance of the Bond Fund, the balance of the Redemption Fund, the balance of the Debt Service Reserve Fund and the balance of the Repair and Replacement Fund; and (ii) all other amounts owed under the Loan Agreement and the Indenture have been paid, money held in the Redemption Fund is required to be deposited into the Bond Fund and credited against payments of Loan Payments required under “THE LOAN AGREEMENT— Loan Payments and Other Accounts Payable” described below (or otherwise required pursuant to an amendment to the Loan Agreement) or may be used in such other manner for which an Opinion of Bond Counsel has been obtained.

Issuance Cost Fund

There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Issuance Cost Fund,” which is required to be used as a fund to pay Issuance Costs and the Borrower Acquisition Fee. Within the Issuance Cost Fund, there is created by the Issuer and ordered established a separate account designated as the “2016 Proceeds Account.” There is required to be deposited into the 2016 Proceeds Account of the Issuance Cost Fund from the sale of the Series 2016 Bonds the amount specified in the Indenture which is required to be used to pay Issuance Costs, including, in particular, the Borrower Acquisition Fee. Except for authorized disbursements on the Series 2016 Closing Date, money in the Issuance Cost Fund is required to be disbursed in this manner upon receipt of a requisition for payment substantially in the form attached to the Indenture, executed by the Authorized Borrower Representative, and the Trustee is authorized and directed to make each disbursement upon receipt of such a requisition. If any funds remain in the 2016 Proceeds Account of the Issuance Cost Fund on the earlier of the receipt by the Trustee of a certificate of the Borrower stating that all Issuance Costs and the Borrower Acquisition Fee have been paid or one year from the date of issuance and delivery of the Series 2016 Bonds, the Trustee is required to transfer any funds remaining in the 2016 Proceeds Account of the Issuance Cost Fund to the 2016 Proceeds Account of the Construction Fund.

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Construction Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Construction Fund,” which is required to be used solely for the purposes set forth in this caption. Within the Construction Fund, there is created by the Issuer and ordered established two separate Accounts designated as the “2016 Proceeds Account” and the “2016 Marketing Account.” There is required to be deposited into the 2016 Proceeds Account of the Construction Fund from the sale of the Series 2016 Bonds and the 2016 Marketing Account of the Construction Fund from the sale of the Series 2016 Bonds the amounts specified in the Indenture. The Trustee is required to deposit into the 2016 Proceeds Account, as and when received by the Trustee any money paid to the Trustee under the Loan Agreement or the Indenture for credit or transfer to the 2016 Proceeds Account. Money in the 2016 Proceeds Account of the Construction Fund is required to be expended for Costs of the Series 2016 Project other than start-up costs in accordance with the provisions of the Loan Agreement, particularly the provisions thereof described below under “THE LOAN AGREEMENT—Construction Fund.” Except for authorized disbursements on the Series 2016 Closing Date, money in the 2016 Proceeds Account of the Construction Fund is required to be disbursed upon receipt of a requisition for payment substantially in the form provided in the Indenture executed by the Authorized Borrower Representative and the Authorized Developer Representative, as applicable, and the Trustee is authorized and directed to make each disbursement upon receipt of such a requisition. Money in the 2016 Marketing Account of the Construction Fund is required to be disbursed for start-up costs upon receipt of a requisition for payment substantially in the form provided in the Indenture executed by the Authorized Borrower Representative and the Authorized Manager Representative, a copy of which is required to be provided to the University by the Trustee, and the Trustee is authorized and directed to make each disbursement upon receipt of such a requisition. The Trustee is authorized and directed to make each disbursement required by the aforesaid provisions of the Loan Agreement.

(b) The Trustee is required to establish a separate Account or Accounts within the Construction Fund with respect to each series of Additional Bonds issued under the Indenture. The provisions governing such Account or Accounts is required to be set forth in the supplemental indenture pursuant to which Additional Bonds are authorized.

(c) All proceeds of the Series 2016 Bonds and investment earnings thereon remaining in the 2016 Proceeds Account and the 2016 Marketing Account of the Construction Fund on the Series 2016 Completion Date, less amounts retained or set aside to meet costs not then due and payable or that are being contested, are required to be used for other capital expenditures related to the Project approved by the University with the consent of the Borrower, which consent may not be unreasonably withheld; provided, however, that, with respect to proceeds in the 2016 Proceeds Account, a Favorable Opinion of Bond Counsel with respect to such expenditure has been obtained. If there are no such additional capital expenditures, such excess amounts are required to be transferred (i) to the 2016A Payment Subaccount of the Bond Fund and used for the payment of principal of the Series 2016A Bonds provided the Borrower delivers to the Trustee a Favorable Opinion of Bond Counsel if amounts are being transferred from the 2016 Proceeds Account; or (ii) if the Borrower fails to deliver such an opinion, to the Redemption Fund by the Trustee and used to redeem Series 2016A Bonds on the earliest possible date for which notice may be given in accordance with the Indenture.

(d) Upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the 2016 Proceeds Account and the 2016 Marketing Account of the Construction Fund will not be disbursed, but are required to instead be applied to the Debt Service Payment or redemption price of the Series 2016 Bonds.

Debt Service Reserve Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Debt Service Reserve Fund,” which is required to be used solely for the purposes set forth in this caption. Within the Debt Service Reserve Fund there is created by the Issuer and ordered established a separate Account designated as the “2016 Account.” Unless otherwise provided for in a supplemental indenture, the Trustee is required to establish a separate Account within the Debt Service Reserve Fund with respect to each series of Additional Bonds issued under the Indenture (or, if more than one series of Additional Bonds is issued on the same date, with respect to each such multiple series of Additional Bonds if authorized in a supplemental indenture). If so provided for in a supplemental

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indenture, the 2016 Account may be a shared Account benefitting the Series 2016 Bonds and any Additional Bonds identified in such supplemental indenture.

(b) There is required to be deposited into the Debt Service Reserve Fund from the sale of the Series 2016 Bonds cash in an amount equal to the Debt Service Reserve Requirement for the Series 2016 Bonds on and as of the Series 2016 Closing Date. The Trustee is required to deposit in the applicable Account or Accounts of the Debt Service Reserve Fund any funds paid to the Trustee under the Loan Agreement or the Indenture for credit or transfer to the Debt Service Reserve Fund. If the Borrower has exercised its option or has become obligated to prepay the Loan relating to a series of Bonds in whole and not in part pursuant to the terms of the Loan Agreement and has paid the sums as provided therein, all of the funds then in the related Account of the Debt Service Reserve Fund, are required to be deposited into the Bond Fund. The Trustee is required to promptly give written notice to the Issuer, the University and the Borrower of (i) any withdrawals from any Accounts of the Debt Service Reserve Fund, (ii) any diminution in Value as of any Valuation Date, or (iii) net losses from the investment of funds in the Debt Service Reserve Fund as of any Valuation Date that reduce the Value of the cash and investments deposited in the Indenture or credited thereto to less than the Debt Service Reserve Requirement for each series of the Bonds.

(c) The Trustee is required to withdraw funds from the related Account of the Debt Service Reserve Fund to pay the Debt Service Payments on the Series 2016 Bonds and on any Additional Bonds if authorized pursuant to a supplemental indenture to the extent that there are insufficient funds in the Bond Fund, the Redemption Fund, the Surplus Fund, the Operations Contingency Fund and the Repair and Replacement Fund (in such order of priority) available therefor on the date such Debt Service Payments are due.

(d) When (i) the remaining amount of Debt Service Payments on the Outstanding Bonds is equal to or less than the sum of the balance of the Bond Fund, the balance of the Redemption Fund, the balance of the Debt Service Reserve Fund, and the balance of the Repair and Replacement Fund, and (ii) all other amounts owed under the Loan Agreement and the Indenture have been paid, money held in the Debt Service Reserve Fund is required to be deposited into the Bond Fund and credited against payments of Loan Payments required under the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Loan Payments and Other Amounts Payable” or may be used in such other manner approved by an Opinion of Bond Counsel.

(e) Except during the Construction Period relating to a Project financed with a series of Bonds (in which case interest and profits from the investment of money in the Debt Service Reserve Fund is required to be transferred to the related Proceeds Account or Accounts of the Construction Fund, unless otherwise modified pursuant to a supplemental indenture), if as a result of the valuation of the investments held in the Debt Service Reserve Fund as of any Valuation Date pursuant to the provisions of the Indenture described below under “THE INDENTURE— Investment of Funds and Accounts,” the balance of any Account of the Debt Service Reserve Fund is greater than the Debt Service Reserve Requirement for the related series of Bonds, all amounts in such Account of the Debt Service Reserve Fund in excess of the Debt Service Reserve Requirement for such series of the Bonds are required to be transferred to the related Payment Account of the Bond Fund corresponding to the Series 2016 Bonds and to each series of Additional Bonds as applicable (or, if there is a shared Account of the Reserve Fund, to the Payment Account of the Bond Fund as directed in writing by the Borrower).

Repair and Replacement Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Repair and Replacement Fund.” The Trustee is required to credit or deposit into the Repair and Replacement Fund as and when received, any Repair and Replacement Loan Payments paid to the Issuer under the Loan Agreement, particularly under the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Loan Payments and Other Amounts Payable—Repair and Replacement Loan Payments,” or the Indenture, for credit or transfer to the Repair and Replacement Fund.

(b) The Issuer authorizes and directs the Trustee to withdraw funds from the Repair and Replacement Fund to pay (i) the costs incurred in connection with the maintenance, repair or replacement of Equipment or other components of the Project which would be considered “capital” in nature under GAAP or, to the extent that the Net Proceeds are insufficient for such purposes and after depleting any amounts in the Surplus Fund and the Operations Contingency Fund, to the costs of restoration or replacement of the Project (or any portion thereof) pursuant to the

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provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Destruction and Damage” and “—Condemnation,” and (ii) the Debt Service Payments to the extent there are insufficient funds in the Bond Fund, the Redemption Fund, the Surplus Fund and the Operations Contingency Fund available therefor on the date such Debt Service Payments are due, which authorization and direction the Trustee accepts.

(c) Money in the Repair and Replacement Fund to be used for the purpose described in item (i) of the preceding paragraph (b) is required to be disbursed upon receipt by the Trustee of a requisition for payment substantially in the form attached to the Indenture executed by the Authorized Borrower Representative, and the Trustee is authorized and directed to make each such disbursement upon receipt of such a requisition; however, upon the occurrence of an Event of Default or a failure by the Borrower to pay Basic Loan Payments required by the provisions of the Original Loan Agreement described below in paragraph (a) under “THE LOAN AGREEMENT— Loan Payments and Other Amounts Payable” (or otherwise required pursuant to an amendment to the Loan Agreement), the Trustee will not be obligated to disburse funds from the Repair and Replacement Fund for such purposes. The Trustee is authorized and directed to withdraw funds from the Repair and Replacement Fund for the purpose described in clause (ii) of the preceding paragraph (b) automatically, without any requisition from the Borrower. Requisitions may be submitted either on the completion of the maintenance, repair or replacement of Equipment or other components of the Project or periodically as such maintenance, repair or replacement progresses.

(d) Notwithstanding the foregoing provisions of the Indenture described under this caption, no amounts may be disbursed for the purpose described in clause (i) of paragraph (b) under this caption without the written consent of the University, unless (i) such disbursement has been included in the then current Annual Budget; or (ii) such disbursement does not exceed $5,000 or, in the case of an emergency (which is required to be certified to the University), $10,000; or (iii) such disbursement, together with all other disbursements from the Repair and Replacement Fund during such Annual Period that were not included in the then current Annual Budget and to which the University has not consented does not exceed $15,000.

(e) Amounts deposited but not used in any year are required to remain in the Repair and Replacement Fund and continue to be available for the purposes authorized under the provisions of the Indenture described under this caption.

(f) When (i) the remaining amount of the Debt Service Payments on the Outstanding Bonds is equal to or less than the sum of the balance of the Bond Fund, the balance of the Redemption Fund, the balance of the Debt Service Reserve Fund and the balance of the Repair and Replacement Fund; and (ii) all other amounts owed under the Loan Agreement and the Indenture have been paid, money held in the Repair and Replacement Fund is required to be deposited into the Bond Fund and credited against payments of Loan Payments required under the provisions of the Original Loan Agreement described below under “THE LOAN AGREEMENT—Loan Payments and Other Amounts Payable” or used as otherwise permitted by an Opinion of Bond Counsel.

Insurance and Condemnation Funds

Reference is made to the Loan Agreement whereunder it is provided that under certain circumstances the Net Proceeds of insurance and condemnation awards are to be paid to the Trustee and deposited into the Insurance Fund and the Condemnation Fund, respectively, and are to be disbursed and paid out as provided in the Indenture. The Trustee accepts and agrees to perform the duties and obligations as specified in the Indenture. There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Insurance Fund,” a trust fund to be designated the “Condemnation Fund,” and, within each of such Funds, a “2016 Account,” all of which are required to be opened only if funds are required to be deposited therein as provided in the Loan Agreement. The Trustee is required to also establish a separate Account within the Insurance Fund and within the Condemnation Fund with respect to each series of Additional Bonds issued under the Indenture or, if more than one series of Additional Bonds is issued on the same date, with respect to each such multiple series of Additional Bonds. Funds held in the Insurance Fund or in the Condemnation Fund are required to be disbursed in accordance with the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Destruction and Damage” and “—Condemnation,” respectively, upon receipt of a requisition for payment substantially in the form attached to the Indenture executed by the Authorized Borrower Representative, and the Trustee is authorized and directed to make each disbursement upon receipt of such a requisition. Notwithstanding anything contained in the Indenture to the contrary, any amounts required to be deposited in the Insurance Fund or in the Condemnation Fund in accordance with the Loan Agreement

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are required to be deposited in the applicable Account thereof, and, prior to the occurrence of an Event of Default, any amounts in an Account of the Insurance Fund or the Condemnation Fund may be used only to restore that portion of the Project in respect of which such Account was established or to acquire land and/or improvements in substitution for that portion of the Project in respect of which such Account was established or to redeem Bonds in accordance with the provisions of the Indenture.

Operations Contingency Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Operations Contingency Fund.” The Trustee is required to credit or deposit into the Operations Contingency Fund any amounts remaining in the Revenue Fund as described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Revenue Fund” and above under “THE INDENTURE—Transfer of General Revenues” as applicable.

(b) Money in the Operations Contingency Fund may be used by the Trustee to pay Expenses of, or (following payment in full of the Alternate Services and Excess Cost Payments), to make capital expenditures or repairs and replacements in respect of, the Project, which are not included in the Annual Budget or to pay Subordinated Expenses and/or Alternate Services or Excess Cost Payments (provided, the Manager determines, and certifies in writing to the Trustee that, based on the Annual Budget, after payment of such Subordinated Expenses and/or Alternate Services or Excess Cost Payments, there are sufficient funds in the Bond Fund, the Revenue Fund and the Operations Contingency Fund to pay the ensuing payments due as described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Revenue Fund” and above under “THE INDENTURE—Transfer of General Revenues,” for the next succeeding six months), and such funds are required to be disbursed upon receipt of a requisition for payment substantially in the form attached to the Indenture, executed by the Authorized Borrower Representative and approved by the Ground Lessor, and the Trustee is authorized and directed to issue its checks for each disbursement upon receipt of such a requisition.

(c) Money in the Operations Contingency Fund may also be used to pay Debt Service Payments, and the Issuer authorizes and directs the Trustee to withdraw funds from the Operations Contingency Fund to make such Debt Service Payments to the extent that there are insufficient funds in the Revenue Fund, the Bond Fund, the Redemption Fund and the Surplus Fund (in such order of priority) available therefor on such date.

(d) So long as no liabilities or obligations of the Borrower, whether budgeted or unbudgeted, are then due and unpaid as of June 30 of each Annual Period, there will be paid to the Developer an amount equal to all Alternate Services and Excess Cost Payments, to the extent that funds are available therefor, that have not previously been reimbursed to the Developer for the payment of Unavoidable Costs (as defined in the Development Agreement).

(e) So long as no liabilities or obligations of the Borrower, whether budgeted or unbudgeted, are then due and unpaid as of June 30 of each Annual Period, including payments required to be made pursuant to clause (d) above, all amounts remaining in the Operations Contingency Fund in excess of 25% of the aggregate Expenses reflected in the Annual Budget for the following Annual Period are required to be credited or transferred to the Surplus Fund on June 30 of such Annual Period.

(f) Amounts credited to or held in the Operations Contingency Fund will be available on a monthly basis to make the monthly credits or deposits required from the Revenue Fund as described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Revenue Fund” and above under “THE INDENTURE—Transfer of General Revenues.”

Surplus Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Surplus Fund.” The Trustee is required to credit or deposit amounts to the Surplus Fund as described under the caption “THE INDENTURE—Operations Contingency Fund.”

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(b) If the Trustee has received, (i) a certificate of an Authorized Borrower Representative confirming that no Event of Default has occurred and is then continuing as of the proposed release date, and (ii) the annual financial statements and Audit Report for the most recently ended Annual Period with supporting calculations that indicate a Fixed Charges Coverage Ratio of at least 1.20 for the prior Annual Period, then, at the written direction of the Borrower, upon which the Trustee may rely, the Trustee is required to transfer to the Foundation any portion of the Borrower Membership Fee that has not been paid to the Foundation and to transfer the balance thereafter in the Surplus Fund, after applying any amounts required by subsection (c) below, to the Ground Lessor as payment of rent due under the Ground Lease.

(c) Until such time as the foregoing release test in subsection (b) above is satisfied, amounts credited to or held in the Surplus Fund will be available on a monthly basis to make the monthly credits, deposits or transfers required from the Revenue Fund as described in the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Revenue Fund” and above under “THE INDENTURE—Transfer of General Revenues,” and to pay Debt Service Payments if there are insufficient funds in the Revenue Fund, the Bond Fund and the Redemption Fund (in such order of priority). Upon satisfaction of the release test in subsection (b) above with respect to a subsequent Annual Period, the Trustee is required to transfer to the Ground Lessor the balance in the Surplus Fund, including the balance in the Surplus Fund that relates to any prior Annual Period, all after applying such amounts required by this subsection (c).

Rebate Fund

(a) There is created by the Issuer and ordered established with the Trustee a trust fund to be designated the “Rebate Fund.” The Rebate Fund is for the sole benefit of the United States of America and is not subject to the claim of any other Person, including, without limitation, the Owners. The Rebate Fund is established for the purpose of complying with §148 of the Code and the Regulations promulgated thereunder. The money deposited in the Rebate Fund, together with all investments thereof and investment income therefrom, is required to be held in trust and applied solely as provided in under this caption. The Rebate Fund is not a portion of the Trust Estate and is not subject to the lien of the Indenture.

(b) The Borrower will be required under the terms of the Loan Agreement (i) to calculate the Rebate Amount as of each Calculation Date; (ii) to transmit a copy of such calculation to the Trustee on or before the date due under the Loan Agreement; and (iii) to pay to the Trustee for deposit to the Rebate Fund or to direct the Trustee, as the case may be, to transfer from the Revenue Fund an amount equal to the difference, if any, between the amount then in the Rebate Fund and the Rebate Amount so calculated. If, as of any Calculation Date, the amount in the Rebate Fund exceeds the Rebate Amount, such excess may, upon the written request of the Borrower, be transferred from the Rebate Fund to the Revenue Fund or as otherwise directed by the Borrower upon receipt of an Opinion of Bond Counsel.

(c) On the dates directed by the Borrower in writing, the Trustee is required to pay to the United States of America from the amounts on deposit in the Rebate Fund an amount determined by the Borrower to be the amount owed to the United States of America under §148(f) of the Code and the Regulations promulgated thereunder. The Borrower is required to provide to the Trustee any completed IRS form that must accompany each payment to the United States of America.

