NEW ISSUE Ratings: Moody’s: Baa2 S&P: BBB See “RATINGS” herein.

In the opinion of Harris Beach PLLC, Bond Counsel to the Authority, based on existing statutes, regulations, court decisions and administrative rulings, and assuming compliance with the tax covenants described herein, interest on the Series G Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). Furthermore, Bond Counsel is of the opinion that interest on the Series G Bonds is not an “item of tax preference” for purposes of the federal alternative minimum tax imposed on individuals and corporations. Interest on the Series G Bonds is, however, included in the computation of “adjusted current earnings” for purposes of calculating the federal alternative minimum tax imposed on certain corporations. Bond Counsel is further of the opinion that, based on existing statutes, interest on the Series G Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates, and such interest is excluded from amounts on which the net Connecticut minimum tax is based in the cases of individuals, trusts and estates required to pay the federal alternative minimum tax. See “TAX MATTERS” in this Official Statement.

$43,905,000 STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY REVENUE BONDS, SACRED HEART UNIVERSITY ISSUE, SERIES G

Dated: Date of Issuance Due: July 1, as shown below The Series G Bonds are issuable only as fully registered bonds without coupons, and when issued, will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Series G Bonds. Purchases of beneficial interests in the Series G Bonds will be made in book-entry-only form, in the denomination of $5,000 or any integral multiple thereof. Purchasers of beneficial interests will not receive certificates representing their interests in the Series G Bonds. So long as Cede & Co., as nominee of DTC, is the Bondowner, references herein to the Bondowners or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners (as defined herein) of the Series G Bonds. See “THE SERIES G BONDS - Book-Entry-Only System” herein. Principal of, premium, if any, and interest on (payable semiannually on January 1 and July 1 of each year, commencing on January 1, 2012) the Series G Bonds will be paid directly to DTC by U.S. Bank National Association, as Trustee (the “Trustee”), so long as DTC or its nominee, Cede & Co., is the Bondowner. Disbursement of such payments to DTC's Direct Participants (as defined herein) is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the Direct Participants and the Indirect Participants (as defined herein), as more fully described herein. The Series G Bonds will be special obligations of the State of Connecticut Health and Educational Facilities Authority (the “Authority”) payable solely from the Revenues of the Authority which are paid to the Trustee for the account of the Authority by Sacred Heart University, Incorporated (the "Institution") in accordance with the provisions of the Loan Agreement, dated as of June 1, 2011 (the “Loan Agreement”), by and between the Authority and the Institution. The obligation to make payments pursuant to the Loan Agreement is an absolute and unconditional obligation of the Institution. The Series G Bonds will be secured under the provisions of the Trust Indenture dated as of June 1, 2011 (the “Indenture”) by and between the Authority and the Trustee. (See inside front cover for maturities, interest rates and prices or yields) The Series G Bonds are subject to optional and mandatory redemption, including mandatory sinking fund redemption, as more fully described herein. See “THE SERIES G BONDS - Redemption Provisions.” The Series G Bonds are not and shall not be deemed to constitute a debt or liability or a pledge of the faith and credit of the State of Connecticut or any political subdivision thereof, but shall be payable solely from the Revenues derived by the Authority under the Loan Agreement. Neither the faith and credit nor the taxing power of the State of Connecticut or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Series G Bonds. The State of Connecticut Health and Educational Facilities Authority Act does not in any way create a so-called moral obligation of the State of Connecticut to pay debt service on the Series G Bonds in the event of default by the Institution or the Authority. The Authority has no taxing power. The Series G Bonds are offered when, as, and if issued and received by the Underwriters, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of the legality of the Series G Bonds by Harris Beach PLLC, New Haven, Connecticut, Bond Counsel to the Authority. Certain legal matters will be passed upon for the Authority by its Special Counsel, Shipman & Goodwin, LLP, Hartford, Connecticut, for the Institution by its counsel, Schine, Julianelle & Antonucci, P.C., Orange Connecticut and Robinson & Cole, LLP, Hartford, Connecticut, and for the Underwriters by their counsel, Wiggin and Dana LLP, New Haven, Connecticut. It is expected that the Series G Bonds will be available for delivery to DTC in New York, New York or its custodial agent, on or about June 29, 2011.

RBC CAPITAL MARKETS BofA Merrill Lynch

June 22, 2011

$43,905,000 STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY REVENUE BONDS, SACRED HEART UNIVERSITY ISSUE, SERIES G

Due Amount Interest Price Yield CUSIP (July 1) Rate

2012 $915,000 2.000% 100.387% 1.610% 20774U7J8 2013 945,000 3.000 102.154 1.900 20774U7K5 2014 980,000 2.250 99.913 2.280 20774U7L3 2015 1,000,000 4.000 104.787 2.730 20774U7M1 2016 1,040,000 4.000 104.143 3.100 20774U7N9 2017 1,080,000 5.000 107.724 3.560 20774U7P4 2018 1,135,000 5.000 106.686 3.900 20774U7Q2 2019 1,190,000 4.250 100.404 4.190 20774U7R0 2020 1,240,000 5.000 104.044 4.450 20774U7S8 2021 1,305,000 5.000 102.936 4.630 20774U7T6 2022 1,370,000 4.750 99.745 4.780 20774U7U3

$4,325,000 5.125% Term Bonds due July 1, 2026 Price 98.712% Yield 5.250% (CUSIP 20774U7X7)

$6,805,000 5.375% Term Bonds due July 1, 2031 Price 99.213% Yield 5.440% (CUSIP 20774U7V1)

$20,575,000 5.625 % Term Bonds due July 1, 2041 Price 100% Yield 5.625% (CUSIP 20774U7W9)

No dealer, broker, salesman or other person has been authorized by the Authority, the Institution, or the Underwriters to give any information or to make any representation with respect to the Series G Bonds, other than as contained in this Official Statement, and, if given or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. Certain information contained herein has been obtained from the Institution, DTC and other sources. NEITHER THE AUTHORITY NOR THE UNDERWRITERS MAKE ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION, AND SUCH INFORMATION IS NOT TO BE CONSTRUED AS A REPRESENTATION OF THE AUTHORITY OR OF THE UNDERWRITERS. THE AUTHORITY HAS RELIED ENTIRELY UPON THE INSTITUTION AND OTHER SOURCES FOR SUCH INFORMATION, INCLUDING THE INFORMATION PERTAINING TO DTC, THE INFORMATION INCLUDED IN APPENDICES A AND B AND THE OTHER INFORMATION HEREIN PERTAINING TO THE INSTITUTION AND ITS FINANCIAL CONDITION. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, its responsibility to investors under the Federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are 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 parties referred to above since the date hereof.

This Official Statement contains forecasts, projections and estimates that are based on current expectations. In light of the important factors that may materially affect the operating results and financial condition of the Institution, the inclusion in this Official Statement of such forecasts, projections and estimates should not be regarded as a representation by the Institution or the Underwriters that such forecasts, projections and estimates will occur. Such forecasts, projections and estimates are not intended as representations of fact or guarantees of results.

If and when included in this Official Statement, the words "expects," "forecasts," "projects," "intends," "anticipates," "estimates" and analogous expressions are intended to identify forward-looking statements and any such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, among others, general economic and business conditions, changes in political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, litigation and various other events, conditions and circumstances, many of which are beyond the control of the Institution. These forward- looking statements speak only as of the date of this Official Statement. The Institution disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Institution's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

The CUSIP (Committee on Uniform Securities Identification Procedures) number on the cover page of this Official Statement has been assigned by an organization not affiliated with the Authority, the Institution, the Underwriters or the Trustee, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience Bondholders and no representation is made as to the correctness of the CUSIP numbers printed on the cover hereof. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including but not limited to the refunding or defeasance of such issue or the use of secondary market financial products. None of the Authority, the Institution, the Underwriters, or the Trustee has agreed to, nor is there any duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers printed on the cover hereof.

IN CONNECTION WITH THE OFFERING OF THE SERIES G BONDS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF SUCH SERIES G BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE SERIES G BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUE AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

TABLE OF CONTENTS

Page

INTRODUCTION...... 1 THE AUTHORITY...... 3 THE SERIES G BONDS...... 6 BOOK-ENTRY-ONLY SYSTEM...... 9 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES G BONDS...... 11 ESTIMATED SOURCES AND USES OF FUNDS ...... 16 DEBT SERVICE SCHEDULE ...... 17 BONDOWNERS’ RISKS ...... 18 TAX MATTERS ...... 21 CONTINUING DISCLOSURE ...... 23 LEGALITY OF THE SERIES G BONDS FOR INVESTMENT AND DEPOSIT...... 23 NEGOTIABLE INSTRUMENTS...... 24 STATE NOT LIABLE ON THE SERIES G BONDS ...... 24 COVENANT BY THE STATE ...... 24 UNDERWRITING...... 24 LEGAL MATTERS ...... 24 FINANCIAL STATEMENTS...... 25 LITIGATION ...... 25 RATINGS...... 25 MISCELLANEOUS...... 25 Appendix A - Description of the Institution...... A-1 Appendix B - Certain Financial Statements of the Institution...... B-1 Appendix C – Definitions of Certain Terms...... C-1 Appendix D - Summary of Certain Provisions of the Trust Indenture ...... D-1 Appendix E - Summary of Certain Provisions of the Loan Agreement ...... E-1 Appendix F - Indebtedness of the Authority ...... F-1 Appendix G - Proposed Form of Opinion of Bond Counsel ...... G-1 Appendix H - Form of Continuing Disclosure Agreement...... H-1

OFFICIAL STATEMENT

Relating to $43,905,000 STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY REVENUE BONDS, SACRED HEART UNIVERSITY ISSUE, SERIES G

INTRODUCTION

Purpose of This Official Statement. The purpose of this Official Statement is to set forth certain information concerning the State of Connecticut Health and Educational Facilities Authority (the “Authority”), Sacred Heart University, Incorporated (the “Institution” or “Sacred Heart University”) and the $43,905,000 aggregate principal amount of State of Connecticut Health and Educational Facilities Authority Revenue Bonds, Sacred Heart University Issue, Series G (the “Series G Bonds”) authorized by a resolution adopted by the Authority on March 29, 2011 (the “Resolution”). The Series G Bonds will be dated their date of delivery and secured by and issued in accordance with the provisions of the Trust Indenture dated as of June 1, 2011 (the “Indenture”), by and between the Authority and U.S. Bank National Association, as trustee (the “Trustee”). The proceeds of the Series G Bonds will be loaned by the Authority to the Institution pursuant to the Loan Agreement dated as of June 1, 2011, by and between the Authority and the Institution (the “Loan Agreement”). Under the Loan Agreement, the Institution will execute and deliver the Note, dated as of the date of delivery of the Series G Bonds (the “Note”), which provides for payments to the Authority in amounts and at times sufficient to provide for payments due on the Series G Bonds. No additional bonds are authorized to be issued under the Indenture.

The descriptions, summaries and excerpts of various documents hereinafter set forth do not purport to be comprehensive or definitive, and reference is made to each document for the complete details of all terms and conditions. All statements herein are qualified in their entirety by reference to each document. See Appendix C for definitions of certain words and terms used herein. See Appendix D for a summary of certain provisions of the Indenture and see Appendix E for a summary of certain provisions of the Loan Agreement.

The Institution. Sacred Heart University is a private, tax-exempt, coeducational, institution of higher education located in Fairfield, Connecticut. For further information concerning the Institution, see Appendix A and Appendix B hereto.

The Series G Bonds. The Series G Bonds are to be issued pursuant to the State of Connecticut Health and Educational Facilities Authority Act, Chapter 187 of the General Statutes of Connecticut, Sections 10a-176 to 10a-198, inclusive, as amended (the “Act”), and other applicable provisions of law and will be secured and issued in accordance with the Indenture. The Series G Bonds initially will be issued in the form of one registered bond for each maturity of the Series G Bonds and will be delivered to Cede & Co. as registered owner and nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will represent to the Authority that it will maintain a book-entry system for recording ownership interests of its participants (the “DTC Participants”) for the Series G Bonds such that the ownership interest of a purchaser of a beneficial interest in the Series G Bonds (the “Beneficial Owner”) will be recorded through book entries on the records of the DTC Participants. Beneficial Owners will not receive any certificates representing their interest in the Series G Bonds. See “BOOK-ENTRY-ONLY SYSTEM” herein.

Use of Proceeds. The proceeds of the Series G Bonds, together with funds of the Institution, will be used to finance and refinance (i) a portion of the cost of a new student commons building, (ii) the purchase of 4.25 acres of land in Fairfield, Connecticut, (iii) the purchase of 17 acres of land in Trumbull, Connecticut, (iv) costs of issuance of the Series G Bonds, (v) current refunding and defeasance of the State of Connecticut Health and Educational Facilities Authority Revenue Bonds, Sacred Heart University Issue, Series C (the “Refunded Bonds”), (vi) the funding of a debt service reserve fund for the Series G Bonds, and (vii) the costs of miscellaneous capital projects located on the Main Campus, and (vii) the costs of

issuance of the Series G Bonds. The Refunded Bonds were used, together with other available monies, to finance various facilities and infrastructure at the Institution’s facilities. See “ESTIMATED SOURCES AND USES OF FUNDS” and Appendix A - “THE PROJECTS” herein.

Security and Sources of Payment for the Series G Bonds. The Series G Bonds are special obligations of the Authority payable from Revenues of the Authority received from the Institution under the terms of the Loan Agreement. Under the Loan Agreement, the proceeds of the Series G Bonds will be loaned by the Authority to the Institution. Pursuant to the Loan Agreement, the Institution will be obligated to provide amounts which will be sufficient to enable the Authority to pay the principal of, premium, if any, and interest on the Series G Bonds.

As security for payment of the Series G Bonds, under the Indenture the Authority will assign and pledge to the Trustee all right, title and interest of the Authority in and to the Loan Agreement, the Note, the Mortgage and the Revenues (as defined in the Loan Agreement) payable to the Authority or to the Trustee for the account of the Authority and to the moneys and securities deposited and held from time to time by the Authority or by the Trustee in the Funds and Accounts created under the Indenture (excluding fees and expenses payable to the Authority, moneys and securities held in the Rebate Fund, the Authority’s right to enforce certain covenants of the Institution set forth in the Loan Agreement prior to an Event of Default under the Indenture, and the Authority’s right to indemnification, to receive notices, to grant waivers and to give consents and approvals, and to otherwise take actions, under certain circumstances). In order to secure its obligations under the Loan Agreement and the Note, the Institution has granted to the Authority for assignment to the Trustee: (i) an open-end mortgage on and security interests in the Mortgaged Premises (as defined therein), (ii) a pledge of its Gross Receipts (as defined herein), and (iii) a covenant not to further encumber its main campus at 5151 Park Avenue in Fairfield, Connecticut, except the library, and except for Permitted Encumbrances (the "Negative Pledge"). The property subject to the Negative Pledge is leased from the Bridgeport Roman Catholic Diocese Corporation. The Mortgage and the pledge of Gross Receipts are subject to Permitted Encumbrances that include pledges of Gross Receipts to secure loan agreements to repay the proceeds of the outstanding principal amount of the Authority's Revenue Bonds, Sacred Heart University Issue, Series F (the "Series F Bonds") and Series E (the "Series E Bonds"), open-end mortgages to secure the Institution’s obligations under certain loan agreements between the Authority and the Institution relating to the Series E Bonds and Series F Bonds, and an open-end mortgage in favor of the credit facility provider for the Series F Bonds to secure the Institution's obligations under the credit facility agreement for the Series F Bonds, each on a parity with the Mortgage and pledge of Gross Receipts securing the Institution’s obligations under the Loan Agreement for the Series G Bonds as set forth herein. The property subject to the mortgage consists generally of certain properties on Park Avenue in Bridgeport, Connecticut. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" herein.

A Debt Service Reserve Fund and a Capitalized Interest Account will be created to support payment of the Series G Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS”.

The Institution's payment obligations on the Bonds will be on a parity with the Institution's payment obligations on the outstanding Series E Bonds and Series F Bonds. Simultaneously with the issuance of the Bonds, the Institution, the Authority, the credit facility provider for the Series F Bonds, the Trustee and the trustees for the Series F Bonds and the Series E Bonds will enter into, and the bond insurer of the Series E Bonds will consent to, an Intercreditor Agreement pursuant to which all indebtedness of the Institution in connection with its payment obligations relating to the Series G Bonds will rank pari passu with its indebtedness in connection with its payment obligations for the Series E Bonds and the Series F Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - Intercreditor Agreement."

Continuing Disclosure. The Institution will agree to provide, or cause to be provided, (i) certain annual and quarterly financial information and operating data, (ii) timely notice of the occurrence of certain material events with respect to the Series G Bonds and (iii) timely notice of any failure by the Institution to provide the requested annual and quarterly financial information, pursuant to a Continuing Disclosure Agreement to be executed by the Institution in substantially the form attached as Appendix H to this

2 Official Statement. See “CONTINUING DISCLOSURE” and “Appendix H - Form of Continuing Disclosure Agreement” herein.

THE AUTHORITY

The Authority is a body politic and corporate of the State of Connecticut (the “State”), constituting a public instrumentality organized and existing under and by virtue of the Act. The purpose of the Authority, as stated in the Act, is essentially to assist certain health care institutions, institutions of secondary or higher education, nursing homes, child care and child development facilities and other qualified nonprofit organizations in the construction and financing of eligible projects.

Authority Membership and Organization

The Act provides that the Board of Directors of the Authority shall consist of ten members, two of whom shall be the Treasurer of the State of Connecticut, ex-officio, and the Secretary of the Office of Policy and Management of the State of Connecticut, ex-officio, and eight of whom shall be residents of the State appointed by the Governor, provided not more than four of such appointed members may be members of the same political party. Three of the appointed members shall be associated with institutions of higher education, two members shall be associated with health care institutions, and one member shall be experienced in and knowledgeable of (by virtue of business or other activities) state and municipal securities. The terms of the members of the Authority, other than the State Treasurer and the Secretary of the Office of Policy and Management, are for five years, but the members continue to serve until their successors have been appointed and qualified. Each ex-officio member may designate a deputy or any staff member to represent the State Treasurer or the Secretary of the Office of Policy and Management, as the case may be, as a member of the Board of Directors at meetings of the Authority with full power to act and vote on behalf of such ex-officio member. All Authority members serve without compensation, but are entitled to reimbursement for expenses incurred in the performance of their duties in relation to the Authority. The Governor, with the advice and consent of both houses of the General Assembly, has power to appoint the Chairperson of the Board of Directors of the Authority from among its members. The Board of Directors annually elects one of its members to serve as Vice Chairperson.

The members of the Board of Directors of the Authority are as follows:

Barbara Rubin, Chairperson, term as member expires June 30, 2011

Ms. Rubin, a resident of Glastonbury, is Executive Vice President of iStar Financial. Ms. Rubin has over 30 years experience in commercial real estate investments. Prior to joining iStar, Ms. Rubin was an investment professional with Phoenix Home Life Mutual Insurance Company. She is currently a member of the Board of Hartford Stage.

Patrick A. Colangelo, Vice Chairman, term as member expires February 10, 2013

Mr. Colangelo, a resident of Stamford, is the former Senior Vice President, Finance, and Treasurer of Stamford Health System, joining the executive staff in 1981 and retiring in 2002. Previously, Mr. Colangelo was the Chief Financial Officer of The Greenwich Hospital and Audit Manager with Peat Marwick Mitchell & Co. in New York City. Mr. Colangelo is past president of the Healthcare Association, Connecticut chapter, and currently is a member of the Board of Directors of St. Vincent’s College.

3

Denise L. Nappier, ex-officio

Ms. Nappier, a resident of Hartford, became Treasurer of the State of Connecticut on January 6, 1999. Prior to her election as Treasurer in November 1998, Ms. Nappier was Treasurer of the City of Hartford for nearly ten years. Previously Ms. Nappier served as consultant in the Connecticut Office of Policy and Management, Director of Institutional Relations for the University of Connecticut Health Center, and Executive Director of Riverfront Recapture, Inc. She was a member of the Hartford Redevelopment Agency for seven years, including five years as Chair of the Agency. She is currently Treasurer of the National Association of State Treasurers (NAST), serves on the boards of the Yale Millstein Center for Corporate Governance and Performance, and the Connecticut Chapter of the National Association of Corporate Directors, and serves as a corporator of the Village for Families and Children.

Benjamin Barnes, ex-officio

Mr. Barnes, a resident of Stratford, is the Secretary of the Office of Policy and Management of the State of Connecticut. Prior to his appointment, effective January 5, 2011, Mr. Barnes was the Operating Officer for the Bridgeport Public Schools. Previously, Mr. Barnes was the Director of Operations for the City of Stamford and also served as Director of Administration and as Director of Public Safety, Health and Welfare for the City of Stamford. He has also worked as the Government Finance Director for the Connecticut Conference of Municipalities and as a planner for the Cities of Hartford, Connecticut and St. Petersburg, Florida. Mr. Barnes has served on the Boards of Directors of the Housing Development Fund and the Childcare Learning Centers.

John M. Biancamano, term as member expires June 30, 2015

Mr. Biancamano, a resident of Wethersfield, is the Chief Financial Officer of The University of Connecticut Health Center. Prior to joining The University of Connecticut Health Center in November 2008, he served as Vice President, Finance and Chief Financial Officer of Hartford Health Care Corporation and Hartford Hospital from 1990-2008, and as Vice President and Treasurer of Mount Sinai Hospital in Hartford from 1984 to 1990. Previous to 1984, Mr. Biancamano was an Audit Manager with Ernst & Whinney. Mr. Biancamano is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and Connecticut Society of Certified Public Accountants. In addition, he serves as a member of the Finance Committee of the VNA HealthCare.

Benson R. Cohn, term as member expires June 30, 2014

Mr. Cohn, a resident of East Windsor, is retired from a 31-year career with the State of Connecticut. His most recent positions were as Assistant State Treasurer for Debt Management from July 1987 through March 1994 and as the State’s Executive Finance Officer in OPM thereafter until his retirement in November 2001.

Peter W. Lisi, term as member expires June 30, 2015

Mr. Lisi, a resident of West Hartford, is the Director of Institutional Partnerships and Sponsored Research for the University of Hartford. Prior to joining the University in November 2004, he served as the Director of External Affairs for the Connecticut Historical Society Museum and at Choate Rosemary Hall as Director of Planning and Budgeting and also as Associate Director of Development. Mr. Lisi serves as Vice President and Board Member for Watkinson School, is a member of the West Hartford Chamber of Commerce, and a member of the Board of Deacons at Asylum Hill Congregational Church.

Estela R. Lopez, Ph.D., term as member expires February 10, 2013.

Dr. Lopez, a resident of East Hartford, is the former Director of the Latino Policy Institute of the Hispanic Health Council. She is also the former Vice Chancellor of Academic Affairs of the Connecticut

4 State University System, a position which she held from April 2002 to April 2007. Prior to her association with CSU, Dr. Lopez served as Provost and Vice President for Academic Affairs at Northeastern Illinois University, as a Senior Associate at the American Association for Higher Education, as a Senior Fellow at the American Council on Education, and as Vice President for Academic Affairs and Planning at the Inter American University of Puerto Rico. She is a board member of the Fund for Greater Hartford, The Village, United Way of Connecticut and the Latino Endowment Fund of the Hartford Foundation. She is also a member of the Judicial Review Council and the Sustinet Board.

Paul Mutone, term as member expires June 30, 2015

Mr. Mutone, a resident of West Hartford, is Vice President of Finance and Operations and Treasurer at Trinity College. Prior to joining Trinity in October 2008, he served as Vice President for Business and Financial Affairs at Marist College, as Controller and then as Associate Vice President and Controller at Vassar College, and as Supervising Senior Auditor at KPMG Peat Marwick. Mr. Mutone is a member of NACUBO and EACUBO and is a board member and executive committee member of the Southside Institutions Neighborhood Alliance.

Bryan K. Pollard, term as member expires June 30, 2015

Mr. Pollard, a resident of Middletown, is Associate Counsel - Commercial at Otis Elevator Company. Prior to joining Otis, Mr. Pollard held various positions at United Technologies Corporation, Hamilton Standard, Day, Berry & Howard, and Crowell & Moring. He is currently a member of the Board of Directors of the YMCA of Northern Middlesex County, a member of the Insurance Committee and the Committee on Diversity and Opportunity of the University of Connecticut Alumni Association. His former positions include: Lay Advisory Committee Member of the Archbishop of Hartford’s Annual Appeal, Finance Committee Chairperson of St. Justin Parish, Hartford, a Member and Chairperson of the City of Middletown Board of Ethics, Member of the Board of Directors of The Connection, Inc. and a Member of the Board of Directors of The Rushford Center, Inc.

Jeffrey A. Asher is Executive Director of the Authority. The Executive Director is appointed by, and serves at the pleasure of, the Board of Directors. In the performance of his duties as Executive Director, Mr. Asher is responsible for the general management of the Authority’s affairs. Jeanette W. Weldon is Managing Director, Paula Lacey Herman is General Counsel, and Michael F. Morris and Cynthia D. Peoples-H. are Assistant Directors of the Authority.

Harris Beach PLLC, New Haven, Connecticut is serving as Bond Counsel to the Authority and will submit its approving opinion with regard to the legality of the Series G Bonds on the date of delivery of the Series E Bonds, in substantially the form attached hereto as “Appendix G – Proposed Form of Opinion of Bond Counsel.”

Shipman & Goodwin LLP, Hartford, Connecticut, is serving as Special Counsel to the Authority and will pass on certain matters with respect to the financing.

Lamont Financial Services Corporation of Wayne, New Jersey is serving as Financial Advisor to the Authority with respect to this financing.

In addition to the mentioned individuals, counsel and advisor, the Act provides that the Authority may appoint, retain, hire or employ such other staff, counsel, consultants, engineers, architects, accountants, construction companies or others as the Authority deems necessary in order to implement projects or to assist in the performance of its duties.

Powers of the Authority

Under the Act, the Authority is authorized and empowered with respect to health care institutions, nursing homes, institutions of secondary or higher education, child care and child development facilities, and other qualified nonprofit organizations, among other things: to acquire real and personal property; to

5 issue bonds, bond anticipation notes and other obligations and to refund the same; to acquire federally guaranteed securities or to make loans to acquire such securities in order to finance, refinance or refund projects; to charge and collect rentals for the use of projects or for services furnished in relation thereto; to construct, reconstruct, renovate, replace, maintain, repair, operate, lease, or regulate projects and to enter into contracts in order to provide, manage or operate such projects; to establish or cause to be established rules and regulations for the use of projects provided by the Authority; to receive, in relation to projects, loans or grants from any public agency or other source; to make loans for the cost of projects, including the refunding of obligations, mortgages or advances thereof; to finance or refinance certain items of equipment; to mortgage any project and the site thereof for the benefit of the owners of bonds issued to finance such project; to accept mortgages as security for project loans; and to do all things necessary to carry out the purposes of the Act.

Indebtedness of the Authority

The Authority as of April 30, 2011, had authorized and issued certain series of its general obligation and revenue bonds for eligible institutions under the Act in an aggregate principal amount of $13,613,373,000 of which $7,474,109,891 was outstanding as of April 30, 2011.

Appendix F annexed hereto contains a complete tabulation of all series of the Authority’s bonds issued, retired and outstanding as of April 30, 2011. In addition, the Authority has issued Revenue Bonds: CIL Community Resources Issue, Series A in the principal amount of $12,020,000 on June 9, 2011; Western Connecticut Health Network Issue, Series K in the principal amount of $33,035,000 on June 17, 2011; and Connecticut State University System Issue, Series J & K in the principal amount of $41,045,000 on June 22, 2011 and has Board approval to issue Revenue Bonds: Middlesex Hospital Issue, Series N in a principal amount not to exceed $42,000,000; Connecticut Children’s Medical Center Issue, Series D in a principal amount not to exceed $48,000,000; Connecticut College Issue, Series H in a principal amount not to exceed $18,000,000; and Western Connecticut Health Care Issues, Series L & M in a principal amount not to exceed $160,000,000.

With respect to subsequent bond or note issues, the Authority intends to enter into separate agreements with institutions of secondary or higher education, health care institutions, nursing homes, child care and child development facilities and other qualified nonprofit institutions in the State for the purpose of financing projects for such institutions, and each such series so issued will be issued pursuant to a resolution, a trust agreement or a bond indenture other than the Indenture.

The Authority has never defaulted in the payment of principal of or interest on its bonds or notes.

THE SERIES G BONDS

General

The Series G Bonds will be issued as fully registered bonds and will be dated their date of issuance. The Bonds will have stated maturities as shown on the cover hereof. The Bonds will be subject to sinking fund redemption, special mandatory redemption and optional redemption prior to maturity, as described under "THE SERIES G BONDS – Redemption Provisions."

The Series G Bonds will be special obligations of the Authority secured by and payable from a pledge of and lien on, to the extent provided by the Indenture, the moneys received by the Trustee for the account of the Authority pursuant to the Loan Agreement and Note, whether such moneys are received as amounts paid or caused to be paid by the Institution pursuant to the Loan Agreement and the Note.

Neither the full faith and credit nor taxing power nor any moral obligation of the State or any political subdivision thereof is pledged to the payment of the principal of, premium or interest on the Bonds. The issuance of any bonds or notes, including the Bonds under the provisions of the Act, does not directly or indirectly or contingently obligate the State or any political subdivision

6 thereof to levy or pledge any form of taxation whatever therefor or to make an appropriation for such payments. The Authority has no taxing power.

The Series G Bonds will be payable from the Revenues and moneys available under the terms of the Indenture. There shall be no other recourse against the Authority on any other property now or hereafter owned by it. Except as otherwise specified in the Indenture, all Bonds are entitled to the benefits of such Indenture equally and ratably both as to principal and interest with all other Bonds issued under the Indenture, to which reference is made for a description of the rights of the owners of the Bonds, the rights and obligations of the Authority, the rights, duties and obligations of the Trustee, and the provisions relating to amendments to and modifications of, the Loan Agreement and the Indenture. See “Appendix D – Summary of Certain Provisions of the Trust Indenture.”

Manner of Payment

The Bonds initially will be issued as one fully registered bond for each maturity, in the aggregate principal amount of the Bonds and shall be delivered to and registered in the name of CEDE & Co. as registered owner and nominee for DTC. The principal of and interest on the Bonds will be paid by the Trustee. As long as DTC or its nominee, CEDE & Co., is the registered owner of the Bonds, such payments will be made directly to CEDE & Co. See "Book-Entry System" herein.

Interest Payment Dates and Record Dates for Payments

Interest on the Series G Bonds will be payable semiannually on each January 1 and July 1, commencing January 1, 2012 and ending at maturity. The Record Date for the Series G Bonds shall be the fifteenth (15th) day of each December and June.

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Redemption Provisions

Sinking Fund Redemption. The Series G Bonds maturing on July 1, 2026, July 1, 2031, and July 1, 2041 respectively are subject to redemption on each July 1, commencing July 1, 2023, July 1, 2027, and July 1, 2032, respectively, at the principal amount thereof specified below plus accrued interest thereon to the date set for redemption:

Sinking Fund Year Installments Bonds Maturing on July 1, 2026

2023 $1,000,000 2024 1,055,000 2025 1,105,000 2026* 1,165,000

Bonds Maturing on July 1, 2031

2027 $1,220,000 2028 1,290,000 2029 1,360,000 2030 1,430,000 2031* 1,505,000

Bonds Maturing on July 1, 2041

2032 $1,590,000 2033 1,680,000 2034 1,775,000 2035 1,870,000 2036 1,980,000 2037 2,090,000 2038 2,205,000 2039 2,330,000 2040 2,460,000 2041* 2,595,000 * Final Maturity

Optional Redemption. The Bonds maturing on and after July 1, 2022 are subject to optional redemption prior to maturity commencing July 1, 2021 as a whole or in part at any time, at the option of the Authority, at the direction of the Institution, and in any maturity selected by the Authority at the direction of the Institution or by operation of the Redemption Fund, at par, plus accrued interest thereon to the date set for redemption.

Special Redemption. The Bonds shall be subject to special mandatory redemption in the event insurance or condemnation proceeds of $25,000 or more resulting from any damage, destruction, casualty loss or condemnation with respect to the Premises shall be on deposit in the Redemption Fund pursuant to the Loan Agreement at least forty-five (45) days prior to any Interest Payment Date, in which case the Trustee shall apply, at the written direction of the Authority, such proceeds to the redemption of Bonds as a whole or in part, at par, plus accrued interest thereon to the date set for redemption, on such Interest Payment Date. Partial redemption of the Bonds shall be in any maturity or maturities selected by the Authority at the direction of the Institution.

8 Redemption Procedures. The Trustee shall give or cause to be given notice of the redemption of the Bonds (or portions thereof) in the name of the Authority which notice may be conditional and shall specify: (i) the Bonds to be redeemed in whole or in part; (ii) the redemption date; (iii) the numbers and other distinguishing marks of the Bonds to be redeemed (except in the event that all of the Outstanding Bonds are to be redeemed) and (iv) that such Bonds will be redeemed at the designated corporate trust office of the Trustee. Such notice shall further state that on such date there shall become due and payable upon each Bond (or a portion thereof) to be redeemed the Redemption Price thereof, together with interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue. Such notice shall be given not more than forty-five (45) nor less than thirty (30) days prior to the redemption date by the Trustee by mail, postage prepaid, or by Electronic Means to the Bondowners of any Bonds which are to be redeemed, at their addresses appearing on the registration books maintained by the Trustee. Notice having been given in accordance with the foregoing, failure to receive any such notice by any of such Bondowners or any defect therein, shall not affect the redemption or the validity of the proceedings for the redemption of the Bonds.

In the event that less than all Bonds of any maturity subject to redemption are to be redeemed, Bonds shall be selected for redemption by lot or in any customary manner of selection as determined by the Trustee.

BOOK-ENTRY-ONLY SYSTEM

Book-Entry-Only System. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Series G Bonds. The Series G Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Series G 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, 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 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 Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of the Series G Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series G Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant

9 through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series G Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series G Bonds, except in the event that use of the book-entry only system for the Series G Bonds is discontinued.

To facilitate subsequent transfers, all Series G 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 G Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series G Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series G Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Series G Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Series G Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of the Series G Bonds may wish to ascertain that the nominee holding the Series G Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

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

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series G Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as 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 G Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments and redemption premium, if any, with respect to the Series G 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 the Trustee, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Authority or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest, and redemption premium, if any, to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

10 The Institution may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. See “Certificated Series G Bonds” below.

THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC'S BOOK-ENTRY SYSTEM HAS BEEN OBTAINED FROM DTC, BUT NONE OF THE AUTHORITY, THE INSTITUTION OR THE UNDERWRITERS TAKE RESPONSIBILITY FOR THE ACCURACY THEREOF.

No Responsibility of Authority, Institution and Trustee. NONE OF THE AUTHORITY, THE INSTITUTION OR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO DIRECT PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES OR ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT; (II) THE PAYMENT BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF, OR PREMIUM IF ANY, OR INTEREST ON, THE BONDS; (III) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDOWNERS; (IV) ANY CONSENT GIVEN BY DTC OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER; OR (V) THE SELECTION BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS.

SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDOWNERS OR REGISTERED OWNERS OF THE BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS.

Certificated Series G Bonds. DTC may discontinue providing its services as securities depository with respect to the Series G Bonds at any time by giving reasonable notice to the Authority and the Trustee. In addition, the Authority may determine that continuation of the system of book-entry transfers through DTC (or a successor securities depository) is not in the best interest of the Beneficial Owners. If, for either reason the Book-Entry-Only system is discontinued, Bond certificates will be delivered as described in the Loan Agreement and the Beneficial Owner, upon registration of certificates held in the Beneficial Owner’s name, will become the Bondowner. Thereafter, Series G Bonds may be exchanged for an equal aggregate principal amount of Series G Bonds in other authorized denominations and of the same maturity, upon surrender thereof at the principal corporate trust office of the Trustee. The transfer of any Bond may be registered on the books maintained by the Trustee for such purpose only upon assignment in form satisfactory to the Trustee. For every exchange or registration of transfer of Series G Bonds, the Authority and the Trustee may make a charge sufficient to reimburse them for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge may be made to the Bondowner for any exchange or registration of transfer of the Series G Bonds. The Trustee will not be required to transfer or exchange any Bond during the notice period preceding any redemption if such Bond (or any part thereof) is eligible to be selected or has been selected for redemption.

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES G BONDS

Special Obligations of the Authority

The Indenture provides that all Series G Bonds issued thereunder shall be special obligations of the Authority, payable solely from and secured solely by the payments made by the Institution under the Loan Agreement and the Note and from the funds established under the Indenture.

Neither the faith and credit nor the taxing power or any moral obligation of the State or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Series G Bonds. The issuance of any bonds or notes, including the Series G Bonds, under the

11 provisions of the Act does not directly or indirectly or contingently obligate the State or any political subdivision thereof to levy or pledge any form of taxation whatever therefor or to make an appropriation for such payments. The Authority has no taxing power.

Obligations of the Institution

The Authority will enter into the Loan Agreement with the Institution. The Authority will loan the proceeds of the Series G Bonds to the Institution under the Loan Agreement, and the Institution will be obligated thereunder to repay such amounts with interest. The payments of principal and interest to be made by the Institution under the Loan Agreement will be pledged by the Authority to the Trustee as security for and as the source of payment of the principal of and interest on the Series G Bonds.

Pledge under the Indenture

Under the Indenture, the Authority pledges and assigns all right, title and interest of the Authority to the Trustee, to secure the payment of the principal of, premium, if any and interest on the Bonds, all of the Authority's interest in the Loan Agreement, the Note, the Mortgage and the Revenues (as defined in the Loan Agreement) payable to the Authority or to the Trustee for the account of the Authority and all amounts and to monies and securities on deposit in the funds and accounts created and established under the Indenture (excluding fees and expenses payable to the Authority, moneys and securities held in the Rebate Fund established under the Indenture, the Authority's right to enforce certain covenants of the Institution set forth in the Loan Agreement prior to an Event of Default under the Indenture, and the Authority's right to indemnification, to receive notices, to grant waivers and to give consents and approvals, and to otherwise take actions, under certain circumstances), and any and all other property transferred as additional security by the Authority or the Institution or by anyone on their behalf to the Trustee, including, without limitation, funds of the Institution held by the Trustee and the Authority as security for the Bonds. "Revenues" are defined in the Loan Agreement to include all amounts paid or payable to the Authority or to the Trustee for the account of the Authority (excluding fees and expenses payable to the Authority and the Trustee and the rights to indemnification of the Authority and the Trustee) under and pursuant to the Loan Agreement and the Note and as may be further described in a Supplemental Loan Agreement or a Supplemental Indenture.

The Loan Agreement

At the time of delivery of the Series G Bonds the Institution will enter into the Loan Agreement with the Authority, pursuant to which the Institution will borrow the proceeds of the Series G Bonds. The Institution will be absolutely and unconditionally obligated under the Loan Agreement to make payments sufficient to pay, when due, the principal of, sinking fund installments, and interest on the Series G Bonds. To evidence and secure such obligations and certain other amounts, the Institution will deliver the Note to the Authority, and the Authority will assign its right, title and interest therein (subject to certain exceptions) to the Trustee as security for the payment of obligations in respect of the Series G Bonds.

12 The Loan Agreement contains certain covenants, including the following:

Long-Term Debt Service Coverage Ratio. The Institution shall maintain for each fiscal year its Long-Term Debt Service Coverage Ratio (as defined in the Loan Agreement) at least at 1.25 unless a lower level is consented to in writing by the Authority. If such Long-Term Debt Service Coverage Ratio, as calculated at the end of any fiscal year, is below the required level, the Institution covenants to retain a consultant, within sixty (60) days after the end of such fiscal year, to make recommendations to increase such Long-Term Debt Service Coverage Ratio for subsequent fiscal years of the Institution at least to the required level, or, if in the opinion of the consultant the attainment of such level is impracticable, to the highest practicable level and to provide a copy of the report of such consultant to the Authority. The Institution agrees that it will, to the extent permitted by law, charter, by laws or contract, follow the recommendations of the consultant. So long as the Institution shall retain a consultant and the Institution shall follow such consultant’s recommendations to the extent permitted by law, charter, by laws or contract, this Section shall be deemed to have been complied with even if such Long-Term Debt Service Coverage Ratio for any subsequent fiscal year of the Institution is below the required level of 1.25; provided, however, that an event of default shall be deemed to have occurred under the Loan Agreement if any calculation of the Long-Term Debt Service Coverage Ratio for any subsequent fiscal year (subsequent to the fiscal year the results of which gave rise to the requirement that such consultant be retained) indicates that such Long-Term Debt Service Coverage Ratio is less than 1.00.

Ratio of Expendable Funds to Debt. The Institution shall maintain for each fiscal year its ratio of Expendable Funds to Total Debt (as defined in the Loan Agreement) at least at .20 unless a lower level is consented to in writing by the Authority. See “APPENDIX C – DEFINITIONS OF CERTAIN TERMS” for definitions of “Expendable Funds” and “Total Debt”.

Loan Repayments by the Institution

Pursuant to the Loan Agreement, the Authority will lend the proceeds of the Bonds to the Institution under the Loan Agreement, and the Institution will be obligated thereunder to repay such amounts with interest. The payments of principal and interest to be made by the Institution under the Loan Agreement will be pledged by the Authority to the Trustee as security for and as the source of payment of the principal of and interest on the Bonds.

The obligations of the Institution to make payments under the Loan Agreement will be absolute and unconditional and will constitute a general obligation of the Institution. The Institution will be obligated to make monthly payments sufficient to pay when due the principal, sinking fund installments and interest on the Bonds. To evidence and secure such obligations and certain other amounts, the Institution will deliver the Note and the Mortgage to the Authority and the Authority will assign its right, title and interest therein (subject to certain exceptions) to the Trustee as security for the payment of the principal, sinking fund installments and interest on the Bonds.

Security for the Loan Agreement; Negative Pledge

Concurrently with the issuance and delivery of the Bonds, the Institution will issue the Note to secure its obligations in respect of the Bonds and will grant to the Authority for assignment to the Trustee an open-end mortgage on and a security interest in certain real property together with the buildings, improvements and personal property thereon (the "Mortgage"). See "The Mortgage" below. The Institution also will secure its obligations in respect to the Bonds by a pledge of its Gross Receipts and by a covenant not to encumber the Negative Pledge Property (the "Negative Pledge"). The Negative Pledge Property is the Institution’s main campus, a 56-acre site with fourteen buildings, including the main academic center and six residence halls housing 1,050 students, at 5151 Park Avenue in Fairfield, Connecticut, except the library. The Negative Pledge Property is leased from the Bridgeport Roman Catholic Diocese Corporation. The Mortgage and pledge of Gross Receipts and Negative Pledge are subject to other Permitted Encumbrances.

13

The Mortgage

The Mortgaged Premises (as defined in the Mortgage) consist of certain land, buildings and improvements owned by the Institution that are either refinanced with the proceeds of the Series G Bonds or financed with prior Series of Bonds, including a 4-acre property at 4940 Park Avenue, Bridgeport, Connecticut, that includes Roncalli Hall, a ten-story academic and residential facility that houses 396 students, a 7-acre property at 5252 Park Avenue, Bridgeport, Connecticut, that includes Christian Witness Commons, including three three-story residence halls housing 403 students, and a 4-acre undeveloped property located at 5401 Park Avenue, Fairfield, Connecticut being held for future development, all of which are adjacent to the main campus. The Mortgage will be granted as security to the Authority for assignment to the Trustee to secure the obligations of the Institution to the Authority under the Loan Agreement on a parity with mortgages securing the Series E Bonds and the Series F Bonds and the obligations of the Institution to the credit facility provider for the Series F Bonds. Disposition of collateral under the Loan Agreement and Mortgage will be subject to the Intercreditor Agreement. See "Intercreditor Agreement" below.

Debt Service Reserve and Capitalized Interest Funds

A Debt Service Reserve Fund and a Capitalized Interest Fund will be created to support payment of the Series G Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” and “APPENDIX D - SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE”.

Pledge of Gross Receipts

As security for its obligation to make payments required by the Loan Agreement and the Note and other parity obligations, the Institution will pledge, assign and grant to the Authority, for the equal and ratable benefit of the Holders of the Series G Bonds and other parity obligations, including the Series E Bonds and the Series F Bonds, a security interest in its Gross Receipts (as defined in Appendix C), on a parity with a security interest granted with respect to the Series E Bonds and the Series F Bonds and the credit facility provider for the Series F Bonds. The security interest in Gross Receipts will not prevent the expenditure, deposit or commingling of Gross Receipts by the Institution so long as no Event of Default constituting a payment default shall have occurred and is continuing under the Loan Agreement, and so long as all required payments under the Institution Documents are made when due. Upon the occurrence of an Event of Default constituting a payment default under the Loan Agreement, any Gross Receipts which are then received and any Gross Receipts thereafter received shall not be commingled or deposited but shall immediately, or upon receipt, be transferred by the Institution on a daily basis to the Trustee (giving recognition to any other Indebtedness secured on a parity by a pledge of Gross Receipts and to any amounts deposited with the Trustee or another party with respect to any Parity Debt in accordance with the Loan Agreement) for deposit into a Gross Receipts Fund to be established by the Authority and the Trustee under the Indenture. Such daily deposits shall continue until such Event of Default has been cured. All amounts deposited into the Gross Receipts Fund shall be applied by the Trustee for application pro rata, based on the outstanding principal amount of the Bonds and any Parity Debt, (i) in the sole discretion of the Trustee (and with written consent or direction of the Authority) to the payment of the reasonable and necessary costs of operation of the Institution's facilities, including the Premises all in accordance with budgeted amounts proposed by the Institution and approved by the Authority as provided in the Loan Agreement; (ii) to the payment of the principal of, Redemption Price of, and interest on the Bonds and any other Parity Debt in accordance with their respective terms; and (iii) to such other purposes as may be required by the Loan Agreement, the Mortgage or the Indenture and approved by the Authority. Disposition of Gross Receipts will also be subject to the Intercreditor Agreement. See "Intercreditor Agreement" below.

Intercreditor Agreement

On the date of issuance of the Series G Bonds, the Authority, the Institution, the Trustee and the trustees for the outstanding Series E Bonds and the Series F Bonds, and the issuer of the letter of credit

14 securing the Series F Bonds will enter into an Intercreditor Agreement. The Intercreditor Agreement generally will determine how shared collateral or proceeds thereof will be distributed under: (i) the Indenture, the Loan Agreement, including the pledge of Gross Receipts thereunder, and the Mortgage with respect to amounts owed by the Institution in connection with the Bonds; (ii) the credit facility agreement securing the Series F Bonds in connection with any amounts owing thereunder to the credit facility provider that are secured by the credit facility mortgage and security agreement securing the Series F Bonds; (iii) the documents that evidence and secure amounts the Institution owes in connection with loans made to it by the Authority with the proceeds of the Series E Bonds previously issued by the Authority; and (iv) the documents that evidence and secure amounts the Institution owes in connection with loans made to it by the Authority with the proceeds of the Series F Bonds previously issued by the Authority. The Intercreditor Agreement generally provides that distributions from shared collateral will be shared pro rata among the parties to the Intercreditor Agreement based on their percentage share of the sum of all obligations outstanding to those parties, except so long as the credit facility provider for the Series F Bonds is not in default of its obligations to pay a draw under the credit facility agreement securing the Series F Bonds, distributions otherwise payable to the Trustee with respect to the Series F Bonds from shared collateral shall be payable to the credit facility provider for the Series F Bonds for credit to the obligations of the Institution under the credit facility agreement. If the credit facility provider for the Series F Bonds is in default of its obligation to pay a draw under the credit facility securing the Series F Bonds, the Intercreditor Agreement provides that distributions will be shared pro rata among the parties to the Intercreditor Agreement based on their percentage share of the sum of all current obligations outstanding to those parties.

Additional Indebtedness

The Institution may incur additional indebtedness, including additional parity indebtedness, subject to the limitations set forth in the Loan Agreement. See Appendix E - “Summary of Certain Provisions of the Loan Agreement” under the heading “Permitted Indebtedness.”

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ESTIMATED SOURCES AND USES OF FUNDS

The proceeds from the sale of the Series G Bonds and other available funds are expected to be applied as follows:

SOURCES OF FUNDS

Series G Bonds...... $43,905,000 Plus Net Original Issue Premium...... 253,819 Funds from Prior Bonds...... 894,853

TOTAL SOURCES...... $45,053,672

USES OF FUNDS

Deposit to Construction Fund ...... $35,621,073

Redemption of Refunded Bonds† † ...... 4,337,708 Deposit to Debt Service Reserve Fund ...... 3,182,069 Deposit to Capitalized Interest Fund...... 1,037,677

Costs of Issuance† ...... 875,145

TOTAL USES ...... $45,053,672

† Costs of issuance include, but are not limited to, legal fees, Authority fees, underwriters’ discount, printing costs, and the fees of the rating agencies.

† † The Refunded Bonds will be redeemed at par on July 22 , 2011.

16 DEBT SERVICE SCHEDULE

The following table sets forth, for each respective year ending June 30, the amounts required to be made available in such year for payment of the principal, Sinking Fund Installments and interest on the Bonds under the Loan Agreement and the existing Series E Bonds and Series F Bonds. Principal is payable on July 1, one day following the close of the respective years listed. The Series F Bonds have variable interest rates and an assumed rate of 2.50% per annum is used in the following table.