Investment of Funds and Accounts

(a) Subject to the provisions of the Indenture, any money held by the Trustee as part of the Revenue Fund, the Bond Fund (except money in the Defeasance Account), the Redemption Fund, the Issuance Cost Fund, the Construction Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund, the Insurance Fund, the Condemnation Fund, the Operations Contingency Fund, the Surplus Fund, the Rebate Fund, or any Accounts therein, reserves in connection with contested liens, or other special trust funds created under the Indenture, is required to be invested and reinvested by the Trustee, at the written direction of, and as specified by, the Authorized Borrower Representative in accordance with the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Investment of Funds and Accounts.” In the absence of any such written direction by the Authorized Borrower Representative to the Trustee, such amounts are required to be invested by the Trustee in the fund or funds specified in the Indenture. Any such investments are required to be held by or under the control of the Trustee and

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will be deemed at all times a part of the Revenue Fund, the Bond Fund, the Redemption Fund, the Issuance Cost Fund, the Construction Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund, the Insurance Fund, the Condemnation Fund, the Operations Contingency Fund, the Surplus Fund, the Rebate Fund, reserve, other special trust fund or other Funds or Accounts, as the case may be, and the interest accruing thereon and any profit realized from such investments are required to be credited as provided below under “THE INDENTURE—Allocation of Income from Investments” or as may be set forth in a supplemental indenture, and any loss resulting from such investments by the Trustee is required to be charged to such Fund or Account. The Trustee is directed to sell and reduce to cash funds a sufficient amount of such investments whenever the cash balance in any Fund or Account is insufficient for the uses prescribed for money held in such Fund or Account. The Trustee may transfer investments from any Fund or Account to any other Fund or Account in lieu of cash when required or permitted by the provisions of the Indenture. The Trustee is required to value the investments held in each Account of the Debt Service Reserve Fund as of the close of business on each Valuation Date and is required to promptly deliver copies of such valuation to the Issuer, the Borrower and the University if the value is less than the related Debt Service Reserve Requirement. In computing the assets of any Fund or Account, investments and accrued interest thereon are required to be deemed a part thereof. The Trustee will not be liable for any depreciation in the Value of any obligations in which money of Funds or Accounts may be invested, as aforesaid, or for any loss arising from any investment. The Trustee may purchase from or sell to itself or any affiliate, as principal or agent, Series 2016 Bonds authorized by the Indenture. Such investments are required to be made by the Trustee only as follows:

(i) money in the Revenue Fund, the Issuance Cost Fund, the Construction Fund, the Repair and Replacement Fund, the Operations Contingency Fund, the Surplus Fund, the Rebate Fund and any other Funds or Accounts (other than as described in clauses (ii) through (v) below) only in Permitted Investments maturing or redeemable at the option of the holder in such amounts and on such dates as may be necessary to provide money to meet the payments from each such respective Fund or Account as may be specified, for Funds and Accounts held by the Trustee, as directed in writing by the Authorized Borrower Representative;

(ii) money in the Bond Fund only in Permitted Investments maturing or redeemable at the option of the holder not later than the immediately succeeding Bond Payment Date;

(iii) money in the Redemption Fund only in Permitted Investments maturing or redeemable at the option of the holder not later than the immediately succeeding Bond Payment Date, subject to the requirements of the applicable Tax Regulatory Agreement;

(iv) money in the Insurance Fund and the Condemnation Fund only in Permitted Investments maturing or redeemable at the option of the holder in such amounts and on such dates as may be necessary to provide money to meet the payments from each such respective Fund, subject to the requirements of the applicable Tax Regulatory Agreement; and

(v) money in the Debt Service Reserve Fund only in Permitted Investments maturing or redeemable at the option of the holder not later than 10 years from the date of purchase thereof.

Money deposited in the Defeasance Account of the Bond Fund is required to be invested by the Trustee only in Defeasance Obligations and in accordance with the provisions of the Indenture described below under “THE INDENTURE—Discharge; Release of the Bond Indenture.”

Allocation of Income from Investments

All interest accruing from investments of money in the following Funds and Accounts and any profit realized therefrom is required to be allocated as follows:

(a) interest and profits from the investments of money in the Revenue Fund are required to be retained in the Revenue Fund;

(b) interest and profits from the investments of money in the Bond Fund and in the Accounts and subaccounts therein are required to be retained in the Bond Fund and in such Accounts and subaccounts, respectively;

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(c) interest and profits from the investments of money in the Redemption Fund and any Account therein are required to be deposited into the related Payment Subaccount;

(d) interest and profits from the investments of money in the Accounts of the Issuance Cost Fund are required to be deposited into the corresponding Proceeds Accounts of the Construction Fund;

(e) subject to the provisions of the Indenture described in paragraphs (c) and (d) under “THE INDENTURE—Construction Fund,” interest and profits from the investment of money in the Construction Fund and the Accounts therein are required to be retained in the Construction Fund and in such Accounts, respectively;

(f) interest and profits from the investment of money in the Debt Service Reserve Fund and the Accounts therein are required, subject to the provisions of the Indenture described in paragraph (e) under “THE INDENTURE—Debt Service Reserve Fund,” to be retained in the Debt Service Reserve Fund and in such Accounts, respectively, unless otherwise set forth in a supplemental indenture; provided, however, that interest and profits from the investment of money in the 2016 Account of the Debt Service Reserve Fund are required, during the Construction Period for the Series 2016 Project, to be transferred to the 2016 Proceeds Account of the Construction Fund, and thereafter such money is required to be retained in the 2016 Account of the Debt Service Reserve Fund unless the amount contained in the Debt Service Reserve Fund is in excess of the Debt Service Reserve Requirement, in which case such excess is required to be transferred to the related Account of the Bond Fund (or, if the Account of the Debt Service Reserve Fund is a shared Account, to the Payment Account of the Bond Fund as directed in writing by the Borrower);

(g) interest and profits from the investment of money in the Repair and Replacement Fund are required to be retained in the Repair and Replacement Fund;

(h) interest and profits from the investment of money in the Insurance Fund and the Account(s) therein are required to be retained in the Insurance Fund and in such Account(s), respectively;

(i) interest and profits from the investment of money in the Condemnation Fund and the Account(s) therein are required to be retained in the Condemnation Fund and in such Account(s), respectively;

(j) interest and profits from the investment of money in the Operations Contingency Fund are required to be retained in the Operations Contingency Fund;

(k) interest and profits from the investment of money in the Surplus Fund are required to be retained in the Surplus Fund;

(l) subject to the provisions of the Indenture described in paragraph (a) under “THE INDENTURE— Rebate Fund,” interest and profits from the investment of money in the Rebate Fund are required to be retained in the Rebate Fund; and

(m) interest and profits from the investment of money in any other Fund or Account are required, at the written direction of the Authorized Borrower Representative, to be retained in the respective Fund or Account or deposited into the Bond Fund.

The provisions described under this caption may be modified with respect to interest and profits from the investment of proceeds of Additional Bonds, to the extent set forth in a supplemental indenture, without Bondholder approval.

Money to be Held in Trust

All money required to be credited to, deposited with or paid to the Trustee for the account of the Revenue Fund, the Bond Fund, the Redemption Fund, the Issuance Cost Fund, the Construction Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund, the Insurance Fund, the Condemnation Fund, the Operations Contingency Fund, the Surplus Fund or any other trust fund or reserve under any provision of the Indenture, as applicable, is

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required to be held by the Trustee, in trust and, with the exception of the Rebate Fund, is required to, while held by the Trustee, constitute part of the Trust Estate and be subject to the trust created by the Indenture and any lien or security interest granted with respect to the Trust Estate and is required to be and remain entitled to the benefit and is required to be subject to the security of the Indenture for the benefit of the Owners of the Bonds. The Trustee acknowledges and agrees that it is the intent of the parties to the Indenture that all money held in any Fund under the Indenture and the Management Agreement relating to the Series 2016 Project or any other Project, and any collateral securing such funds are a part of the Trust Estate, and that the rights and interests of the Bondholders in and to such money and collateral is and, subject to the provisions of the Indenture with respect to the payment of the reasonable fees and expenses of the Trustee, will be superior to the claims of the general creditors and depositors of the Trustee.

Events of Default and Remedies

Events of Default. Each of the following events is an Event of Default under the Indenture:

(a) payment of any installment of interest on any Bond is not made by or on behalf of the Issuer when the same becomes due and payable; or

(b) payment of the principal of any Bond is not made by or on behalf of the Issuer when the same becomes due and payable, whether at maturity or by proceedings for redemption or pursuant to a Sinking Fund Requirement or otherwise; or

(c) the failure to perform in a punctual manner any other of the covenants, conditions, agreements or provisions contained in the Indenture or any agreement supplemental to the Indenture and the continuation of such failure for 30 days after receipt by the Issuer of a written notice from the Trustee specifying such failure and requiring the same to be remedied and stating that such notice is a “Notice of Default;” provided, however, that if such performance requires work to be done, action to be taken or conditions to be remedied that by their nature cannot reasonably be done, taken or remedied, as the case may be, within such 30 day period, no Event of Default will be deemed to have occurred or to exist if, and so long as, the Issuer begins such performance within such period and diligently and continuously prosecutes the same to completion; or

(d) an “Event of Default” has occurred under any of the other Bond Documents other than the Continuing Disclosure Agreement.

Acceleration of Maturities. On the happening and continuance of any Event of Default described in paragraphs (a) or (b) above under “Events of Default,” the Trustee is required to first send written notice to the Issuer of the Event of Default; provided that a failure or delay in sending such notice may not preclude the Trustee from exercising its remedies under the Indenture. On the happening and continuance of any Event of Default described in paragraphs (a) or (b) above under “Events of Default,” the Trustee may, and on the written request of a Majority of the Bondholders, is required to, by notice in writing to the Issuer, the Borrower, and, if the Trustee is not the Dissemination Agent, the Dissemination Agent, declare the principal of all Bonds then Outstanding (if not then due and payable) to be due and payable immediately, and on such declaration, the same is required to become and be immediately due and payable. Upon the happening and continuance of any Event of Default described in paragraphs (c) or (d) above under “Events of Default,” the Trustee is required to, on the written request of a Majority of the Bondholders, by notice in writing to the Issuer, the Borrower, and, if the Trustee is not the Dissemination Agent, the Dissemination Agent, declare the principal of all Bonds then Outstanding (if not then due and payable) to be due and payable immediately, and on such declaration, the same is required to become and be immediately due and payable. Upon such declaration, interest on the Bonds will cease to accrue and the Trustee is required to promptly notify the Owners of the Bonds of such declaration and that interest on the Bonds has ceased to accrue on and as of the date of such declaration. If at any time after the principal of the Bonds has been so declared to be due and payable, and before the entry of final judgment or decree in any suit, action or proceeding instituted on account of such Event of Default, or before the completion of the enforcement of any other remedy under the Indenture, money will have accumulated in the Bond Fund sufficient to pay the principal of all matured Bonds and all arrears of interest, if any, on all Bonds then Outstanding (except the principal of any Bonds not then due and payable by their terms and the interest accrued on such Bonds since the last Interest Payment Date), and the charges, compensations, expenses, disbursements, advances and liabilities of the Trustee and all other amounts then payable by the Issuer under the Indenture has been

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paid or a sum sufficient to pay the same has been deposited with the Trustee, and every other failure known to the Trustee in the observance or performance of any covenant, condition or agreement contained in the Bonds, in the Indenture (other than a failure to pay the principal of such Bonds then due only because of a declaration under this subcaption), and in the other Bond Documents has been remedied to the satisfaction of the Trustee, then, and in every such case, the Trustee may, and on the written request of the Owners of not less than 25% in aggregate principal amount of the Outstanding Bonds not then due and payable by their terms (Bonds then due and payable only because of a declaration under this subcaption will not be deemed to be due and payable by their terms) is required to, by written notice to the Issuer, the Borrower, the Owners of the Bonds and, if the Trustee is not the Dissemination Agent, the Dissemination Agent, rescind and annul such declaration and its consequences, but no such rescission or annulment may extend to or affect any subsequent Event of Default or impair any right consequent thereon. Upon any declaration of acceleration under the Indenture, the Trustee is required to immediately proceed to exercise such rights as it may have under the Loan Agreement to declare all payments thereunder to be immediately due and payable.

Trustee May Bring Suit. Upon the happening and continuance of any Event of Default, then and in every such case the Trustee may, and on the written request of a Majority of the Bondholders is required to, proceed, subject to the provisions of the Indenture, to protect and enforce its rights and the rights of the Owners under the laws of the State under the Indenture, the other Security Documents, and the Notes 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, either for the specific performance of any covenant, condition or agreement contained in the Indenture or in the other Security Documents or the Notes or in aid or execution of any power in the Indenture granted or for the enforcement of any proper legal or equitable remedy, as the Trustee, being advised by counsel, deems most effectual to protect and enforce such rights. The Trustee may maintain a proceeding even if it does not possess any of the Bonds or does not produce them in the proceeding. All remedies will be cumulative to the extent permitted by law.

Application of Funds. (a) All money received by the Trustee pursuant to any right given or action taken under the Indenture (other than amounts held in the Rebate Fund) is required to, after payment of the costs and expenses of the proceedings resulting in the collection of such money and the fees and expenses of the Trustee, be deposited in the Bond Fund and applied to the payment of the Debt Service Payments then due and unpaid in accordance with the provisions of the Indenture. Anything in the Indenture to the contrary notwithstanding, if at any time the money in the Bond Fund is not sufficient to pay the interest on or the principal of the Bonds as the same becomes due and payable (either by their terms or by acceleration of maturities under the provisions of the Indenture), such money, together with any money then available or thereafter becoming available for such purpose, whether through the exercise of the remedies provided for in this subcaption or otherwise in the Indenture, is required to be applied as follows:

(i) if the principal of all Bonds has not become or has not been declared due and payable, all such money is required to be applied as follows:

FIRST, to the payment to the persons entitled thereto of all installments of interest on Bonds then due and payable in the order in which such installments became due and payable and, if the amount available is not sufficient to pay in full any particular installment, then to the payment, ratably according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in such Bonds;

SECOND, to the payment to the persons entitled thereto of the unpaid principal of any Bonds that has become due and payable (other than Bonds deemed to have been paid under the Indenture), in the order of their due dates, and, if the amount available is not sufficient to pay in full the principal of Bonds due and payable on any particular date, then to the payment ratably according to the amount of such principal due on such date, to the persons entitled thereto without any discrimination or preference; and

THIRD, to the payment of the interest on and the principal of Bonds, to the purchase and retirement of Bonds, and to the redemption of Bonds, all in accordance with the Indenture;

(ii) if the principal of all Bonds has become or has been declared due and payable, all such money is required to be applied to the payment of principal and interest then due on the Bonds, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest

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over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference; and

(iii) if the principal of all Bonds has been declared due and payable and if such declaration thereafter has been rescinded and annulled under the provisions of the Indenture described above under “Acceleration of Maturities,” then, subject to paragraph (ii) above, if the principal of all Bonds later becomes due and payable or is declared due and payable, the money then remaining in and thereafter accruing to the Bond Fund is required to be applied in accordance with paragraph (i) above.

(b) Whenever money is to be applied by the Trustee as described under this caption, the Trustee is required to apply such money at such times and from time to time, as the Trustee in its sole discretion determines, having due regard for the amount of such money available for such application and the likelihood of additional money becoming available for such application in the future; the setting aside of such money, in trust for the proper purpose, constitutes proper application by the Trustee, and the Trustee will incur no liability whatsoever to the Issuer, the Borrower and any Owner or to any other person for any delay in applying any such money so long as the Trustee 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 exercises such discretion in applying such money, it is required to set the date (which must be an Interest Payment Date unless the Trustee deems another date more suitable) on which such application is to be made. The Trustee is required to give notice by first class mail, postage prepaid, to all Owners of the setting of any such date and will not be required to make payment to the Owner of any Bonds until such Bonds are surrendered to the Trustee for cancellation if fully paid.

Control of Proceedings by a Majority of the Bondholders. Anything in the Indenture to the contrary notwithstanding, a Majority of the Bondholders has the right, subject to the provisions of the Indenture, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, (a) to direct the time, method and place of conducting all remedial proceedings to be taken by the Trustee under the Indenture or under any other Security Document, if such direction is in accordance with law and the Indenture; and (b) to approve any consent, approval or waiver requested to be given by the Trustee under the Indenture; provided that, in any case, the Trustee may require indemnity satisfactory to it be furnished prior to taking such actions and provided further that, the Trustee may refuse to follow any direction that conflicts with law or the Indenture, is unduly prejudicial to the rights of other bondholders, or would involve the Trustee in personal liability.

Restrictions Upon Actions by Individual Owners. Except as provided in the Indenture, no Owner has any right to institute any suit, action or proceeding in equity or at law on any Bond or for the execution of any trust under the Indenture or for any other remedy under the Indenture unless the Issuer or the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding previously have given to the Trustee written notice of the Event of Default on account of which such suit, action or proceeding is to be instituted, and unless also the Issuer or the Owners have made a written request of the Trustee after the right to exercise such powers or right of action, as the case may be, has accrued, and has afforded the Trustee a reasonable opportunity either to proceed to exercise the powers in the Indenture above granted or to institute such action, suit, or proceedings in its or their name, and unless, also, there has been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee has refused or neglected to comply with such request within sixty (60) days after the receipt of such request and offer of indemnity. Such notification, request and offer of indemnity are declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of the Indenture or to any other remedy under the Indenture. Notwithstanding the foregoing provisions of this subcaption and without complying therewith, the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding may institute any such suit, action or proceeding in their own names for the benefit of all Owners under the Indenture. It is understood and intended that, except as otherwise above provided, no one or more Owners have any right in any manner whatsoever by his, her, its or their action to affect, disturb or prejudice the security of the Indenture, or to enforce any right under the Indenture except in the manner provided, that all proceedings at law or in equity are required to be instituted, had and maintained in the manner in the Indenture provided and for the benefit of all Owners and that any individual rights of action or other right given to one or more of such Owners by law are restricted by the Indenture to the rights and remedies in the Indenture provided.

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No Remedy Exclusive. No remedy conferred on or reserved to the Trustee or the Owners is intended to be exclusive of any other remedy or remedies provided in the Indenture, and each and every such remedy is cumulative and in addition to every other remedy given in the Indenture or now or hereafter existing at law or in equity.

Waivers. No delay or omission by the Trustee or any Owner in the exercise of any right or power accruing on any Event of Default may impair any such right or power or may be construed to be a waiver of any Event of Default or any acquiescence therein; and every power or remedy given by the Indenture to the Trustee and the Owners may be exercised from time to time and as often as may be deemed expedient.

Amendments to Indenture and Supplemental Indentures

Amendments to Indenture and Supplemental Indentures Not Requiring Consent of Bondholders.

(a) The Issuer and the Trustee may, without the consent of or notice to any of the Bondholders, enter into an amendment to the Indenture or an indenture supplemental to the Indenture for any one or more of the following purposes:

(i) to cure any error, ambiguity or formal defect or omission in, or to correct or supplement any defective provision of, the Indenture;

(ii) to add to the covenants and agreements of, and limitations and restrictions upon, the Issuer in the Indenture or other covenants, agreements, limitations and restrictions to be observed by the Issuer for the protection of the Bondholders;

(iii) to evidence the appointment of a separate trustee or a co-trustee, or the succession of a new trustee or the appointment of a new or additional paying agent or bond registrar;

(iv) to grant to or confer upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, benefits, security, liabilities, duties or authority that may lawfully be granted to or conferred or imposed upon the Bondholders or the Trustee or either of them;

(v) to subject to the lien and security interest of the Indenture additional revenues, properties or collateral;

(vi) to modify, amend or supplement the Indenture or any indenture supplemental thereto in such manner as to permit the qualification thereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect or to permit the qualification of any Bonds for sale under the securities laws of any state, and, if they so determine, to add to the Indenture or any indenture supplemental to the Indenture such other terms, conditions and provisions as may be permitted by the Trust Indenture Act of 1939, as amended, or any similar federal statute;

(vii) to modify, amend or supplement the Indenture in such manner as to assure the continued exclusion of the interest on any Tax-Exempt Bonds from the gross income of the Owners thereof for federal income tax purposes;

(viii) to comply with any provisions of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or any rules or regulations promulgated thereunder;

(ix) to reflect a change in applicable law; provided that the Trustee determines that such amendment or supplemental indenture does not prejudice the rights of Bondholders; or

(x) to make any other change in the Indenture that, in the judgment of the Trustee (which may be in reliance upon an opinion of counsel), will not materially adversely affect the Bondholders or impair the Security.

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(b) The Issuer and the Trustee are required to, without the consent of or notice to any of the Bondholders, enter into an amendment to the Indenture or an indenture supplemental to the Indenture (i) in connection with the issuance of any Additional Bonds in accordance with the Indenture and the inclusion of additional Security in connection therewith; (ii) to the extent necessary with respect to the land and interests in land, buildings, furnishings, machinery, equipment and all other real and personal property that may form a part of the Project, so as to identify the same more precisely or add additional land or interests in land, buildings, furnishings, machinery, equipment or real or personal property as Security; or (iii) with respect to any changes required to be made in the description of the Security in order to conform with similar changes made in the Loan Agreement as permitted by the provisions of the Indenture described below under “THE INDENTURE—Amendments to Other Bond Documents.”

Amendments to Indenture and Supplemental Indentures Requiring Consent of the Bondholders.

(a) Exclusive of amendments and indentures supplemental to the Indenture described under the above subcaption and subject to the terms and provisions of the Indenture described under this subcaption and not otherwise, the Requisite Number of Bondholders has the right, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the Issuer and the Trustee of an amendment to the Indenture or such indenture supplemental to the Indenture as deemed necessary and desirable by the Issuer for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in the Indenture, in any amendment to the Indenture, or in any supplemental indenture; provided, however, that nothing contained in this subcaption may permit, or be construed as permitting:

(i) an extension of the stated maturity or reduction in the principal amount of, or a reduction in the rate or an extension of the time of payment of interest on, or a reduction of any premium payable on the redemption of, any Bonds, without the consent of every Owner of such Bonds; or

(ii) the creation of any lien or security interest (other than any Permitted Encumbrances) prior to or on a parity with the lien and security interest of the Indenture, without the consent of the Owners of all the Bonds at the time Outstanding that would be affected by the action to be taken; or

(iii) a reduction in the amount, or an extension of the time of any payment, required by the mandatory sinking fund redemption provisions of the Indenture, without the consent of the Owners of all the Bonds at the time Outstanding that would be affected by the action to be taken; or

(iv) a reduction in the aforesaid aggregate principal amount of Bonds the Owners of which are required to consent to any such amendment or supplemental indenture, without the consent of the Owners of all the Bonds at the time Outstanding; or

(v) the modification of the trusts, powers, obligations, remedies, privileges, rights, duties or immunities of the Trustee, without the written consent of the Trustee; or

(vi) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, without the consent of the Owners of all the Bonds then Outstanding; or

(vii) the release of or requirements for the release of the Indenture, without the consent of the Owners of all the Bonds at the time Outstanding.