Series G Bonds Series E and F Bonds Total 1, 2, 3 Series E, Series F Bond Year and Series G Ending Combined Debt June 30 Principal Interest 3 Current Debt Service 1, 2, 3 Service

2012 $915,000 $2,261,212 $5,892,671 $9,068,883 2013 945,000 2,230,419 5,902,507 9,077,926 2014 980,000 2,202,069 5,918,627 9,100,696 2015 1,000,000 2,180,019 5,931,387 9,111,406 2016 1,040,000 2,140,019 5,952,896 9,132,915 2017 1,080,000 2,098,419 5,970,502 9,148,921 2018 1,135,000 2,044,419 5,992,529 9,171,948 2019 1,190,000 1,987,669 6,006,209 9,183,878 2020 1,240,000 1,937,094 6,037,536 9,214,630 2021 1,305,000 1,875,094 6,058,491 9,238,585 2022 1,370,000 1,809,844 6,087,046 9,266,890 2023 1,000,000 1,744,769 6,625,519 9,370,288 2024 1,055,000 1,693,519 6,658,817 9,407,336 2025 1,105,000 1,639,450 6,688,999 9,433,449 2026 1,165,000 1,582,819 6,722,878 9,470,697 2027 1,220,000 1,523,113 6,758,307 9,501,420 2028 1,290,000 1,457,538 6,800,300 9,547,838 2029 1,360,000 1,388,200 1,461,864 4,210,064 2030 1,430,000 1,315,100 1,502,823 4,247,923 2031 1,505,000 1,238,238 1,550,997 4,294,235 2032 1,590,000 1,157,344 1,601,426 4,348,770 2033 1,680,000 1,067,906 1,653,579 4,401,485 2034 1,775,000 973,406 - 2,748,406 2035 1,870,000 873,563 - 2,743,563 2036 1,980,000 768,375 - 2,748,375 2037 2,090,000 657,000 - 2,747,000 2038 2,205,000 539,438 - 2,744,438 2039 2,330,000 415,406 - 2,745,406 2040 2,460,000 284,344 - 2,744,344 2041 2,595,000 145,969 - 2,740,969

Totals 3 $43,905,000 $43,231,768 $113,775,910 $200,912,684

1. Includes annual debt service on the Series F variable-rate bonds at projected interest rate of 2.50%, and annual credit facility fee of 0.65% per annum. 2. Excludes the Series C Bonds refunded by the Series G Bonds. 3. Totals may not foot due to rounding.

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BONDOWNERS’ RISKS

The following discussion of risks that could affect payments to be made by the Institution with respect to the Series G Bonds is not intended to be definitive, dispositive or comprehensive, but rather is intended to summarize certain matters that could adversely affect the ability of Institution to make such payments, or could otherwise affect the Series G Bonds.

General

The Series G Bonds are special obligations of the Authority payable solely from the payments made by the Institution under the Loan Agreement and the security provided therefor, and, other funds held pursuant to the Indenture. No representation or assurance can be given that the Institution will generate sufficient revenues to make payments under the Loan Agreement sufficient to pay principal of, premium, if any, and interest on the Series G Bonds and to make other payments required by the Loan Agreement. The capabilities of management, future legislation, regulatory actions, economic conditions, changes in demand for education, investment performance of the Institution's endowment funds or other factors could adversely affect the Institution's ability to pay its obligations under the Loan Agreement. For discussion of the financial condition of the Institution see Appendix A. The audited financial statements of the Institution are included in Appendix B.

THE INFORMATION SET FORTH IN THE FOLLOWING DISCUSSION OF BONDOWNERS’ RISKS IS LIMITED. IT IS NOT A DEFINITIVE LIST OF RISKS, NOR DOES IT PURPORT TO DESCRIBE RISKS SPECIFIC TO THE INSTITUTION.

Adequacy of Revenues

The ability of the Institution to make payments under the Loan Agreement will depend, among other things, upon the ability of the Institution to generate adequate revenues from its investments and its operations. A key factor in maintaining revenues is the Institution's ability to attract a sufficient number of qualified students. No assurances can be given that the Institution will continue to attract sufficient numbers of qualified students or that the revenues available to the Institution from its operations or otherwise will be available in amounts sufficient to make the payments required under the Loan Agreement.

Relationship to Other Parity Debt

An Intercreditor Agreement by and among the Institution, the Authority, the credit facility provider for the Series F Bonds, the Trustee, and the trustees for the outstanding Series E Bonds and Series F Bonds generally will determine how the shared collateral will be distributed among the Parity Debt. In the event of a default by the Institution, the shared collateral may not be sufficient to make payments on the Bonds and there might be disagreement among the parties to the Intercreditor Agreement regarding the distribution of the shared collateral to the Parity Debt; such disagreement could adversely affect payment on the Bonds.

Investment and Gift Matters

The Institution derives a substantial portion of its revenues from income from investments and gifts. Any significant deterioration in the securities markets generally or adverse results in the specific investments which the Institution has made or reduction in gifts due to economic conditions or for other reasons would reduce its income and cash flow and therefore could adversely affect the Institution's ability to pay its obligations under the Loan Agreement and its ability to finance its capital needs and future growth.

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Risk of Redemption

The Series G Bonds are subject to redemption or acceleration prior to maturity in certain circumstances. See "THE BONDS - Redemption Provisions" and Appendices D and E. Bondowners may not realize their anticipated yield or investment to maturity because the Bonds may be redeemed or accelerated prior to maturity at par or at a redemption price that results in the realization of less than the anticipated yield to maturity.

Default by the Institution or the Authority

No representations or assurances can be given that the Institution or the Authority will not default in performing their respective obligations under the Indenture or any of the other financing documents. If an Event of Default occurs under the Indenture, the Trustee may accelerate the maturity of the Series G Bonds, notwithstanding the fact that the Bondowners may not receive notice of such acceleration until after such date. In addition, no premium will be received upon an acceleration of the Series G Bonds due to an Event of Default.

Economic Factors Beyond the Institution’s Control

Apart from competition and other business risks facing the Institution, the financial performance of the Institution will depend to some degree upon factors beyond the control of the Institution including general, national and local economic conditions (e.g., inflation, unemployment, population growth and distribution trends) and Federal, state and local taxation and laws and regulations affecting the Institution.

Enforceability of Remedies

The remedies available to the Trustee, the Authority and the Bondowners upon an Event of Default under the Indenture are in many respects dependent upon judicial actions which are, in turn, often subject to discretion and delay. Under existing constitutional and statutory laws and judicial decisions, including specifically the Federal Bankruptcy Code, a particular remedy specified by the Indenture may not be readily available or, if available, may be limited or subject to substantial delay. The various legal opinions to be delivered concurrently with the issuance and delivery of the Series G Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by principles of equity and by bankruptcy, reorganization, insolvency, moratorium and similar laws affecting the rights of creditors generally.

Secondary Market for the Series G Bonds

There can be no guarantee there will be a secondary market for the Series G Bonds or, if a secondary market exists, that the Series G Bonds may be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular bond issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

19 Loss of Federal Tax Exemption

If the Institution does not comply with certain covenants in the Loan Agreement or the Tax Regulatory Agreement or if certain representations made by the Institution in the Loan Agreement or the Tax Regulatory Agreement or certain certificates of the Institution are false or misleading, the interest payable on the Series G Bonds may become subject to Federal income taxation retroactive to the date of issuance of the Series G Bonds, regardless of the date on which noncompliance or misrepresentation is ascertained. In the event that interest on the Series G Bonds should become subject to Federal income taxation, the Indenture does not provide for the redemption of the Series G Bonds, the acceleration of the payment of debt service on the Series G Bonds, or an increase in interest paid on the Series G Bonds. A breach of the tax covenants set forth in the Indenture by the Authority, or a breach of the tax covenants set forth in the Loan Agreement or in the Tax Regulatory Agreement by the Institution, however, may result in an Event of Default under the Indenture, the Loan Agreement, or the Tax Regulatory Agreement, as the case may be, and the exercise of appropriate remedies, including acceleration of payments, thereunder.

Changes in Federal and State Tax Law

From time to time proposals are introduced in Congress that, if enacted into law, could have an adverse impact on the potential benefits of the exclusion from gross income for Federal income tax purposes of the interest on the Series G Bonds, and thus on the economic value of the Series G Bonds. This could result from reductions in Federal income tax rates, changes in the structure of the Federal income tax rates, changes in the structure of the Federal income tax on its replacement with another type of tax repeal of the exclusion of the interest of the Series G Bonds from gross income for such purposes, or otherwise. It is not possible to predict whether any legislation having an adverse impact on the tax treatment of holders of the Series G Bonds may be proposed or enacted at the State or Federal level.

Environmental Matters

Organizations are subject to a wide variety of Federal, state and local environmental and occupational health and safety laws and regulations. These requirements govern medical and toxic or hazardous waste management, air and water quality control, notices to employees and the public and training requirements for employees. The Institution could become subject to potentially material liability for costs of investigating and remedying releases of any such substances. Such liability could involve substances that are either located on its properties, that have migrated from its properties or that have been improperly disposed of off site.

Other Risk Factors

In the future, the following additional factors, among others, may adversely affect the operations of educational institutions, including the Institution, to an extent that cannot be determined at this time:

l. Reduced demand for private university education services or increasing demand for financial aid arising from a change in demographics or from adverse or declining economic conditions in the areas from which the Institution draws a significant portion of its enrollment.

2. Cost increases without corresponding increases in revenues could result from, among other factors, increases in the salaries, wages and fringe benefits of education employees, and from inflation.

3. Competition from colleges and universities located elsewhere in Connecticut and throughout the United States, some of which will enjoy public subsidies permitting lower tuition and fees than those which the Institution is required to charge, and from alternative or substitute educational programs.

4. Rising costs and reduced availability of energy.

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5. Developments affecting the Federal or state tax-exempt status of non-profit organizations or the reduction or elimination of the real estate tax exemption available to charitable organizations. Both Congress and the IRS recently have increased scrutiny of the activities of tax-exempt entities.

6. The occurrence of natural disasters, including floods and earthquakes, which may damage the facilities of the Institution, interrupt utility service to the facilities, or otherwise impair the operation of the Institution and the generation of revenues from the facilities.

TAX MATTERS

Federal Income Taxes. In the opinion of Harris Beach PLLC, Bond Counsel to the Authority, and subject to the limitations set forth below, under existing statutes, regulations, administrative rulings and court decisions as of the date of such opinion, interest on the Series G Bonds is excluded from gross income for federal income tax purposes, pursuant to Section 103 of the Code. Furthermore, Bond Counsel is of the opinion that interest on the Series G Bonds is not an “item of tax preference” for purposes of computing the federal alternative minimum tax imposed on individuals and corporations. However, interest on the Series G Bonds is included in “adjusted current earnings” for purposes of calculating the federal alternative minimum tax imposed on certain corporations. Corporate purchasers of the Series G Bonds should consult with their tax advisors regarding the computation of any alternative minimum tax liability.

The difference between the principal amount of the Series G Bonds maturing in the years 2014, 2022,2026 and 2031 (collectively, the “Discount Bonds”), and the initial offering price to the public (excluding bond houses, brokers and other intermediaries, or similar persons acting in the same capacity of underwriters or wholesalers), at which price a substantial amount of such Discount Bonds of the same maturity is first sold, constitutes original issue discount, which is not included in gross income for federal income tax purposes to the same extent as interest on the Discount Bonds. The Code provides that the amount of original issue discount accrues in accordance with a constant interest method based on the compounding of interest, and that the basis of a Discount Bond acquired at such initial offering price by an initial purchaser of such an owner’s adjusted basis for purposes of determining an owner’s gain or loss on the disposition of a Discount Bond will be increased by the amount of such accrued original issue discount. A portion of the original issue discount that accrues in each year to an owner of a Discount Bond that is a corporation will be included in the calculation of such corporation’s federal alternative minimum tax liability. Consequently, a corporate owner of any Discount Bond should be aware that the accrual of original issue discount in each year may result in a federal alternative minimum tax liability, even though the owner of such Discount Bond has not received cash attributable to such original issue discount in such year.

The Series G Bonds maturing in the years 2012, 2013, and 2015 through 2021, inclusive (collectively, the “Premium Bonds”) are initially offered to the public at prices greater than the amounts payable thereon at maturity. As a result of the tax cost reduction requirements of the Code relating to amortization of bond premium, under certain circumstances, an initial owner of Premium Bonds may realize a taxable gain upon disposition of such Premium Bonds even though they are sold or redeemed for an amount equal to such owner’s original cost of acquiring such Premium Bonds. Owners of Premium Bonds are advised that they should consult with their own tax advisors with respect to the tax consequences of owning such Premium Bonds.

The Code establishes certain requirements that must be met at and subsequent to the issuance and delivery of the Series G Bonds in order that interest on the Series G Bonds be and remain excluded from gross income for federal income tax purposes, pursuant to Section 103 of the Code. These continuing requirements include certain restrictions and prohibitions on the use of the proceeds of the Series G Bonds and the Project, restrictions on the investment of proceeds and other amounts and the rebate to the United States of certain earnings in respect of such investments. Failure to comply with such continuing requirements may cause the interest on the Series G Bonds to be included in gross income for federal

21 income tax purposes retroactive to the date of issue of the Series G Bonds irrespective of the date on which such noncompliance occurs. In the Indenture, the Loan Agreement and the Tax Regulatory Agreement, the Authority and the Institution have covenanted to comply with certain procedures, and have made certain representations and certifications, designed to satisfy the requirements of the Code. The opinion of Bond Counsel described above is made in reliance upon, and assumes continuing compliance with, such covenants and procedures and the continuing accuracy, in all material respects, of such representations and certifications.

Bond Counsel expresses no opinion regarding any other federal income tax consequences related to the ownership or disposition of, or the receipt or accrual of interest on, the Series G Bonds. The proposed form of opinion of Bond Counsel is attached to hereto as Appendix G.

In addition to the matters referred to in the preceding paragraphs, prospective purchasers of the Series G Bonds should be aware that the accrual or receipt of interest on the Series G Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences may depend upon the recipient’s particular tax status or other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences. Examples of such other federal income tax consequences of acquiring or holding the Series G Bonds include, without limitation, that (i) with respect to certain insurance companies, the Code reduces the deduction for loss reserves by a portion of the sum of certain items, including interest on the Series G Bonds, (ii) interest on the Series G Bonds earned by certain foreign corporations doing business in the United States may be subject to a branch profits tax imposed by the Code, (iii) passive investment income, including interest on the Series G Bonds, may be subject to federal income taxation under the Code for certain S corporations that have certain earnings and profits, and (iv) the Code requires recipients of certain Social Security and certain other federal retirement benefits to take into account, in determining gross income, receipts or accruals of interest on the Series G Bonds. In addition, the Code denies the interest deduction for indebtedness incurred or continued by a taxpayer, including, without limitation, banks, thrift companies, and certain other financial companies to purchase or carry tax exempt obligations, such as the Series G Bonds. The foregoing is not intended as an exhaustive list of potential tax consequences. Prospective purchasers should consult their tax advisors regarding any possible collateral consequences with respect to the Series G Bonds.

Certain requirements and procedures contained or referred to in the Indenture, the Loan Agreement, the Tax Regulatory Agreement and other relevant documents may be changed and certain actions may be taken or omitted subsequent to the date of issue, under the circumstances and subject to the terms and conditions set forth in such documents or certificates, upon the advice or with the approving opinion of a nationally recognized bond counsel. Bond Counsel expresses no opinion as to any tax consequences with respect to the Series G Bonds, or the interest thereon, if such change occurs or action is taken or omitted upon the advice or approval of bond counsel other than Harris Beach PLLC.

State Income Taxes. In the opinion of Bond Counsel, interest on the Series G Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates, and is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the federal alternative minimum tax.

Bond Counsel expresses no opinion regarding any other state tax consequences related to the ownership or disposition of, or the receipt or accrual of interest on, the Series G Bonds.

Interest on the Series G Bonds may or may not be subject to state or local income taxes in jurisdictions other than the State of Connecticut under applicable state or local tax laws. Bond Counsel expresses no opinion as to the tax treatment of the Series G Bonds under the laws of such other state or local jurisdictions. Each purchaser of the Series G Bonds should consult his or her own tax advisor regarding the taxable status of the Series G Bonds in a particular jurisdiction other than the State of Connecticut.

22 Other Considerations. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or omitted) or any events occurring (or not occurring) after the date of issuance of the Series G Bonds may adversely affect the value of, or the tax status of interest on, the Series G Bonds.

No assurance can be given that any future legislation, including amendments to the Code or the State income tax laws, regulations, administrative rulings, or court decisions, will not, directly or indirectly, cause interest on the Series G Bonds to be subject to federal or State income taxation, or otherwise prevent Bondholders from realizing the full current benefit of the tax status of such interest. Further, no assurance can be given that the introduction or enactment of any such future legislation, or any judicial decision or action of the Internal Revenue Service or any State taxing authority, including, but not limited to, the promulgation of a regulation or ruling, or the selection of the Series G Bonds for audit examination, or the course or result of any Internal Revenue Service examination of the Series G Bonds or of obligations which present similar tax issues, will not affect the market price or marketability of the Series G Bonds. Prospective purchasers of the Series G Bonds should consult their own tax advisors regarding the foregoing matters.

All quotations from and summaries and explanations of provisions of law do not purport to be complete, and reference is made to such laws for full and complete statements of their provisions.

ALL PROSPECTIVE PURCHASERS OF THE SERIES G BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS IN ORDER TO UNDERSTAND THE IMPLICATIONS OF THE CODE AS TO THESE AND OTHER FEDERAL AND STATE TAX CONSEQUENCES OF PURCHASING OR HOLDING THE SERIES G BONDS.

CONTINUING DISCLOSURE

The Authority has determined that no financial or operating data concerning the Authority is material to any decision to purchase, hold or sell the Series G Bonds and the Authority will not provide any such information. The Institution has undertaken all responsibilities for any continuing disclosure for the benefit of the Beneficial Owners of the Series G Bonds as described below, and the Authority shall have no liability to the Beneficial Owners of the Series G Bonds or any other person with respect to such disclosures.

The Institution will enter into a Continuing Disclosure Agreement with respect to the Series G Bonds for the benefit of the Beneficial Owners of the Series G Bonds, substantially in the form attached as Appendix H to this Official Statement (the “Continuing Disclosure Agreement”), to provide or cause to be provided, in accordance with the requirements of SEC Rule 15c2-12, (i) certain annual financial information and operating data, (ii) timely notice of the occurrence of certain material events with respect to the Series G Bonds, and (iii) timely notice of a failure by the Institution to provide the required annual or quarterly financial information on or before the date specified in the Continuing Disclosure Agreement. The Underwriters’ obligation to purchase the Series G Bonds shall be conditioned upon its receiving, at or prior to the delivery of the Series G Bonds, an executed copy of the Continuing Disclosure Agreement. During the past five years, the Institution has complied in all material respects with its existing continuing disclosure agreements in accordance with SEC Rule 15c2-12.

LEGALITY OF THE SERIES G BONDS FOR INVESTMENT AND DEPOSIT

Under the Act, the Series G Bonds are securities in which all public officers and public bodies of the State and its political subdivisions, all insurance companies, State bank and trust companies, national banking associations, savings banks, savings and loan associations, investment companies, executors, administrators, trustees and other fiduciaries in the State may properly and legally invest funds, including capital in their control or belonging to them.

23 The Series G Bonds may, under the Act, be deposited with and received by the State or any municipal officer or any agency or political subdivision of the State for any purpose for which the deposit of bonds or obligations of the State may be authorized by law.

NEGOTIABLE INSTRUMENTS

Under the Act, the Series G Bonds are, and are deemed to be for all purposes, negotiable instruments, subject only to the provisions for registration and transfer contained in the Indenture and in the Series G Bonds.

STATE NOT LIABLE ON THE SERIES G BONDS

The Series G Bonds are special obligations of the Authority payable solely from the sources therefor as set forth in the Indenture, and neither the faith and credit nor the taxing power of the State or any political subdivision thereof is pledged to the payment of the principal of or interest on the Series G Bonds. The Act does not in any way create a so-called moral obligation of the State to pay debt service in the event of default by the Institution or the Authority. The Authority has no taxing power.

COVENANT BY THE STATE

Pursuant to the Act, the Authority has included in the Indenture the State’s pledge and agreement for the benefit of the owners of the Series G Bonds, that the State will not limit or alter the rights vested in the Authority until such obligations, together with the interest thereon, are fully met and discharged, provided that nothing in the Act shall preclude such limitation or alteration if and when adequate provision shall be made by law for the protection of the owners of such obligations.

UNDERWRITING

RBC Capital Markets, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the “Underwriters”), have agreed to purchase the Series G Bonds at a purchase price of $43,763,674 (representing $43,905,000 principal amount of the Bonds, plus original issue premium of $253,819, and less an underwriters’ discount of $395,145). The Underwriters intend to make an initial public offering of the Series G Bonds at prices not in excess of the public offering prices set forth on the inside cover of this Official Statement. The purchase contract provides that the Underwriters shall purchase all of the Series G Bonds if any are purchased. The Institution has agreed to indemnify the Underwriters and the Authority against certain liabilities relating to this Official Statement. The Underwriters may offer and sell the Series G Bonds to certain dealers (including dealers depositing Series G Bonds into investment trusts) and others at prices lower than the public offering price stated on the inside cover page hereof.

LEGAL MATTERS

All legal matters incidental to the authorization and issuance of the Series G Bonds by the Authority are subject to the approval of by Harris Beach PLLC, New Haven, Connecticut, Bond Counsel, whose approving opinion, the form of which is attached hereto as Appendix G, will be delivered with the Series G Bonds. Certain legal matters will be passed upon for the Authority by its special counsel, Shipman & Goodwin LLP, Hartford, Connecticut. Certain legal matters will be passed upon for the Institution by its counsel, Schine, Julianelle & Antonucci, P.C., Orange Connecticut and Robinson & Cole LLP, Hartford, Connecticut. Certain matters will be passed upon for the Underwriters by their counsel, Wiggin and Dana, LLP New Haven, Connecticut.

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FINANCIAL STATEMENTS

The financial statements of the Institution as of June 30, 2010 and 2009 and for the years then ended included in Appendix B in this Official Statement have been audited by KPMG, LLP, independent auditors (the “Auditors”), as set forth in their report appearing therein. The Auditors have not been requested to consent, nor have they rendered any consent, to the inclusion of the financial statements in this Official Statement. The Auditors have not been engaged to perform and have not performed, since the date of their report included herein, any procedures on the financial statements addressed in that report, nor have the Auditors performed any procedures relating to this Official Statement.

LITIGATION

The Authority

There is not now pending or, to the knowledge of the Authority, threatened any litigation against the Authority restraining or enjoining the issuance or delivery of the Series G Bonds or questioning or affecting the validity of the Series G Bonds or the proceedings and authority under which they are to be issued. Neither the creation, organization or existence of the Authority, nor the title of the present members or other officers of the Authority to their respective offices is being contested. There is no litigation pending which in any manner questions the right of the Authority to make the loan to the Institution in accordance with the provisions of the Act and the Indenture.

The Institution

For information on litigation with respect to the Institution, see the section entitled “Litigation” within Appendix A attached hereto.

RATINGS

Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Service have assigned long-term ratings of “Baa2” and “BBB” to the Series G Bonds. Such ratings reflect only the views of the rating organization and any desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances so warrant. The above ratings are not a recommendation to buy, sell or hold the Series G Bonds, and such rating may be subject to revision or withdrawal at any time by the rating agency. Any such downward revision or withdrawal of a rating may have an adverse effect on the market price of the Series G Bonds.

MISCELLANEOUS

The references in this Official Statement to the Act, the Indenture, the Loan Agreement and the other documents are brief summaries of certain provisions thereof. Such summaries do not purport to be complete and references are made to the Act, the Indenture, the Loan Agreement, and the other documents for full and complete statements of such and all provisions. The agreements of the Authority with the Bondowners are fully set forth in the Indenture, and neither any advertisement of the Series G Bonds nor this Official Statement is to be construed as constituting an agreement with the Bondowners. So far as any statements are made in this Official Statement involving matters of opinion or forecasts, whether or not expressly so stated, they are intended merely as such and not as representations of fact. Copies of the documents mentioned in this paragraph are on file at the office of the Authority.

25 Attached hereto as Appendix A is certain information relating to the Institution. Appendix B contains certain audited financial statements of the Institution. With respect to Appendices A and B, and any other information contained herein pertaining to the Institution or the Institution’s financial condition or operations, the Authority makes no representations or warranties whatsoever with respect to the information contained herein or therein. The Authority has relied entirely on the Institution for the information contained in Appendices A and B and the other information pertaining to the Institution, and the Institution’s financial condition or operations and on the information contained in Appendices A and B.

Appendix C - “Definitions of Certain Terms,” Appendix D - “Summary of Certain Provisions of the Trust Indenture,” Appendix E - “Summary of Certain Provisions of the Loan Agreement,” and Appendix H - “Form of Continuing Disclosure Agreement” have been prepared and provided by or on behalf of the Authority.

Appendix F - “Indebtedness of the Authority” has been prepared by the Authority.

Appendix G - “Proposed Form of Opinion of Bond Counsel” has been prepared and provided by Bond Counsel.

All Appendices are incorporated as an integral part of this Official Statement.

The Authority has authorized the execution and delivery of this Official Statement by one of its Authorized Officers.

STATE OF CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY

By: /s/ Jeffrey A. Asher Jeffrey A. Asher Executive Director

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APPENDIX A

June 22, 2011

State of Connecticut Health and Educational Facilities Authority 10 Columbus Boulevard Hartford, Connecticut 06106-1976

Ladies and Gentlemen:

We are pleased to submit the following information with respect to Sacred Heart University, Incorporated (the “University”) and the Project. This letter and information contained herein are submitted to the State of Connecticut Health and Educational Facilities Authority for inclusion in its Official Statement relating to its Revenue Bonds, Sacred Heart University Issue, Series G (the “Bonds”).

GENERAL

The University is an independent coeducational institution of higher learning located primarily in Fairfield, Connecticut. The University has been granted institutional accreditation by the New England Association of Schools and Colleges. The University’s academic structure has four colleges: The College of Arts and Sciences, The John F. Welch College of Business, The College of Education and Health Professions, and The University College. Each college is headed by a Dean who reports to the Vice President of Academic Affairs. The University offers baccalaureate and associate degrees in 26 majors, 30 minors, two associates programs, master degrees programs in 11 fields, and two doctoral programs at the main campus and two major extension sites in Connecticut and a wholly owned subsidiary in Luxembourg.

The University serves four broadly defined groups of learners: (1) full-time undergraduate students; (2) students pursuing graduate studies on a part-time or full-time basis; (3) students pursuing undergraduate studies on a part-time basis; and (4) students pursuing studies on-line at the graduate and undergraduate levels.

The University’s main campus (the “Core Campus”) is situated on a 56-acre parcel of land in Fairfield, Connecticut. The land and buildings comprising the Main Campus, except for the library and the land upon which the library is located, are leased pursuant to several ground lease agreements, all of which expire on May 1, 2080, between the Bridgeport Roman Catholic Diocese Corporation and the University. The library and the land upon which the library is located is owned by the University. The University also owns four residence halls located across Park Avenue from the Core Campus; and has leased two commercial office buildings with a total of 102,490 square feet nearby to provide additional classrooms, labs and faculty and administration offices. The acquisition of property surrounding the Core Campus is an essential part of the University’s Strategic Plan. The University currently owns 4.1 acres of land and several surrounding residential properties slated for development. The University will purchase a 17- acre parcel of property in Trumbull with the proceeds of the Bonds. In addition, the two branch campuses the University maintains within Connecticut support distinct student populations and needs. A branch is also maintained in Luxembourg, which offers an M.B.A. degree for international students.

EDUCATIONAL PROGRAMS

The University offers baccalaureate candidates (BA and BS degrees) a choice of 26 majors in the areas of liberal arts, business and professional studies. Majors leading to a baccalaureate degree include Art, Biology, Business, Chemistry, Computer Science/Information Technology, Modern Foreign Languages, Criminal Justice, English and Communication, History, Mathematics, Media Studies, Philosophy, Government and Politics, Psychology, Religious Studies, Social Work, Sociology, Nursing, Accounting, Business Administration, Economics, Finance, and Human Movement and Sports Science. Associate degrees (AA and AS) are offered in General Studies and Computer Science and Information Technology.

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In addition, master degree programs are offered in the field of business administration (MBA, MBA/Health Care), religious studies (MARS), teaching (MAT), nursing (MSN), chemistry (MS), computer science (MS), occupational therapy (MS), geriatric rehabilitation and wellness (MS) and Exercise Science and Nutrition (MS). Professional certificates (6th year) in Administration and Advanced Teaching are also offered as well as teacher preparation programs for initial certification (5th year). In addition, Doctoral programs are offered in Physical Therapy (DPT) and Nurse Practioner (DNP).

University College attracts a growing number of area men and women who seek learning experiences apart from the degree granting programs -- courses which provide cultural enrichment, intellectual growth and career development.

The Deans of each of the Colleges and year of their appointments are:

• Dr. Seamus Carey (2010) – College of Arts & Sciences • Dr. Rupendra Paliwal (Interim 2010) – John F. Welch College of Business • Dr. Patricia Walker (1997) – College of Education and Health Professions • Mary Lou DeRosa (2009) – University College

ACCREDITATION

Sacred Heart University has been granted institutional accreditation by the New England Association of Schools and Colleges (NEASC), one of six regional associations in the United States that accredit schools and colleges since 1969. Institutional accreditation is the means used by regional accrediting commissions to assure the educational community, the general public and other agencies and organizations that an institution has clearly defined and appropriate educational objectives and that it has established conditions under which its objectives can be met. Accreditation also provides that an institution is so organized, staffed, and supported that it can continue to meet its objectives in the future.

In addition, several University programs either have received specialized accreditation or approval by the State of Connecticut, or have been granted specialized accreditation by national professional organizations. The John F. Welch College of Business is accredited by the Association to Advance Collegiate Schools of Business (AACSB- International); the Education program for Teacher Certification at the elementary and secondary levels is approved by the Connecticut State Department of Education; the Bachelor of Science in Nursing and Master of Science in Nursing programs are accredited by the Commission on Collegiate Nursing Education (CCNE); the Doctor of Physical Therapy program is accredited by the Commission on Accreditation in Physical Therapy Education (CAPTE); the Master of Science in Occupational Therapy program is accredited by the Accreditation Council for Occupational Therapy Education; the Bachelor of Science in Athletic Training is accredited by the Commission on Accreditation of Athletic Training Education; and the Bachelor of Arts or Science in Social Work program is accredited by the Council on Social Work Education.

GOVERNANCE

The University is governed by an independent self perpetuating Board of Trustees (the “Board”), consisting of not less than five, no more than 35 members. Members are elected by affirmative vote of the Board at its annual meeting to serve for a 3-year term and are eligible for re-election. Members of the Board serve without pay or other compensation. The full Board meets four (4) times each year. The Executive Committee of the Board, which meets four (4) or more times per year, consists of the Chairpersons of various standing committees of the Board, and the President of the University, who is an ex-officio member of the Board.

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The current officers* and members of the Board and their principal business or professional affiliations are as follows:

Name Affiliation

Rosanne Badowski, ‘79 Executive Asst. to John Welch Jack Welch, LLC Palm Beach Gardens, FL

Norbert Becker Chairman Corporate Finance ATOZ Luxembourg

Mary-Ann Bunting Senior Financial Advisor Bunting & Somma Westport, CT

Patrick J. Carolan, MD President Merritt Orthopaedic Associates Bridgeport, CT

Robert L. Corcoran President GE Foundation General Electric Company Fairfield, CT

James J. Costello** Vice President and Corporate Controller (retired) (Treasurer)* General Electric Company Fairfield, CT

Lawrence G. Foley** Bronson Point Management, LLC Fairfield, CT

Rev. Msgr. William Genuario, JCD Tribunal Diocese of Bridgeport Judge Bridgeport, CT

Robert L. Julianelle, J.D.** President (Secretary)* Schine, Julianelle & Antonucci, P.C. Orange, CT

Rev. Robert M. Kinnally Office of Vocations Diocese of Bridgeport Bridgeport, CT

Most Rev. William E. Lori, S.T.D. Bishop of the Diocese of Bridgeport (Chairman)* The Catholic Center Bridgeport, CT

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Name Affiliation

Vincent Maffeo** Executive Vice President & General Counsel SAIC McLean, VA

Frank Martire President & CEO FIS Jacksonville, FL

Robert J. Matura Chairman/CEO (Retired) Learning Span, Inc. Stamford, CT Christopher K. McLeod** President & CEO 454 Life Sciences Corporation Branford, CT

Linda E. McMahon** McMahon Ventures, LLC Stamford, CT

William E. Mitchell Owner Mitchell’s of Westport Westport, CT

James T. Morley, Jr.** Senior Group Vice President (Retired) (Vice Chairman)* Cox Radio, Inc. Newtown, CT

John J. Petillo President Sacred Heart University Fairfield, CT

Lois Schine** President and Executive Director Westport Chamber of Commerce Westport, CT

Jeffrey A. Sonnenfeld D.B.A. Senior Associate Dean Yale School of Management New Haven, CT

Peter Terpeluk, Jr. Finance Chairman Republican National Committee Washington, DC

Rev. Msgr. Kevin W. Wallin** Pastor Cathedral of St. Augustine Bridgeport, CT

** Executive Committee member

It is the policy of Sacred Heart University to provide guidelines for its trustees, employees, agents and consultants to enable them to avoid situations which give rise to or which give the appearance of conflicts of interest between their responsibilities to the University and other interests.

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FACULTY AND OTHER EMPLOYEES

As of Fall 2010, the University had 222 full-time faculty, 34% of whom are tenured and 79% of whom hold a doctorate degree or are terminally qualified in their respective fields of expertise. In fall 2010, 389 adjunct faculty, active in their professional fields, supplement the full-time faculty of the University. The combined full-time faculty and adjunct faculty allow the University to maintain a student-faculty ratio of 13:1.

The following table presents information on the composition of the University’s faculty:

Faculty

Fall Fall Fall Fall Fall 2006 2007 2008 2009 2010 Faculty headcount 502 528 567 567 611 Faculty full-time 194 202 214 204 222 Faculty part-time 308 326 353 363 389 % tenured (full-time faculty) 35.6% 37.0% 36.0% 37.2% 33.8% % holding doctorates (full-time faculty) 72.7% 75.0% 75.0% 76.5% 79.0%

The University employs approximately 547 non-faculty employees including executive, professional and support staff.

UNIVERSITY FRINGE BENEFITS

The University participates in the Teachers’ Insurance and Annuity Association (“TIAA”) and College Retirement Equities Fund (“CREF”), with Fidelity as an investment manager alternative, as a retirement plan for the faculty, administrators, and non-exempt employees. The University contributes a defined percentage of a participant’s compensation for the purchase of individual annuities (8% for eligible employees with a 5% participant contribution). The cost of the plan is funded as accrued.

The University is in compliance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).

LABOR RELATIONS

The University’s faculty, administration, staff and hourly personnel are not represented by any union nor is there any anticipation of unionization with respect to such groups. The University considers its relations with its employees to be excellent.

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ADMINISTRATION

The senior administrative officers of the University and certain biographical information with respect thereto are as follows:

John J. Petillo, President. Dr. Petillo was appointed President of the University in March 2011, after serving as Interim President for five months. Dr. Petillo came to the University in March, 2009 as Dean, John F. Welch College of Business and brought to the Welch School a rich background of leadership in both higher education and business. He has served as chancellor and chief executive officer of Seton Hall University and as president of the University of Medicine and Dentistry of New Jersey. He was regional president of First Union Insurance Services and president and chief executive officer of the Newark Alliance, a distinctive private-public partnership to enhance the economy and quality of life of the City of Newark. Dr. Petillo has earned a Bachelor of Arts degree in Classical Languages and a Master of Arts degree in Counseling from Seton Hall University, a Master of Divinity in Pastoral Theology from Darlington School of Theology, and a Professional Diploma in Counselor Education and a Ph.D. in Counseling and Personnel Services from Fordham University.

Thomas V. Forget, Vice President for Academic Affairs. Dr. Forget came to the University on August 1, 1996 as Executive Assistant to the President. In January 1998, he was appointed Interim Vice President of Institutional Advancement and also served as Interim Vice President for Academic Affairs prior to being appointed to his present position. Prior to joining the University, Dr. Forget was Principal of St. Raymond’s School in New York City and St. Eugene School in Yonkers, New York. Dr. Forget holds a Ph.D. and Masters degree from Fordham University.

Michael J. Kinney, Senior Vice President for Finance and Administration. Michael J. Kinney came to the University on April 18, 2005 as Senior Vice President for Finance and Administration. Since 1995, Mr. Kinney had served as a Trustee for Sacred Heart University. Mr. Kinney was the Chief Financial Officer and Senior Vice President of Finance and Strategic Planning for Kraft Foods International. Mr. Kinney also served as President of Philip Morris Capital Corporation, and held various positions at Bankers Trust, Continental Illinois and General Electric Capital Corporation. He received his Bachelor of Arts degree in Business Administration from Sacred Heart University in 1972 and his Master of Business Administration degree in Finance from the University of Bridgeport.

James M. Barquinero, Vice President for Enrollment Planning and Student Affairs. Mr. Barquinero came to the University in 1990 from Our Lady of the Elms College in Chicopee, Massachusetts. He previously served as Assistant Director of Admissions at St. Anselm College, Manchester, New Hampshire for four years. Mr. Barquinero received his B.A. in Economics/Business from St. Anselm College, Manchester, and his Masters in Human Services Administration from Antioch University.

David L. Coppola, Vice President for Strategic Planning and Administration. David L. Coppola came to the University in July of 1998 as Director of Conferences and Publications in the Center for Christian-Jewish Understanding. In October of 2000, he assumed the additional role of Executive Assistant to the President. In that position, he supported the President by assisting with the managing of the University’s Mission and Strategic Plan. In July of 2006, Dr. Coppola was promoted to Assistant Vice President for Administration and in December of 2009, Dr. Coppola was promoted to Vice President for Strategic Planning and Administration. Dr. Coppola holds a Bachelor of Science degree in secondary education from Seton Hall University; bachelor and master degrees in theology from St. Mary’s University; and his Ph.D. in Educational Administration from Fordham University. He is an instructor of Religious Studies in the College of Arts and Sciences.

Robert M. Hardy, Vice President for Human Resources. Mr. Hardy came to Sacred Heart University in 1999 as director of Training and Development before transitioning into the role of director of Human Resources. Robert M. Hardy, was promoted to Vice President for Human Resources at Sacred Heart University on March 5, 2007. Before joining Sacred Heart, Mr. Hardy worked as the manager of Employee Training and Development at G.E. Capital in Danbury, Conn. Prior to that, he worked at WITCO Corporation in Greenwich, Conn. as a Training and Development Manager, and at Sprint Communications in Purchase, N.Y, as a Customer Service Training Manager. Mr. Hardy earned his Bachelor of Arts degree in Corporate Communications at Central Connecticut State

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University, and a Master of Arts degree in Corporate Communications from Fairfield University. He also studied leadership development at Harvard University. He is a member of The Society of Human Resources Management (SHRM), the College and University Professional Association for Human Resources (CUPA-HR), and the American Society of Training and Development.

Michael L. Iannazzi, Interim Vice President for Institutional Advancement. Michael L. Iannazzi is the Interim Vice President for Institutional Advancement. He joined Sacred Heart University in 2005 with more than 15 years’ experience in communications, publishing and marketing in higher education and media. Before joining Sacred Heart, Mr. Iannazzi worked at the Yale School of Management. Prior to Yale, he worked at Doubleday, Inc., in New York, as an editor and marketing manager. Mr. Iannazzi holds a B.A. from Boston College and a Master of Divinity degree from the Divinity School at Harvard University.

Michael W. Higgins, Vice President for Mission & Catholic Identity. Dr. Higgins came to the University from St. Thomas University, where he was president and vice chancellor. From 1999 to 2006, he was president and vice chancellor of St. Jerome’s University in the University of Waterloo, Ontario, and he has held numerous appointments at other Canadian colleges and universities. He earned his bachelor’s degree in English from St. Francis Xavier University, magna cum laude, and his masters degree and Ph.D. in English from York University. He also earned a bachelor’s degree in Education from the University of Toronto.

Philip J. McCabe, Vice President for Finance. Philip J. McCabe joined Sacred Heart University as Assistant Vice President for Finance in 2000 with more than 23 years of experience in financial services. Before joining Sacred Heart, Mr. McCabe had been a vice president and controller at the Hartford Insurance Group and an associate general auditor at Mass Mutual. He received his Bachelor of Business Administration in Accounting from Sienna College and Masters of Science in Finance from Rensselaer Polytechnic Institute.

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CAMPUS MAP

1. Cambridge 10. Chapel of the Holy Spirit 19. Merton Hall. 2. Oakview 11. Edgerton Center for the Performing Arts 20. Taft Commons 3. Christian Witness Commons 12. University Commons Atrium & Courtyard 21. Oakwood Apartments 4. WSHU Public Radio Station 13. Humanities Center 22. Parkridge Apartments and Townhouses 5. Ryan Matura Library 14. The Student Commons 23. Campus Field 6. Administration Building 15. Park Avenue House 24. William H. Pitt Health and Recreation Center 7. Science Center Wing of Main Academic 16. The St. Martha Community Garden Center 17. Roncalli Hall 25. Curtis Hall 8. Campus Info Center and Entrance 18. Seton Hall 26. Scholars Commons 9. The Campus Center

FACILITIES, PLANT AND ASSETS

The University is located in the Town of Fairfield, County of Fairfield, Connecticut. The Academic Center, Administration Center and Curtis Hall were built in the mid-1950’s as a Catholic High School, Convent and Priests’ Residence, respectively.

The Library, built in 1968, is a three story structure which contains over 165,000 volumes. The Library is being equipped with computer capabilities, which allows access to on-line databases. The recently renovated Schine Auditorium is housed on the first floor of the Library.

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The Academic Center provides a comprehensive system of facilities which integrate state-of-the-art technology and equipment and the traditions of liberal arts learning. The Academic Center houses classrooms, computer and science laboratories, faculty offices, Student Life, various administrative offices and a dining hall.

The Administration Center houses the President’s offices, the Vice President for Academic Affairs, University College offices and College of Arts and Science Faculty offices. This building was renovated with proceeds from the Series D Bonds.

Curtis Hall contains Admissions, Financial Aid and other administrative offices.

Scholars Commons, which provide upper classmen housing, were constructed in 1992 and paid for from the proceeds from the Series A Bonds. The four, three-story buildings contain a total of 240 beds.

Seton Hall is a six story residence hall constructed in 1993 and paid for from the proceeds of the Series B Bonds. The building contains a total of 278 beds.

Merton Hall is a six story residence hall constructed in 1994 and financed with a portion of the proceeds of the Series C Bonds. The building contains a total of 248 beds.

Roncalli Hall is a ten story residence hall constructed in 1999 and located across Park Avenue from the University’s core campus. The building is 111,000 square feet with a design capacity to house 386 students, classrooms and faculty offices. The building was financed with the proceeds of the Series E Bonds.

Christian Witness Commons is a residence hall complex completed in 2004 and located on Park Avenue across from the Core Campus with a design capacity of over 400 students.

The William H. Pitt Health and Recreation Center is the University’s 144,000 square foot athletic facility which was also financed with a portion of the proceeds of the Series C Bonds in 1997.

The Chapel of the Holy Spirit was completed and dedicated in 2009. The Chapel is located at the southwest corner of the Quad on the Core Campus. The 14,000 square foot Chapel is a key visual and spiritual beacon which seats 500 in the main Chapel and 50 in the smaller Chapel of the Nativity.

As an interim solution to growth of the University Graduate Program, the Cambridge Campus was established in neighboring Trumbull, Connecticut which houses the College of Education and Health Professions.

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THE PROJECTS

Student Commons Building ($22.0M with $5M Equity Contribution) $17.0 million 5401 Park Avenue Property Purchase Refinance $ 8.5 million 17 Acre Trumbull Property Purchase $ 6.0 million Other capital projects on the main campus $ 4.0 million Refunding Series C Bonds $ 4.2 million

Student Commons Building - The Student Commons Building is a free-standing 46,000 square foot student services building. It connects the upper and lower campus and acts as a hub for student life at the crossroads of the campus. The building will contain a full service kitchen to provide meal service for 250 in the large cafeteria and 50 in a smaller upscale dining room. The Student Commons will also have additional programming such as a pub in the basement with a 150- person capacity as well as a large bookstore (6,000 sq. ft.), a high-tech presentation room, and a mezzanine level that will feature lounges, meeting spaces and social learning conference rooms for students.

Miscellaneous capital projects located on the Main Campus, are also planned that include a renovation of the library, including mechanical equipment, renovation of the Network Operations Center, and the construction and equipping of a new softball field.

The University currently has a satellite campus in nearby Trumbull, CT, three miles from the main campus, which houses the College of Education and Health Professions, the Art Department and a number of administrative offices. The University is purchasing a seventeen (17) acre parcel of property in Trumbull, near the satellite campus, with existing office, retail and storage buildings, which will ultimately be razed to make room for future University expansion. Across Park Avenue from the main campus, the University has purchased a number of residential properties with the long term goal of creating a “Learning Corridor” that extends from the Merritt Parkway down Park Avenue.

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STUDENT ENROLLMENT

The University’s enrollment consists of three distinct groups of students: full-time undergraduate, part-time undergraduate and graduate. For the fiscal year 2010, full-time undergraduate students comprised 60% of the total student body and part-time undergraduate students comprised 10% of the student body. Both populations can select among 28 different academic programs of study. The University offers graduate degree and certificate programs in the fields of education, business, nursing, physical therapy, occupational therapy, chemistry, religious studies and computer science and accounts comprising 30% of the University’s student enrollment.

Student life involves a wide array of student activities including academic associations, honor societies, performing arts, multicultural and diversity groups, and service organizations all in all in effort to compliment learning inside and outside the classroom. The University also maintains 31 varsity athletic teams for men and women competing at the National Collegiate Athletic Association’s Division I level.

Enrollment. The following table shows the University’s enrollment (undergraduate and graduate) for the current and prior four academic years. Student Enrollment Data

Fall Fall Fall Fall Fall 2006 2007 2008 2009 2010 Total headcount enrollment 5,775 5,801 5,778 5,899 6,131 Total FTE enrollment 4,815 4,970 4,973 5,165 5,308 Undergraduate headcount 4,203 4,226 4,154 4,123 4,161 Undergraduate FTE 3,719 3,848 3,851 3,811 3,839 Full-time undergraduates FTE 3,406 3,465 3,533 3,531 3,506 Part-time undergraduates FTE 313 383 318 280 333 Graduate headcount 1,572 1,575 1,624 1,776 1,974 Graduate FTE 1,096 1,122 1,122 1,354 1,469

Undergraduate Applications and Admissions. Application, acceptance and enrollment information for freshmen and transfers for the last five academic years 2006 through 2010 are listed below:

Freshman and Transfer Applications

Fall Fall Fall Fall Fall Admissions 2006 2007 2008 2009 2010 Freshman Applications 6,219 7,528 7,569 7,343 7,568 Freshman Acceptances 3,885 4,662 4,925 4,855 4,832 Percent Accepted 62.5% 61.9% 65.1% 66.1% 63.8% Freshman Enrollments 943 966 989 912 989 Percent Enrolled 24.3% 20.7% 20.1% 18.8% 20.5% Transfer Applications 542 493 422 403 408 Transfer Acceptances 380 312 335 328 314 Percent Accepted 70.1% 63.3% 79.4% 81.4% 77.0% Transfer Enrollments 205 136 157 161 139 Percent Enrolled 53.9% 43.6% 46.9% 49.1% 44.3%

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The average SAT scores, percentage in top 20% of high school class and percentage from Connecticut, for undergraduate freshmen enrolling in academic years 2006 through 2010 were as presented in the chart below. SAT scores became optional for freshmen entering in 2010.

Student Quality Indicators

Fall Fall Fall Fall Fall 2006 2007 2008 2009 2010 Mean SAT scores (Total) 1,082 1,070 1,065 1,075 1,060 Freshman in top 20% of class 39.0% 35.0% 22.0% 29.0% 37.0%

The following table presents information on the geographic distribution of recent freshman classes.

Geographic Distribution

Fall Fall Fall Fall Fall 2006 2007 2008 2009 2010 Connecticut Percent 31% 26% 30% 26% 27% Out-of-State Percent 65% 71% 66% 70% 70% International Percent 4% 3% 4% 4% 3% Total Percent 100% 100% 100% 100% 100%

STUDENT HOUSING

The following table details the University’s current utilization of residence halls. The University houses approximately 20% of the resident students in leased facilities. These leases are typically five year leases with staggered renewal dates to provide the University the flexibility to respond to changes in student housing needs.

Student Housing Information

Fall Fall Fall Fall Fall Occupancy level 2006 2007 2008 2009 2010 Resident Students 2,242 2,315 2,199 2,075 2,075 Occupancy 2,209 2,357 2,357 2,024 1,963

Occupancy Rate 101.5% 98.2% 93.3% 102.5% 105.7%

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TUITION AND FEES

Tuition and fees for full-time undergraduates at the University for the current and prior four academic years are summarized below:

Tuition and Fee Charges

Fall Fall Fall Fall Fall 2006 2007 2008 2009 2010 Annual Tuition and Fees $25,400 $27,150 $28,990 $30,298 $31,440 Annual Room and Board 10,272 10,800 11,330 11,684 11,760 Total $35,672 $37,950 $40,320 $41,982 $43,200

COMPETITION AND COMPARATIVE TUITION, ROOM AND BOARD

Competing Institutions

The institutions that the University competes with for students within the New England area primarily are: Fairfield University, Stonehill College, Providence College, Quinnipiac University and University of Hartford. In the metro New York area the competing institutions primarily are: Iona College and Marist College. The nearest competing program in Health Science at a Catholic university is at the University of Scranton.