(b) If at any time the Issuer requests the Trustee to enter into any such amendment or supplemental indenture for any of the purposes allowed by this subcaption, the Trustee is required, upon being reasonably indemnified with respect to expenses, to cause notice of the proposed execution of such amendment or supplemental indenture to be given in substantially the manner provided in the Indenture with respect to redemption of Bonds. Such notice is required to briefly set forth the nature of the proposed amendment or supplemental indenture and is required to state that copies thereof are on file at the Office of the Trustee for inspection by all Bondholders. If, within 60 days or such longer period as may be reasonably prescribed by the Issuer following the giving of such notice, the Requisite Number of Bondholders (or, if required, all of the Bondholders affected by the action taken) has consented to and approved the execution thereof as in the Indenture provided, no Owner of any Bond has any right to object to any of

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the terms and provisions contained therein or to the operation thereof or in any manner to question the propriety of the execution thereof or to enjoin or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such amendment or supplemental indenture as in this subcaption permitted and provided, the Indenture will be and be deemed to be modified and amended in accordance therewith. The Trustee may rely upon an opinion of counsel as conclusive evidence that execution and delivery of an amendment or supplemental indenture has been effected in compliance with the provisions of the Indenture.

(c) Anything in the Indenture to the contrary notwithstanding, if the Borrower is not in default under the Loan Agreement at such time, an amendment to the Indenture or supplemental indenture under this caption that affects any rights or obligations of the Borrower under the Borrower Documents or that changes the priority or use of money under the Indenture will not become effective unless and until the Borrower has consented to the execution and delivery of such amendment or supplemental indenture. In this regard, the Trustee is required to cause notice of the proposed execution and delivery of any such amendment or supplemental indenture, together with a copy of such amendment or supplemental indenture, to be mailed by certified or registered mail or personally delivered to the Borrower at least 15 days prior to the proposed date of execution and delivery of any such amendment or supplemental indenture. Under such circumstances, the Borrower will be deemed to have consented to the execution and delivery of any such amendment or supplemental indenture if the Trustee does not receive a letter of protest or objection thereto signed by or on behalf of the Borrower on or before 4:30 p.m., on the fifteenth day, after the mailing of such notice and a copy of the proposed amendment or supplemental indenture.

(d) The Trustee will not be obligated to sign any amendment or supplement to the Indenture or the Bonds as authorized by the Indenture if such amendment or supplement, in the judgment of the Trustee, might adversely affect the rights, duties, liabilities, protections, indemnities or immunities of the Trustee. In signing any such amendment or supplement, the Trustee will receive, and will be fully protected in relying upon, an opinion of Bond Counsel stating that such amendment or supplement is authorized by the Indenture and will not impair the exclusion of the interest on any Tax-Exempt Bonds from the gross income of the Owners thereof for federal income tax purposes.

(e) Anything in the Indenture to the contrary notwithstanding, no amendment to the Indenture or supplemental indenture under the Indenture that affects any rights or obligations of the Board under the Ground Lease may become effective without the prior written consent of the Board. Provided that the Board is not in default under the Ground Lease at such time, no amendment to the Indenture or supplemental indenture that materially affects any other rights or obligations of the Board (outside the scope of the Ground Lease) may become effective without the prior written consent of the Board.

Amendments to Other Bond Documents

Amendments to Other Bond Documents Not Requiring Consent of the Bondholders. The Issuer and the Trustee are required to, without the consent of or notice to the Bondholders, consent to any amendment, change, or modification of the Bond Documents other than the Indenture for any one or more of the following purposes: (a) as may be required or contemplated by the provisions of the Ground Lease, Loan Agreement or the Indenture; (b) in connection with the issuance of Additional Bonds as provided in the Indenture; (c) for the purpose of curing any error, ambiguity, or formal defect or omission therein, or to correct or supplement any defective provision thereof; (d) in connection with the land and interests in land, buildings, machinery, equipment and other real or personal property described in Exhibit A and Exhibit B to the Loan Agreement, the Ground Lease, the Leasehold Deed of Trust and/or the Security Agreement so as to identify more precisely the same or to add additional land or interests in land, buildings, machinery, equipment or other real or personal property; (e) so as to add additional rights acquired in accordance with the provisions of the Bond Documents; (f) to substitute a new “Borrower” under the Loan Agreement as provided therein; (g) to comply with any provisions of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or any rules or regulations promulgated thereunder; or (h) to make any other change therein that, in the judgment of the Trustee (which may rely on an opinion of counsel), does not materially adversely affect the Bondholders.

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Amendments to Other Bond Documents Requiring Consent of the Bondholders.

(a) Except for the amendments, changes or modifications described under the above caption, neither the Issuer nor the Trustee may consent to any other amendment, change or modification of the Bond Documents or any of them other than the Indenture without giving notice to and obtaining the written approval or consent of the Requisite Number of Bondholders given and procured as in this caption; provided, however, that nothing described under this caption may permit or be construed as permitting, (i) an extension of the time for payment of any amounts payable under the Loan Agreement or a reduction in the amount of any payment or in the total amount due under the Loan Agreement, without the consent of the Owners of all of the Bonds at the time Outstanding; or (ii) a reduction in the aforesaid aggregate principal amount of Bonds the Owners of which are required to consent to any such amendment, change or modification of such other Bond Documents, without the consent of the Owners of all of the Bonds at the time Outstanding. If at any time the Issuer and the Borrower request the consent of the Trustee to any such proposed amendment, change or modification of such other Bond Documents, the Trustee is required, upon being satisfactorily indemnified with respect to expenses, to cause notice of such proposed amendment, change or modification to be given in the same manner as described under “THE INDENTURE—Amendments to Indenture and Supplemental Indentures Requiring Consent of the Bondholders” with respect to supplemental indentures. Such notice is required to briefly set forth the nature of such proposed amendment, change or modification and is required to state that copies of the instrument embodying the same are on file at the Office of the Trustee for inspection by all Bondholders. If, within 60 days or such longer period as may be prescribed by the Issuer following the giving of such notice, the Trustee and the Requisite Number of Bondholders (or, if required, all of the Bondholders) have consented to and approved the execution thereof as provided in the Indenture, no Owner of any Bond has any right to object to any of the terms and provisions contained therein or to the operation thereof or in any manner to question the propriety of the execution thereof or to enjoin or restrain the Trustee from consenting to the execution thereof or to enjoin or restrain the Issuer or the Borrower from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such amendment, change or modification as in this caption permitted and provided, such other Bond Documents will be and be deemed to be modified, changed and amended in accordance therewith.

(b) The Trustee is not obligated to sign any amendment or supplement to the Bond Documents if such amendment or supplement, in the judgment of the Trustee, might adversely affect the rights, duties, liabilities, protections, indemnities or immunities of the Trustee. In signing any such amendment or supplement, the Trustee is required to receive, and will be fully protected in relying on, an opinion of Bond Counsel stating that such amendment or supplement is authorized by the Indenture and will not impair the exclusion of the interest on any Tax-Exempt Bonds from the gross income of the Owners thereof for federal income tax purposes.

(c) Anything in the Indenture to the contrary notwithstanding, no amendment or supplement to the Bond Documents that affects the rights or obligations of the Board under the Ground Lease may become effective without the prior written consent of the Board. Provided that the Board is not in default under the Ground Lease at such time, no amendment to the Bond Documents that materially affects any other rights or obligations of the Board (outside the scope of the Ground Lease) may become effective without the prior written consent of the Board.

Discharge; Release of the Indenture

When (a) any Bond has become due and payable in accordance with the terms thereof or otherwise as provided in the Indenture, the whole amount of the Debt Service Payments so due and payable on such Bond is required to be paid; (b) if the Bond has not become due and payable in accordance with the terms thereof, the Trustee is required to hold sufficient Defeasance Obligations, the principal of and the interest on which, when due and payable, will provide sufficient money to pay the Debt Service Payments on such Bond to the maturity date of such Bond or to the date specified for the redemption thereof and the Issuer is required to cause to be delivered to the Trustee a verification or other appropriate report to such effect issued by an Accountant; (c) if such Bond is to be called for redemption, irrevocable instructions to call such Bond for redemption has been given by the Issuer to the Trustee; (d) sufficient funds are required to also have been provided or provision has been made for paying all other obligations payable under the Indenture with respect thereto by the Issuer and the Trustee, including any Rebate Amount, then and in that case, the right, title, and interest of the Trustee in the Funds and Accounts, if any, established with respect to such Bond will then cease, determine and become void and, on demand of the Issuer and on being furnished with an opinion, in form and substance satisfactory to the Issuer and the Trustee, of nationally recognized bond counsel approved by the Issuer and the Trustee, to the effect that all conditions precedent to the release of the Indenture or that

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portion, if any, of the Trust Estate relating to such Bond has been satisfied, the Trustee is required to release the Indenture or that portion, if any, of the Trust Estate relating to such Bond and is required to execute such documents to evidence such release as may be reasonably required by the Issuer and is required to transfer to the Ground Lessor any surplus in, and all balances remaining in, all such Funds and Accounts.

Otherwise, the Indenture is required to continue and remain in full force and effect; but if Defeasance Obligations are deposited with and held by the Trustee as hereinabove provided, (a) in addition to the requirements set forth in the Indenture but not as a condition to defeasance, the Trustee, within 30 days after such Defeasance Obligations have been deposited with it, is required to cause a notice signed by the Trustee to be mailed, postage prepaid, to all Owners of Bonds to be paid or redeemed, setting forth (i) the date or dates, if any, designated for the redemption of such Bonds; (ii) a description of the Defeasance Obligations so held by it; and (iii) that the Indenture or that portion, if any, of the Trust Estate relating to such series of Bonds has been released in accordance with the provisions of this caption; and (b) the Trustee will nevertheless retain such rights, powers and privileges under the Indenture as may be necessary and convenient in respect of such Bonds (i) for the payment of the Debt Service Payments for which such Defeasance Obligations have been deposited; and (ii) for the registration, transfer and exchange of such Bonds.

All money and Defeasance Obligations held by the Trustee as described under this caption is required to be held in trust and applied to the payment, when due, of the obligations payable therewith.

Anything in the Indenture to the contrary notwithstanding, if such money or Defeasance Obligations has been deposited or set aside with the Trustee pursuant to this caption for the payment of the Debt Service Payments on a Bond, but have not in fact been actually paid in full, no amendment to the provisions of this caption may be made without the consent of the Owner of each Bond affected thereby.

THE LOAN AGREEMENT

The following is a summary of certain provisions of the Loan Agreement. Reference is made to the Loan Agreement for the complete text thereof. The discussion in the Loan Agreement is qualified by such reference.

Payment of Principal, Premium and Interest

The Borrower will duly and punctually pay the principal of, premium, if any, and interest on the Series 2016 Notes at the dates and the places and in the manner mentioned therein and in the Loan Agreement, according to the true intent and meaning thereof and of the Loan Agreement. Notwithstanding any schedule of payments on the Series 2016 Notes set forth therein or in the Loan Agreement, the Borrower is required to make payments on the Series 2016 Notes and be liable therefor at times and in amounts sufficient to pay when due all Debt Service Payments on all Series 2016 Bonds from time to time Outstanding under the Indenture.

Security for Payments under the Bonds

As security for the payment of the Bonds, the Issuer is required to execute and deliver the Indenture, under the terms of which all of the right, title, interest, and remedies of the Issuer in the Loan Agreement (except the Reserved Rights) and the Notes, together with all revenues and amounts to be received and all property to be held by the Issuer thereunder, are required to be assigned and pledged as security for, among other things, the payment of the Bonds. The Borrower consents to such assignment and pledge and grant of a first priority security interest and agrees that its obligations to make all payments under the Loan Agreement will be absolute and will not be subject to any defense, except payment, or to any right of setoff, counterclaim, or recoupment arising out of any breach by the Issuer of any obligation to the Borrower, whether under the Loan Agreement or otherwise, or arising out of any indebtedness or liability at any time owing to the Borrower by the Issuer. The Borrower further agrees that all Basic Loan Payments required to be made under the Loan Agreement will be paid directly to the Trustee for the account of the Issuer. The Trustee has all rights and remedies accorded to the Issuer (except for Reserved Rights), and any reference to the Issuer is required to be deemed, with the necessary changes in detail, to include the Trustee, and the Trustee and the Bondholders are deemed to be and are third-party beneficiaries of the representations, covenants, and agreements of the Borrower contained in the Loan Agreement.

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Compliance with Laws

The Borrower will, through the term of the Loan Agreement, at no expense to the Issuer, promptly comply or cause compliance with all applicable laws, ordinances, orders, rules, regulations and requirements of duly constituted public authorities, which may be applicable to the Series 2016 Project or to the repair and alteration thereof, or to the use or manner of use of the Series 2016 Project, including, but not limited to the Americans with Disabilities Act, all federal, State and local environmental and health and safety laws, rules, regulations and orders applicable to or pertaining to the Series 2016 Project and the Federal Worker Adjustment and Retraining Notification Act.

Operation of Project

The Borrower is required to operate the Series 2016 Project as a student housing facility and related facilities or cause the same to be operated as a student housing facility and related facilities in accordance with the Ground Lease relating to the Series 2016 Project and the Management Agreement relating to the Series 2016 Project, with housing units for rent only to Eligible Tenants (as defined in the Ground Lease relating to the Series 2016 Project), and is required to continue to maintain the Series 2016 Project in compliance with all applicable life and safety codes and all applicable building and zoning, health, environmental, and safety ordinances and laws and all other applicable laws, rules, and regulations of the United States of America, the State, and any political subdivision or agency thereof having jurisdiction over the Series 2016 Project.

Construction, Furnishing, and Equipping of the Series 2016 Project

(a) Construction. Promptly following the issuance and sale of the Series 2016 Bonds, the Borrower is required to construct the Building that is part of the Series 2016 Project and acquire and install the Equipment that is part of the Series 2016 Project therein. The Issuer authorizes the Borrower to use the proceeds of the Series 2016 Bonds and other amounts deposited into the Construction Fund from time to time to construct, furnish, and equip the Series 2016 Project. The Borrower agrees (i) that it will exercise the foregoing authorizations given to it by the Issuer, (ii) that it will cause the Equipment that is part of the Series 2016 Project to be acquired, and (iii) that the Series 2016 Project will be constructed in accordance with the Plans and Specifications for the Series 2016 Project, and (iv) that it expects that the proceeds of the Series 2016 Bonds will be expended within three years from the date of issuance of the Series 2016 Bonds.

(b) Insurance Obligations of Series 2016 Developer and Series 2016 Builder. The Borrower agrees that it will, at all times during the construction of the Series 2016 Project, (i) maintain or cause the Series 2016 Developer and/or the Series 2016 Builder to maintain, the insurance set forth in the Ground Lease relating to the Series 2016 Project. Such policy or policies of insurance are required to name the Issuer, the Borrower, the Trustee and the University as additional insureds, as their respective interests may appear, and are required to name the Trustee as mortgagee and sole loss payee under a standard loss payable endorsement providing that no act or omission by the named insured in any way prejudices the rights of the Trustee thereunder, and all Net Proceeds received under such policy or policies by the Borrower or the Issuer are required to be paid directly to the Trustee and deposited into the Insurance Fund to be applied to the restoration and/or completion of the Series 2016 Project or to the redemption of Series 2016 Bonds in accordance with the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Destruction and Damage.” Money held by the Trustee in the Insurance Fund is required to be invested and disbursed, from time to time, as described below under “THE LOAN AGREEMENT—Investment of Net Proceeds.” All such policies or copies thereof or certificates that such insurance is in full force and effect are required to be delivered to the Trustee at or prior to the delivery of the Series 2016 Bonds.

(c) Payment and Performance Bonds. The Borrower further agrees that it will cause the Series 2016 Developer to require the Series 2016 Builder to deliver to the Trustee separate Payment and Performance Bonds with respect to the Series 2016 Guaranteed Maximum Price Contract relating to the Series 2016 Project, and in the full amount of the Series 2016 Guaranteed Maximum Price Contract, made by the contractor thereunder as the principal and a surety company or companies that is or are licensed to do business in the State, are rated at least “A” by S&P or “Excellent (A/A-)” by A.M. Best Company, Inc., and otherwise satisfactory and acceptable to the Underwriter. Said Payment and Performance Bonds are required to name the Borrower as obligee and the Developer, the Board, the University and the Trustee as dual obligees with the right to proceed without the Borrower’s involvement. All Net Proceeds received under said bonds are required to become a part of and be deposited into the Construction Fund, or

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if received after the Completion Date for the Series 2016 Project, are required to be used to pay any obligation then owed by the Borrower under the Loan Agreement, and if any Net Proceeds remain, are required to be paid to the Ground Lessor. Any amounts recovered by way of penalties or damages, whether liquidated or actual, for delays in completion by a contractor are required to be deposited into the Bond Fund.

(d) Plans and Specifications. The Borrower is required to construct the Series 2016 Project in accordance with the Plans and Specifications for the Series 2016 Project and the Construction Contracts for the Series 2016 Project and warrants that the construction of the Series 2016 Project in substantial accordance with such Plans and Specifications will, when supplemented by the Equipment for the Series 2016 Project, result in a facility suitable for use by the Borrower as a student housing facility and related facilities and that all real and personal property provided for therein is necessary or appropriate in connection with the Series 2016 Project.

(e) Change Orders. In addition to the procedures and consents set forth in the Series 2016 Guaranteed Maximum Price Contract, the Borrower must obtain prior consent for Change Orders as follows: (i) for the Board, prior written approval is required as set forth in the Ground Lease for the Series 2016 Project; (ii) for the Series 2016 Developer, prior written approval is required as set forth in the Series 2016 Development Agreement.

(f) Construction Liens. The Borrower may not permit any mechanics’ or materialmen’s or other liens to be perfected or remain against the Series 2016 Project for labor or materials furnished in connection with the construction of the Series 2016 Project; provided that it does not constitute an Event of Default upon such liens being filed, if the Borrower promptly notifies the Trustee, the University and the Board of any such liens, and the Borrower in good faith promptly contests such liens; in such event the Borrower may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom provided the Borrower furnishes the Trustee with a bond or cash deposit equal to at least the amount so contested, a title insurance endorsement, or an opinion of Independent Counsel reasonably acceptable to the Trustee stating that by nonpayment of any such items, the liens of the Leasehold Deed of Trust relating to the Series 2016 Project, the Security Agreement relating to the Series 2016 Project and the Assignment of Agreements and Documents relating to the Series 2016 Project as to any material part of the Series 2016 Project will not be materially and imminently endangered and neither the Series 2016 Project nor any material part thereof will be subject to imminent loss or forfeiture. The proceeds of the bond, cash deposit, or title insurance endorsement may be used by the Trustee to satisfy the lien if action is taken to enforce the lien and such action is not stayed. If the Borrower is unable or otherwise fails to obtain such a bond or provide such a cash deposit or title insurance endorsement or such an opinion of Independent Counsel, the Borrower is required to promptly cause to be satisfied and discharged all such items by payment thereof. If the Borrower fails to pay any of the foregoing items required by this paragraph to be paid by the Borrower, the Issuer or the Trustee may (but is under no obligation to) pay the same, and any amounts so advanced therefor by the Issuer or the Trustee becomes an advance repayable in accordance with the Loan Agreement. The Borrower is required to complete the construction of the Series 2016 Project as promptly as practicable and with all reasonable dispatch.

(g) Series 2016 Guaranteed Maximum Price Contract.

(i) Guaranteed Maximum Price. The Borrower will require that the Series 2016 Guaranteed Maximum Price Contract has a guaranteed maximum price in an amount equal to not more than the net proceeds of the Series 2016 Bonds allocated to the construction of the Series 2016 Project. The guaranteed maximum price is required to be based on the final Plans and Specifications for the Series 2016 Project, as approved by the Series 2016 Developer and the Board.

(ii) Liquidated Damages. The Borrower will require that the Series 2016 Guaranteed Maximum Price Contract will require the Series 2016 Builder to pay as liquidated damages an amount for each day that completion of the Series 2016 Project is delayed beyond August 1, 2017 because of an act (or failure to act), event, or condition within the reasonable control of the Series 2016 Builder.

(iii) Substantial Completion and Final Completion. The Borrower will require that the applications for payments for substantial completion and final completion of the Series 2016 Project must include a certificate from the Series 2016 Developer as to the matters required by Developer set forth in the Loan Agreement.

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(h) Project Contingency. The Borrower will require that the amount of the Project Contingency included in the Project Budget is established under the Series 2016 Development Agreement. The Borrower and the Series 2016 Developer will be permitted to use the Project Contingency funds in amounts equal to (a) the amount specified in the Development Agreement plus (b) amounts of retainage theretofore retained by the Borrower under the Series 2016 Guaranteed Maximum Price Contract in such manner as is determined in construction of the Series 2016 Project.

Construction Fund

The Issuer is required, in the Indenture, to authorize and direct the Trustee to disburse money in the 2016 Proceeds Account and the 2016 Marketing Account of the Construction Fund to pay for the Costs of the Series 2016 Project in accordance with the procedures set forth in the Loan Agreement.

Establishment of Completion Date for the Series 2016 Project

The Completion Date for the Series 2016 Project is required to be evidenced to the Trustee by a certificate of substantial completion listing the items to be completed or corrected, if any, and the amounts to be withheld therefor, signed by the Authorized Borrower Representative and approved by the Series 2016 Developer.