The following table sets forth the University’s relative position compared to other institutions with whom the University compete for students regarding tuition, room and board charges for the academic year. The table was prepared by the University using information obtained directly from the colleges and universities listed below:

Total Tuition, Institution Room & Board Providence College $51,125 Fairfield University $50,780 Quinnipiac University $46,980 University of Scranton $46,488 Stonehill College $45,230 Sacred Heart University $43,780 St. Michael’s College $43,530 Salve Regina University $42,750 Assumption College $41,565 University of Hartford $41,364 Iona College $40,650 Marist College $39,326 Note: All competitive institutions in the above table are private institutions.

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FINANCIAL OPERATIONS

Management Discussion & Analysis

Over the most recent five year period presented below, the University has experienced steady revenue growth, consistent operating margins and substantial growth in total net assets. Net tuition has increased 32% since 2006, driven by growth in full time graduate and undergraduate programs and tuition rate increases that have averaged 6% (4% in the last two years), while maintaining a favorable tuition rate level compared to our peer institutions. The net tuition reflects increased financial aid provided to students in response to the recent economic downturn. This increase in financial aid was funded by reducing expenses and reallocating resources. Disciplined financial practices throughout this period have enabled the University to maintain operating margins of 10-12% and increase total net assets 86% since 2006.

The University is in the midst of a strategic plan initiative to diversity revenue by increasing the University’s graduate program offerings. Three new programs began enrolling students this year, with one to three programs expected per year going forward. Additionally, three existing graduate programs began being offered on- line as part of a multi-year strategy to expand access to the University.

Budgeting Process. The University’s annual budget is based on income estimates of tuition and fees, endowment income, gifts, grants and miscellaneous other income and expenditure estimates, based on the prospective costs of the academic and administrative sectors of the University. In the fall of each year, the Budget Review Committee begins a series of meetings which will result in the recommendation of a balanced budget to the President’s Council. The Budget Review Committee is comprised of representatives, including faculty members, appointed by each Vice President and the President. Working within the guidelines of the University’s Strategic Plan and general parameters set by the President, the Committee reviews budget requests. After extensive review, a budget is recommended to the President’s Council. The President’s Council, in turn, may accept or modify the recommendations of the Budget Review Committee. The President’s Council then recommends the budget to the President. The President’s recommendation is presented to the Finance Committee of the Board of Trustees. The full Board of Trustees formally approves an operating budget at its May meeting.

Budget Contingencies. The Operating Budget is developed to generate a 10-11% operating margin. Additionally, within the budget, reserves equal to 3- 4% of the budget, are established in the event of budget shortfalls in enrollment, residence hall occupancy, financial aid or expense issues which surface after the budget process has concluded.

In the subsequent fall, the budget may be revised based on actual enrollment and any other income or expenditure items requiring adjustment. Budget performance is monitored on a monthly basis with the distribution of departmental reports, including current activity, actual versus budget, and past historic performance. If actual revenue and expense forecasts indicate the reserves will not be needed, the funding is reallocated to University non-occurring and/or capital projects.

The table below shows the historical debt service coverage for the University for the last four fiscal years ended June 30, 2007 through June 30, 2010.

Debt Service Coverage

Fiscal Year Ended June 30, Description 2007 2008 2009 2010 Increase in unrestricted net assets $22,084,990 $10,099,024 ($1,714,768) $25,341,832 Depreciation and amortization 7,395,545 8,295,677 9,287,632 10,481,912 Interest Expense 4,618,268 4,791,532 4,371,272 3,724,158 Unrealized (gains)/losses (5,233,493) 6,025,830 9,585,066 (5,440,580) Income available for debt service $28,865,310 $29,212,063 $21,529,202 $34,107,322

Actual debt service * $8,636,308 $8,885,192 $9,256,112 $11,549,835 Historical coverage of actual debt service 3.34x 3.29x 2.33x 2.95x * Includes principal payments on bonds and notes, interest expense, and payments on capital lease obligations.

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The following tables set forth a summary of current funds, revenues, expenditures and mandatory transfers of the University for fiscal years ended June 30, 2006 through 2010.

2006 2007 2008 2009 2010 Unrestricted revenues and gains: Tuition and fees $95,418,154 $106,922,08 $116,658,966 $128,119,788 $134,124,267 Less: University sponsored financial aid (20,191,547) (23,083,098) (25,886,412) (31,231,491) (36,291,470) Externally funded financial aid (3,220,216) (3,013,498) (3,862,197) (4,009,236) (3,018,671) Net tuition and fees 72,006,391 80,825,488 86,910,357 92,879,061 94,814,126 Auxiliary activities 23,394,464 23,609,501 24,789,051 25,065,973 23,691,718 Less – University sponsored financial aid (477,405) (563,277) (642,123) (703,990) (734,809) Net auxiliary activities 22,917,059 23,046,224 24,146,928 24,361,983 22,956,909 Contributions 1,845,390 1,717,154 5,477,323 (1) 4,617,562(1) 1,180,887 Investment return 4,660,835 10,087,073 853,529 789,514 1,244,063 Other 3,381,019 3,493,756 2,764,919 3,258,487 3,603,846 Total unrestricted revenues and 104,810,694 119,169,695 120,153,056 125,906,607 123,799,831 gains Net assets released from restrictions 11,938,722 9,422,308 9,753,865 9,935,933 9,905,945 Total unrestricted revenues and other 116,749,416 128,592,003 129,906,921 135,842,540 133,705,776 support

Expenses: Educational program services: Instruction 31,820,557 33,881,850 39,506,373 42,951,848 41,920,276 Student services 16,318,728 17,676,331 18,077,761 19,672,645 18,814,623 Academic Support 8,029,360 8,751,493 8,619,280 8,665,586 8,757,172 Public service radio station 3,699,224 3,895,306 4,145,885 4,311,422 3,980,563 Auxiliary activities 21,434,577 21,652,402 22,940,459 23,501,468 23,174,334 Institutional supporting services 21,927,650 20,649,631 21,100,407 22,765,992 22,628,154 Total expenses 103,230,096 106,507,013 114,390,165 121,868,961 119,275,122

Increase in unrestricted net assets before cumulative effect of change in accounting principle 13,519,320 22,084,990 15,516,756 13,973,579 14,430,654 Investment return less portion designated for operations (2) - - (2,213,310) (12,930,335) 7,169,848 Restructuring costs - - - (2,758,012) - Net asset released from restrictions - - - - 3,741,330 Cumulative effect of change in accounting principle (515,202) - (3,204,422) - - Total nonoperating activities (515,202) - (5,417,732) (15,688,347) 10,911,178 Increase in unrestricted net assets $13,004,118 $22,084,990 $10,099,024 ($1,714,768) $25,341,832

(1) 2008 and 2009 included non-reoccurring gifts of $3.6 million and $3.1 million respectively, as a result of the capital campaign. (2) Measure of operations calculation was adopted in 2008.

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Student Financial Assistance. The University’s financial assistance programs operate on the philosophy that the primary responsibility for financing post-secondary education rests with the student and his or her family’s ability to meet those costs.

At present, approximately 90% of the University’s students receive assistance through scholarships, grants, student loans, part-time employment, and other family financial alternatives. Combining the University’s own resources with a variety of federal and state financial assistance programs develops financial assistance packages. To assist students and their families in financing higher education the amount of institutional assistance at the University has increased from $20.1 million in 2006 to $37.3 million in 2010.

A summary of student financial assistance for the fiscal years 2006 through 2010 is presented below:

2006 2007 2008 2009 2010 Pell Grant $1,238,176 $1,268,384 $1,369,465 $1,707,511 $2,747,875 Supplemental Educational Opportunity Grant (SEOG) 300,179 282,284 290,302 278,281 258,236 Perkins Loans 54,300 59,300 19,000 30,000 41,800 Work Study 410,858 442,965 490,866 546,625 800,000 Stafford Loans/Direct Loans 25,336,232 25,584,514 26,923,390 32,670,861 36,602,096 Other Federal Programs - 96,073 113,951 594,491 280,806 Total Federal Programs 27,339,745 27,733,520 29,206,974 35,827,769 40,730,813

State funds from Connecticut Independent College Student Grant Program 1,679,964 1,629,863 2,375,212 2,379,953 2,353,743 Other State Programs 366,309 196,100 278,200 229,245 229,415 2,046,273 1,825,963 2,653,412 2,609,198 2,583,158

Total Federal and State 29,386,018 29,559,483 31,860,386 38,436,967 43,313,971

University Scholarship & Grants 20,799,057 23,786,647 26,683,976 32,108,579 37,279,612

Total Assistance $50,185,075 $53,346,130 $58,544,362 $70,545,546 $80,593,583

Percentage of University Assistance to Total Assistance 41.4% 44.6% 45.6% 45.5% 46.3%

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ENDOWMENT AND SIMILAR FUNDS

Net Assets 2006 2007 2008 2009 2010 Unrestricted: Designated principally as financial reserve $43,376,544 $59,100,133 $63,002,578 $55,031,120 $66,594,062 Net Investment in plant 12,521,810 18,883,211 25,079,889 31,336,579 45,115,469 Total Unrestricted 55,898,354 77,983,344 88,082,467 86,367,699 111,709,531

Temporarily Restricted 6,441,430 8,756,109 15,961,999 14,032,230 11,255,210 Permanently Restricted 10,317,638 11,637,667 11,733,992 12,042,207 12,196,465 Total net assets $72,657,422 $98,377,120 $115,778,458 $112,442,136 $135,161,206

The University reports information regarding its financial position and activities according to three classes of net assets as follows: ƒ Permanently restricted net assets contain donor-imposed restrictions that stipulate the resources be maintained permanently, but permits the University to use the income from the resources for either specified or unspecified purposes. ƒ Temporarily restricted net assets contain donor-imposed restrictions that permit the University to use or expend the assets as specified. The restrictions are satisfied either by the passage of time or by action of the University. ƒ Unrestricted net assets are not restricted by donors, or the donor-imposed restrictions have expired. The University's Board of Trustees has designated portions of the unrestricted net assets for fixed assets and as a financial reserve (quasi-endowment).

Investments The University’s investments are primarily composed of Board designated and endowed funds.

Fiscal Year Total* Ending June 30 Investments 2001 $20,400,433 2002 $24,032,004 2003 $29,706,994 2004 $37,276,132 2005 $45,320,735 2006 $57,616,433 2007 $73,445,948 2008 $82,425,603 2009 $70,213,766 2010 $82,855,801

* As of May 31, 2011, the value of the investments in the University’s unaudited financial statements was approximately $110,000,000.

The University has adopted investment and spending policies for Board designated endowed assets to maximize investment return within reasonable and prudent levels of risk, and provide a predictable stream of income to the University. The current target asset allocation for the University investments is 70% equities and 30% fixed income and cash. The Investment Committee and management review investment manager performance on a monthly basis. The University’s spending rate from endowed assets is 4% of the fair value of the permanently restricted endowment using the average market value for the prior three years; provided that market value exceeds the endowment contributions adjusted for inflation. For the Board designated assets, the dividends and interest (typically 1-2%) augment the University budget to fund non-reoccurring and/or capital projects.

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Capital Campaign and Annual Giving

The University completed the first phase of its first capital campaign in 2010. This first phase yielded $23.8 million. This initial campaign was to raise funds for a new Chapel, other building projects and the endowment. The $20 million Chapel of the Holy Spirit was opened in September 2009. The University is preparing to enter their next major capital campaign in celebration of its 50th anniversary in 2013.

On January 25, 2006, the College of Business was renamed the John F. Welch College of Business for the former Chairman and CEO of the General Electric Company. As part of his commitment to the University, Mr. Welch is actively involved with the John F. Welch College of Business through ongoing appearances, advice and guidance.

The University’s capital campaign annual fundraising efforts are coordinated through the University’s division of Institutional Advancement who is responsible for fundraising, public relations, alumni relations, special events and related gift reporting and stewardship.

Annual Contributions Unrestricted and Restricted

2006 2007 2008 2009 2010 $5,160,163 $4,765,285 $5,077,116 $4,704,592 $5,730,312

COMMITMENTS

Lease Obligations. The University’s minimum annual rental commitments under non cancelable operating leases for office space, dormitories, equipment and automobiles was as follows as of June 30, 2010:

2011 $ 6,259,118 2012 5,111,900 2013 2,404,788 2014 1,432,482 Total $ 15,208,288

Food Services. The University has a contract with Chartwell’s to operate the food service facilities maintained for the students, employees and invited guests of the University. The contract expires on June 30, 2021.

Bookstore. The University has a contract with Follett Higher Education Group, Inc. to manage the University bookstore. The contract expires on July 31, 2020.

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NOTES AND BONDS PAYABLE

Notes payable at June 30, 2010 were comprised of the following:

Principal Maturity Balance Borrowings for land and renovations Various $26,720,608

Bank lines of credit None outstanding

Bonds payable as of June 30, 2010 included the following:

Final Principal Issue Maturity Balance Series C Bonds 2026 $ 4,410,000 Series E Bonds 2028 $60,185,000 Series F Bonds 2033 $20,205,000

In accordance with the Indentures for the above referenced bond issues, the University maintains debt service funds with the bank trustee and deposits moneys sufficient to pay interest and principal on the bonds during the succeeding twelve months.

INSURANCE

The University maintains a comprehensive risk management program for both casualty and liability risks which includes a retention and reinsurance program and insurance against such risks through several different insurance carriers. Insurance coverage includes: (1) comprehensive all-risk coverage for buildings and their contents at a total replacement value of approximately $194,315,651; (2) comprehensive general liability insurance against personal injury and property damage plus a $35,000,000 umbrella policy; (3) a blanket employee fidelity policy; (4) automobile liability insurance; (5) errors and omissions policy covering all trustees and employees; (6) professional liability policy covering allied health students; (7) various specialized policies covering art exhibits, sports teams, and miscellaneous equipment.; (8) Builder’s Risk; (9) Business Interruption insurance, and (10) workers’ compensation in compliance with state law.

LITIGATION

There are various lawsuits and other legal proceedings against the University. Management is of the opinion that the ultimate disposition of such litigation will not have a material adverse effect on the University’s financial statements.

This letter and the information contained herein, together with the University’s audited financial statements, are submitted to the Authority and the Underwriter for inclusion in the Official Statement related to the Authority’s Revenue Bonds, Sacred Heart University Issue, Series G. The use of this letter by the Authority and the Underwriter in connection with the initial sale of the Bonds, and the execution and delivery thereof by its President and its Senior Vice President for Finance and Administration have been duly authorized by the Board of Trustees of the University.

SACRED HEART UNIVERSITY, INCORPORATED

By: John J. Petillo John J. Petillo President

By: Michael J. Kinney Michael J. Kinney Senior Vice President for Finance & Administration

A- 19 (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX B

Financial Statements of the Institution

(THIS PAGE LEFT BLANK INTENTIONALLY)

SACRED HEART UNIVERSITY, INC. Financial Statements June 30, 2010 and 2009 (With Independent Auditors’ Report Thereon)

KPMG LLP 345 Park Avenue New York, NY 10154

Independent Auditors’ Report

The Board of Trustees Sacred Heart University, Inc.

We have audited the accompanying balance sheets of Sacred Heart University, Inc. (the University) as of June 30, 2010 and 2009, and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the University’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sacred Heart University, Inc. as of June 30, 2010 and 2009, and the changes in its net assets and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

October 15, 2010

KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity. SACRED HEART UNIVERSITY, INC. Balance Sheets June 30, 2010 and 2009

Assets 2010 2009 Cash and cash equivalents $ 14,756,919 14,714,790 Accounts receivable: Students, net of allowance of $5,298,597 in 2010 and $4,580,118 in 2009, respectively 2,219,965 1,907,052 Contributions and other, net (note 3) 5,288,958 7,058,638 Loans to students, net of allowance of $93,647 in 2010 and 2009 212,548 195,263 Land held for sale (note 4) 3,350,000 3,350,000 Prepaid expenses 2,813,799 1,515,274 Investments (note 4) 82,855,801 70,213,766 Interest in split-interest agreements 225,455 229,484 Funds held by bond trustee (notes 4 and 5) 10,135,759 10,382,167 Other assets (note 8) 2,318,631 2,487,588 Land, buildings, and equipment, net (note 6) 144,886,226 136,379,739 Total assets $ 269,064,061 248,433,761 Liabilities and Net Assets Liabilities: Accounts payable and accrued liabilities $ 17,444,065 18,657,035 Deferred revenue 4,713,499 4,019,478 Government grants refundable – student loans 236,966 197,690 Capital lease obligations (notes 6 and 7) 1,331,008 938,448 Bonds and notes payable (note 8) 110,177,317 112,178,974 Total liabilities 133,902,855 135,991,625 Net assets (note 9): Unrestricted 111,709,531 86,367,699 Temporarily restricted 11,255,210 14,032,230 Permanently restricted 12,196,465 12,042,207 Total net assets 135,161,206 112,442,136 Total liabilities and net assets $ 269,064,061 248,433,761

See accompanying notes to financial statements.

2 SACRED HEART UNIVERSITY, INC. Statements of Activities Years ended June 30, 2010 and 2009

2010 2009 Changes in unrestricted net assets: Operating revenues: Tuition and fees $ 134,124,267 128,119,788 Less: University-sponsored financial aid (36,291,470) (31,231,491) Externally funded financial aid (3,018,671) (4,009,236) Net tuition and fees 94,814,126 92,879,061 Auxiliary activities 23,691,718 25,065,973 Less University-sponsored financial aid (734,809) (703,990) Net auxiliary activities 22,956,909 24,361,983 Contributions 1,180,887 4,617,562 Investment return, net (note 4) 1,244,063 789,514 Other, net 3,603,846 3,258,487 Net assets released from restrictions (note 10) 9,905,945 9,935,933 Total operating revenues 133,705,776 135,842,540 Operating expenses: Instruction 41,920,276 42,951,848 Student services 18,814,623 19,672,645 Academic support 8,757,172 8,665,586 Public service radio station 3,980,563 4,311,422 Auxiliary activities 23,174,334 23,501,468 Institutional supporting services 22,628,154 22,765,992 Total operating expenses 119,275,122 121,868,961 Increase in unrestricted net assets from operations 14,430,654 13,973,579 Nonoperating activities: Investment return in excess of (less than) amounts designated for operations (note 4) 7,169,848 (12,930,335) Restructuring costs — (2,758,012) Net asset released from restrictions (note 10) 3,741,330 — Total nonoperating activities 10,911,178 (15,688,347) Increase (decrease) in unrestricted net assets 25,341,832 (1,714,768)

3 (Continued) SACRED HEART UNIVERSITY, INC. Statements of Activities Years ended June 30, 2010 and 2009

2010 2009 Changes in temporarily restricted net assets: Contributions $ 4,865,300 5,261,926 Federal grants and contracts 2,033,492 1,813,780 State grants and contracts 2,439,824 2,549,021 Investment return, net (note 4) 1,531,639 (1,618,563) Net assets released from restrictions (note 10) (13,647,275) (9,935,933) Decrease in temporarily restricted net assets (2,777,020) (1,929,769) Changes in permanently restricted net assets: Contributions 153,287 315,775 Gain (loss) on interest in split-interest agreements 971 (7,560) Increase in permanently restricted net assets 154,258 308,215 Change in net assets 22,719,070 (3,336,322) Net assets: Beginning of year 112,442,136 115,778,458 End of year $ 135,161,206 112,442,136

See accompanying notes to financial statements.

4 SACRED HEART UNIVERSITY, INC. Statements of Cash Flows Years ended June 30, 2010 and 2009

2010 2009 Cash flows from operating activities: Change in net assets $ 22,719,070 (3,336,322) Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization – buildings, equipment, and other assets 10,481,912 9,287,632 Provision for bad debts 718,479 130,719 Contributed land — (1,400,000) Net (appreciation) depreciation in fair value of investments (7,143,059) 16,282,809 Contributions for long-term investment (1,285,533) (1,350,317) Change in interest in split-interest agreements 4,029 7,560 Changes in operating assets and liabilities: Student accounts receivable (1,031,392) (538,017) Contributions and other receivables 1,769,680 1,487,270 Prepaid expenses and other assets (1,129,568) (298,939) Accounts payable and accrued liabilities, net of investing amounts (1,005,533) 1,904,600 Deferred revenue 694,021 (438,854) Net cash provided by operating activities 24,792,106 21,738,141 Cash flows from investing activities: Additions to land, buildings and equipment (18,988,399) (19,296,685) Accounts payable and accrued liabilities for construction (207,437) 1,721,345 Purchases of investments (118,532,501) (95,385,039) Proceeds from sales of investments 113,033,525 91,314,067 Student loans issued, net (17,285) (18,346) Net cash used in investing activities (24,712,097) (21,664,658) Cash flows from financing activities: Contributions for long-term investment 1,285,533 1,350,317 Decrease in funds held by bond trustee 246,408 343,799 Borrowings under capital lease obligations 2,356,165 1,175,528 Payments on capital lease obligations (1,963,605) (1,324,020) Borrowings under notes payable 4,500,000 7,500,000 Principal payments on bonds and notes payable (6,501,657) (3,560,820) Government grants refundable – student loans 39,276 34,063 Net cash (used in) provided by financing activities (37,880) 5,518,867 Net increase in cash and cash equivalents 42,129 5,592,350 Cash and cash equivalents: Beginning of year 14,714,790 9,122,440 End of year $ 14,756,919 14,714,790 Supplemental information: Interest paid (interest expense: $3,724,158 and $4,371,272, respectively) $ 3,815,174 4,602,420

See accompanying notes to financial statements.

5 SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

(1) The University Sacred Heart University, Inc. (the University) is an independent coeducational institution of higher learning located primarily in Fairfield, Connecticut. The University has been granted institutional accreditation by the New England Association of Schools and Colleges. The University’s academic structure has four colleges: The College of Arts and Sciences, The John F. Welch College of Business, The College of Education and Health Professions, and The University College. Baccalaureate and associate degrees are offered in 26 majors, 30 minors, two associates programs, master degrees programs in 11 fields, and one doctoral program at the main campus and two major extension sites in Connecticut and a wholly owned subsidiary in Luxembourg.

The University is exempt from federal income taxes under Section 501(a), as an organization described in Section 501(c)(3) of the Internal Revenue Code, as amended. Accordingly, it is not subject to income taxes except to the extent it has taxable income from activities that are not related to its exempt purpose. The University recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. No provision for income taxes was required for fiscal 2010 or 2009.

(2) Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying financial statements have been prepared on the accrual basis of accounting.

(b) Net Asset Classifications The University reports information regarding its financial position and activities according to three classes of net assets: permanently restricted, temporarily restricted, and unrestricted.

Permanently restricted net assets contain donor-imposed restrictions that stipulate the resources be maintained permanently, but permit the University to use the income from the resources for either specified or unspecified purposes.

Temporarily restricted net assets contain donor-imposed restrictions that permit the University to use or expend the assets as specified. The restrictions are satisfied either by the passage of time or by action of the University.

Unrestricted net assets are not restricted by donors, or the donor-imposed restrictions have expired. The University’s Board of Trustees has designated a portion of the unrestricted net assets for fixed assets and long-term investment (quasi-endowment).

Revenues are reported as increases in unrestricted net assets unless their use is limited by donor- imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets and liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law.

(c) Measure of Operations In the statements of activities, the University includes in operations all support, revenue, and expenses that are an integral part of its program and supporting activities. Investment return,

6 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

including net realized and unrealized gains and losses, earned in excess of the University’s authorized spending policy, and other nonrecurring activities are recognized as nonoperating activities.

(d) Cash and Cash Equivalents Cash and cash equivalents include highly liquid short-term investments with initial maturities of three months or less, with the exception of cash and cash equivalents held for long-term investment purposes.

(e) Investments Investments are presented in the financial statements at fair value determined on the basis of quoted market prices.

Investment return (including net realized and unrealized gains or losses) is allocated between unrestricted and temporarily restricted net assets, based upon donor-imposed restrictions or the absence thereof.

(f) Deferred Revenue The University recognizes revenue from student tuition and fees within the fiscal year in which the academic term is predominantly conducted. Amounts collected in advance of such revenue recognition are deferred.

(g) Land, Buildings, and Equipment Land, buildings, and equipment are recorded at cost on the date of acquisition or fair value on the date of donation. Depreciation is computed on a straight-line basis over the estimated useful lives of the related plant assets as follows: buildings, 30 years; leasehold improvements, 30 years or the term of the lease, whichever is shorter; land improvements, 20 years; equipment and furniture, 5 or 7 years; art, 20 years; and library books, 10 years.

(h) Contributions Contributions, including unconditional promises to give, are recognized as revenues in the period received. Conditional contributions are recognized as revenue when the conditions on which they depend have been substantially met.

The University records contributions as temporarily restricted if they are received with donor stipulations that limit their use through purpose or time restrictions. When donor-imposed restrictions expire, that is, when a purpose restriction is fulfilled or a time restriction ends, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Contributions to be received after one year are discounted at an appropriate discount rate commensurate with the risk involved. Amortization of discount is recorded as additional contributions revenue in accordance with donor- imposed restrictions, if any, on the contributions. An allowance for uncollectible contributions receivable is provided based upon management’s judgment including such factors as prior collection history, type of contribution and nature of fund-raising activity. Government grants are accounted for

7 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

as temporarily restricted contributions. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulation, the University reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service.

The University has interests in several charitable remainder trusts and other split-interest agreements. The interests are carried at the present value of the estimated future benefit to be received when the trust assets are distributed using a discount rate of 6.8%.

(i) Functional Allocation of Expenses The costs of providing University programs and supporting services have been summarized on the statements of activities. Accordingly, certain costs (depreciation, interest, and operation and maintenance of plant) have been allocated to functional categories based on building square footage applicable to that specific function.

Institutional supporting services include total fund-raising costs of $2,003,909 in fiscal year 2010 and $2,286,819 in fiscal year 2009. Fund-raising activities of the University include salaries and employee benefits of program staff that develop proposals for fund-raising; solicit contributions for those needs and for endowment purposes from individuals, corporations, government agencies and foundations; and conduct specific fund-raising events. Fund-raising costs are expensed as incurred.

(j) Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(k) Fair Value Measurements Certain of the University’s assets are reported at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three levels of inputs that may be used to measure fair value:

• Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quotes prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

8 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

(l) Financial Instruments The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximates fair value. The fair value of investments and long-term debt is discussed elsewhere in these notes.

(3) Contributions and Other Receivables Contributions and other receivables as of June 30, 2010 and 2009 are summarized as follows:

2010 2009 Unconditional promises expected to be collected: Within one year $ 2,126,878 2,294,915 Between one and five years 1,807,819 3,428,020 After 5 years 1,200,000 1,225,000 5,134,697 6,947,935 Less: Allowance for uncollectible amounts (67,610) (95,648) Discount to present value (rates ranging from 2% to 6%) (580,038) (754,979) Net contributions receivable 4,487,049 6,097,308 Other receivables 801,909 961,330 $ 5,288,958 7,058,638

Amounts receivable from five donors represented 81% of gross contributions receivable as of June 30, 2010 and 2009.

(4) Investments Investments, at fair value, comprised the following as of June 30:

2010 2009 Money market $ 7,978,924 6,304,263 Short-term investments 118,030 2,596,465 Equity securities 52,916,637 39,997,770 Government securities – U.S. treasuries 7,531,931 9,288,436 Government securities – mortgage pools 5,998,454 4,603,572 Asset–backed securities 2,487,898 — Corporate bonds 5,823,927 7,423,260 $ 82,855,801 70,213,766

9 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

Investment return was as follows for the years ended June 30:

2010 Temporarily Unrestricted restricted Total Investment earnings, net of $280,725 of expenses $ 1,985,110 545,972 2,531,082 Other interest income 270,143 1,266 271,409 Net appreciation in fair value of investments 6,158,658 984,401 7,143,059 Total return on investments 8,413,911 1,531,639 9,945,550 Less portion designated for operations (1,244,063) — (1,244,063) $ 7,169,848 1,531,639 8,701,487

2009 Temporarily Unrestricted restricted Total Investment earnings, net of $297,156 of expenses $ 1,175,336 520,302 1,695,638 Other interest income 825,444 2,343 827,787 Net depreciation in fair value of investments (14,141,601) (2,141,208) (16,282,809) Total return on investments (12,140,821) (1,618,563) (13,759,384) Less portion designated for operations (789,514) (474,106) (1,263,620) $ (12,930,335) (2,092,669) (15,023,004)

10 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

The following table presents the fair value hierarchy for those University assets measured at fair value at the balance date. No liabilities are measured at fair value.

2010 Level 1 Level 2 Level 3 Investments: Money market $ 7,978,924 — — Short-term investments 118,030 — — Equity securities 52,916,637 — — Corporate bonds 5,823,927 — — Government securities - U.S. treasuries 7,531,931 — — Government securities - mortgage pools — 5,998,454 — Asset-backed securities — 2,487,898 — Land held for sale — — 3,350,000 Funds held by bond trustee: Money market 6,845,529 — — U.S. Treasuries 3,290,230 — —

2009 Level 1 Level 2 Level 3 Investments: Money market $ 6,304,263 — — Short-term investments 2,596,465 — — Equity securities 39,997,770 — — Corporate bonds 7,423,260 — — Government securities - U.S. treasuries 9,288,436 — Government securities - mortgage pools — 4,603,572 — Land held for sale — — 3,350,000 Funds held by bond trustee: Money market 4,432,735 — — Guaranteed investment contracts — 5,949,432 —

11 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

(5) Funds Held by Bond Trustee In connection with the issuance of Connecticut Housing and Education Facilities Authority (CHEFA) revenue bonds (note 8), the University is required to maintain certain funds with a bond trustee. Funds held by the bond trustee as of June 30, 2010 and 2009 consisted of the following:

2010 2009 Series C: Debt service reserve fund $ 889,645 894,534 Series E: Debt service reserve fund 8,760,200 8,983,066 Series F: Debt service reserve fund 485,914 347,343 Capital construction fund — 157,224 $ 10,135,759 10,382,167

Funds held by the trustee consisted of the following at June 30:

2010 2009 Money market $ 6,845,529 4,432,735 Government securities 3,290,230 — Guaranteed investment contracts — 5,949,432 $ 10,135,759 10,382,167

(6) Land, Buildings, and Equipment Land, buildings, and equipment consisted of the following at June 30:

2010 2009 Land and land improvements $ 21,489,733 20,829,788 Buildings 114,113,022 87,337,509 Leasehold improvements 47,512,110 44,100,699 Equipment, furniture, and art (including $2,356,165 and $1,175,528 under capital leases) 41,199,374 36,318,706 Library books 10,106,433 9,474,755 Construction in progress 4,386,496 21,783,345 Total 238,807,168 219,844,802 Less accumulated depreciation and amortization (93,920,942) (83,465,063) $ 144,886,226 136,379,739

12 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

(7) Capital Lease Obligations The University leases copiers, computer equipment, and furniture under capital lease arrangements, which extend through 2011. All leases are collateralized by the leased equipment and furniture.

Future minimum lease payments and the present values of such payments as of June 30 are as follows:

2010 2009 2010 $ — 814,211 2011 1,332,792 154,711 Total payments 1,332,792 968,922 Less imputed interest (1,784) (30,474) Present value of obligations under capital leases $ 1,331,008 938,448

(8) Bonds and Notes Payable (a) Notes and Construction Loan Payable Maturity 2010 2009 Land and leasehold improvements notes Various $ 12,944,447 11,947,195 Construction loan 2012 13,776,161 14,500,000 $ 26,720,608 26,447,195

During fiscal year 2010, the University obtained a $4,500,000 note payable to New Alliance Bank at an interest rate of 4.95% and a maturity date of April 1, 2015. The monthly principal and interest payment is $85,041. The balance outstanding at June 30, 2010 is $4,370,180.

Included in the land and leasehold improvements notes at June 30, 2009 is a note payable to New Alliance Bank for $3,000,000 for leasehold improvements at the University’s Cambridge Campus location at a fixed interest rate of 5.55% and a maturity date of July 1, 2012. Prior to June 30, 2010, this note was paid in full.

At June 30, 2010 and 2009, the University had a note payable to Bank of America for $8,500,000 for the purchase of land adjacent to the main campus at an interest rate at the stated Bank of America Prime Rate or an optional rate of LIBOR plus 0.85%, and a maturity date of June 30, 2011. The interest rate at June 30, 2010 and 2009 was 1%. As of June 30, 2010 and 2009, the University had two outstanding installment notes on various equipment and vehicles, at rates of 4.71% and 5.67%. The total amount due at June 30, 2010 is $74,267.

At June 30, 2010 and 2009, the University had unsecured bank lines of credit totaling $3,000,000 and $2,500,000, respectively with varying interest rates of LIBOR plus 0.85% and LIBOR plus 1.00%. There were no amounts outstanding during fiscal years 2010 and 2009.

13 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

In connection with financing for a new chapel located at the center of the main campus, the University has a construction loan payable at LIBOR plus 0.75% and a maturity date of June 25, 2012. Principal payments of $60,320 plus interest are payable each month with interest rates for the year range from 1% to 1.2%.

(b) Bonds Payable 2010 2009 Weighted Weighted average Principal average Principal Facility financed Maturity rate balance rate balance CHEFA Series C – Health and Recreational facilities and In installments through residential housing July 1, 2026 6.56% $ 4,410,000 6.57% $ 4,620,000 CHEFA Series E – Residential housing, renovations, and In installments through equipment July 1, 2028 4.93% 60,185,000 4.94% 61,985,000 CHEFA Series F – Residential housing, renovations, and In installments through equipment July 1, 2033 Variable 20,205,000 Variable 20,545,000

84,800,000 87,150,000

Less unamortized discount (1,343,291) (1,418,221) $ 83,456,709 $ 85,731,779

The fair value of the CHEFA Series C, E, and F Revenue Bonds was $83,241,660 and $79,726,263 at June 30, 2010 and 2009, respectively.

(c) Series C Revenue Bonds In fiscal year 1996, the University issued CHEFA Series C Revenue Bonds in the amount of $35,395,000. The proceeds of these bonds were used to finance construction of the health and recreation facility, to defease $5,915,000 of CHEFA Series A Bonds outstanding, and to repay $7,113,000 of principal due on a note payable relating to construction of a residence hall (Thomas Merton Hall; formerly, West Hall). The bonds are collateralized by the University’s gross receipts, including tuition and room charges derived from the core campus, and a negative mortgage pledge on the core campus. In addition, a residence hall (Elizabeth Ann Seton Hall; formerly, South Hall) and a lease on the land thereunder have been pledged as additional collateral. The University was required to establish a debt service reserve fund with a trustee sufficient to cover payments of principal, interest, and sinking fund requirements due on the bonds in any one year (note 5). On December 9, 1998, $28,305,000 of these bonds were retired with proceeds from the Series E Revenue Bonds.

(d) Series E Revenue Bonds In fiscal year 1999, the University issued CHEFA Series E Revenue Bonds in the amount of $76,020,000. These bonds were used to finance construction of residential housing for students, finance improvements to facilities on the main campus and to advance refund and defease CHEFA

14 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

Series B Bonds outstanding in the principal amount of $11,510,000, CHEFA Series D Bonds in the principal amount of $6,105,000, and $28,305,000 of the CHEFA Series C Bonds.

The University was required to establish a debt service fund with a trustee sufficient to cover payments of principal, interest, and sinking fund requirements due on the bonds in any one year (note 5).

To collateralize the Series E Revenue Bonds, the University has pledged its gross receipts to CHEFA, created a negative pledge on the core campus and granted a mortgage on Angelo Roncalli Hall (formerly, East Hall), subject to encumbrances, in favor of CHEFA.

Upon issuance of the Series E Revenue Bonds, CHEFA entered into a Refunding Escrow Deposit Agreement (the Escrow Agreement) with State Street Bank and Trust Company of Connecticut, N.A., as trustee. The agreement provided that CHEFA deposit a portion of the proceeds of the Series E Revenue Bonds in an irrevocable escrow deposit trust fund that, together with other funds, was used to purchase defeasance obligations in an amount sufficient to defease and make payments of the principal and accrued interest on the outstanding prior bonds to their maturity or redemption dates. Under the Escrow Agreement, such amounts held by the escrow trustee are pledged solely for the benefit of the owners of the prior bonds and will not be available to pay debt service on the Series E Revenue Bonds.

(e) Pursuant to the Series C and E Revenue Bonds issued, the University covenants that, unless CHEFA has given their written consent, it will not incur any indebtedness unless the University will maintain as a result of such indebtedness a ratio of indebtedness to unrestricted funds, as defined, of not more than 3.0 to 1.0 and a 150% coverage of maximum annual debt service on all outstanding and proposed indebtedness. The University has met these covenants as of June 30, 2010.

(f) Series F Revenue Bonds In fiscal year 2004, the University issued CHEFA Series F Variable Rate Demand Revenue Bonds in the amount of $21,700,000. The proceeds of these bonds were used to finance construction of Christian Witness Commons (formerly, North Hall) and renovations of classroom and computer infrastructure. The bonds are collateralized by the University’s gross receipts, including tuition and room charges derived from the core campus, and a negative mortgage pledge on the core campus.

The University was required to establish a debt service fund with a trustee sufficient to cover payments of principal, interest, and sinking fund requirements due on the bonds in any one year (note 5).

Pursuant to the Series F Revenue Bonds issued, the University covenants that it will not permit the ratio of Cash and certain other Unrestricted Assets to Total Funded Debt be less than 0.20 to 1.0 or income available for Debt Service to Total Debt Service be less than 1.25 to 1.0. The University has met these covenants as of June 30, 2010.

15 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

The aggregate amount of principal due in respect to notes and bonds payable at June 30, 2010 is as follows: 2011 $ 12,565,555 2012 4,183,185 2013 15,946,467 2014 3,798,966 2015 3,811,435 Thereafter 71,215,000 $ 111,520,608

Deferred financing costs of $1,601,809 and $1,680,174 at June 30, 2010 and 2009, respectively, are included in other assets on the balance sheets and are being amortized over the terms of the related debt.

(9) Net Assets 2010 2009 Temporarily restricted net assets: Student financial assistance $ 1,698,695 1,693,861 Capital improvements 4,980,715 9,408,698 Time restricted 2,551,177 1,920,152 Instruction 1,962,138 978,362 Academic support 62,485 31,157 $ 11,255,210 14,032,230 Permanently restricted net assets – endowment funds for which the income is restricted for: Instruction $ 4,263,244 4,253,244 Student financial assistance 7,688,381 7,688,381 Academic support 244,840 100,582 $ 12,196,465 12,042,207

16 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

The University’s endowment includes both donor-restricted endowment funds and funds designated by the board of trustees to function as endowment. With respect to donor-restricted endowment funds, the University classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund.

The remaining portion of the donor-restricted endowment fund that is not classified as permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the University, giving consideration to the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

1. The duration and preservation of the fund

2. The purposes of the University and the donor-restricted endowment fund

3. General economic conditions

4. The possible effect of inflation and deflation

5. The expected total return from income and the appreciation of investments

6. Other resources of the University

7. The investment policies of the University

Endowment net assets consist of the following at June 30, 2010:

Temporarily Permanently Unrestricted restricted restricted Total Donor-restricted $ — 2,541,433 12,196,465 14,737,898 Board-designated 67,174,334 — — 67,174,334 Total endowed net assets $ 67,174,334 2,541,433 12,196,465 81,912,232

Endowment net assets consist of the following at June 30, 2009:

Temporarily Permanently Unrestricted restricted restricted Total Donor-restricted $ (869,229) 1,398,601 12,042,207 12,571,579 Board-designated 54,467,482 — — 54,467,482 Total endowed net assets $ 53,598,253 1,398,601 12,042,207 67,039,061

17 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

Changes in endowment net assets for the year ended June 30, 2010 are as follows:

Temporarily Permanently Unrestricted restricted restricted Total Endowment June 30, 2009 $ 53,598,253 1,398,601 12,042,207 67,039,061 Investment return 7,088,365 1,142,832 — 8,231,197 Contributions — — 154,258 154,258 Transfer to create board- designated funds 6,487,716 — — 6,487,716 Endowment at June 30, 2010 $ 67,174,334 2,541,433 12,196,465 81,912,232

Changes in endowment net assets for the year ended June 30, 2009 are as follows:

Temporarily Permanently Unrestricted restricted restricted Total Endowment June 30, 2008 $ 60,270,207 3,711,266 11,733,992 75,715,465 Investment return (11,295,771) (1,838,559) — (13,134,330) Contributions 400,000 — 308,215 708,215 Appropriation for expenditure (569,523) (474,106) — (1,043,629) Transfer to create board- designated funds 4,793,340 — — 4,793,340 Endowment at June 30, 2009 $ 53,598,253 1,398,601 12,042,207 67,039,061

Return Objectives and Risk Parameters The University has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of income, while seeking to maintain the purchasing power of the endowment assets. Under this policy, as approved by the University’s Finance Committee of the board of directors, the endowment assets are invested in a number of different asset classes and investment strategies to diversify the investments to provide a balance that will enhance the long-term total return of the overall investment portfolio while avoiding undue risk or concentration in any single asset class or investment category. The amount available for spending is determined annually by applying a rate (4% for fiscal years 2010 and 2009) to the fair value of the permanently restricted endowment using the average market value for the past twelve quarters through the preceding December 31 provided the market value of the donor-restricted endowment exceeds the endowment contributions adjusted for inflation. Based on the calculation, there was no spending allowance for fiscal year 2010.

Funds with Deficiencies From time to time, the fair value of assets associated with an individual donor-restricted endowment fund may fall below the original value of the fund. Deficiencies of this nature that are reported in unrestricted net assets were $869,229 as of June 30, 2009. These deficiencies resulted from unfavorable market fluctuations that occurred shortly after the investment of new permanently restricted contributions and continued appropriation for certain programs that was deemed prudent by the board of trustees. Subsequent

18 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

gains that restore the fair value of the assets of the endowment fund to the required level will be classified as an increase in unrestricted net assets.

(10) Net Assets Released from Restrictions Net assets were released from donor restrictions due to the passage of time or by incurring expenses satisfying the restricted purposes specified by the donors as follows for fiscal years 2010 and 2009:

2010 2009 Unrestricted – passage of time $ 1,111,275 111,628 Restricted for specified purposes: Student financial assistance 4,026,058 4,708,491 Instruction 837,267 1,003,240 Public service radio station 3,699,770 3,816,303 Institutional supporting services 165,238 226,797 Other 66,337 69,474 Net assets released from restrictions designated for operating activities 9,905,945 9,935,933 Plus portion designated for nonoperating activities 3,741,330 — Total net assets released from restrictions $ 13,647,275 9,935,933

(11) Retirement Benefits The University has a 403(b) defined contribution retirement plan for all employees. The University contributes a defined percentage of a participant’s compensation for the purchase of individual annuities (8% for eligible faculty and administrators with a 5% participant contribution and 3% for eligible nonexempt employees). The cost of the plan is funded as accrued through direct payments to qualified carriers. Total contributions made during fiscal years 2010 and 2009 were $2,813,539 and $2,905,400, respectively.

The University also participates in the Diocesan Pension Plan with the Diocese of Bridgeport as a retirement plan for the nonexempt employees (clerical, secretarial support, and security staff). The Diocesan Plan is a noncontributory, defined benefit plan. The benefits are based on years of service and employee compensation over their term of employment. Total pension contributions made to the Diocesan Plan during fiscal years 2010 and 2009 were $1,566 and $2,094, respectively. As of June 30, 2007, all participants, excluding retirees in the Diocesan Plan have been transferred to the University’s defined contribution retirement plan.

19 (Continued) SACRED HEART UNIVERSITY, INC. Notes to Financial Statements June 30, 2010 and 2009

(12) Commitments and Contingent Liabilities Effective May 1, 1990, the University extended its lease agreement on approximately 53 acres of land and buildings thereon with the Diocese of Bridgeport for ninety years. In connection with the lease, the University instituted a scholarship program providing for a minimum of $180,000 in tuition benefits per academic year. Actual tuition benefits afforded under the lease agreement in fiscal years 2010 and 2009 were $437,891 and $267,234, respectively. Insurance programs were established independent of the Diocese in fiscal year 2008.

At June 30, 2010, the University’s minimum annual rental commitments under noncancelable operating leases for office space, dormitories, equipment, and automobiles were as follows: 2011 $ 6,259,118 2012 5,111,900 2013 2,404,788 2014 1,432,482 $ 15,208,288

Total rental expense under noncancelable operating leases for fiscal years 2010 and 2009 was $6,684,065 and $7,104,115, respectively.

There are various lawsuits and other legal proceedings against the University. Management is of the opinion that the ultimate disposition of such litigation will not have a material adverse effect on the University’s financial statements.

(13) Subsequent Events In connection with the preparation of the financial statements, the University evaluated subsequent events after the balance sheet date of June 30, 2010 through October 15, 2010, which was the date the financial statements were issued. The University has determined that there are no subsequent events to disclose.

20 (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX C

DEFINITIONS OF CERTAIN TERMS

“Account” or “Accounts” means, as the case may be, each or all of the accounts established in Section 5.1 of the Indenture.

“Act” means the State of Connecticut Health and Educational Facilities Authority Act, being Chapter 187 of the General Statutes of Connecticut, Revision of 1958, Sections 10a-176 to 10a-198, inclusive, as amended from time to time.

“Annual Administrative Fee” means the annual fee for the general administrative expenses of the Authority in the amount of ten (10) basis points, paid semiannually in arrears on the Outstanding principal amount of Bonds on each June 20 and December 20 while the Bonds are Outstanding.

“Annual Debt Service” means the Long-Term Debt Service Requirement for the Fiscal Year in question.

“Assignment of Contract Documents and Consents” means one or more assignments of contracts (including assignments of construction contracts and warranties; developer’s contracts; permits, licenses, approvals and contracts; leases and rents; and construction management agreements) executed and delivered by the Institution to the Authority for assignment to the Trustee as security for the Bonds, together with a consent to such assignment executed by the Person(s) with whom the Institution has contracted.

“Assignment of Note” means the Assignment of Mortgage and Mortgage Note, dated as of June 29, 2011, from the Authority to the Trustee, assigning the Mortgage and the Note securing the Bonds.

“Authority” means the State of Connecticut Health and Educational Facilities Authority, a body politic and corporate of the State of Connecticut, constituting a public instrumentality created by the Act.

“Authorized Denomination” means $5,000 or any integral multiple thereof.

“Authorized Officer” means: (i) in the case of the Authority, the Chairman, Vice Chairman, Executive Director, General Counsel, any Managing Director, any Assistant Director, or any other duly authorized officer of the Authority, and when used with reference to any act or document also means any other person authorized by Resolution of the Authority to perform such act or execute such document; (ii) in the case of the Institution, the President or Senior Vice President for Finance and Administration of the Institution and any other person or persons authorized by resolution of the Institution to perform any act or execute any document; and (iii) in the case of the Trustee, means any officer in its corporate trust administration department, and when used with reference to any act or document also means any other person authorized to perform any act or sign any document by or pursuant to a resolution of the governing body of the Trustee.

“Balloon Indebtedness” means (i) Long-Term Indebtedness, or Short-Term Indebtedness which is intended to be refinanced upon or prior to its maturity by Long-Term Indebtedness so that such Short-Term Indebtedness will be outstanding, in the aggregate, for more than one year as certified in an Officer’s Certificate, twenty-five percent (25%) or more of the initial principal amount of which matures (or is payable at the option of the holder) in any twelve-month period, if such twenty-five percent (25%) or more is not to be amortized to below twenty-five percent (25%) by mandatory redemption prior to such twelve month period; or (ii) any portion of an issue of Long-Term Indebtedness which, if treated as a separate issue of Indebtedness, would meet the test set forth in clause (i) of this definition and which Indebtedness is designated as Balloon Indebtedness in an Officer’s Certificate stating that such portion shall be deemed to constitute a separate issue of Balloon Indebtedness.

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“Bond Counsel” means an attorney or firm of attorneys designated by the Authority and having a national reputation in the field of municipal finance whose opinions are generally accepted by purchasers of municipal bonds.

“Bond Index” means (i) for tax-exempt Indebtedness, the 30-year Revenue Bond Index published most recently by The Bond Buyer, or a comparable index determined by the Authority if such Revenue Bond Index is not so published; or (ii) for taxable Indebtedness, the interest rate or interest index as may be certified to the Authority and the Trustee as appropriate to the situation by a firm of nationally recognized investment bankers or a financial advisory firm experienced in such field.

“Bondowner”, “Owner” or “Holder” or any similar term, when used with reference to a Bond or Bonds, means any person who shall be the registered owner of any Bond.

“Bonds” means the Series G Bonds authorized, issued and secured pursuant to the Indenture.

“Bond Year” means a period of twelve (12) consecutive months, beginning on July 1 in any calendar year and ending on June 30 of the succeeding calendar year.

“Business Day” means any day other than (i) a Saturday or a Sunday; (ii) a day on which the New York Stock Exchange is closed; or (iii) a day on which banking institutions are authorized or required by law or executive order to be closed for commercial banking purposes in New York or Connecticut or such other state where the applicable corporate trust office of the Trustee is located.