If the Borrower determines not to complete any portion of the Series 2016 Project for which Series 2016 Bond proceeds (or investment earnings thereon) are available and delivers the completion certificate, or funds such portion of the Series 2016 Project from any other source, such Bond proceeds (or investment earnings thereon) in the 2016 Proceeds Account or other Account of the Construction Fund other than the 2016 Marketing Account otherwise allocable to such portion of the Series 2016 Project must be used: (i) to pay costs of the remaining parts of the Series 2016 Project, provided that the Borrower certifies to the Issuer and the Trustee that after recalculating the average reasonably expected economic life of the Series 2016 Project being financed, refinanced or reimbursed with proceeds of the Series 2016 Bonds (or investment earnings thereon), the weighted average maturity of the Series 2016 Bonds will not exceed 120% of the average reasonably expected economic life of the Series 2016 Project; (ii) to redeem principal on the Bonds in accordance with the provisions of the Loan Agreement and the Indenture; or (iii) in any other lawful manner, provided there is delivered to the Trustee and the Issuer a Favorable Opinion of Bond Counsel with respect to such application. If the Borrower so determines (A) not to complete any portion of the Series 2016 Project, or (B) to fund such portion from any other source, such portion of the Series 2016 Project will no longer be deemed to be within the meaning of the term “Project” for any purpose of the Loan Agreement or the Indenture; if the Borrower so determines to use available Series 2016 Bond proceeds in the 2016 Proceeds Account or other Account of the Construction Fund to pay the costs of other projects approved by the Issuer, such projects will thereafter be deemed to be within the meaning of the term “Project” for all purposes of the Loan Agreement and the Indenture.

Investment of Funds and Accounts

(a) Subject to the provisions of the Indenture and the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Special Investment Covenants,” any money held by the Trustee, as set forth in the Indenture, as a part of the Revenue Fund, the Bond Fund, the Redemption Fund, the Issuance Cost Fund, the Construction Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund, the Insurance Fund, the Condemnation Fund, the Operations Contingency Fund, the Surplus Fund, the Rebate Fund or as reserves in connection with contested liens or any other special trust funds, are required to be invested or reinvested in such Permitted Investments as may be designated by the Borrower to the Trustee, which designation may not contain directions contrary to State law, the Tax Regulatory Agreement, or provisions of the Indenture described above under “THE INDENTURE—Investment of Funds and Account” prior to any amendment thereof. The particular investments are required to be designated by the Borrower to the Trustee, at the written (or oral confirmed in writing) direction of the Authorized Borrower Representative. The Trustee will not be liable for any depreciation in the value of any obligations in which money of funds or accounts held under the Indenture are invested, as aforesaid, or for any loss arising from any investment or for any investment that does not comply with State law.

(b) The investments so purchased are required to be deemed at all times a part of the Revenue Fund, the Bond Fund, the Redemption Fund, the Issuance Cost Fund, the Construction Fund, the Debt Service Reserve Fund, the Repair and Replacement Fund, the Insurance Fund, the Condemnation Fund, the Operations Contingency Fund,

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the Surplus Fund, the Rebate Fund, as the case may be, and the interest accruing thereon and any profit realized therefrom is required to be credited as provided in the Indenture prior to any amendment thereof, and any losses resulting from such investments are required to be charged to such Fund and paid by the Borrower.

Special Investment Covenants

The Issuer and the Borrower each covenant that they will not directly or indirectly use or permit the use of any proceeds (as defined in the Regulations) of any issue or any other funds of the Issuer or the Borrower, or take or omit to take any action, or direct the Trustee to invest any funds held by it, in such manner as will cause any Tax- Exempt Bonds to be “arbitrage bonds” within the meaning of §148 of the Code and any Regulations proposed or promulgated in connection therewith or to be “federally guaranteed,” as such term is used and defined in §149(b) of the Code and any Regulations proposed or promulgated in connection therewith. To that end, the Issuer and the Borrower are required to comply with all requirements of §148 of the Code to the extent applicable to any Tax-Exempt Bonds. If at any time the Issuer or the Borrower are of the opinion that for purposes of this paragraph it is necessary to dispose of any investment or to restrict or limit the yield on any investment held under the Bond Documents or otherwise, the Issuer or the Borrower, as the case may be, is required to so instruct the Trustee in writing.

Borrower and Foundation to Maintain Status; Conditions under which Exceptions Permitted

(a) The Borrower (i) is required to maintain its legal existence as a single member limited liability company organized under the laws of the State of Alabama that is authorized to conduct business in the State and whose sole member is a Tax-Exempt Organization; (ii) is required to cause the Foundation to maintain its legal existence as a Tax-Exempt Organization; (iii) may not, except as permitted by this caption, consolidate with or merge into another entity or permit another entity to consolidate with or merge into it; (iv) may not dissolve or otherwise dispose of all or substantially all of its assets; (v) is required to cause the Foundation to file all required reports and documents with the IRS so as to maintain its status as a Tax-Exempt Organization; (vi) may not operate the Project in any manner nor engage in any activities or take any action that might reasonably be expected to result in the Foundation’s ceasing to be a Tax-Exempt Organization; and (vii) is required to promptly notify the Issuer and the Trustee of any loss of the Foundation’s status as a Tax-Exempt Organization or of any investigation, proceeding, or ruling that might result in such loss of status. The Borrower is required to preserve and keep in full force and effect all licenses and permits necessary to the proper conduct of its business.

(b) The Borrower covenants that it will not permit any of the Foundation’s or its revenues, income, or profits, whether realized or unrealized, to be distributed to any of the Foundation’s or its directors, or inure to the benefit of any private Person, other than for the lawful corporate purposes of the Foundation or the Borrower; provided, however, that the Foundation and Borrower may pay to any Person the value of any service or product performed for, or supplied to, the Foundation or the Borrower by such Person. The Borrower is required to take such actions, or cause the Foundation to take such actions, as are necessary or appropriate and within its control to take to comply with the provisions of the Code and the Regulations in order to preserve the exclusion of the interest paid on the Tax-Exempt Bonds from the gross income of the Owners thereof for federal income tax purposes and may not act or fail to act in any other manner that would adversely affect such exclusion. In connection with the foregoing, the Borrower acknowledges and agrees to comply with the provisions of the Tax Regulatory Agreement, and is required to provide certification from the Foundation as to the matters set forth in clause (a)(ii) under this caption.

(c) The Borrower may, without violating the covenant contained in the provisions of the Loan Agreement described under this caption, consolidate, merge, sell, or otherwise transfer to another Person all or substantially all of its assets as an entirety (and may thereafter dissolve), provided (i) such consolidation, merger, sale, or other transfer will not otherwise cause an Event of Default; and (ii) the surviving, resulting, or transferee Person (A) is authorized to do business in the State; (B) is a domestic corporation, partnership, or other entity, or if a natural person, a resident of the United States of America; (C) has the power to assume and assumes in writing all of the obligations of the Borrower under the Bond Documents and delivers to the Trustee any security agreement necessary to ensure that after such consolidation, merger, sale, or other transfer, the Trustee has a security interest in all assets that constitute, or would have constituted, Collateral (as defined in the Security Agreement) prior to such consolidation, merger, sale or transfer, together with an opinion of counsel that all action has been taken to perfect such security interest to the extent perfection can be made by the filing of financing statements; (D) obtains all licenses and permits required by law to operate the Project; (E) delivers to the Trustee a title insurance policy insuring that the

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surviving, resulting or transferee Person has a valid leasehold interest in the Property and insuring the Leasehold Deed of Trust as a first lien, subject only to the Permitted Encumbrances; (F) delivers to the Trustee an opinion of Independent Counsel to the effect that the Loan Agreement, as assumed by the surviving, resulting or transferee Person, the Notes, and the other Borrower Documents are valid and enforceable obligations of such Person, subject only to exceptions related to bankruptcy and other customary exceptions and that immediately after the transition no Event of Default would exist under the Loan Agreement or the Indenture or would exist upon notice and lapse of time as the result thereof; (G) delivers to the Trustee an opinion of Bond Counsel to the effect that such consolidation, merger, sale or transfer will not bring about an Event of Taxability; (H) has a fund balance or net worth, as the case may be, as reflected in the pro forma financial statements required to be furnished pursuant to this paragraph, not less than the fund balance or net worth, as the case may be, of the Borrower, as reflected in the most recent audited balance sheet of the Borrower furnished to the Trustee pursuant to the Loan Agreement; and (I) has a Fixed Charges Coverage Ratio not less than that of the Borrower for the two consecutive years prior to such consolidation, merger, sale or transfer, as determined from the surviving, resultant, or transferee Person’s financial statements on a pro forma basis that gives effect to such consolidation, merger, sale or transfer, which pro forma basis financial statements are accompanied by a report of the Accountant with respect to such historical pro forma basis financial statements stating the Fixed Charges Coverage Ratio for the periods reported on.

(d) The Borrower may also, without violating any covenants contained in the Loan Agreement, sell, or otherwise transfer the Project to another Person that is controlled solely by the Borrower and that, prior to such sale or transfer, has no assets or liabilities, upon completion or satisfaction of the conditions set forth in clauses (i) and (ii)(A) through (G) of paragraph (c) above, and upon such completion or satisfaction will be released from all liabilities and obligations under the Borrower Documents.

(e) The Borrower warrants that it is and while the Loan Agreement is in effect it (or the surviving, resulting, or transferee entity permitted by this paragraph) will continue to be duly qualified to do business in the State.

Financial Statements

(a) The Borrower has agreed to provide the Trustee, the University, the Dissemination Agent and the Underwriter annually, within 150 days after the end of each Annual Period, beginning with the Annual Period ending June 30, 2018, the audited financial statements of the Borrower including its balance sheet, statements of revenue, expenses, and changes in fund balance (deficit), and statement of cash flow, for the year then ended in comparative form with the preceding Annual Period, which financial statements are required to be accompanied by an Audit Report.

(b) The financial statements to be furnished to the Trustee, the University and the Underwriter annually pursuant to the provisions of the Loan Agreement described under this caption are required to be accompanied by a calculation of the Fixed Charges Coverage Ratio and by a certificate of the Borrower to the effect that the Borrower is not then in default under any provisions of the Loan Agreement and has fully complied with all of the provisions thereof, or if the Borrower is then in default or has failed to so comply, setting forth the nature of the default or failure to comply.

(c) The Borrower agrees to cause the Series 2016 Developer to prepare and deliver the monthly reports described in the Series 2016 Development Agreement. Within 30 days of receipt of such report, Borrower agrees to cause it to be posted on the Electronic Municipal Market Access System operated by the Municipal Securities Rulemaking Board.

Agreement Term

The Loan Agreement becomes effective upon its execution and delivery and will be in full force and effect until the Bonds have been fully paid (or provision for such payment has been made as provided in the Indenture), all fees, charges, indemnities and expenses of the Issuer and Trustee, have been fully paid or provision made for such payment (the payment of which fees, charges, indemnities and expenses are required to be evidenced by a written certification of the Borrower that it has fully paid or provided for all such fees, charges, indemnities and expenses); and all other amounts due under the Loan Agreement have been duly paid or provision made for such payment. All representations, certifications and covenants by the Borrower as to the indemnification of various parties and the payment of fees and expenses of the Issuer and the Trustee and all matters affecting the tax-exempt status of the Bonds,

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will survive the termination of the Loan Agreement, but in all events continue to be subject to the provisions of the Loan Agreement relating to the non-liability of Borrower’s officers.

Loan Payments and other Amounts Payable

(a) Basic Loan Payments:

(i) Until the Debt Service Payments have been fully paid or provision for the payment thereof has been made in accordance with the Indenture, the Borrower is required to pay to the Trustee for the account of the Issuer as Basic Loan Payments, in each case for deposit into the Bond Fund, amounts sufficient to pay the Debt Service Payments as and when the same become due and all other sums payable under the terms of the Bonds. The Borrower is required to pay to the Trustee for the account of the Issuer:

(A) On or before the twentieth day of each month, a sum equal to one-sixth of the amount payable on the immediately succeeding Interest Payment Date as interest on the Series 2016 Bonds, or such lesser amount that, together with amounts already on deposit in the 2016A CI Subaccount, with respect to the Series 2016A Bonds, or in the Series 2016B CI Subaccount, with respect to the Series 2016B Bonds, of the Capitalized Interest Account of the Bond Fund and available therefor, will be sufficient to pay interest on the Series 2016 Bonds to become due on the immediately succeeding Interest Payment Date, as provided in the Indenture;

(B) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of interest on such Additional Bonds;

(C) On or before the twentieth day of each month, a sum equal to (1) one-twelfth of the principal due on the immediately succeeding April 1 that is a maturity date of the Series 2016 Bonds, or (2) one-twelfth of the amount required to retire Series 2016 Bonds under the mandatory sinking fund redemption requirements of the Indenture on the immediately succeeding April 1, as provided in the Indenture, as the case may be;

(D) on the dates set forth in any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds, the amount(s) set forth therein to be paid by the Borrower in respect of the principal of such Additional Bonds (whether at maturity or under any mandatory sinking fund or other similar redemption requirements of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds); and

(E) on the Business Day prior to any date on which any Additional Bonds are to be redeemed pursuant to any mandatory redemption provisions of any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds (other than mandatory sinking fund or other similar redemption pursuant to such supplemental indenture or indentures), an amount equal to the Redemption Price of such Additional Bonds to be redeemed (taking into account amounts then on deposit in the Bond Fund to be used for the payment of such Additional Bonds to be redeemed).

(ii) Each payment of Basic Loan Payments under clauses (a)(i)(A) and (B) above will in all events be sufficient, after giving credit for funds held in the Bond Fund (including amounts held in the Capitalized Interest Account) and the Revenue Fund available for such purpose, to pay the total amount of interest payable on the Bonds on the immediately succeeding Interest Payment Date, each payment of Basic Loan Payments under clauses (a)(i)(C) and (D) above is required in all events to be sufficient, after giving credit for funds held in the Bond Fund available for such purpose, to pay the total amount of principal payable in respect of the Bonds on the immediately succeeding April 1, and each payment of Basic Loan Payments under clauses (a)(i)(E) above is required in all events to be sufficient, after giving credit for funds held in the Redemption Fund available for such purpose, to pay the total Redemption Price of the Bonds on the applicable date of redemption. Any Basic Loan Payments are required to be reduced or need not be made to

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the extent that there is money on deposit in the Bond Fund and/or the Redemption Fund in excess of scheduled payments of Basic Loan Payments plus the amount required for the payment of Bonds theretofore matured or called for redemption, the amount required for the payment of interest for which checks or drafts have been mailed by the Trustee, and past due interest in all cases where Bonds have not been presented for payment. Further, if the amount held by the Trustee in the Bond Fund and the Redemption Fund is sufficient to pay at the times required the Debt Service Payments then remaining unpaid, the Borrower is not obligated to make any further payments of Basic Loan Payments as described herein. There will also be a credit against remaining Basic Loan Payments for Bonds purchased or redeemed, and canceled, as provided in the Indenture or in any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds as provided therein.

(b) Additional Loan Payments:

(i) The Borrower is required to pay (A) to the Trustee, until the Debt Service Payments have been fully paid (1) for credit or deposit into any Fund or Funds created under the Indenture or any supplemental indenture or indentures executed in connection with the issuance of Additional Bonds other than the Repair and Replacement Fund, the Operations Contingency Fund and the Surplus Fund, any and all additional amounts required to be allocated to or deposited into such Fund or Funds by any amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds on the dates set forth therein; (2) annually, an amount equal to the annual fee of the Trustee for the Ordinary Services of the Trustee rendered and, on a monthly basis, the Ordinary Expenses of the Trustee incurred under the Indenture, as and when the same become due; (3) except as included in this clause, the reasonable fees and charges of any paying agents on the Bonds for acting as paying agents as provided in the Indenture, as and when the same become due; (4) the reasonable fees and charges of the Trustee for the Extraordinary Services of the Trustee rendered by it and the Extraordinary Expenses of the Trustee incurred by it under the Indenture, as and when the same become due; provided, that the Borrower may, without creating an Event of Default, contest in good faith the reasonableness of any such Extraordinary Services of the Trustee and Extraordinary Expenses of the Trustee and the reasonableness of any such fees, charges, or expenses; and (5) any other amounts due to the Trustee by the Borrower pursuant to the Indenture; (B) to the Issuer, (1) the fees of the Issuer and the fees of its counsel, prior to or contemporaneously with the issuance of the Series 2016 Bonds or as otherwise agreed by the Borrower and the Issuer; and (2) an amount sufficient to reimburse the Issuer for all fees and expenses reasonably incurred by it under the Loan Agreement in connection with the Project, including, but not limited to, the reasonable fees and expenses of counsel for the Issuer and Bond Counsel, reasonable fees and expenses for any rebate consultant or analyst retained by the Issuer as a result of the Borrower’s failure to comply with the provisions of the Loan Agreement relating to rebate (or similar provisions contained in an amendment to the Loan Agreement), and any expenses incurred as a result of any audit relating to the Bonds; and (C) to the Manager, any management fees owed pursuant to the Management Agreement. The obligations of the Borrower to pay any such amounts to the Trustee will survive the Payment in full of the Bonds, the defeasance of the Bonds and the removal or resignation of the Trustee.

(ii) Such Additional Loan Payments are required to be billed to the Borrower by the Issuer or the Trustee from time to time, together with a statement certifying that the amount billed has been incurred or paid by such party for one or more of the above items. Amounts so billed are required to be paid by the Borrower within 30 days after receipt of the bill by the Borrower.

(iii) If the Borrower fails to make any of the payments required in this paragraph, the item or installment so in default continues as an obligation of the Borrower until the amount in default has been fully paid and bears interest at the highest rate of interest on the Bonds.

(iv) All amounts deposited in the Funds and Accounts created in the Indenture and available to be used to pay the amounts, fees, charges, and expenses described in item (i) immediately above in accordance with the terms of the Indenture are required to be credited against the Borrower’s obligation to make Additional Loan Payments to the extent such amounts are so used.

(c) Reserve Loan Payments. A separate Account of the Debt Service Reserve Fund is required to be funded in an amount equal to the Debt Service Reserve Requirement for the Series 2016 Bonds and thereafter, unless

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otherwise provided for in a supplemental indenture, for each series of the Bonds (or, if more than one series of Additional Bonds is issued on the same date, with respect to each such multiple series of Additional Bonds if authorized in an amendment to the Loan Agreement) for the purpose of paying Debt Service Payments on the Series 2016 Bonds or the related series of Bonds as the same become due if there are insufficient funds for said purpose in the Bond Fund, the Redemption Fund, the Surplus Fund, the Operations Contingency Fund and the Repair and Replacement Fund (in such order of priority), unless provision for their payment in full has been duly made, and for payment of the fees, charges and expenses of the Trustee upon the occurrence of an Event of Default under the Indenture. If so provided for in a supplemental indenture, the 2016 Account of the Debt Service Reserve Fund may be a shared Account benefitting the Series 2016 Bonds and any Additional Bonds identified in such supplemental indenture. If any funds from the Debt Service Reserve Fund are withdrawn or if there is a diminution in Value of the cash and investments held in the Debt Service Reserve Fund as of any Valuation Date or if any net losses result from the investment of amounts held in the Debt Service Reserve Fund that reduces the Value of the cash and investments in the Debt Service Reserve Fund to less than the Debt Service Reserve Requirement for any series (or multiple series, if applicable) of Bonds as of any Valuation Date, the Borrower is required to, beginning on the twentieth day of the month following notice from the Trustee of such withdrawal, diminution in Value, or losses, and on the twentieth day of each month thereafter, in addition to any other Loan Payments that may be due, make payments to cure such deficiency as Reserve Loan Payments to the Trustee for deposit into the related Account or Account of the Debt Service Reserve Fund, as follows: (i) one-fourth of the amount of such deficiency due to a diminution in Value, or such losses; or (ii) one-twelfth of the amount of such deficiency if such deficiency results from any withdrawal from the Debt Service Reserve Fund or from any other source; in each case until the amount on deposit in the Debt Service Reserve Fund equals the Debt Service Reserve Fund Requirement.

(d) Repair and Replacement Loan Payments. Until the principal of, premium, if any, and interest on the Series 2016 Bonds has been fully paid, the Borrower agrees to pay to the Trustee, for deposit into the Repair and Replacement Fund with respect to the Series 2016 Project, commencing on the twentieth day of the first full month following the Completion Date for the Series 2016 Project and on the twentieth day of each month thereafter to and including June 20 of the partial Annual Period in which the Completion Date for the Series 2016 Project occurred in equal monthly installments, a fraction, the denominator of which is 12, and the numerator of which is the number of full calendar months following the Completion Date for the Series 2016 Project through June 20 of such partial Annual Period, of the Repair and Replacement Fund Requirement for the Series 2016 Project for the partial Annual Period on the exhibit attached to the Loan Agreement, and on the twentieth day of each month thereafter in equal monthly installments of one twelfth (1/12th) of the Repair and Replacement Fund Requirement for the Series 2016 Project for each applicable Annual Period as scheduled on the exhibit attached to the Loan Agreement. In addition, the Borrower agrees to pay to the Trustee amounts for deposit into the Repair and Replacement Fund as specified in any amendment to this Loan Agreement. The Repair and Replacement Fund Requirement for the Series 2016 Project will be subject to additional increases as is recommended in a report following each Periodic Project Assessment for the Series 2016 Project, which assessments are required to be conducted at least once every five years following the Completion Date for the Series 2016 Project. The Periodic Project Assessment report for the Series 2016 Project is required to be promptly delivered to the Borrower, the University and the Trustee.

(e) Operations Contingency Fund Payments. The Borrower is required to make such payments to the Trustee as are required of the Borrower with respect to any of the items specified under the Official Statement under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS—Operations Contingency Fund” and above under “THE INDENTURE—Operations Contingency Fund.”

Agreement to Deposit General Revenues

As security for its obligation to make the Loan Payments, the Borrower agrees to deposit and/or cause the Manager to deposit all General Revenues received by it in the form of cash, checks or negotiable instruments into a “deposit only” account and to deliver such amounts not less frequently than each Friday (or if any Friday is not a Business Day, the immediately preceding Business Day) to the Trustee for deposit to the Revenue Fund; provided, however, that if an Event of Default has occurred and is continuing, the Borrower is required to deliver and/or cause the Manager to deliver all such General Revenues daily. The Borrower agrees to execute all instruments necessary for the Trustee to perfect a security interest in the General Revenues prior to their deposit in the Revenue Fund.

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Maintenance and Modification of Project by the Borrower

(a) The Borrower agrees that during the Agreement Term it will at its own expense (i) keep the Project in as reasonably safe condition as its operations permit; (ii) keep the Building and all other improvements forming a part of the Project in good repair and in good operating condition, making from time to time, subject to the provisions of the Loan Agreement, all necessary and proper repairs thereto and renewals and replacements thereof, including external and structural repairs, renewals and replacements; and (iii) use the Equipment in the regular course of its business only, within the normal capacity of the Equipment, without abuse, and in a manner contemplated by the manufacturer thereof, and cause the Equipment to be maintained in accordance with the manufacturer’s then currently published standard maintenance contract and recommendations. The Borrower may, also at its own expense, from time to time make any Additions or Alterations to the Project it may deem desirable for its business purposes that do not adversely affect the operation or value of the Project. Additions or Alterations to the Project so made by the Borrower are required to be on the Property, are required to become a part of the Project, and are required to become subject to the lien and security interest of the Leasehold Deed of Trust and the Security Agreement. Such Additions or Alterations that cost in excess of $500,000 are required to be made only by contractors who furnish performance and labor and material payment bonds in the full amount of such contracts, made by the contractor thereunder as the principal and a surety company or companies reasonably acceptable to the Trustee as surety, and such bonds are required to be in such form as is reasonably acceptable to the Trustee. Such bonds are required to name the Borrower and the Trustee as obligees, and all Net Proceeds received under such bonds are required to be paid over to the Trustee and deposited into the Insurance Fund to be applied to the completion of the Additions or Alterations to the Project. Such money held by the Trustee in the Insurance Fund is required to be invested from time to time, as provided in the Loan Agreement.

(b) The Borrower is required to execute a conditional assignment directing the architect who has prepared any Plans and Specifications for any “material” Additions or Alterations to make available to the Trustee a complete set of the Plans and Specifications, which assignment will be effective only upon the occurrence of an Event of a Default. All Construction Contracts executed by the Borrower for construction of any “material” Additions or Alterations are required to contain a provision that, or by separate agreement such contractors are required to agree that, upon the occurrence of an Event of Default, said contracts with the contractors and/or subcontractors will be deemed assigned to the Trustee should the Trustee so direct. The Borrower covenants to include such conditional assignments in all material contracts and subcontracts executed for work to be performed on the Property. For purposes of this paragraph, the term “material” means any Addition or Alteration or contract having a cost of more than $100,000.

(c) The Borrower further agrees that at all times during the construction of Additions or Alterations that cost in excess of $500,000 it will maintain or cause to be maintained in full force and effect Builder’s Risk-Completed Value Form insurance to the full insurable value of such Additions or Alterations. The Borrower may not permit any mechanics’ or materialmen’s or other statutory liens to be perfected or remain against the Project for labor or materials furnished in connection with any Additions or Alterations so made by it; provided that it will not constitute an Event of Default upon such liens being filed, if the Borrower promptly notifies the Trustee in writing of any such liens, and the Borrower in good faith promptly contests such liens; in such event the Borrower may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom provided the Borrower furnishes the Trustee with a bond or cash deposit equal to at least the amount so contested, which, in the case of cash, is required to be placed into an account with the Trustee and held and invested for the purposes stated in this paragraph, or with an opinion of Independent Counsel reasonably acceptable to the Trustee stating that by nonpayment of any such items, the lien and security interest of the Leasehold Deed of Trust and the Security Agreement will not be materially endangered and neither the Project nor any material part thereof will be subject to imminent loss or forfeiture. The proceeds of the bond or cash deposit may be used by the Trustee to satisfy the lien if action is taken to enforce the lien and such action is not stayed. The bond or cash deposit is required to be returned to the Borrower if the lien is successfully contested. If the Borrower is unable or otherwise fails to obtain such a bond or provide such a cash deposit or such an opinion of Independent Counsel, the Borrower is required to promptly cause to be satisfied and discharged all such items by payment thereof. If the Borrower is unable or otherwise fails to obtain such a bond or provide such a cash deposit or such an opinion of Independent Counsel, or to satisfy and discharge the lien, the Trustee may, but is under no obligation to, satisfy and discharge the lien by payment thereof or provide security that causes the claimant to release the lien against the Project, and all amounts so paid by the Trustee are required to be treated as an advance to the Borrower repayable in accordance with the Loan Agreement.

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(d) The Borrower may not do or permit others under its control to do any work in or about the Project or related to any repair, rebuilding, restoration, replacement, alteration of, or addition to the Project, or any part thereof, unless the Borrower has first procured and paid for all requisite municipal and other governmental permits and authorizations. All such work is required to be done in a good and workmanlike manner and in compliance with all applicable building, zoning, and other laws, ordinances, governmental regulations, and requirements and in accordance with the requirements, rules, and regulations of all insurers under the policies required to be carried under the provisions of the Loan Agreement.

Removal of Equipment

(a) If no Event of Default under the Loan Agreement has occurred and is continuing, in any instance where the Borrower in its discretion determines that any items of Equipment or any portion thereof have become inadequate, obsolete, worn out, unsuitable, undesirable, or unnecessary, the Borrower may remove such items of Equipment or portion thereof from the Premises and sell, trade-in, exchange, or otherwise dispose of them (as a whole or in part) without any responsibility or accountability to the Trustee therefor; provided that the Borrower is required to either:

(i) substitute and install anywhere in the Building or on the Property items of replacement equipment or related property having equal or greater value or utility (but not necessarily having the same function) in the operation of the Project for the purpose for which it is intended, provided such removal and substitution may not impair the nature of the Project, all of which replacement equipment or related property will be free of all liens, security interests and encumbrances (other than Permitted Encumbrances), will become subject to the lien and security interest of the Leasehold Deed of Trust and the Security Agreement, and will be held by the Borrower on the same terms and conditions as the items originally constituting Equipment; or

(ii) not make any such substitution and installation, unless in the case of: (A) the sale of any such Equipment; (B) the trade in of such Equipment for other machinery, furnishings, equipment or related property not to become part of the Equipment or to become subject to the lien and security interest of the Leasehold Deed of Trust and the Security Agreement; or (C) any other disposition thereof, the Borrower is required to pay to the Trustee the proceeds of such sale or disposition or an amount equal to the credit received upon such trade in for deposit into the Redemption Fund. In the case of the sale, trade in or other disposition of any such Equipment to an Affiliate of the Borrower, the Borrower is required to pay to the Trustee an amount equal to the greater of the amounts and credits received therefor or the fair market value thereof at the time of such sale, trade in or other disposition for deposit into the Redemption Fund.

The market value of all Equipment sold, traded in or otherwise disposed in any Annual Period may not exceed five percent of the total value of all Equipment. Except to the extent that amounts are deposited into the Redemption Fund, the removal from the Project of any portion of the Equipment pursuant to the provisions of this paragraph will not entitle the Borrower to any postponement, abatement or diminution of the Basic Loan Payments payable under the Loan Agreement.

(b) If prior to such removal and disposition of items of Equipment from the Building and the Property, the Borrower has acquired and installed machinery, furnishings, equipment, or related property with its own funds that become part of the Equipment and subject to the lien and security interest of the Leasehold Deed of Trust and the Security Agreement and that have equal or greater utility, but not necessarily the same functions, as the Equipment to be removed, the Borrower may take credit to the extent of the amount so spent by it against the requirement that it either substitute and install other machinery and equipment having equal or greater value or that it make payment to the Trustee for deposit into the Redemption Fund.

(c) The Borrower is required to report promptly to the Trustee each such removal, substitution, sale, or other disposition and is required to pay to the Trustee such amounts as are required by the provisions of paragraph (a) above to be paid into the Redemption Fund promptly after the sale, trade-in or other disposition requiring such payment; provided, that no such report and payment need be made until the amount to be paid into the Redemption Fund on account of all such sales, trade-ins or other dispositions not previously reported are required to equal, in the aggregate, at least $50,000 in any Annual Period. All amounts deposited into the Redemption Fund pursuant to this

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caption as a result of the sale, trade-in, exchange or other disposition of Equipment are required to be applied to the redemption of all or a portion of the Bonds issued to finance or refinance the acquisition of such Equipment or, if such Bonds are no longer Outstanding, the redemption of such other Bonds as may be directed by the Borrower in accordance with the provisions of the Indenture. The Borrower may not remove, or permit the removal of, any of the Equipment from the Buildings or the Property except in accordance with the provisions of the Loan Agreement described under this caption.

Taxes, Other Governmental Charges, and Utility Charges

(a) The Borrower is required to pay, as the same become due, (i) all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Project or any machinery, equipment, furnishings or other property installed by the Borrower thereon that, if not paid, will become a lien on the Project prior to or on a parity with the lien and security interest of the Leasehold Deed of Trust and the Security Agreement or a charge on the General Revenues prior to or on a parity with the charge and security interest thereon and the pledge or assignment thereof created and made in the Security Agreement and including all ad valorem taxes or payments in lieu of such taxes lawfully assessed upon the Project; (ii) all utility and other charges incurred in the ownership, operation, maintenance, use, occupancy and upkeep of the Project; and (iii) all assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Project; provided, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Borrower is obligated to pay only such installments as are required to be paid during the Agreement Term.

(b) If the Borrower first notifies the Trustee in writing of its intention to do so, the Borrower may, at its own expense and in good faith, contest any such taxes, assessments, or other charges and, in the event of any such contest, may permit the taxes, assessments, or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom, provided the Borrower furnishes the Trustee with a bond or a cash deposit equal to at least the amount so contested plus any interest or penalties that might be payable as a result of any late payment, which, in the case of cash, is required to be placed into an account with the Trustee and held for the purposes stated in this paragraph (b), or an opinion of Independent Counsel stating that by nonpayment of any such items, the lien and security interest of the Leasehold Deed of Trust and the Security Agreement will not be materially endangered and neither the Project nor any material part thereof will be subject to imminent loss or forfeiture. The proceeds of such bond or cash deposit may be used by the Trustee to satisfy the lien if action is taken to enforce the lien and such action is not stayed. Such bond or cash deposit is required to be returned to the Borrower if the taxes, assessments, or other charges are successfully contested. If the Borrower is unable or otherwise fails to obtain such a bond or provide such a cash deposit or such an opinion of Independent Counsel, such taxes, assessments, or charges will be promptly satisfied and discharged by payment thereof.

Insurance Required

(a) In addition to the insurance described above under “THE LOAN AGREEMENT—Acquisition, Construction, Furnishing and Equipping of the Series 2016 Project,” throughout the Agreement Term, except as provided below, the Borrower is required to keep the Series 2016 Project or cause the same to be kept continuously insured against such risks as are customarily insured against with respect to facilities of like size and type, as recommended by an Insurance Consultant and agreed to below. Any changes to the insurance requirements contained in the Loan Agreement will be recommended by the Insurance Consultant after consulting with the Borrower and the University. If the following insurance policies are unattainable at a reasonable market rate, as certified by the Insurance Consultant, then the Borrower may elect to insure for a lesser amount of available coverage. If such policies are attainable at reasonable market rates then such insurance is required to include, but not be limited to:

(i) commencing on the Completion Date for the Series 2016 Project, insurance upon the repair or replacement basis in an amount of not less than 100% of the then actual cost of replacement (excluding costs of replacing excavations and foundations, but without deduction for depreciation) of the Series 2016 Project (with deductible provisions not to exceed $25,000 per casualty) against loss or damage by fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles and smoke and such other risks as are now or hereafter included in the special form property policy in common use for similar structures (including vandalism and malicious mischief);

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(ii) The Series 2016 Project is required to also be insured against the perils of earthquake and flood, either as part of the aforementioned commercial property policy, or under a separate policy or policies in an amount of at least $5,000,000 (with the lowest commercially available deductible provisions, but in any case with deductibles not to exceed 5% of value at risk). Such earthquake and flood insurance is required to include 12 months of rental interruption coverage consistent with paragraph (a)(iv) under this caption and is required to name the Trustee as sole loss payee. Borrower is required to maintain earthquake and flood insurance so long as such coverage is commercially available, but will not be in default under the Loan Agreement if coverage is no longer written or is unavailable for properties comparable to the premises. Borrower will be excused of its obligation to maintain or cause to be maintained earthquake and flood insurance by reason of such coverage being not available at commercially reasonable cost;

(iii) the Borrower is required to promptly forward any notification of material change received from an insurance carrier to the Trustee upon receipt and will promptly notify the Trustee upon becoming aware of any reduction of coverage, limits, terms and conditions;

(iv) commencing on the date on which the Borrower begins leasing the Series 2016 Project to Eligible Tenants, business interruption insurance (also referred to as “business income” or “loss of rents” insurance) covering loss of revenues and other income by the Borrower by reason of total or partial suspension of, or interruption in, the operation of the Series 2016 Project caused by covered damage or destruction of the Series 2016 Project in an amount not less than 12 months’ debt service on the Bonds plus budgeted operating expenses minus those operating expenses avoided as a result of and during the period of interruption (with deductible provisions not to exceed $25,000 or a waiting period of up to 30 days per occurrence). Such rental income cover is required to include extended period of indemnity for at least 12 months;

(v) comprehensive general liability insurance providing insurance (with deductible provisions not to exceed $50,000 per occurrence) covering all claims for bodily injury and property damage, including not less than $1,000,000 per occurrence and $2,000,000 in the aggregate, to include personal and advertising injury, general aggregate, products and completed operations aggregate insurance beginning at the completion of each Series 2016 Project component, and contract liability to cover all insurable obligations in the Ground Lease relating to the Series 2016 Project;

(vi) commencing on the date any vehicle is acquired or hired by the Borrower for use with respect to the Series 2016 Project, automobile liability insurance providing insurance (with deductible provisions not to exceed $50,000 per occurrence) to the extent of not less than a combined single limit of $1,000,000 per accident covering liability arising out of the use of any Borrower vehicle used in conjunction with the Series 2016 Project, whether owned, non-owned, or hired;

(vii) at all times, unless otherwise insured under the all risk perils in paragraph (a) under this caption, insurance under the Federal Flood Insurance Program within the minimum requirements and amounts required for federally financed or assisted loans under the Flood Disaster Protection Act of 1973, as amended, if the Series 2016 Project is eligible under such program;

(viii) commencing on the date the first employee of the Borrower is hired, workers’ compensation coverage or other similar coverage covering all of the Borrower’s employees on the Premises relating to the Series 2016 Project, as required by the laws of the State, including, with respect to workers’ compensation insurance, Coverage B Employer’s liability limits of: bodily injury by accident $500,000 each accident; and bodily injury by disease $500,000 each employee (and, in this regard, the Borrower will require all subcontractors performing work on the Series 2016 Project to provide an insurance certificate showing proof of workers’ compensation insurance);

(ix) commencing on the Completion Date for the Series 2016 Project, to the extent that the Series 2016 Project contains a steam boiler, pressure vessels, or pressure piping and commencing on the Completion Date, boiler explosion insurance on steam boilers, if any, pressure vessels, and pressure piping in an amount not less than 100% of the then actual cost of replacement (excluding costs of replacing excavations and foundations, but without deduction for depreciation) of the Series 2016 Project (with

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deductible provisions not to exceed $25,000 per occurrence or a waiting period of up to 30 days); provided, that such insurance need not be taken out until steam boilers, pressure vessels or pressure piping are installed in the Series 2016 Project;

(x) commencing on the Completion Date for the Series 2016 Project, fidelity bonds or employee dishonesty insurance in the amount of $100,000 for all officers, agents, and employees of the Borrower with the responsibility of handling General Revenues; and

(xi) additional umbrella or excess liability coverage in an amount of $10,000,000 in the aggregate, which includes all coverages required by paragraphs (a)(v), (a)(vi) and (a)(viii) under this caption. Borrower agrees to notify Issuer if claims filed under this policy reduce the available coverage below the required limit of $10,000,000. In that event, Borrower will promptly increase the insurance limits under such policy so that at least $10,000,000 of coverage is not subject to insurance claims. In any event, the additional premium associated with this provision will be a cost of the Series 2016 Project.

(b) Notwithstanding the foregoing clause (a), so long as the Board remains obligated to pay the cost of repairing and rebuilding the Series 2016 Project as contemplated by Section 21 of the Ground Lease, the Borrower will not be required to obtain the insurance described in paragraphs (a)(i), (ii), (iv), (vii) and (ix) under this caption. In addition, pursuant to the terms of the Ground Lease, the Board may elect to require that the Borrower obtain certain insurance, in which case the proceeds of such insurance would be payable to the Board and could be used by the Board to repair and rebuild. Application of Net Proceeds of Insurance

The Net Proceeds of the insurance carried pursuant to the provisions of the Loan Agreement described above in paragraphs (a)(i), (a)(ii), (a)(vii) and (a)(ix) under “THE LOAN AGREEMENT—Insurance Required” are required to be paid and applied as described below under “THE LOAN AGREEMENT—Destruction and Damage,” and the Net Proceeds of insurance carried pursuant to the provisions of the Loan Agreement described in paragraphs (a)(v), (a)(vi), (a)(viii), (a)(x) and (a)(xi) above under “THE LOAN AGREEMENT—Insurance Required” are required to be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid. The Net Proceeds of the insurance carried pursuant to the provisions of the Loan Agreement described in paragraph (a)(iv) under “THE LOAN AGREEMENT—Insurance Required,” up to an amount equal to the debt service on the Series 2016 Bonds (including any mandatory sinking fund redemption requirements) for the succeeding 12-month period, are required to be deposited into the Revenue Fund and applied as provided in the Indenture.

Additional Provisions Respecting Insurance

All insurance required above under “THE LOAN AGREEMENT—Insurance Required” is required to be taken out and maintained in generally recognized responsible insurance companies qualified to do business in the State and that have a rating of “A-VIII” or better by the latest Best Insurance Report. All policies evidencing such insurance are required to provide for payment to the Borrower, the Ground Lessor and the Trustee as their respective interests may appear, the policies described above in paragraphs (a)(v), (a)(vi) and (a)(xi) under “THE LOAN AGREEMENT—Insurance Required” are required to name the Issuer, the Ground Lessor, the University and the Trustee as additional insureds, and the policies described above in paragraphs (a)(i), (a)(ii), (a)(iv), (a)(vii) and (a)(ix) under “THE LOAN AGREEMENT—Insurance Required” are required to name the Trustee as mortgagee and sole loss payee under a standard loss payable endorsement providing that no act or omission by the Borrower in any way prejudices the rights of the Trustee under such policies and requires that all Net Proceeds of insurance if in excess of $250,000 for loss or damage covered thereby be paid to the Trustee and applied pursuant to the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Destruction and Damage”; provided, however, that prior to the occurrence of an Event of Default, all claims regardless of amount may be adjusted by the Borrower with the insurers, subject to prior written approval of the Trustee as to any settlement of any claim in excess of $250,000, which approval may not be unreasonably withheld. A certificate or certificates of the insurers that such insurance is in force and effect is required to be deposited with the Trustee, and prior to the expiration of any such policy the Borrower is required to furnish the Trustee with a certificate or certificates that the policy has been renewed or replaced or is no longer required by the Loan Agreement. In lieu of separate policies, the Borrower may maintain

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one or more blanket policies of insurance having the coverage described above under “THE LOAN AGREEMENT—Insurance Required.” All such policies that include the Trustee as an additional insured are required to provide that such insurance may not be canceled by the issuer thereof before the Series 2016 Bonds have been fully paid without at least 30 days’ written notice (or 10 days’ written notice for nonpayment of premium) to the Borrower and the Trustee and the Borrower is required to otherwise promptly forward to the Trustee any notice received from a carrier regarding the cancellation of such insurance coverage.

Review by Insurance Consultant; Insurance Certification

At all times during the Agreement Term, an Insurance Consultant is required to be designated by the Borrower. The Borrower is required to procure from the Insurance Consultant a review of its insurance requirements not less than every two years (commencing two years after the issuance of the Series 2016 Bonds) along with a written recommendation, if any, for increasing or decreasing any of the insurance or coverages hereinabove required, and is required to furnish a copy of such review to the Trustee, the University and the Underwriter. If any such review by the Insurance Consultant contains recommendations for increasing any of such insurance or coverages, the Borrower is required, as promptly as possible, to increase such insurance or coverages in accordance with such recommendations, and if any such review by the Insurance Consultant contains recommendations for decreasing any of such insurance or coverages, the Borrower may decrease such insurance or coverages in accordance with such recommendations after consultation with the University. In addition, on or before the execution and delivery of the Loan Agreement and, thereafter, upon the request of the Trustee, the Borrower is required to furnish to the Trustee a certificate of the Insurance Consultant to the effect that the insurance procured by the Borrower satisfies in all respects the requirements of the Loan Agreement. The provisions of the Loan Agreement described under this caption will not apply to insurance contemplated above under paragraphs (a)(i), (ii), (iv), (vii) and (ix) of “THE LOAN AGREEMENT—Insurance Required” so long as the Board remains obligated to pay the cost of repairing and rebuilding the Series 2016 Project as contemplated by Section 21 of the Ground Lease.