“Capitalized Interest Account” means the account for the Bonds so designated, created and established in the Construction Fund pursuant to Section 5.1 of the Indenture.

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

“Completion Indebtedness” means any Indebtedness incurred by the Institution for the purpose of financing the completion of constructing or equipping facilities for the construction or equipping of which some Indebtedness has theretofore been incurred in accordance with the provisions of the Loan Agreement, to the extent necessary to provide a completed and equipped facility of the type and scope contemplated at the time, and in accordance with the general plans and specifications for such facility as originally prepared with only such changes as have been made in conformity with the documents pursuant to which such Indebtedness was originally incurred, including funding debt reserves.

“Construction Account” means the account for the Bonds so designated, created and established in the Construction Fund pursuant to Section 5.1 of the Indenture.

“Construction Fund” means the fund so designated, created and established pursuant to Section 5.1 of the Indenture.

“Consultant” means a Person selected by the Institution which is not, and no member, stockholder, director, officer or employee of which is, an officer or employee of the Institution, and which is a nationally recognized professional management consultant or accountant (which may be the Institution’s external auditing firm) in the area of higher educational finance acceptable to the Authority and having the skill and experience necessary to render the particular opinion, certificate or report required by the provisions hereof in which such requirement appears.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement between the Institution and the Trustee, as dissemination agent, dated as of June 1, 2011, relating to the Bonds, pertaining to disclosure of future material events and annual financial information in accordance with Rule 15c2-12 of the Securities Exchange Commission.

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“Cost” or “Costs” means, as applied to the Project or any portion thereof financed with the proceeds of bonds issued under the provisions of the Act, as approved by the Authority, all or any part of the cost of construction and acquisition of all lands, structures, real or personal property, rights, rights-of-way, franchises, easements and interests acquired or used for the Project, the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which such buildings or structures may be moved, the cost of all machinery and equipment, financing charges, interest prior to, during and for a period after completion of such construction, cost of architectural and engineering plans, specifications, studies, surveys, and estimates of cost and of revenues, expenses necessary or incident to determining the feasibility or practicability of constructing the Project and such other expenses as may be necessary or incident to the construction and acquisition of the Project, but shall not include such items which are customarily deemed to result in a current operating charge.

“Cost of Issuance” means all costs and expenses of the Authority incurred in connection with the authorization, issuance, sale and delivery of the Bonds including, but not limited to, legal fees and expenses, initial credit enhancement fees, financial advisory fees, the Trustee’s acceptance fees and expenses under the Indenture and initial (including first annual) fees, paying agent fees, fiscal or escrow agent fees, printing fees and travel expenses.

“Cost of Issuance Account” means the account for the Bonds as designated, created and established pursuant to Section 5.1 of the Indenture.

“Debt Service Fund” means the fund so designated, created and established pursuant to Section 5.1 of the Indenture.

“Debt Service Reserve Fund” means the fund so designated, created and established pursuant to Section 5.1 of the Indenture.

“Debt Service Reserve Fund Requirement” means, as of any particular date of computation, for the then current or any future Bond Year, an amount (such amount may take the form of cash, securities or a Reserve Fund Letter of Credit, to the extent otherwise permitted by the terms of the Indenture and the Loan Agreement, or a combination thereof) equal to the lesser of (i) ten percent (10%) of the then-Outstanding principal amount of the Bonds; (ii) the greatest amount required to be paid in any such Bond Year with respect to the payment of principal, Sinking Fund Installment, or interest on the Outstanding Bonds during such Bond Year; or (iii) 125% of the average annual debt service on the Outstanding Bonds.

“Defeasance Obligations” means: (i) non-callable direct obligations of, or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by, the United States of America; and (ii) any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local government unit of any such state (a) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (b) which are secured as to principal and interest and redemption premium by a fund consisting only of cash or bonds or other obligations of the character described in clause (i) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (ii), as appropriate, (c) as to which the principal of and interest on the bonds and obligations of the character described in clause (i) hereof which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (ii) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (ii) as appropriate, and (d) which are rated AAA by Standard & Poor’s or Aaa by Moody’s.

“Discount Indebtedness” means Indebtedness sold to the original purchaser thereof (other than any underwriter or other similar intermediary) at a discount from the par amount of such Indebtedness.

“DTC” means The Depository Trust Company, New York, New York, a New York State limited purpose trust company, subject to regulation by the Securities and Exchange Commission, the Board of Governors

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of the Federal Reserve System and the New York State Banking Department, or its successors appointed under the Indenture.

“Electronic Means” means telecopy, telegraph, facsimile transmission, email, or other similar electronic means of communication, including a telephonic communication confirmed in writing or written transmission.

“Equal Employment Opportunity Laws” means Executive Order No. 11246, dated September 28, 1965, as supplemented from time to time, and all of the regulations, rules and orders promulgated thereunder, and Chapter 814c of the Connecticut General Statutes, the Human Rights and Opportunities Law, as amended from time to time, and all of the regulations, rules and orders promulgated thereunder.

“Event of Default” means, with respect to the Loan Agreement, any of the events of default set forth in Section 8.1 of the Loan Agreement, and, with respect to the Indenture, any of the events of default set forth in Section 8.1 of the Indenture.

“Expendable Funds” means, with respect to the Institution, as to any period of time, the total unrestricted and temporarily restricted net assets less Net Investment in Plant (as defined as net property, plant & equipment plus investments held by trustee, less Total Debt), as set forth in the audited financial statements of the Institution, calculated in accordance with generally accepted accounting principles.

“Fiscal Year” means the fiscal year of the Institution, currently from July 1 to June 30.

“Fitch” means Fitch, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, by notice to the Trustee.

“Fixed Assets” means the aggregate amount of the Institution’s land, buildings, improvements, equipment and construction in progress (prior to any deduction for accumulated depreciation), as identified in or derived from the Institution’s most recent audited financial statements.

“Fund” or “Funds” means, as the case may be, each or all of the funds established in Section 5.1 of the Indenture.

“Future Test Period” means the two full Fiscal Years of the Institution immediately following the computation then being made, or, if such computation is then being made in connection with the incurrence of Indebtedness for capital improvements or expenditures, the two full Fiscal Years immediately following completion of the capital improvements or expenditures then being financed.

“Gross Receipts” means all receipts, revenues, income and other moneys received by or on behalf of the Institution, including, but without limiting the generality of the foregoing, revenues derived from the ownership or operation of the Premises and the Property, including insurance and condemnation proceeds with respect to the Premises and the Property or any portion thereof, and all rights to receive the same, whether in the form of accounts, accounts receivable, contract rights or other rights, and the proceeds of such rights, and whether now owned or held or hereafter coming into existence; provided, however, that gifts, grants, bequests, donations and contributions heretofore or hereafter made and designated or specified by the granting authority, donor or maker thereof as being for specified purposes (other than payment of debt service on Indebtedness) and the income derived therefrom to the extent required by such designation or specification shall be excluded from Gross Receipts. Gross Receipts shall not include cash, cash equivalents, investment securities or endowment funds from time to time on hand with the Institution except to the extent derived from Gross Receipts received after an Event of Default under the Loan Agreement requiring deposits into the Gross Receipts Fund under Section 2.6(b) of the Loan Agreement.

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“Guaranty” means all obligations of the Institution guaranteeing in any manner, whether directly or indirectly, any obligation of any other Person which would, if such other Person were the Institution, constitute Indebtedness under the Loan Agreement.

“Hazardous Substance Agreement” means the Hazardous Substance Certificate and Indemnification Agreement, dated as of June 1, 2011, by and between the Authority and the Institution, relating to the Bonds.

“Historic Test Period” means the most recent full Fiscal Year of the Institution.

“Income Available for Debt Service” means, with respect to the Institution, as to any period of time, the increase in unrestricted net assets from operations and non-operating activities, including funds made available for operations from the endowment, before depreciation, amortization, interest and non-recurring, non- cash expenses, as determined in accordance with generally accepted accounting principles consistently applied; provided, that no determination thereof shall take into account (i) any revenue or expense of any Person which is not the Institution; (ii) any gain or loss resulting from either the extinguishment of Indebtedness or the sale, exchange or other disposition of capital assets not in the ordinary course of business; (iii) the net proceeds of insurance (other than business interruption insurance) and condemnation awards; (iv) any extraordinary gain or loss as defined and allowed under generally accepted accounting principles; or (v) unrealized gains or losses from investments (notwithstanding generally accepted accounting principles).

“Indebtedness” means (i) indebtedness or liability for borrowed money, or for the deferred purchase price of property or services; (ii) obligations as lessee under leases which are, should be, or should have been reported as capital leases in accordance with generally accepted accounting principles, provided that operating leases on the books of the Institution on the date of the issuance of the Bonds that may be deemed capital leases under changes to generally accepted accounting principles effective after the date of issuance of the Bonds would be excluded from this definition but all operating leases entered into after the date of issuance of the Bonds and subject to the changes to generally accepted accounting principles would be included in such definition; (iii) current liabilities in respect of unfunded vested benefits under any defined benefit plans of the Institution; (iv) all obligations arising under acceptance facilities; (v) all Guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment of, to supply funds to invest in any entity or the Indebtedness of any entity or otherwise to assure a creditor against loss; (vi) obligations secured by any mortgage, lien, pledge, security interest or other charge or encumbrance on property, whether or not the obligations have been assumed; and (vii) all other items or obligations which would be included in determining total liabilities on the balance sheet of an entity; provided, however, that “Indebtedness” shall not include trade payables, current salaries, current pension contributions, interest rate swap projections, insurance premiums and similar obligations incurred.

“Indenture” means the Trust Indenture between the Authority and the Trustee, dated as of June 1, 2011, as the same may from time to time be amended or supplemented by a Supplemental Indenture or Indentures.

“Independent Insurance Consultant” means a person or firm who is not a director, trustee, employee or officer of the Institution or a director, trustee, employee or member of the Authority, appointed by an Authorized Officer of the Institution and satisfactory to the Authority, qualified to survey risks and to recommend insurance coverage for higher educational facilities and services and organizations engaged in like operations and having a favorable reputation for skill and experience in such surveys and such recommendations, and who may be a broker or agent with whom the Institution transacts business.

“Institution” means Sacred Heart University, Incorporated, a non-profit corporation duly organized and existing under the laws of the State and the principal place of business of which is presently located in Fairfield, Connecticut.

“Institution Documents” means, collectively, the Loan Agreement, the Continuing Disclosure Agreement, the Hazardous Substance Agreement, the Letter of Representation and Indemnification, the Mortgage, the Note, and the Tax Regulatory Agreement.

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“Intercreditor Agreement” means the Amended and Restated Intercreditor Agreement, dated as of June 29, 2011, among the Authority, the Institution, the Trustee, U.S. Bank National Association, as trustee for the Series E Bonds, Bank of America, as issuer of the credit facility securing the Series F Bonds, and U.S. Bank National Association, as trustee for the Series F Bonds, as the same may from time to time be amended or supplemented.

“Interest Account” means the account so designated, created and established in the Debt Service Fund pursuant to Section 5.1 of the Indenture.

“Interest Payment Date” means January 1 and July 1 of each year, commencing January 1, 2012.

“Investment Agreement” means an agreement for the investment of moneys held by the Trustee or the Authority pursuant to the Indenture with a Qualified Financial Institution (which may include the entity acting as Trustee).

“Letter of Representation and Indemnification” means the Letter of Representation and Indemnification of the Institution to the Authority and the initial underwriters of the Bonds, dated the date of the sale of the Bonds.

“Lien” means any mortgage, pledge, leasehold interest, security interest, choate or inchoate lien, judgment lien, easement, or other encumbrance on title, including, but not limited to, any mortgage or pledge of, security interest in or lien or encumbrance on any Property of the Institution which secures any Indebtedness or any other obligation of the Institution.

“Loan Agreement” means the Loan Agreement between the Authority and the Institution, dated as of June 1, 2011, as the same may from time to time be amended or supplemented by a Supplemental Loan Agreement or Agreements.

“Long-Term Debt Service Coverage Ratio” means the ratio for the period in question of Income Available for Debt Service to Maximum Annual Debt Service. Notwithstanding anything in the Loan Agreement to the contrary requiring a Consultant’s opinion, report or certificate, projections of the Long-Term Debt Service Coverage Ratio may be made by an Officer’s Certificate if (i) the Long-Term Debt Service Coverage Ratio for the Historic Test Period as shown by an Officer’s Certificate exceeded 1.50; and (ii) the Long-Term Debt Service Coverage Ratio for the Future Test Period is projected by an Officer’s Certificate to exceed 1.50, unless the Authority, in its sole discretion, requires that such Long-Term Debt Service Coverage Ratio calculations be made or confirmed by a Consultant’s opinion, report or certificate.

“Long-Term Debt Service Requirement” means, for any period of time, the aggregate of the scheduled payments to be made (other than from amounts irrevocably deposited with the Trustee or a lender for purposes of such payments, including but not limited to, amounts on deposit in the Capitalized Interest Account, the Interest Account, the Principal Account, the Sinking Fund Account, and the Debt Service Reserve Fund, which amounts shall be deducted from the Long-Term Debt Service Requirement for any period in which such amounts will actually be applied to pay such debt service) in respect of principal and interest on outstanding Long-Term Indebtedness of the Institution during such period, also taking into account (i) with respect to Balloon Indebtedness, the provisions of Section 5.20 of the Loan Agreement; (ii) with respect to Variable Rate Indebtedness, the provisions of Section 5.21 of the Loan Agreement; (iii) with respect to Discount Indebtedness, the provisions of Section 5.22 of the Loan Agreement; and (iv) with respect to Indebtedness represented by a Guaranty, the provisions of Section 5.18 of the Loan Agreement.

“Long-Term Indebtedness” means all Indebtedness for any of the following:

(i) Payments of principal and interest with respect to money borrowed for an original term, or renewable at the option of the borrower for a period from the date originally incurred, of longer than one year;

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(ii) Payments under leases which are capitalized in accordance with generally accepted accounting principles having an original term, or renewable at the option of the lessee for a period from the date originally incurred, longer than one year; and

(iii) Payments under installment purchase contracts having an original term in excess of one year.

“Maximum Annual Debt Service” means, at the time of computation, the greatest Long-Term Debt Service Requirement for the then current or any future Fiscal Year.

“Moody’s” means Moody’s Investors Service Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, by notice to the Trustee.

“Mortgage” means the Open-End Mortgage and Security Agreement, dated as of June 1, 2011, from the Institution to the Authority, given to secure the Institution’s obligations under the Loan Agreement and with respect to the Bonds, as amended from time to time.

“Mortgaged Premises” means the Property mortgaged pursuant to the Mortgage.

“Net Proceeds” means the original principal amount of the Bonds less original issue discount and underwriters’ discount plus accrued interest to the date of original delivery (upon the issuance) of the Bonds.

“Non-Recourse Indebtedness” means any Indebtedness secured by a Permitted Encumbrance, which Indebtedness is not a general obligation of the Institution, and the liability for which Indebtedness is effectively limited to the Property subject to such Permitted Encumbrance with no recourse, directly or indirectly, to any other Property of the Institution.

“Note” means the Series G Note of the Institution, dated as of the date of issuance of the Bonds, given to the Authority and assigned by the Authority to the Trustee pursuant to the Indenture with respect to the Bonds, in a principal amount equal to the principal amount of the Bonds, to evidence the loan to the Institution from the Authority of the proceeds of the Bonds, in substantially the form attached as Schedule A to the Loan Agreement.

“Officer’s Certificate” means a certificate signed by an Authorized Officer of the Institution.

“Official Statement” means the Official Statement of the Authority, containing information, data and statistics concerning the Authority, the Institution, the Bonds and other information, and the appendices thereto, including a letter from the Institution, relating to the Bonds.

“Operating Expenses” means the total operating expenses of the Institution, as determined in accordance with generally accepted accounting principles consistently applied.

“Operating Revenues” means the total operating revenues of the Institution less applicable deductions from operating revenues, as determined in accordance with generally accepted accounting principles consistently applied.

“Opinion of Bond Counsel” means an opinion in writing signed by Bond Counsel.

“Opinion of Counsel” means an opinion in writing signed by legal counsel acceptable to the Authority and who may be an employee of or counsel to the Institution.

“Outstanding” when used in reference to Bonds, means as of a particular date, all Bonds authenticated and delivered under the Indenture except: (i) any Bond canceled by the Trustee at or before such date; (ii) any Bond or portion thereof paid or deemed paid in accordance with Section 12.1 of the Indenture; and (iii) any

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Bond in lieu of or in substitution for which another Bond shall have been authenticated and delivered pursuant to the Indenture.

“Parity Debt” means any Indebtedness of the Institution designated by the Institution as parity debt and incurred in accordance with the provisions set forth in Section 5.17 of the Loan Agreement, which may be secured on a parity basis with the Bonds as to (i) the pledge, lien and security interests in the Premises created pursuant to the Mortgage; and (ii) the pledge of and security interest in Gross Receipts granted pursuant to the Loan Agreement.

“Permitted Dispositions” means dispositions of Property permitted by Section 5.15(b) of the Loan Agreement.

“Permitted Encumbrances” means encumbrances on Property permitted by Section 5.14(b) of the Loan Agreement.

“Permitted Guarantees” means Guarantees by the Institution permitted by Section 5.18(b) of the Loan Agreement.

“Permitted Indebtedness” means Indebtedness of the Institution permitted by Section 5.17(b) of the Loan Agreement.

“Permitted Releases” means releases of Property or portions thereof from the Mortgage, or from any security interests, liens, pledges or negative pledges of such Property securing the Bonds permitted by Section 5.16(b) of the Loan Agreement.

“Permitted Reorganizations” means any consolidation, merger or reorganization of the Institution or a transfer of all or substantially all Property of the Institution permitted by Section 5.19(b) of the Loan Agreement.

“Person” means an individual, a corporation, a partnership, an association, a joint stock company, a joint venture, a trust, any unincorporated organization, a limited liability company, a governmental body or a political subdivision, a municipality, a municipal authority or any other group or organization of individuals.

“Preliminary Official Statement” means the Preliminary Official Statement of the Authority, containing information, data and statistics concerning the Authority, the Institution and other information, and the appendices thereto, including a letter from the Institution, but without pricing, yield or maturity information on the Bonds.

“Premises” means the Premises of the Institution described in the Premises Schedule attached to the Loan Agreement and as defined in the Hazardous Substance Agreement and as defined as the “Mortgaged Premises” in Schedule A (Part I) to the Mortgage.

“Principal Account” means the account so designated, created and established in the Debt Service Fund pursuant to Section 5.1 of the Indenture.

“Project” means the higher educational facilities to be acquired, constructed, renovated, equipped, installed or provided for the Institution, including necessary attendant facilities, equipment, site work and utilities thereof, financed or refinanced with proceeds of the Bonds as set forth on the Project Schedule attached to the Loan Agreement.

“Property” means any and all assets of the Institution, any land, leasehold interests, buildings, machinery, equipment, hardware, and inventory of the Institution wherever located and whether now owned or hereafter acquired, any and all rights, titles and interests in and to any and all fixtures and property whether real or personal, tangible or intangible and wherever situated and whether now owned or hereafter acquired and shall include all current assets, funds, endowments, revenues, receipts or other moneys, or right to receive any of the

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same, including, without limitation, Gross Receipts, accounts, accounts receivable, the Premises, the Project, contract rights and general intangibles, and all proceeds of all of the foregoing.

“Purchase Contract” means the Purchase Contract with respect to the Bonds by and between the Authority and the initial underwriters of the Bonds.

“Purchase Money Mortgage” means a mortgage or security interest created to secure all or part of the purchase price or to secure Indebtedness incurred to pay all or part of the purchase price or cost of construction of any property or improvement thereon, provided that such mortgage or security interest shall extend solely to the item or items of such property (or improvement thereon) so acquired or constructed.

“Qualified Financial Institution” means a financial institution that is a domestic corporation, a bank, a trust company, a national banking association, a corporation subject to registration with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956 or any successor provisions of law, a federal branch pursuant to the International Banking Act of 1978 or any successor provisions of law, a foreign bank acting through a domestic branch or agency which branch or agency is duly licensed or authorized to do business under the laws of any state or territory of the United States of America, a savings bank, a savings and loan association, or an insurance company or association chartered or organized under the laws of any state of the United States of America; provided that for each such entity its unsecured or uncollateralized long-term debt obligations, or obligations secured or supported by a letter of credit, contract, guarantee, agreement or surety bond issued by any such organization, directly or by virtue of a guarantee of a corporate parent thereof have been assigned a long-term credit rating by any two Rating Agencies which is not lower than the two highest ratings (with respect to a foreign bank, the highest rating category) then assigned (i.e., at the time an Investment Agreement or Repurchase Agreement is entered into) by such rating service without qualification by symbols “+” or “-“ or a numerical notation.

“Qualified Investments” means the obligations described below:

A. Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury) or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by the United States of America.

B. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies, provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself; mortgage pass-through securities, mortgage-backed securities pools (MBS), collateralized mortgage obligations (CMO) and all mortgage derivative securities trusts shall not constitute Qualified Investments):

(1) Direct obligations of or fully guaranteed certificates of beneficial ownership of the Export Import Bank of the United States;

(2) Federal Financing Bank;

(3) Participation certificates of the General Services Administration;

(4) Guaranteed mortgage-backed bonds and guaranteed pass-through obligations of the Government National Mortgage Association; and

(5) Project Notes, Local Housing Authority Bonds, New Communities Debentures and U.S. public housing notes and bonds fully guaranteed by the U.S. Department of Housing and Urban Development.

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C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies, provided the corporation is rated “AAA” at the time of purchase by at least two of the Nationally Recognized Statistical Rating Organizations (“NRSROs”) (stripped securities are only permitted if they have been stripped by the agency itself):

(1) Federal Home Loan Bank System senior debt obligations;

(2) Participation Certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation;

(3) Mortgage-backed securities and senior debt obligations of the Federal National Mortgage Association; and

(4) Consolidated system wide bonds and notes of the Farm Credit System Corporation.

D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating of “AAAm” or equivalent by at least two of the NRSROs.

E. Certificates of deposit secured at all times by collateral described in (A) and/or (B) above, issued by commercial banks, savings and loan associations or mutual savings banks where the collateral is held by a third party and the Trustee or the Authority has a perfected first security interest in the collateral.

F. Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the FDIC.

G. Unsecured Investment Agreements (subject to approval of the Authority of any Investment Agreement with a term in excess of thirty (30) days); any Investment Agreement with a term greater than three (3) years must be with an issuer rated “AA” by at least two of the NRSROs unless a lower rating is consented to by the Authority and the Institution.

In the event the counterparty is downgraded below either AA- or Aa3 by S&P or Moody’s, respectively, or equivalent by an NRSRO:

i. The agreement will be transferred to an acceptable institution that meets the ratings requirement described above, or

ii. Collateral consisting of securities outlined in (A) or (B) above shall be posted that has a value equal to at least 104% of the principal plus accrued interest, or collateral consisting of securities outlined in (C) above shall be posted that has a value equal to at least 105% of the principal plus accrued interest, or

iii. The agreement must be converted into a Repurchase Agreement (See clause (L) below), or

iv. The agreement shall terminate at par plus accrued interest within ten (10) business days should (i), (ii) or (iii) above not be accomplished.

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H. Collateralized Investment Agreements with providers rated at least “A- ” and “A3” by S&P and Moody’s, respectively, or equivalent by at least two NRSROs, provided that (i) the same collateral requirements as outlined in (G)(ii) are followed and (ii) if the provider is downgraded below “A-” and “A3”, or equivalent by at least two NRSROs, the agreement shall terminate.

I. Commercial paper rated “Prime-1” by Moody’s and “A-1+” by Standard & Poor’s, or equivalent by at least two NRSROs, and which matures no more than 270 days from the date of purchase and subject to the following limitations:

a. Only U.S. issuers of corporate (issued to provide working capital funding) commercial paper including U.S. issuers with a foreign parent; and

b. Limited-purpose trusts, structured investment vehicles (SIVs), Asset-Back Commercial Paper (“ABCP”) conduits, and any other type of specialty finance company, whose purpose is generally limited to acquiring and funding a defined pool of assets that are used to repay obligations, are NOT eligible.

J. Bonds or notes issued by any state or municipality which are rated by any two NRSROs in one of the two highest long-term rating categories assigned by such agencies (without qualification by symbols “+” or “-” or a numerical notation).

K. Federal funds or bankers’ acceptances, with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of “Prime-1” by Moody’s and “A-1” by Standard & Poor’s, or equivalent by at least two NRSROs.

L. Repurchase Agreements.

M. Forward delivery agreements with providers rated at least “A-” and “A3” by S&P and Moody’s, respectively, or equivalent by at least two NRSROs, provided that (i) permitted deliverables are limited to securities described in (A), (B) and (C) above and (ii) if the provider is downgraded below “A-” or “A3”, or equivalent by an NRSRO, the agreement shall terminate.