Destruction and Damage

(a) If the Project is destroyed or damaged (in whole or in part) by fire or other casualty, the Borrower is required to promptly notify in writing the Issuer and the Trustee, and, unless the Bonds are paid in full from the Net Proceeds of insurance resulting from such destruction or damage, will be obligated to continue to make the Loan Payments and will not be entitled to any postponement, abatement or diminution thereof.

(b) If such Net Proceeds of insurance are less than $250,000, all such insurance proceeds are required to be paid to the Borrower, and the Borrower is required to repair, replace, rebuild, restore and/or re-equip the Project promptly to substantially the same condition thereof as existed prior to the event causing such destruction or damage with such changes, alterations and modifications (including the substitution and addition of other property) as may be desired by the Borrower and as will not impair the value or the character of the Project. If the Net Proceeds are not sufficient to pay in full the costs of any such repair, replacement, rebuilding, restoration and/or re-equipping, the Borrower is required nonetheless to complete said work and is required to pay that portion of the costs thereof in excess of the amount of said Net Proceeds.

(c) If such Net Proceeds of insurance are in excess of $250,000, all such insurance proceeds are required to be paid to the Trustee and deposited and held in the Insurance Fund to be applied, as fully as practicable, in one or more of the following ways as directed in writing by the Borrower within 60 days from the date of such deposit:

(i) subject to the requirements of paragraph (f) of the provisions of the Loan Agreement described under this caption, such Net Proceeds may be applied to the restoration of the Project; or

(ii) subject to the requirements of paragraph (f) of the provisions of the Loan Agreement described under this caption, such Net Proceeds may be applied to the acquisition of other suitable land and the acquisition, by construction or otherwise, to the extent permitted by applicable law, of improvements consisting of a building or buildings, facilities, furnishings, machinery, equipment or other properties suitable for the Borrower’s operations at the Project as conducted prior to such destruction or damage (which improvements are required to be deemed a part of the Project and available for use and occupancy by the Borrower without the payment of any Loan Payments other than as provided to the same extent as if such

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improvements were specifically described in the Loan Agreement and are required to be acquired by the Borrower subject to no liens, security interests or encumbrances prior to or on a parity with the lien and security interest of the Leasehold Deed of Trust and the Security Agreement, other than Permitted Encumbrances); or

(iii) such Net Proceeds may be transferred to the Redemption Fund to be applied to the redemption of Bonds; or

(iv) such Net Proceeds may be applied in some combination permitted by the foregoing clauses (i), (ii) and (iii) of this paragraph (c).

(d) All Net Proceeds deposited into the Redemption Fund pursuant to the provisions of the Loan Agreement described under this caption as a result of the destruction of or damage to the Project are required to be applied to the redemption of all or a portion of the Bonds issued to finance or refinance the acquisition of such portion of the Project or, if such Bonds are no longer Outstanding, the redemption of such other Bonds as may be directed by the Borrower in accordance with the provisions of the Indenture or, if no Bonds are Outstanding, such remaining Net Proceeds are required to be paid to the Ground Lessor.

(e) All Net Proceeds so deposited into the Redemption Fund to be applied to the redemption of the Series 2016 Bonds are required to be used to redeem Series 2016 Bonds:

(i) pursuant to the provisions of the Indenture described under “THE SERIES 2016 BONDS— Redemption—Extraordinary Optional Redemption” in the Official Statement; provided, that no part of such Net Proceeds may be applied to a redemption of the Bonds in whole pursuant to the provisions of the Indenture described under “THE SERIES 2016 BONDS—Redemption—Extraordinary Optional Redemption” in the Official Statement unless the requirements of the Loan Agreement described below under “THE LOAN AGREEMENT—Option to Prepay Loan upon the Occurrence of Certain Extraordinary Events” have been met; and

(ii) pursuant to the provisions of the Indenture described under “THE SERIES 2016 BONDS— Redemption—Other Redemptions at Par” in the Official Statement with respect to takings and eminent domain.

All Net Proceeds so deposited into the Redemption Fund to be applied to the redemption of Additional Bonds are required to be used to redeem such Additional Bonds as provided in the supplemental indenture pursuant to which such Additional Bonds were authorized. (f) Before the Trustee may apply any Net Proceeds pursuant to the provisions of the Loan Agreement described in clauses (i), (ii), or (iv) of paragraph (c) immediately above, the Authorized Borrower Representative is required to furnish to the Trustee and the Issuer a certificate of the Borrower, the University and the Independent Engineer (A) to the effect that the Project can reasonably be expected to be restored, within a period of 12 months from the receipt of such Net Proceeds, to substantially the condition thereof immediately preceding such damage or destruction; (B) setting forth the estimated cost of the proposed repair, rebuilding, restoration or re- equipping of the Project, including an allowance for contingencies, and the estimated date of completion of such repair, rebuilding, restoration and re-equipping; (C) to the effect that all amounts necessary to accomplish the proposed repair, rebuilding, restoration and re-equipping are on deposit in the Insurance Fund; and (D) to the effect that all permits, licenses, accreditations and other governmental approvals necessary for operation of the Project are in full force and effect.

(g) Any balance of such Net Proceeds of insurance remaining after application pursuant to the provisions of the Loan Agreement described immediately above in paragraph (b) or (c) or remaining because of the failure of the Authorized Borrower Representative to furnish to the Trustee the items required by paragraph (f) immediately above, is required to be paid into the Redemption Fund and used to redeem Bonds as provided in paragraph (e) immediately above. If the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the Indenture) and all amounts due by the Borrower under the Loan Agreement have been paid in full, any such balance of such Net Proceeds remaining after application described immediately above in

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paragraph (b) or (c) or remaining because of the failure of the Authorized Borrower Representative to furnish to the Trustee the items required by the provisions of the Loan Agreement described immediately above in paragraph (f) is required to be paid to the Ground Lessor.

Condemnation

(a) If title to or the temporary use of the Project or any part thereof is taken under the exercise of the power of eminent domain by any governmental body or by any Person acting under governmental authority, the Borrower is required to promptly notify the Issuer and the Trustee, and, unless the Bonds are paid in full from the award made in such eminent domain proceedings, will be obligated to continue to make the Loan Payments and will not be entitled any postponement, abatement or diminution thereof.

(b) Except for Net Proceeds received by the Borrower pursuant to the provisions of the Loan Agreement described below under “THE LOAN AGREEMENT—Condemnation of Property Not Included in Project,” the Borrower and the Trustee are required to cause the Net Proceeds received by them or any of them from any award made in such eminent domain proceedings to be paid to the Trustee and deposited and held in the Condemnation Fund to be applied, as fully as practicable, in one or more of the following ways as directed in writing by the Borrower and the University within 60 days from the date of such deposit:

(i) subject to the requirements of paragraph (e) immediately below, such Net Proceeds may be applied to the restoration of the Project; or

(ii) subject to the requirements of paragraph (e) immediately below, such Net Proceeds may be applied to the acquisition of other suitable land and the acquisition, by construction or otherwise, to the extent permitted by applicable law, of improvements consisting of a building or buildings, facilities, furnishings, machinery, equipment or other properties suitable for the Borrower’s operations at the Project as conducted prior to such taking (which improvements are required to be deemed a part of the Project and available for use and occupancy by the Borrower without the payment of any Loan Payments other than as provided to the same extent as if such improvements were specifically described in the Loan Agreement and will be acquired by the Borrower subject to no liens, security interests or encumbrances prior to or on a parity with the lien and security interest of the Leasehold Deed of Trust and the Security Agreement, other than Permitted Encumbrances); or

(iii) such Net Proceeds may be transferred to the Redemption Fund to be applied to the redemption of Bonds; or

(iv) such Net Proceeds may be applied in some combination permitted by the foregoing clauses (i), (ii) and (iii) of this paragraph (b).

(c) All Net Proceeds deposited into the Redemption Fund pursuant to the provisions of the Loan Agreement described under this caption as a result of the condemnation of a portion of the Project are required to be applied to the redemption of all or a portion of the Bonds issued to finance or refinance the acquisition of such portion of the Project or, if such Bonds are no longer Outstanding and all amounts due by the Borrower under the Loan Agreement has been paid in full, the redemption of such other Bonds as may be directed by the Borrower in accordance with the provisions of the Indenture or, if no Bonds are Outstanding, such remaining Net Proceeds are required to be paid to the Ground Lessor.

(d) All Net Proceeds so deposited into the Redemption Fund to be applied to the redemption of the Series 2016 Bonds are required to be used to redeem Series 2016 Bonds:

(i) pursuant to the provisions of the Indenture described under “THE SERIES 2016 BONDS—Redemption—Extraordinary Optional Redemption” in the Official Statement; provided, that no part of any such Net Proceeds may be applied to a redemption of the Bonds in whole pursuant to the provisions of the Indenture described under “THE SERIES 2016 BONDS—Redemption—Extraordinary Optional Redemption” in the Official Statement unless the requirements of the Loan Agreement described

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below under “THE LOAN AGREEMENT—Option to Prepay Loan upon the Occurrence of Certain Extraordinary Events” has been met; and

(ii) pursuant to the provisions of the Indenture described under “THE SERIES 2016 BONDS—Redemption—Other Redemptions at Par” in the Official Statement with respect to takings and eminent domain.

(e) Before the Trustee may apply any Net Proceeds pursuant to the provisions of the Loan Agreement described above in clauses (i), (ii) or (iv) of paragraph (b) under this caption to pay the costs of restoring and replacing the Project, the Authorized Borrower Representative has furnished to the Trustee and the Issuer (i) a certificate of the Borrower, the University and the Independent Engineer (A) to the effect that the Project can reasonably be expected to be restored, within a period of 12 months from the receipt of such Net Proceeds, to substantially the condition thereof immediately preceding such condemnation; (B) setting forth the estimated cost of the proposed restoration or replacement of the Project, including an allowance for contingencies, and the estimated date of completion of such restoration or replacement; and (C) to the effect that all amounts necessary to accomplish the proposed restoration and replacement are on deposit in the Condemnation Fund; and (ii) a certificate of the Authorized Borrower Representative to the effect that all permits, licenses, accreditations and other governmental approvals necessary for operation of the Project are in full force and effect.

(f) Any balance of such Net Proceeds remaining after application pursuant to the provisions of the Loan Agreement described above in paragraph (b) under this caption or remaining because of the failure of the Authorized Borrower Representative to furnish to the Trustee the items required by paragraph (e) of the provisions of the Loan Agreement described under this caption is required to be paid into the Redemption Fund and used to redeem Bonds as described in paragraph (d) under this caption. If the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the Indenture) and all amounts due by the Borrower under the Loan Agreement have been paid in full, any such balance is required to be paid to the Ground Lessor.

Condemnation of Property Not Included in Project

The Borrower is entitled to the Net Proceeds of any condemnation award or portion thereof made for damages to or for taking of its property not included in the Project and not subject to the lien and security interest of the Leasehold Deed of Trust and the Security Agreement.

Investment of Net Proceeds

Any money held by the Trustee in the Insurance Fund or the Condemnation Fund under the provisions of the Loan Agreement described under “THE LOAN AGREEMENT—Destruction and Damage” and “— Condemnation,” respectively, is required, at the written request of the Borrower, to be invested or reinvested by the Trustee, as specified by the Authorized Borrower Representative in such request, in Permitted Investments at a yield that is not greater than the yield on the Bonds that financed or refinanced the acquisition of the damaged, destroyed or condemned property.

Annual Budget

(a) At least 10 days prior to the first day of each Annual Period commencing with the Annual Period ending June 30, 2018, the Borrower is required to prepare a line-item operation and capital budget for the Project (the “Annual Budget”) for the immediately succeeding Annual Period which is required to include the monthly budgeted Expenses and budgeted Subordinated Expenses of the Project for such Annual Period and which have been approved by the University in accordance with the applicable Ground Lease, and which Annual Budget is required to include the Borrower Membership Fee, the Management Fee, insurance premiums and the other requirements set forth in the Management Agreement. If the Borrower fails to prepare the Annual Budget for any Annual Period, the Annual

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Budget for the immediately preceding Annual Period continues in effect until the Annual Budget is prepared for the remainder of the applicable Annual Period.

(b) To the extent that the Borrower deems it necessary at any time during any Annual Period, the Borrower will submit a revised Annual Budget to the University and the Trustee declaring that the revisions are necessary to operate or maintain the Project and setting forth the reasons therefor which revised Annual Budget will, for all purposes of the Loan Agreement, be deemed the Annual Budget for the remainder of the applicable Annual Period.

(c) A copy of each Annual Budget or revised Annual Budget is required to be furnished to the Trustee, the Ground Lessor and the Issuer as soon as possible, but in no event later than the beginning of the Annual Period. The Annual Budget or revised Annual Budget is required to be accompanied by a certificate (with supporting calculations) of the Borrower to the effect that the Fixed Charges Coverage Ratio for the Annual Period to which such Annual Budget relates, based on the projected Revenues and Expenses set forth therein, will be not less than 1.20 or, if not so, stating in reasonable detail the reasons therefor.

(d) If the Borrower fails to provide a certificate required by the provisions of the Loan Agreement described in paragraph (c) above stating that the Fixed Charges Coverage Ratio will be not less than 1.20, a Financial Consultant will be engaged by the Borrower as provided in the Loan Agreement.

Covenant Regarding Manager

The Borrower agrees that if the initial Manager ceases to serve as the Manager, the Borrower will employ a Manager to manage the Series 2016 Project that is either (a) the University, or (b) a recognized manager of student housing facilities that is acceptable to the Ground Lessor and that then manages, and has for each of the past five years managed, at least 5,000 beds of student housing. Prior to entering into a contract with any successor Manager, the Borrower is required to first deliver to the Trustee and the Ground Lessor an Opinion of Bond Counsel to the effect that the terms of the proposed Management Agreement relating to the Series 2016 Project will not bring about an Event of Taxability.

Tax-Exempt Status

(a) The Borrower covenants with the Issuer and for and on behalf of the purchasers and Beneficial Owners of the Series 2016A Bonds from time to time outstanding that so long as any of the Series 2016A Bonds remain outstanding, money on deposit in any fund in connection with the Series 2016A Bonds, whether or not such money was derived from the proceeds of the sale of the Series 2016A Bonds or from any other sources, will not be used in a manner which will cause the Series 2016A Bonds to be “arbitrage bonds,” within the meaning of Section 148 of the Code, and any lawful Treasury Regulations promulgated thereunder, as the same exist on this date, or may from time to time hereafter be amended, supplemented or revised. The Borrower also covenants for the benefit of the Beneficial Owners of the Series 2016A Bonds to comply with all of the provisions of the Tax Regulatory Agreement relating to the Series 2016A Bonds. The Borrower reserves the right, however, to make any investment of such money permitted by State law, if, when and to the extent that said Section 148 or the Treasury Regulations promulgated thereunder is repealed or relaxed or is held void by final judgment of a court of competent jurisdiction, but only upon receipt of a Favorable Opinion of Bond Counsel with respect to such investment.

(b) The Borrower agrees that it will take such actions as are necessary or appropriate and within its control to take to comply with the provisions of the Code and the Regulations promulgated thereunder in order to avoid any loss of any the exclusion of interest on the Series 2016A Bonds from gross income of the owners thereof for federal income tax purposes, and will not act or fail to act in any other manner which would adversely affect such exclusion.

(c) The Borrower acknowledges that in the event of an examination by the Internal Revenue Service of the exclusion of interest on the Series 2016A Bonds from gross income of the owners thereof for federal income tax purposes, the Issuer may be treated as a “taxpayer” in such examination, and the Borrower agrees that it will respond, and will direct the Issuer to respond, in a commercially reasonable manner to any inquiries from the Internal Revenue

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Service in connection with such an examination. The Issuer covenants that it will cooperate with the Borrower, at the Borrower’s expense and at its direction, in connection with such examination.

(d) The Borrower further covenants that on or before the date that is 30 days following a date that is five years from the Series 2016 Closing Date, the Borrower is required to provide to the Trustee a written certificate of an Authorized Borrower Representative stating that either (a) no rebate payments are then required to be made to the United States of America because of the existence of one or more exceptions from the rebate provisions contained in Section 148(f) of the Code and the Treasury Regulations relating to the tax-exempt bond provisions of the Code (the “Rebate Provisions”); or (b) the Borrower has made (or caused to be made) a calculation of the amount of rebate owed pursuant to the Rebate Provisions and either (i) no rebate was then due and owing with respect to the Series 2016A Bonds, or (ii) rebate (the amount of which is required to be specified) has been paid to the United States of America with respect to the Series 2016A Bonds. The Borrower acknowledges that its obligations under this paragraph are supplemental to, and not in lieu of, the Rebate Provisions set forth in the Tax Regulatory Agreement relating to the Series 2016A Bonds.

(e) Except as otherwise described in the Tax Regulatory Agreement, the Borrower has agreed that the proceeds of the Series 2016A Bonds and any investment earnings thereon will not be used in an "unrelated trade or business" of the Foundation or the Borrower within the meaning of Section 513(a) of the Code;

(f) If regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Series 2016A Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Series 2016A Bonds under Section 103 of the Code. If regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Series 2016A Bonds, the Issuer and the Borrower agree to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Series 2016A Bonds under Section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Issuer Agents to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, which may be permitted by the Code as are consistent with the purpose for the issuance of the Series 2016A Bonds.

Assignment and Subleasing

(a) The Borrower may enter into residency agreements with Eligible Tenants (as defined in the Ground Lease relating to the Series 2016 Project) of the Series 2016 Project or the University without complying with the provisions of this paragraph (a) other than clause (vii) below. With the prior written consent of the University, the rights and obligations of the Borrower under the Loan Agreement may be assigned and delegated, and the Project may be assigned or subleased, as a whole or in part, by the Borrower without the necessity of obtaining the consent of either the Issuer or the Trustee, subject, however, to each of the following conditions:

(i) No assignment (other than pursuant to the provisions of the Loan Agreement described under “THE LOAN AGREEMENT—Borrower and Foundation to Maintain Status; Conditions Under Which Exceptions Permitted”) or sublease will relieve the Borrower from primary liability for any of its obligations under the Loan Agreement, and in the event of any such assignment or sublease, the Borrower will continue to remain primarily liable for payment of the Loan Payments and for the payment, performance and observance of the other obligations and agreements on its part provided in the Loan Agreement to be performed and observed by it.

(ii) The assignee is required to assume in writing the obligations of the Borrower under the Loan Agreement to the extent of the interest assigned.

(iii) The Borrower is required to furnish or cause to be furnished to the Issuer and the Trustee assurances reasonably satisfactory to the Issuer and the Trustee that the Project will continue to be operated as a student housing facility and related facilities.

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(iv) No assignment or sublease with any Person will be entered into by the Borrower without the Borrower’s first furnishing to the Trustee and the Issuer a Favorable Opinion of Bond Counsel or a ruling from the IRS to the effect that such assignment or sublease will not bring about an Event of Taxability.

(v) No such assignment or sublease will give rise to a novation.

(vi) The Borrower is required, within 30 days after the execution thereof, to furnish or cause to be furnished to the Issuer, the Trustee and the University a true and complete copy of each such assignment or sublease, as the case may be. The Issuer and the Trustee has the right, at any time and from time to time, to notify any assignee or sublessee of the rights of the Issuer and the Trustee as provided by this paragraph. From time to time, upon the request of the Issuer or the Trustee, the Borrower will specifically assign and grant a security interest to the Trustee, as additional security for the Loan Payments, by an amendment to the Security Agreement in writing and in the form approved by the Issuer and the Trustee, all the right, title, and interest of the Borrower in and to any and all subleases hereafter on or affecting the Premises (other than any sublease to which the University is a party as the sublessee), together with all security therefor and all money payable thereunder, subject to the conditional right of the Borrower to collect the rentals under any such subleases. The Borrower and the Issuer are required to also execute and deliver to the Trustee any notification, financing statement, or other document reasonably required by the Trustee to perfect the foregoing assignment and security interest created as to any such subleases and other properties.

(vii) All residency agreements are required to contain an attornment clause providing in effect that if at any time during the term of the residency agreement, the Trustee or the designee of the Trustee, or a subsequent purchaser at a foreclosure sale from the Trustee, becomes the owner of the Project, the resident under such residency agreement agrees, at the election and upon demand of any owner of the Project, to attorn, from time to time, to any such owner upon the terms and conditions set forth in the residency agreement and further, that at the request of the party to whom it has attorned, it will execute, acknowledge and deliver, without charge, from time to time, instruments acknowledging such attornment. The attornment clause is required to also provide that upon such attornment, the residency agreement will continue in full force and effect as, or as if it were, a direct residency agreement between the successor and the resident under such residency agreement, except that the successor landlord will not (A) have any liability for any previous act or omission of a predecessor landlord under the residency agreement; (B) be bound by any previous modification of the residency agreement, unless such modification or prepayment has been expressly approved in writing by the Issuer and the Trustee; or (C) have any liability for refusal or failure to perform or complete landlord’s work or otherwise prepare the demised premises for occupancy in accordance with the provisions of the residency agreement.

(b) The Issuer confirms and recognizes that the right of possession of the residents under residency agreements of the Borrower to the Premises and their other rights arising out of the residency agreements will not be affected or disturbed in any way by the Issuer or the Trustee or by the exercise of any rights or remedies by the Issuer or the Trustee for any reason other than one that would entitle the Borrower under the residency agreements to dispossess the residents under such residency agreements from the Premises or that would constitute an event of default under the residency agreements. Further, in the event of a foreclosure or such other exercise of the Issuer’s or the Trustee’s rights under the Loan Agreement and the Indenture, the Issuer agrees that so long as any resident is not in default under the terms of its residency agreement, it is required to recognize such resident as the resident under such residency agreement.

(c) Notwithstanding any other provision contained in the Loan Agreement, the Borrower is permitted to sublease all or a portion of the Premises or the Project to the University without the necessity of obtaining the consent of the Issuer, the Trustee or the Owners of any Bonds.

Restrictions on Sale, Encumbrance, or Conveyance of the Project by the Borrower

The Borrower may not, except as described in the Ground Lease or under “THE LOAN AGREEMENT— Borrower and Foundation to Maintain Status; Conditions Under Which Exceptions Permitted” and “—Assignment and Subleasing” and in the applicable Leasehold Deed of Trust, (a) directly, indirectly, or beneficially sell, convey, or otherwise dispose of any part of its interest in the Project during the Agreement Term, except for Permitted

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Encumbrances, which are permitted; (b) permit any part of the Premises to become subject to any mortgage, lien, claim of title, encumbrance, security interest, conditional sale contract, title retention arrangement, finance lease, or other charge of any kind, except for Permitted Encumbrances, which are permitted, or except as otherwise permitted under the Loan Agreement; and (c) assign, transfer, or hypothecate (other than to the Trustee) any rent (or analogous payment) then due or to accrue in the future under any residency agreement or sublease of the Premises, except for Permitted Encumbrances, which are permitted, or except as otherwise permitted by the provisions of the Loan Agreement described above under “THE LOAN AGREEMENT—Assignment and Subleasing.”

Events of Default and Remedies

Events of Default. The following are “Events of Default” under the Loan Agreement, and the terms “Event of Default” or “Default” mean, whenever they are used in the Loan Agreement, any one or more of the following events:

(a) The Borrower fails to pay the Basic Loan Payments of interest required to be paid under the provisions of the Loan Agreement at the times specified therein and such failure continues for a period of three days.

(b) The Borrower fails to pay the Basic Loan Payments of interest and principal on Additional Bonds, including Redemption Price thereof, required to be paid under the provisions of the Loan Agreement at the times specified therein and such failure continues for a period set forth in the amendment or amendments to the Loan Agreement executed in connection with the issuance of Additional Bonds.

(c) The Borrower fails to pay the Basic Loan Payments of principal on the Series 2016 Bonds (whether at maturity or under mandatory sinking fund redemption requirements) required to be paid under the provisions of the Loan Agreement at the times specified therein and such failure continues for a period of three days, whether at maturity, by acceleration, call for redemption, or otherwise.

(d) Any representation or warranty made by the Borrower in any statement or certificate furnished to the Issuer or the Trustee or the purchaser of any Bonds, in connection with the sale of any Bonds, or furnished by the Borrower pursuant hereto, proves to have been inaccurate in any material respect as of the date of the issuance or making thereof.

(e) The Borrower fails to perform or cause to be performed any other covenant, condition, or provision of the Loan Agreement, other than as referred to in paragraph (a), (b), or (c) above or any covenant contained in the Loan Agreement relating to continuing disclosure requirements, and to correct such failure within 30 days after written notice specifying such failure has been given to the Borrower by the Issuer or the Trustee. In the case of any such failure that cannot with due diligence be corrected within such 30-day period, but can be wholly corrected within a period of time not materially detrimental to the rights of the Trustee or the Issuer, it does not constitute an Event of Default if corrective action is instituted by the Borrower within the applicable period and diligently pursued until the failure has been corrected in accordance with and subject to any directions or limitations of time established in writing by the Trustee.

(f) The Borrower is required to (i) apply for or consent to the appointment of or the taking of possession by a receiver, custodian, trustee, or liquidator of it or of all or a substantial part of its property or of the Project; (ii) fail to lift or bond promptly (if legally permissible) any execution, garnishment or attachment of such consequence as will impair the ability of the Borrower to carry on its operations at the Project; (iii) enter into an agreement of composition with its creditors; (iv) admit in writing its inability to pay its debts as such debts become due; (v) make a general assignment for the benefit of its creditors; (vi) commence a voluntary case under the federal bankruptcy law or any similar law in effect in a foreign jurisdiction (as now or hereafter in effect); (vii) file a petition or answer seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts; (viii) fail to controvert in a timely or appropriate manner or acquiesce in writing to any petition filed against it in an involuntary case under such federal bankruptcy law or any similar law in effect in a foreign jurisdiction; or (ix) take any action for the purpose of effecting any of the foregoing.

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(g) A proceeding or case is commenced, without the application of the Borrower, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding-up, or composition or adjustment of debts of the Borrower; (ii) the appointment of a trustee, receiver, custodian, liquidator, or the like of the Borrower or of all or any substantial part of the assets of it; or (iii) similar relief in respect of the Borrower under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition and adjustment of debts, and such proceeding or case continues undismissed or an order, judgment, or decree approving or ordering any of the foregoing is entered and continues unvacated and unstayed and in effect for a period of 90 days, whether consecutive or not.

(h) The Fixed Charges Coverage Ratio for any Annual Period is less than 1.00.

(i) The Borrower fails to engage the Financial Consultant or fails to timely implement the recommendations of the Financial Consultant as provided in the Loan Agreement.

(j) The occurrence of an event of default under any of the Bond Documents other than the Continuing Disclosure Agreement.

(k) The Borrower fails to maintain itself as a limited liability company whose sole asset is the project.

Remedies on Default. (a) Whenever any Event of Default referred to above has happened and is subsisting, the Issuer, or the Trustee as the assignee of the Issuer, to the extent permitted by law, may:

(i) at its option, which may be separate and independent from any similar option under the Indenture, declare all unpaid installments of Basic Loan Payments and other amounts payable under the provisions of the Loan Agreement described under “THE LOAN AGREEMENT—Loan Payments and Other Amounts Payable” above for the remainder of the Agreement Term to be immediately due and payable whereupon the same becomes immediately due and payable it being understood that upon a declaration by the Trustee described under “THE INDENTURE—Events of Default and Remedies—Acceleration of Maturities,” all unpaid Basic Loan Payments payable under the Loan Agreement becomes immediately due and payable; provided, however, that if acceleration of the Bonds has been rescinded and annulled as described under “THE INDENTURE—Events of Default and Remedies—Acceleration of Maturities,” acceleration of the Basic Loan Payments and other amounts payable under the provisions of the Loan Agreement described under “THE LOAN AGREEMENT—Loan Payments and Other Amounts Payable” above required by the provisions of the Loan Agreement described in this paragraph will similarly be rescinded and annulled and the Event of Default occasioning such acceleration is required to be waived, but no such waiver, rescission, and annulment will extend to or affect any subsequent Event of Default or impair or exhaust any right, power, or remedy consequent thereon; or

(ii) have access to and inspect, examine, and take electronic or hard copies of the books and records and any and all accounts, similar data, and income tax and other tax returns of the Borrower; or

(iii) from time to time take whatever action at law or in equity or under the terms of the Bond Documents may appear necessary or desirable to collect the Loan Payments and other amounts payable by the Borrower under the Loan Agreement then due and/or thereafter to become due, or to enforce performance and observance of any obligation, agreement, or covenant of the Borrower under the Loan Agreement.

(b) Amounts collected pursuant to action taken under the provisions of the Loan Agreement described under this caption are required to be applied in accordance with the provisions of the Indenture, or, if the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the provisions of the Indenture) and the Borrower has paid all amounts due under the Loan Agreement, then any amounts remaining are required to be paid to the University.

No Remedy Exclusive. No remedy in the Loan Agreement conferred upon or reserved to the Trustee, as assignee of the Issuer, is intended to be exclusive of any other available remedy or remedies, but each and every such

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remedy is cumulative and is in addition to every other remedy given under the Loan Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default will impair any such right or power or will be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved to it in the Loan Agreement, it will not be necessary to give any notice, other than such notice as may be expressly required in the Loan Agreement. Such rights and remedies as are given the Issuer under the Loan Agreement will also extend to the Trustee, and the Trustee and the owners of the Bonds will be deemed third party beneficiaries of all covenants and agreements in the Loan Agreement contained.

Waiver of Events of Default. The Trustee, on behalf of the Issuer, may waive any Event of Default under the Loan Agreement and its consequences or rescind any declaration of acceleration of payments of the Basic Loan Payments due under the Loan Agreement. In case of any such waiver or rescission, or in case any proceeding taken by the Issuer or the Trustee on account of any such Event of Default will be discontinued or abandoned or determined adversely to the Issuer or the Trustee, then and in every such case the Issuer and the Borrower will be restored to their former position and rights under the Loan Agreement, but no such waiver or rescission will extend to any subsequent or other Event of Default or impair any right consequent thereon.

Delay or Omission Not a Waiver. No delay or omission of the Issuer or the Trustee to exercise any right or power accruing upon any Event of Default will impair any such right or power, or will be construed to be a waiver of any such Event of Default or an acquiescence therein; and every power and remedy given by the Loan Agreement to the Issuer or the Trustee may be exercised from time to time and as often as may be deemed expedient by the Issuer or the Trustee.

General Options to Terminate Loan Agreement

The Borrower has, and is granted, the following options to terminate the Loan Agreement at any time prior to full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture). The Borrower may terminate the Agreement Term by (a) paying to the Trustee an amount that, when added to the amount on deposit in the Bond Fund, the Redemption Fund and the Debt Service Reserve Fund, will be sufficient to pay, retire, and redeem all of the Outstanding Bonds in accordance with the provisions of the Indenture (including, without limiting the generality of the foregoing, principal, redemption premium, interest to maturity or earliest applicable redemption date, as the case may be, premium, if any, expenses of redemption, and Trustee’s and paying agents’ fees and expenses, including reasonable attorneys’ fees); (b) in the case of redemption, making arrangements satisfactory to the Trustee for the giving of the required, irrevocable notice of redemption; (c) paying to the Issuer any and all sums then due to the Issuer under the Loan Agreement; and (d) otherwise complying with the provisions of the Indenture. If the Ground Lessor exercised the option granted to it pursuant to each Ground Lease to purchase each Project, the Borrower is required to exercise the option granted by this caption.

Option to Prepay Loan upon the Occurrence of Certain Extraordinary Events

(a) The Borrower has, and is granted, the option to prepay the Series 2016 Loan in full or in part prior to the full payment of all of the Series 2016 Bonds (or provision for payment thereof having been made in accordance with provisions of the Indenture), (i) in full if the Series 2016 Project has been destroyed or damaged to such an extent that, in the opinion of the Borrower, the University and the Independent Engineer expressed in a certificate filed with the Issuer and the Trustee: (A) the Series 2016 Project cannot reasonably be restored within a period of 12 months to the condition thereof immediately preceding such destruction or damage; or (B) the Borrower will thereby be prevented from carrying on its normal operations thereat for a period of 12 consecutive months; or (C) the cost of restoration or replacement thereof would exceed the Net Proceeds of insurance payable in respect of such destruction or damage; (ii) in full if title to, or the temporary use of, a substantial portion of the Series 2016 Project has been taken under the exercise of the power of eminent domain by any governmental authority or person, firm or corporation acting under governmental authority to such an extent that, in the opinion of the Borrower, the University and the Independent Engineer expressed in a certificate filed with the Issuer and the Trustee, (A) the Project cannot be reasonably restored or replaced within a period of 12 months to substantially the condition thereof immediately preceding such taking; or (B) the Borrower will thereby be prevented from carrying on its normal operations thereat for a period of 12 consecutive months; or (C) the cost of restoration or replacement thereof would exceed the total amount of compensation for such taking; or (iii) in part in the event of partial condemnation or destruction of, or

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partial damage to, the Series 2016 Project, from the Net Proceeds received by the Borrower as a result of such taking, damage, or destruction to the extent such Net Proceeds are not used for the restoration of the Series 2016 Project or for the acquisition of substitute property suitable for the Borrower’s operations at the Series 2016 Project as such operations were conducted prior to such taking, damage, or destruction if the Borrower furnishes to the Issuer and the Trustee (A) a certificate of the Borrower and the University stating (1) that the property forming a part of the Series 2016 Project that was taken, damaged or destroyed is not essential to the Borrower’s use or occupancy of the Series 2016 Project at substantially the same revenue producing level as prior to such taking, destruction or damage; or (2) that the Series 2016 Project has been restored to a condition substantially equivalent to its condition prior to such taking, destruction or damage; or (3) that the Borrower has acquired improvements that are substantially equivalent to the property forming a part of the Series 2016 Project that was taken, destroyed or damaged; and (B) a written report of a Financial Consultant filed with the Trustee that the Fixed Charges Coverage Ratio for each of the two Annual Periods following the Annual Period following such taking, destruction or damage will not be less than the lesser of (1) 1.20 and (2) the average Fixed Charges Coverage Ratio for the two most recent Annual Periods prior to such taking, destruction or damage for which Audit Reports are available.

(b) In the case of the occurrence of any of the events described in the preceding paragraph (a), the Borrower, if it exercises its option to prepay the Series 2016 Loan, must prepay the Series 2016 Loan within 180 days after such event.

(c) To exercise such option, the Borrower is required, within 60 days following the event authorizing the exercise of such option, to give written notice of the exercise of such option to the Issuer and to the Trustee and is required to specify therein the date of tender of such prepayment, which date will not be less than 45 nor more than 120 days from the date such notice is mailed, and is required to make arrangements satisfactory to the Trustee for the giving of the required notice of redemption.

(d) The amount payable by the Borrower in the event of its exercise of the option to prepay the Series 2016 Loan in full granted in the circumstances described in clauses (i) and (ii) of paragraph (a) of this caption is required to be the sum of the following:

(i) an amount of money that, when added to the amount then on deposit in the Bond Fund, the Redemption Fund, and the Debt Service Reserve Fund and available therefor will be sufficient to retire and redeem all the then Outstanding Series 2016 Bonds on the applicable redemption date provided by the Indenture, including without limitation, principal, all interest to accrue to said redemption date, and redemption expense, but without premium, plus

(ii) an amount of money equal to the Trustee’s and paying agents’ fees and expenses, including reasonable attorneys’ fees and expenses, under the Indenture accrued and to accrue until such final payment and redemption of the Series 2016 Bonds.

(e) The amount payable by the Borrower in the event of its exercise of the option to prepay the Series 2016 Loan in part granted in the circumstances described in clause (iii) of paragraph (a) of the provisions of the Loan Agreement described under this caption is required to be the sum of the following:

(i) an amount of money that, when added to the amount then on deposit in the Bond Fund and the Redemption Fund and available therefor, will be sufficient to retire and redeem the Series 2016 Bonds that are to be redeemed on the applicable redemption date provided by the Indenture, including, without limitation, principal, all interest to accrue to said redemption date, and redemption expense, but without premium, plus

(ii) an amount of money equal to the Trustee’s and paying agents’ fees and expenses, including reasonable attorneys’ fees and expenses relating to such redemption.

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Option to Prepay Loan in Connection With Optional Redemption of the Bonds

(a) The Borrower has the option to prepay the Series 2016 Loan by prepaying Basic Loan Payments due under the Loan Agreement in such manner and amounts as will enable the Issuer to redeem the Series 2016 Bonds prior to maturity in whole or in part on any date, as described in the Official Statement under the caption “THE SERIES 2016 BONDS—Redemption—Optional Redemption.” The Basic Loan Payments payable by the Borrower in the event of its exercise of the option described under this caption will be (i) in the case of partial redemption, the amount necessary to pay principal, all interest to accrue to the redemption date, the applicable redemption premium, as described in the Official Statement under the caption “THE SERIES 2016 BONDS—Redemption—Optional Redemption,” and any redemption expense; and (ii) in the case of a total redemption, the amounts set forth under the caption “THE INDENTURE—Discharge; Release of the Indenture” herein and the applicable redemption premium, as described in the Official Statement under the caption “THE SERIES 2016 BONDS—Redemption—Optional Redemption.”

(b) To exercise such option, the Borrower is required to give the Issuer and the Trustee not less than 45 days’ prior written notice of the exercise of such option and to specify therein the date of tender of such prepayment and the amount thereof, to direct the redemption of the corresponding amount of Series 2016 Bonds, and to make arrangements satisfactory to the Trustee for the giving of the required notice of redemption.

Inconsistent Provisions

To the extent that any of the terms or provisions of the Ground Lease are inconsistent with any terms or provisions of the Loan Agreement, the terms of the Ground Lease will govern.

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APPENDIX C

FORM OF OPINION OF BOND COUNSEL

[ THIS PAGE INTENTIONALLY LEFT BLANK ] June 30, 2016

$19,975,000 NEW HOPE CULTURAL EDUCATION FACILITIES FINANCE CORPORATION STUDENT HOUSING REVENUE BONDS (CHF – COLLEGIATE HOUSING SAN ANTONIO I, L.L.C. – TEXAS A&M UNIVERSITY–SAN ANTONIO PROJECT) SERIES 2016A AND $885,000 TAXABLE STUDENT HOUSING REVENUE BONDS (CHF – COLLEGIATE HOUSING SAN ANTONIO I, L.L.C. – TEXAS A&M UNIVERSITY–SAN ANTONIO PROJECT) SERIES 2016B

WE HAVE ACTED AS BOND COUNSEL for the New Hope Cultural Education Facilities Finance Corporation (the “Issuer”) solely for the purpose of rendering an opinion as to the validity of the Issuer’s Student Housing Revenue Bonds (CHF – Collegiate Housing San Antonio I, L.L.C. – Texas A&M University–San Antonio Project) Series 2016A (the “Series 2016A Bonds”) and Taxable Student Housing Revenue Bonds (CHF – Collegiate Housing San Antonio I, L.L.C. – Texas A&M University–San Antonio Project) Series 2016B (the “Series 2016B Bonds” and, together with the Series 2016A Bonds, the “Bonds”) under Texas law, and the status of the interest on the Series 2016A Bonds under federal income tax law, and for no other purpose. In such capacity, we do not take responsibility for any matters relating to such transaction except as covered below, and specifically we have not been requested to examine, and have not investigated or verified any records, material or matters relating to the financial condition or capacity of the Issuer or CHF – Collegiate Housing San Antonio I, L.L.C. (the “Company”), an Alabama limited liability company, or any of its affiliates, or any matter relating to the Company or any of its affiliates, other than as stated below, or the disclosure thereof in connection with the sale of the Bonds, and we express no opinion with respect thereto.

THE BONDS ARE ISSUED pursuant to a Trust Indenture dated as of June 1, 2016 (the “Indenture”) between the Issuer and Wilmington Trust, National Association, a national bank (the “Trustee”).

WE HAVE EXAMINED into the validity of the Bonds, bearing interest from their date, until maturity or redemption, at the interest rates set forth in the Indenture. Interest on the Bonds is payable and the Bonds mature on the dates set forth in the Indenture and the Bonds are subject to redemption prior to maturity in accordance with the terms and conditions stated in the Bonds. The Bonds are issuable only as fully registered bonds in the denominations described in the Indenture. WE HAVE EXAMINED certified copies of the proceedings of the Board of Directors of the Issuer; certificates and resolutions of the Company; the opinion of Hand Arendall LLC (“Counsel to the Company”), upon which we rely to the extent described below; a Ground Lease dated as of June 30, 2016 between the Board of Regents of The Texas A&M University System and the Company; and other instruments authorizing and relating to the issuance of the Bonds, including one of each series of the executed Bonds.

BASED ON SUCH EXAMINATION, IT IS OUR OPINION that the Resolution of the Issuer authorizing the Bonds (the “Bond Resolution”) has been duly and lawfully adopted by, and constitutes a valid and binding obligation of, the Issuer, and that the Bonds have been duly authorized, issued and delivered in accordance with Texas law and constitute valid and binding limited obligations of the Issuer. The principal of, redemption premium, if any, and interest on the Bonds are payable from, and secured by a pledge and assignment of, the revenues derived by the Issuer from the Company pursuant to a Loan Agreement related to the Bonds, dated as of June 1, 2016 (the “Loan Agreement”) between the Issuer and the Company. The Company has agreed and is unconditionally obligated to the Issuer to make the payments due under the Loan Agreement to the Trustee under the Indenture for deposit into the Bond Fund established by the Indenture in amounts sufficient to pay and redeem, or provide for the payment of the principal of, redemption premium, if any, and interest on the Bonds, when due, as required by the Indenture. We do not, however, express any opinion nor make any comment with respect to the sufficiency of the security for or the marketability of the Bonds.

IT IS OUR OPINION that the Loan Agreement has been duly and lawfully authorized, executed, and delivered by, and is a valid and binding obligation of the Issuer. We have assumed that the Loan Agreement has been duly and lawfully authorized, executed and delivered by the Company, and is a legal, valid and binding obligation of the Company, enforceable in accordance with its terms and conditions.

THE BONDS ARE FURTHER SECURED BY the Indenture whereunder the Trustee is custodian of the funds established by the Indenture and is obligated to enforce the rights of the Issuer and the owners of the Bonds secured by the Indenture and to perform other duties, in the manner and under the conditions stated in the Indenture; and it is our further opinion that the Indenture has been duly and lawfully authorized, executed and delivered by the Issuer, and is a valid and binding agreement of the Issuer.

AS FURTHER SECURITY FOR THE BONDS, the Company has issued its Series 2016A Note and Series 2016B Note (collectively, the “Notes”) in favor of the Issuer, who has assigned the Notes to the Trustee, for the purpose of evidencing the obligation of the Company to make the payments due under the Loan Agreement. Counsel to the Company has rendered an opinion as to the validity and enforceability of the Notes. We have not been requested to render, nor have we rendered, any opinion on such matters.

THE OWNERS OF THE BONDS shall never have the right to demand payment thereof out of any funds raised or to be raised by taxation, and the Bonds are payable solely from the sources described in the Indenture.

2 THE INDENTURE PERMITS, with certain exceptions as therein provided, the amendment thereof at any time by the Issuer with the consent of the registered owners of not less than two-thirds in aggregate principal amount of all bonds at the time outstanding thereunder.

IN OUR OPINION, except as discussed below for federal income tax purposes, the interest on the Series 2016A Bonds is excludable from the gross income of the owners thereof for federal income tax purposes under the statutes, regulations, published rulings and court decisions existing on the date of this opinion. We are further of the opinion that the Series 2016A Bonds are not “specified private activity bonds” (other than “qualified 501(c)(3) bonds”) and that, accordingly, interest on the Series 2016A Bonds will not be included as an individual or corporate alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the “Code”).

IN EXPRESSING OUR OPINION as to the exclusion of interest on the Series 2016A Bonds from the gross income of the owners as described above, we have relied upon, and assumed to be correct, (i) the representations, covenants and agreements of the Issuer and the Company in the Loan Agreement, (ii) the representations, covenants and agreements of the Issuer, the Trustee, Texas A&M University–San Antonio, the Company and Collegiate Housing Foundation, an Alabama non-profit corporation (the “Foundation”) and the sole member of the Company, in the Tax Regulatory Agreement, (iii) certificates and representations of officers and representatives of the Issuer and the Company with respect to certain material facts that are solely within their knowledge relating to the proposed use of the proceeds of the Series 2016A Bonds and the organization and operation of the Company that affect such exclusion, (iv) certificates and representations of officers and representatives of the Foundation with respect to certain material facts that are solely within their knowledge relating to the organization and operation of the Foundation that affect such exclusion, (v) an opinion of Counsel to the Foundation regarding the status of the Foundation as an organization described in Section 501(c)(3) of the Code, and (vi) an opinion of Counsel to the Company that the Company, as a single-member limited liability company, whose sole member is the Foundation, is a “disregarded entity” for federal income tax purposes. We call your attention to the fact that failure by the Issuer, the Company, the Foundation or the University to comply with such representations and covenants may cause the interest on the Series 2016A Bonds to become includable in gross income of owners thereof retroactively to the date of issuance of the Series 2016A Bonds.

WE CALL YOUR ATTENTION TO THE FACT that the interest on tax-exempt obligations, such as the Series 2016A Bonds, will be included in a corporation’s alternative minimum taxable income for purposes of determining the alternative minimum tax imposed on corporations by section 55 of the Code.

OUR OPINIONS ARE BASED ON EXISTING LAW, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service (the “Service”); rather, such opinions represent our legal judgment based upon our review of existing law and in reliance upon the representations and covenants referenced above that we deem relevant to such opinions. The Service has an ongoing audit program to determine

3 compliance with rules that relate to whether interest on state or local obligations is includable in gross income for federal income tax purposes. No assurance can be given whether or not the Service will commence an audit of the Series 2016A Bonds. If an audit is commenced, in accordance with its current published procedures, the Service is likely to treat the Issuer as the taxpayer. We observe that each of the Issuer, the Company and the Foundation has covenanted not to take any action, or omit to take any action within its control, that if taken or omitted, may result in the treatment of interest on the Series 2016A Bonds as includable in gross income for federal income tax purposes.

EXCEPT AS STATED ABOVE, we express no opinion as to any other federal, state or local tax consequences of acquiring, carrying, owning or disposing of the Bonds. In particular, but not by way of limitation, we express no opinion with respect to the federal, state or local tax consequences arising from the enactment of any pending or future legislation.

THE OPINIONS contained herein are limited to the extent that (a) enforceability of the Bonds, the Bond Resolution, the Indenture and the Loan Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights or remedies generally and (b) a particular court may refuse to grant certain equitable remedies, including, without limitation, specific performance, with respect to any of the provisions of the Bonds, the Bond Resolution, the Indenture and the Loan Agreement.

Respectfully,

4 APPENDIX D

FORM OF CONTINUING DISCLOSURE AGREEMENT

[ THIS PAGE INTENTIONALLY LEFT BLANK ] CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (this “Agreement”) dated as of June 1, 2016, is executed and delivered by CHF-Collegiate Housing San Antonio I, L.L.C. (the “Borrower”) and Wilmington Trust, National Association (the "Dissemination Agent") in connection with the issuance by the New Hope Cultural Education Facilities Finance Corporation (the “Issuer”) of its $19,975,000 New Hope Cultural Education Facilities Finance Corporation Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016A and $885,000 New Hope Cultural Education Facilities Finance Corporation Taxable Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016B (collectively, the “Series 2016 Bonds”). The Series 2016 Bonds are being issued pursuant to the Indenture described below.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Purpose of the Disclosure Agreement. This Agreement is being executed and delivered by the Borrower and the Dissemination Agent for the benefit of the holders and Beneficial Owners (defined below) of the Series 2016 Bonds and in order to assist RBC Capital Markets, LLC (the "Participating Underwriter"), in complying with the Rule (defined below). The Borrower and the Dissemination Agent acknowledge that the Issuer has undertaken no responsibility with respect to any reports, notices or disclosures provided or required to be provided under this Agreement, and has no liability to any Person, including (without limitation) any holder or Beneficial Owner of the Series 2016 Bonds, with respect to any such reports, notices or disclosures.

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Agreement unless otherwise defined herein, the following capitalized terms shall have the following meanings:

"Annual Report" shall mean any Annual Report provided by the Borrower pursuant to, and as described in, Sections 3 and 4 of this Agreement.

"Beneficial Owner" shall mean any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2016 Bonds (including Persons holding Series 2016 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2016 Bonds for federal income tax purposes.

"Bond Trustee" shall mean Wilmington Trust, National Association, as trustee under the Indenture.

"Disclosure Representative" shall mean such person or persons as the Borrower shall designate in writing to the Dissemination Agent and the Bond Trustee from time to time. "Dissemination Agent" shall mean Wilmington Trust, National Association, acting in its capacity as dissemination agent hereunder, or any successor dissemination agent designated in writing by the Borrower and which has filed with the Bond Trustee a written acceptance of such designation.

"EMMA" shall mean the Electronic Municipal Market Access system of the Municipal Securities Rulemaking Board as provided at http://www.emma.msrb.org, or any similar system that is acceptable to or as may be specified by the Securities and Exchange Commission from time to time. A current list of such systems may be obtained from the Securities and Exchange Commission at http://www.sec.gov/info/municipal/nrmsir.html

“Fiscal Year” means the twelve (12) month period commencing on July 1 of each calendar year and ending on June 30 of the immediately succeeding calendar year.

"Indenture" shall mean the Trust Indenture dated as of June 1, 2016, by and between the Issuer and the Bond Trustee.

"Listed Events" shall mean any of the events listed in Section 5(a) of this Agreement.

"Loan Agreement" shall mean the Loan Agreement dated as of June 1, 2016, by and between the Issuer and the Borrower.

"Participating Underwriter" shall mean RBC Capital Markets, LLC, as the original Participating Underwriter of the Series 2016 Bonds required to comply with the Rule in connection with the offering of the Series 2016 Bonds.

"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

"Series 2016 Project" means the student housing facilities to be constructed with proceeds of the Series 2016 Bonds on the campus of Texas A&M University-San Antonio.

"State" means the State of Texas.

SECTION 3. Provision of Annual Reports; Other Reporting Requirements.

(a) The Borrower shall provide, or shall cause the Dissemination Agent to provide, not later than 150 days after the end of each Fiscal Year, commencing with the report for the Fiscal Year ending June 30, 2018, to EMMA, an Annual Report which is consistent with the requirements of Section 4 of this Agreement. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross- reference other information as provided in Section 4 of this Agreement. If the Fiscal Year of the Borrower changes, the Borrower shall notify the Dissemination Agent and the Bond Trustee in writing of such change.

(b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Reports to EMMA, the Borrower shall provide the Annual Report to the Dissemination Agent. If, by such date, the Dissemination Agent has not received a copy of an Annual Report, the Dissemination Agent shall contact the Borrower to determine if the Borrower is in compliance with subsection (a) above.

(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a) above, the Dissemination Agent shall send a notice to EMMA in substantially the form attached hereto as Exhibit A.

(d) The Dissemination Agent shall, if and to the extent the Borrower has provided the Annual Report to the Dissemination Agent, file a report with the Bond Trustee (if the Dissemination Agent is not the Bond Trustee) certifying that the Annual Report has been provided pursuant to this Agreement and stating the date it was provided.

(e) Until the Certificate of Occupancy is obtained and subject to Section 10 of this Disclosure Agreement, the Borrower shall also provide, or shall cause the Dissemination Agent to provide to the MSRB, commencing with the month of July 2016, not later than the date which is the later of (i) thirty (30) business days after the end of each month or (ii) seven 7 business days after its receipt thereof from the Developer, any Construction Reports for the Series 2016 Project received by the Borrower with respect to such month. Not later than five (5) business days prior to the date required for providing the Construction Reports to the MSRB, the Borrower shall provide the Construction Reports to the Dissemination Agent.

(f) Additionally, the Borrower shall provide or cause the Dissemination Agent to provide to EMMA, no later than 45 days after the beginning of each fall semester and spring semester, occupancy reports relating to the Series 2016 Project relating to such semester received by the Borrower from the Manager.

(g) Additionally, the Dissemination Agent shall provide to EMMA, no later than 15 days after the receipt thereof by the Dissemination Agent, any reports from a Financial Consultant (as defined in the Indenture) received in connection with the Fixed Charges Coverage Ratio as described in the Loan Agreement.

SECTION 4. Content of Annual Report. The Annual Report of the Borrower shall contain or include by reference the following information:

(a) The audited financial statements of the Borrower for the Series 2016 Project for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles for nonprofit corporations as promulgated from time to time by the Financial Accounting Standards Board. A calculation of the Fixed Charges Coverage Ratio (as defined in the Indenture) shall be included with such audits in the Auditor’s Report on Accompanying Information.

(b) Statistical information received by the Borrower from the University or the Manager for the preceding Fiscal Year consisting of the type of information included under the heading “THE UNIVERSITY,” including but not limited to updated enrollment statistics, tuition and fee data, on-campus housing rates and on-campus occupancy levels and the rental rates by unit type and number of rentable units under the heading “THE SERIES 2016 PROJECT” in the Official Statement for the Series 2016 Bonds.

The audited financial statements described above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Borrower is an "obligated person" (as defined by the Rule), which have been filed with EMMA. If the document included by reference is a final limited offering memorandum, it must be available from the Municipal Securities Rulemaking Board. The Borrower shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.

(a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events (each, a “Listed Event”):

i. Principal and interest payment delinquencies;

ii. Non-payment related defaults, if material;

iii. Unscheduled draws on debt service reserves reflecting financial difficulty;

iv. Unscheduled draws on credit enhancements reflecting financial difficulty;

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 the Bonds, or other Listed Events affecting the tax status of the 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 Borrower. For purposes of this clause (xii), any such event shall be considered to have occurred when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Borrower in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Borrower, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Borrower;

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

xiv. Appointment of a successor or additional trustee or paying agent or the change of the name of a trustee or paying agent, if material.

(b) The Dissemination Agent shall, within three (3) Business Days of obtaining actual knowledge of the occurrence of a Listed Event or an event that might constitute a Listed Event, provide the Borrower with written notice. The Dissemination Agent shall not be deemed to have actual knowledge of those items listed in clauses (ii), (vi), (vii), (x), (xi), (xii) or (xiii) without the Dissemination Agent having received written notice of such event.

(c) Whenever the Borrower obtains knowledge of the occurrence of a Listed Event or an event that might constitute a Listed Event, because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the Borrower shall, within five (5) Business Days after obtaining such knowledge and in any event no more than seven (7) Business Days after the occurrence of such event, determine if such event is in fact a Listed Event and provide the Dissemination Agent with written notice pursuant to subsections (d) or (e) below, as applicable.

(d) If the Borrower determines that an event is a Listed Event, the Borrower shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent to report the occurrence pursuant to subsection (f). Such notice shall include sufficient information concerning the Listed Event to enable the Dissemination Agent to report the occurrence.

(e) If the Borrower determines that an event is not a Listed Event, the Borrower shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (f).

(f) If the Dissemination Agent has been instructed by the Borrower to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the EMMA within three (3) Business Days of its receipt of such instructions from the Borrower and in any event no more than ten (10) Business Days after the occurrence of such event. Notwithstanding the foregoing, notice of Listed Events described in clauses (a)(viii) and (ix) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the holders of affected Bonds pursuant to the Indenture. SECTION 6. Termination of Reporting Obligation. Except as otherwise provided herein, the obligations under this Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Series 2016 Bonds. If the Borrower's obligations under the Loan Agreement are assumed in full by another Person, such other Person shall be responsible for compliance with this Agreement in the same manner as if it were the Borrower and the Borrower shall have no further responsibility hereunder (except with respect to obligations of the Borrower which survive the termination hereof pursuant to Section 11 hereof). If such termination or substitution occurs prior to the final maturity of the Series 2016 Bonds, the Borrower shall give notice of such termination or substitution in the same manner as for a Listed Event under Section 5(f) hereof.

SECTION 7. Dissemination Agent. The Borrower may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Borrower pursuant to this Agreement. The initial Dissemination Agent shall be Wilmington Trust, National Association. The Dissemination Agent may resign at any time by providing at least 30 days' written notice to the Borrower, and such resignation shall be effective as of the date of the appointment of a designated Dissemination Agent.

SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Agreement, the Borrower and the Dissemination Agent may amend this Agreement (and the Dissemination Agent shall agree to any amendment so requested by the Borrower other than amendments increasing or affecting the obligations or duties of the Dissemination Agent, which amendments shall require the consent of the Dissemination Agent, as applicable) and any provision of this Agreement may be waived if such amendment or waiver would not, in the opinion of nationally recognized federal securities law counsel, cause the undertakings herein to violate the Rule as in effect at the time of the original issuance of the Series 2016 Bonds, after taking into account any amendments or interpretations of the Rule.

In the event of any amendment or waiver of a provision of this Agreement, the Borrower shall describe such amendment in the next Annual Report of the Borrower, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Borrower. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(f), and (ii) the Annual Reports for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 9. Additional Information. Nothing in this Agreement shall be deemed to prevent the Borrower from disseminating any other information, using the means of dissemination set forth in this Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Agreement. If the Borrower chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Agreement, the Borrower shall not have any obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 10. Default. In the event of a failure of the Borrower to comply with any provision of this Agreement, the Dissemination Agent, at the written direction of the Participating Underwriter, or any holder or Beneficial Owner of the Series 2016 Bonds (but only if and to the extent the Dissemination Agent is indemnified to its satisfaction from any costs, liability, or expense including, without limitation, fees and expenses of its attorneys, as provided in the Indenture) may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Borrower to comply with its obligations under this Agreement. A default under this Agreement shall not be deemed an Event of Default under the Indenture, the Loan Agreement, or the Leasehold Mortgage and the sole remedy under this Agreement in the event of a failure of the Borrower to comply with this Agreement shall be an action to compel performance; provided, however that nothing in this Agreement shall limit any holder's rights under applicable federal securities laws.

SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Agreement, and no further duties or responsibilities shall be implied. Any corporation or association into which the Dissemination Agent in its individual capacity may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, conversion or consolidation to which the Dissemination Agent in its individual capacity shall be a party, or any corporation or association to which all or substantially all the corporate trust business of the Dissemination Agent in its individual capacity may be sold or otherwise transferred, shall be the Dissemination Agent under this Agreement without further act. The Borrower covenants and agrees to indemnify and hold the Dissemination Agent and its directors, officers, agents and employees (collectively, the "Indemnitees") harmless from and against any and all liabilities, losses, damages, fines, suits, actions, demands, penalties, costs and expenses, including out-of-pocket, incidental expenses, legal fees and expenses, the allocated costs and expenses of in-house counsel and legal staff and the costs and expenses of defending or preparing to defend against any claim ("Losses") that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any instruction or other direction upon which the Dissemination Agent's authorized to rely pursuant to the terms of this Agreement. Provided the Dissemination Agent has not acted negligently, the Borrower also covenants and agrees to indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by, or asserted against the Indemnitees or any of them in connection with or arising out of the Dissemination Agent's performance under this Agreement. The provisions of this Section 11 shall survive the termination of this Agreement and the resignation or removal of the Dissemination Agent for any reason. Anything in this Agreement to the contrary notwithstanding, in no event shall the Dissemination Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to loss profits), even if the Dissemination Agent has been advised of such loss or damage and regardless of the form of action. The obligations of the Borrower under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Series 2016 Bonds or the termination hereof.

(b) The Issuer shall have no responsibility or liability in connection with the Borrower's compliance with the Rule, its filing obligations under this Agreement or in connection with the contents of such filings. The Borrower agrees to indemnify and save the Issuer, and its members, officers, employees and agents, harmless against any loss, expense (including reasonable attorneys’ fees) or liability arising out of (i) any breach by the Borrower of this Agreement or (ii) any Annual Report or notices provided under this Agreement or any omissions therefrom.

SECTION 12. Notices. Any notices or communications to or among any of the parties to this Agreement may be given as follows:

To the Borrower: CHF – Collegiate Housing San Antonio I, L.L.C. c/o Collegiate Housing Foundation 409 Johnson Avenue Fairhope, Alabama 36532 Attention: President Telephone: (251) 928-9340 Facsimile: (251) 928-0342

with a copy to:

Texas A&M University -- San Antonio Vice President for Business Affairs One University Way San Antonio, Texas 78224 Telephone: (210) 784-2000 Facsimile: (210) 784-2004

and

The Texas A&M University System Office of General Counsel 301 Tarrow, 6th Floor College Station, Texas 77840-7896 Telephone: 979-458-6120

To the Dissemination Agent: Wilmington Trust, National Association, 505 North 20th Street, Suite 350 Birmingham, Alabama 35203 Attention: Corporate Trust Telephone: (205) 918-7457 Facsimile: (410) 244-4236 To the Issuer: New Hope Cultural Education Facilities Finance Corporation c/o John Rapier Gay, McCall, Isaacks, Gordon & Roberts, P.C. 777 East 15th Street Plano, Texas 75074

Any person may, by written notice to the other persons listed above, designate a different address to which subsequent notices or communications should be sent.

SECTION 13. Beneficiaries. This Agreement shall inure solely to the benefit of the Borrower, the Dissemination Agent, the Issuer, the Participating Underwriter, and the holders and Beneficial Owners from time to time of the Series 2016 Bonds, and shall create no rights in any other person or entity.

SECTION 14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

SECTION 15. Applicable Law. This Agreement shall be construed under the laws of the State.

SECTION 16. No Liability of Borrower’s Officers. No recourse under or upon any obligation, covenant, or agreement contained in this Agreement or in any other documents delivered in connection with the issuance of the Series 2016 Bonds, or for any claim based thereon, or under any judgment obtained against the Borrower, or by the enforcement of any assessment or penalty or otherwise or by any legal or equitable proceeding by virtue of any constitution, rule of law or equity, or statute or otherwise or under any other circumstances, under or independent hereof, shall be had against any incorporator, director, member, or officer, as such, past, present, or future of the Borrower or the Foundation, or any incorporator, director, member, or officer of any successor entity, as such, either directly or through the Borrower or any successor entity, or otherwise, for the payment for or to the Borrower or any receiver thereof, of any sum that may be due and unpaid by the Borrower under this Agreement or any other documents delivered in connection with the issuance of the Series 2016 Bonds.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE] IN WITNESS WHEREOF, the Borrower, the Dissemination Agent and the Issuer have executed this Agreement under seal on the date and year first written above.

CHF-COLLEGIATE HOUSING SAN ANTONIO I, L.L.C.

By: Collegiate Housing Foundation, sole member, doing business in the State of Texas as CHF- Collegiate Housing Foundation

By:______Name: Leeman H. Covey Title: President

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Dissemination Agent

By Name: Title: EXHIBIT A

NOTICE TO EMMA OF FAILURE TO FILE REPORT

Name of Issuer: New Hope Cultural Education Facilities Finance Corporation

Name of Bond Issue: $19,975,000 New Hope Cultural Education Facilities Finance Corporation Student Housing Revenue Bonds (CHF-Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016A and $885,000 New Hope Cultural Education Facilities Finance Corporation Taxable Student Housing Revenue Bonds (CHF- Collegiate Housing San Antonio I, L.L.C. – Texas A&M University-San Antonio Project) Series 2016B

Name of Borrower: CHF-Collegiate Housing San Antonio I, L.L.C.

Date of Issuance: June 30, 2016

NOTICE IS HEREBY GIVEN that the Borrower has not provided an Annual Report with respect to the above-named Series 2016 Bonds.

Dated:______

Wilmington Trust, National Association, on behalf of CHF-Collegiate Housing San Antonio I, L.L.C.

By: ______Name:______Title:______

cc: New Hope Cultural Education Facilities Finance Corporation CHF-Collegiate Housing San Antonio I, L.L.C. [ THIS PAGE INTENTIONALLY LEFT BLANK ]