N. Any state administered pool investment fund in which the Authority is statutorily permitted or required to invest, rated “AAA” or equivalent by one of the NRSROs.

“Rating Agency” means Standard & Poor’s and Moody’s or any other nationally recognized securities rating agency acceptable to the Authority and maintaining a credit rating with respect to the Bonds. Except as otherwise provided herein, if more than one Rating Agency maintains a credit rating with respect to the Bonds, then any action, approval or consent by or notice to a Rating Agency shall be effective only if such action, approval, consent or notice is given by or to all such Rating Agencies.

“Rebate Fund” means the fund so designated, created and established pursuant to Section 5.1 of the Indenture.

“Rebate Requirement” means the amount of moneys required to be rebated to the United States Department of the Treasury, the method of calculation of which is described in the Tax Regulatory Agreement.

“Record Date” means the fifteenth day of each June and December and, to the extent interest is to be paid with respect to any Bonds on other than the regularly scheduled date therefor, the “Special Record Date” provisions of the Municipal Securities Rulemaking Board or the successor thereto shall apply.

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“Redemption Fund” means the fund so designated, created and established pursuant to Section 5.1 of the Indenture.

“Redemption Price”, when used with respect to a Bond, means the principal amount of such Bond plus the applicable premium, if any, payable upon redemption thereof pursuant to the Indenture or any Supplemental Indenture.

“Refunded Bonds” means the Authority’s Revenue Bonds, Sacred Heart University Issue, Series C, dated April 1, 1996, which are to be refunded with the proceeds of the Bonds and other available amounts pursuant to the provisions of the Refunding Escrow Deposit Agreement.

“Refunding Escrow Deposit Agent” means U.S. Bank National Association, holding such office under the Refunding Escrow Deposit Agreement, as trustee for the Refunded Bonds.

“Refunding Escrow Deposit Agreement” means the Refunding Escrow Deposit Agreement, dated as of June 29, 2011, by and between the Authority and the Refunding Escrow Deposit Agent.

“Refunding Escrow Deposit Fund” means the Refunding Escrow Deposit Fund established pursuant to the Refunding Escrow Deposit Agreement.

“Repurchase Agreement” means, unless otherwise consented to by the Authority, a written repurchase agreement entered into with a Qualified Financial Institution, a bank acting as a securities dealer or a securities dealer approved by the Authority which is listed by the Federal Reserve Bank of New York as a “Primary Dealer” and rated “AA” or “Aa2” or better by at least two of the NRSROs (unless a lower rating is consented to by the Authority), under which securities are transferred from a dealer bank or securities firm for cash with an agreement that the dealer bank or securities firm will repay the cash plus a yield in exchange for the securities on a specified date and under which

(i) the Authority is the real party in interest and has the right to proceed against the obligor on the underlying obligations which must be obligations of, or guaranteed by, the United States of America;

(ii) the term of which shall not exceed one hundred eighty (180) days, unless the Authority shall consent to a longer period;

(iii) the collateral must be delivered to the Authority, the Trustee (if the Trustee is not supplying the collateral) or a third party acting as agent for the Trustee (if the Trustee is supplying the collateral) prior to or simultaneous with investment of moneys therein;

(iv) such collateral is held free and clear of any lien by the Trustee or an independent third party acceptable by the Authority, acting solely as agent for the Trustee; and

(v) the collateral shall be valued weekly, marked to market at current market prices plus accrued interest At all times the value of the collateral must at least equal the required percentage of the amount invested in the Repurchase Agreement. If the value of such collateral is less than the amount specified, the Qualified Financial Institution or Primary Dealer must invest additional cash or securities such that the collateral value of the amount invested thereafter at least equals as follows: (a) if collateralized by securities described in (A) or (B) above, at least 104%, or (b) if collateralized by securities described in (C) above, at least 105%.

“Reserve Fund Letter of Credit” means the irrevocable, transferable letter of credit, if any, consented to by the Authority, deposited in the Debt Service Reserve Fund in lieu of or in partial substitution for cash or securities on deposit therein, which shall be payable or available to be drawn upon on any Interest Payment Date that moneys are required to be transferred to an account in the Debt Service Fund; provided that the provider of such letter of credit shall be a banking association, bank or trust company or branch thereof whose letter of credit

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results in the rating of municipal obligations secured by such letter of credit to be rated in one of the two highest long-term rating categories (without qualification by symbols “+” or “-” or a numerical notation) by any two national ratings services at the time such Reserve Fund Letter of Credit is issued and while the Bonds are Outstanding.

“Resolution of the Authority” means a resolution duly adopted by the Authority.

“Revenues” means all amounts paid or payable to the Authority or to the Trustee for the account of the Authority (excluding fees and expenses payable to the Authority and the Trustee and the rights to indemnification of the Authority and the Trustee) under and pursuant to the Loan Agreement and the Note and as may be further described in a Supplemental Loan Agreement or a Supplemental Indenture.

“Series C Bonds” means the Authority’s Revenue Bonds, Sacred Heart University Issue, Series C, dated April 1, 1996.

“Series E Bonds” means the Authority’s Revenue Bonds, Sacred Heart University Issue, Series E, dated December 1, 1998.

“Series F Bonds” means the Authority’s Variable Rate Demand Revenue Bonds, Sacred Heart University Issue, Series F, dated December 1, 2003.

“Short-Term Indebtedness” means all Indebtedness for any of the following:

(i) Payments of principal and interest with respect to money borrowed for an original term, or renewable at the option of the borrower for a period from the date originally incurred, of one year or less;

(ii) Payments under leases which are capitalized in accordance with generally accepted accounting principles having an original term, or renewable at the option of the lessee for a period from the date originally incurred, of one year or less; and

(iii) Payments under installment purchase contracts having an original term of one year or less.

“Sinking Fund Account” means the account so designated, created and established in the Debt Service Fund pursuant to Section 5.1 of the Indenture.

“Sinking Fund Installment” means the amount of money sufficient to redeem Bonds at the principal amount thereof in the amounts, at the times and in the manner set forth in the Indenture.

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Standard & Poor’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Authority, by notice to the Trustee.

“State” means the State of Connecticut.

“Subordinated Indebtedness” means all obligations incurred or assumed by the Institution, the payment of which is by its terms specifically subordinated to all payments due under the Loan Agreement and to payments on the Note, or the principal of and interest on which would not be paid (whether by the terms of such obligation or by agreement of the obligee) when any payments due under the Loan Agreement or the Note are in default or while bankruptcy, insolvency, receivership or other similar proceedings are instituted and implemented.

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“Supplemental Indenture” means any indenture of the Authority modifying, altering, amending, supplementing or confirming the Indenture for any purpose, in accordance with the terms thereof.

“Supplemental Loan Agreement” means any agreement between the Authority and the Institution amending or supplementing the Loan Agreement in accordance with the terms of the Indenture.

“Tax Regulatory Agreement” means the Tax Regulatory Agreement, by and between the Authority and the Institution, including all appendices, certificates and attachments thereto, executed on the date of issuance and delivery of the Bonds, as it may be amended from time to time.

“Total Debt” means, as of any date, the aggregate amount of Indebtedness of the Institution (a) for borrowed money, (b) constituting the deferred purchase price of assets, (c) in the form of capitalized leases, provided that operating leases on the books of the Institution on the date of the issuance of the Bonds that may be deemed capital leases under changes to generally accepted accounting principles effective after the date of issuance of the Bonds would be excluded from this definition but all operating leases entered into after the date of issuance of the Bonds and subject to the changes to generally accepted accounting principles would be included in such definition, and (d) in respect of reimbursement obligations in respect of letters of credit, and all Indebtedness of the foregoing types of another Person guaranteed by the Institution (or as to which the Institution otherwise directly or indirectly provided or acted as surety), determined in accordance with generally accepted accounting principles.

“Transaction Test” means the Authority and the Trustee shall have received any one of the following:

(i) a Consultant’s opinion, report or certificate demonstrating that the Long-Term Debt Service Coverage Ratio for the Future Test Period is projected to be not less than 1.35;

(ii) a Consultant’s opinion, report or certificate demonstrating that the Long-Term Debt Service Coverage Ratio for the Historic Test Period, assuming that the proposed transaction occurred at the beginning of the Historic Test Period and as such the proposed Long-Term Indebtedness, if any, is added to the then current aggregate outstanding principal amount of all Long-Term Indebtedness, is projected to be not less than 1.35; or

(iii) (a) an Officer’s Certificate demonstrating that the Long-Term Debt Service Coverage Ratio for the Historic Test Period is not less than 1.35; and (b) a Consultant’s opinion, report or certificate demonstrating that the Long-Term Debt Service Coverage Ratio for the Future Test Period is projected to be not less than 1.25.

Notwithstanding anything in the Loan Agreement to the contrary requiring a Consultant’s opinion, report or certificate, projections of the Long-Term Debt Service Coverage Ratio may be made by an Officer’s Certificate if (i) the Long-Term Debt Service Coverage Ratio for the Historic Test Period as shown by an Officer’s Certificate exceeded 1.50; and (ii) the Long-Term Debt Service Coverage Ratio for the Future Test Period is projected by an Officer’s Certificate to exceed 1.50, unless the Authority, in its sole discretion, requires that such Long-Term Debt Service Coverage Ratio calculations be made or confirmed by a Consultant’s opinion, report or certificate.

“Trustee” means U.S. Bank National Association and its successor or successors and any other entity which may at any time be substituted in its place pursuant to the Indenture.

“Upfront Fee” means the fee of $5,000 payable by the Institution to the Authority, upon the application for the issuance of the Bonds.

“Variable Rate Indebtedness” means Indebtedness that bears interest at a variable, adjustable, convertible or floating rate.

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APPENDIX D

SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE

The following is a brief summary of certain provisions of the Trust Indenture. Such summary does not purport to be complete and reference is made to the Indenture for full and complete statements of such and all provisions.

Trust Estate

The Authority, in consideration of the premises and of the purchase of the Bonds and of other good and lawful consideration, and to secure the payment of the principal of, premium, if any, and interest on the Bonds and the performance and observance of all of the covenants and conditions contained in the Indenture or in the Bonds, does convey, grant, assign, transfer, pledge, set over and confirm and grant a security interest in, unto the Trustee, its successor or successors and its or their assigns forever, with power of sale, all and singular the property, real and personal, described below (such property being in the Indenture sometimes referred to as the “trust estate”) to wit:

DIVISION I

All right, title and interest of the Authority in and to the Loan Agreement, the Note, the Mortgage and the Revenues (as defined in the Indenture) payable to the Authority or to the Trustee for the account of the Authority and to the moneys and securities deposited and held from time to time by the Authority or by the Trustee in the Funds and Accounts created under the Indenture (excluding fees and expenses payable to the Authority, moneys and securities held in the Rebate Fund, the Authority’s right to enforce the covenants of the Institution set forth in certain sections of the Loan Agreement prior to an Event of Default under the Indenture, and the Authority’s right to indemnification, to receive notices, to grant waivers and to give consents and approvals, and to otherwise take actions, under certain circumstances) subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture; and

DIVISION II

Any and all other property of every kind and nature from time to time hereafter, by delivery or by writing of any kind, conveyed, pledged, assigned or transferred as and for additional security under the Indenture by the Authority or the Institution or by anyone on their behalf to the Trustee, including without limitation funds of the Institution held by the Trustee and the Authority as security for the Bonds. (Indenture, Granting Clauses)

Indenture, any Supplemental Indenture and Bonds Constitute a Contract

In consideration of the purchase and acceptance of any and all of the Bonds secured and issued under the Indenture: (i) the Indenture shall be deemed to be and shall constitute a contract among the Authority, the Trustee and the Owners from time to time of such Bonds; (ii) the pledge made in the Indenture and the covenants and agreements set forth to be performed by or on behalf of the Authority shall be for the equal and ratable benefit, protection and security of the Owners from time to time of any and all Bonds, all of which, regardless of the time or times of their issue or maturity, shall be of equal rank without preference, priority or distinction of any of such Bonds over any other thereof except as expressly provided in or permitted by the Indenture or by the applicable Supplemental Indenture, if any; (iii) the Authority does pledge and assign to the Trustee, for the benefit of the Owners of the Bonds, the trust estate, the Revenues and all moneys and securities from time to time held by the Trustee and the Authority in any of the funds and accounts established under the terms of the Indenture (other than the Rebate Fund), and all income and receipts earned thereon, subject to the terms and provisions of the Indenture; (iv) the pledge made by the Indenture shall be valid and binding from the time when the pledge is made and the Revenues and all income and receipts earned on funds held by the Trustee and the Authority under the Indenture (other than the Rebate Fund) and any further pledge of property under the applicable Supplemental Indenture, if any, shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or

D-1 otherwise against the Authority irrespective of whether such parties have notice thereof; and (v) the Bonds shall be special obligations of the Authority payable solely from and secured by a pledge of Revenues and certain moneys and funds as provided by the Indenture and by the applicable Supplemental Indenture, if any. (Indenture, Section 1.2)

Subordinated Bonds

The Authority may also issue revenue bonds for any purpose permitted under the Act secured by a charge and lien on, and payable from, the Revenues which is junior, inferior and subordinate in all respects to the lien of the Revenues which secures the Bonds. Subordinated bonds may be issued pursuant to and in accordance with the provisions of a resolution of the Authority authorizing such bonds or otherwise as determined by the Authority and shall be issued pursuant to an instrument other than the Indenture. (Indenture, Section 3.1)

Medium of Payment of Bonds

The Bonds shall be payable as to principal and Redemption Price, if any, and interest thereon in lawful money of the United States of America. Payment of the interest on the Bonds shall be made to the person appearing on the registration books of the Authority provided for in the Indenture as the Bondowner thereof on the Record Date, by wire or by check or draft mailed by the Trustee to the Bondowner at his address as shown on such registration books of the Authority, kept by the Trustee unless an alternate method of payment is agreed to by the Trustee and the Bondowner, subject to the approval of the Authority, which approval shall not be unreasonably withheld. The principal or Redemption Price of Bonds shall be paid to the Bondowner upon presentation and surrender of the Bonds at the designated corporate trust office of the Trustee or in the manner provided in any Supplemental Indenture. (Indenture, Section 3.2)

Legends

The Bonds may contain, or have endorsed thereon, such provisions, specifications and descriptive words not inconsistent with the provisions authorizing the issuance thereof, as may be necessary or desirable and as may be determined by the Authority prior to their authentication and delivery. (Indenture, Section 3.3)

Execution and Authentication

The Bonds shall be executed in the name and on behalf of the Authority by the manual or facsimile signature of an Authorized Officer of the Authority and sealed with its corporate seal (or a facsimile thereof), attested by the manual or facsimile signature of another Authorized Officer of the Authority who did not execute the Bonds. In case any officer whose signature appears on such Bonds shall cease to be such officer before delivery of such Bonds, such signature shall, nevertheless, be valid and sufficient for all purposes as if he had remained in office until such delivery. The Bonds when so executed shall be delivered to the Trustee for manual authentication by it, and the Trustee shall, upon written order of the Authority, signed by an Authorized Officer thereof, authenticate and deliver such Bonds as provided in the Indenture and not otherwise.

No Bond shall be valid or obligatory for any purpose or shall be entitled to any right or benefit under the Indenture unless there shall be endorsed on such Bond a certificate of authentication in the form set forth in the Indenture, duly executed by the Trustee, and such certificate of the Trustee, upon any Bond executed on behalf of the Authority, shall be conclusive evidence and the only evidence required that the Bonds so authenticated have been duly issued under the Indenture and that the owner thereof is entitled to the benefit of the Indenture. The certificate of the Trustee may be executed by any Authorized Officer of the Trustee. (Indenture, Section 3.4)

Bonds Mutilated, Destroyed, Lost or Stolen

In case any Bond shall become mutilated or be destroyed, lost or stolen, upon request, the Trustee shall authenticate and deliver a new Bond in exchange for the mutilated Bond or in lieu of and substitution for the Bond so destroyed, lost or stolen. In every case of exchange or substitution, the applicant shall furnish to the Authority and to the Trustee such security or indemnity as may be required by them to save each of them harmless from all

D-2 risks, however remote, and the applicant shall also furnish to the Authority and to the Trustee evidence to their satisfaction of the mutilation, destruction, loss or theft of the applicant’s Bond and of the ownership thereof. The Trustee may authenticate any Bond issued upon such exchange or substitution and deliver the same upon the written request or authorization of an Authorized Officer of the Authority. Upon the issuance of any Bond upon such exchange or substitution, the Authority and the Trustee may require the payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto and any other expenses, including counsel fees and expenses, of the Authority or the Trustee. In case any Bond which has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Authority may, instead of issuing a Bond in exchange or substitution therefor, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Bond) if the applicant for such payment shall furnish to the Authority and the Trustee such security or indemnity as they may require to save them harmless, and evidence to the satisfaction of the Authority and the Trustee of the mutilation, destruction, loss or theft of such Bond and of the ownership thereof.

Every Bond issued pursuant to the provisions described above in exchange or substitution for any Bond which is destroyed, lost or stolen shall constitute a contractual obligation of the Authority, whether or not the destroyed, lost or stolen Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of the Indenture equally and proportionately with any and all other Bonds duly issued under the Indenture. All Bonds shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all rights or remedies, notwithstanding any law or statute (to the extent permitted under such law or statute) existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. (Indenture, Section 3.6)

Notice of Redemption

When Bonds (or portions thereof) are to be redeemed, the Authority shall give or cause to be given notice of the redemption of the Bonds to the Trustee no later than 45 days prior to the redemption date. Thereafter, the Trustee shall give or cause to be given notice of the redemption of the Bonds (or portions thereof) in the name of the Authority which notice shall specify: (i) the Bonds to be redeemed in whole or in part; (ii) the redemption date; (iii) the numbers and other distinguishing marks of the Bonds to be redeemed (except in the event that all of the Outstanding Bonds are to be redeemed); and (iv) that such Bonds will be redeemed at the designated corporate trust office of the Trustee. Such notice shall further state that on such date there shall become due and payable upon each Bond (or a portion thereof) to be redeemed the Redemption Price thereof, together with interest accrued to the redemption date, and that, from and after such date, interest thereon shall cease to accrue. Such notice shall be given, not more than forty-five (45) nor less than thirty (30) days prior to the redemption date, by the Trustee by mail, postage prepaid, or by Electronic Means to the Bondowners of any Bonds which are to be redeemed, at their addresses appearing on the registration books maintained by the Trustee. Any notice of optional redemption shall state that it is conditional and that the redemption of such Bonds is subject to there being on deposit with the Trustee on the redemption date funds sufficient to pay the redemption price of such Bonds. Notice having been given in accordance with the foregoing, failure to receive any such notice by any of such Bondowners or any defect therein, shall not affect the redemption or the validity of the proceedings for the redemption of the Bonds. Prior to mailing such notice to Bondowners the Trustee shall send by confirmed fax or shall mail by overnight or first class regular mail, a copy of the notice of such redemption to all of the national information services (of which the Trustee is aware) disseminating information concerning obligations like the Bonds and to any securities depository in the event that the Bonds are registered in the name of a securities depository or its nominee. The Trustee shall also indicate on such notices, the contact person or persons and telephone number of the person or persons handling the redemption. The Trustee shall also comply, in connection with any redemption, to the extent practicable, with the standards set forth in Securities Exchange Commission Release No. 34-23856 (issued December 3, 1986) or by the Municipal Securities Rulemaking Board, as such standards may be amended from time to time, to the extent applicable. (Indenture, Section 4.2)

Payment of Redeemed Bonds

Notice having been given in the manner provided in Section 4.2 of the Indenture, the Bonds (or portions thereof) so called for redemption shall become due and payable on the redemption date so designated at the Redemption Price, plus accrued interest to the redemption date, and upon presentation and surrender thereof at the

D-3 office specified in such notice, such Bonds (or portions thereof) shall be paid at the Redemption Price, plus accrued interest to the redemption date; provided, however, that Bonds containing or having endorsed thereon a legend relating to The Depository Trust Company’s book-entry only system of transfers in accordance with the Indenture need not be presented or surrendered in the manner described in this Section. If, on the redemption date, moneys for the redemption of all Bonds (or portions thereof) to be redeemed, together with interest to the redemption date, shall be held by the Trustee so as to be available therefor on such date, and after notice of redemption shall have been given as aforesaid, then, from and after the redemption date, the Bonds (or portions thereof) so called for redemption shall cease to bear interest and such Bonds (or portions thereof) shall no longer be considered as Outstanding under the Indenture. If such moneys shall not be so available on the redemption date, such Bonds (or portions thereof) shall continue to bear interest until paid at the same rate as they would have borne had they not been called for redemption and, in the case of optional redemption, the Bonds shall continue to be due on their original maturity dates as if the Bonds had not been called for redemption. (Indenture, Section 4.3)

Establishment of Funds and Accounts

The following funds and separate accounts within funds are established, held and maintained by the Trustee pursuant to the Indenture except for the Construction Fund which shall be held by the Authority:

Construction Fund Construction Account Cost of Issuance Account Capitalized Interest Account

Debt Service Fund Interest Account Principal Account Sinking Fund Account

Debt Service Reserve Fund Redemption Fund Rebate Fund

Each Supplemental Indenture may contain provisions with respect to Funds and Accounts, and with respect to the Revenues and the application thereof, which are in addition to or in lieu of the provisions of Article V of the Indenture.

For accounting purposes only, the Funds and Accounts described above may be further divided into subaccounts to facilitate, among other items, the disposition of Revenues. (Indenture, Section 5.1)

Application of Moneys in the Construction Fund

As soon as practicable after the delivery of the Bonds, the Authority shall pay from the Cost of Issuance Account to the firms, corporations or persons entitled thereto the Cost of Issuance of the Authority relating to the issuance of such Bonds solely from moneys (which shall include, with respect to the payment of Cost of Issuance for the Bonds, moneys paid to the Authority by the Institution) deposited in the Cost of Issuance Account with the Authority. Amounts on deposit in the Cost of Issuance Account shall also be applied, as soon as practicable following delivery of the Bonds, to the payment to the Authority of the Upfront Fee. Any moneys remaining on hand in the Cost of Issuance Account upon payment of all Costs of Issuance shall be (i) paid to the Institution (or applied at the direction of the Institution) to the extent such moneys represent amounts contributed by the Institution (and not proceeds of the Bonds) to the payment of Costs of Issuance, and (ii) otherwise transferred to the Construction Account if the Project is not completed, and if not so needed in the Construction Account, to the Trustee for deposit into the Interest Account, the Principal Account and/or the Sinking Fund Account as directed in writing by an Authorized Officer of the Authority.

D-4 Except as otherwise provided in Article V of the Indenture or in any Supplemental Indenture, any moneys deposited in an Account within the Construction Fund shall be used only to pay the Costs of or relating to the Project to which the Indenture, or a project defined in such Supplemental Indenture, relates, including reimbursement to the Institution for such Costs paid by the Institution in connection with the Project and approved by the Authority; provided, however, that to the extent an Event of Default described in clause (a) or (b) of Section 8.1 of the Indenture shall have occurred and be continuing and no other moneys are available under the Indenture to cure such Event of Default, moneys on deposit in the Construction Fund shall be applied in accordance with Section 8.4 of the Indenture.

Payments pursuant to the first paragraph of this Section shall be made in accordance with a requisition submitted to the Authority by the Institution signed by an Authorized Officer of the Institution stating the names of the payees, the purpose of each payment in terms sufficient for identification and the respective amounts of each such payment. Payments pursuant to the second paragraph of this Section shall be made in accordance with a requisition submitted to the Authority by the Institution signed by an Authorized Officer of the Institution, substantiated by a certificate filed with the Authority describing in reasonable detail the purpose for which such moneys were used and the amount thereof, and further stating the opinion that such purposes constitute a necessary part of the Cost of such Project to which such certificate relates, such substantiating certificate to be signed by: (i) the architect for the Project, in the case of payments for constructing the Project; or (ii) an Authorized Officer of the Institution in the case of the acquisition or refinancing of, or equipping the Project and other expenses and reimbursements; or (iii) an Authorized Officer of the Institution if for payment of interest on the Bonds. The Authority shall be entitled to review and approve any such requisition submitted by the Institution.

Upon completion of the Project as evidenced in accordance with the next succeeding paragraph, or if the Project is deemed complete, the Authority shall transfer the balance in the Construction Fund to the Trustee. The Trustee shall deposit the amounts so received first, to make up any deficiency in the Debt Service Reserve Fund and second, either to the Principal Account of the Debt Service Fund, to the Interest Account of the Debt Service Fund, to the Sinking Fund Account of the Debt Service Fund or to the Redemption Fund, as the Authority may direct in writing. Such payment if deposited in the Debt Service Fund shall be applied as a credit against the next due payment of the principal or interest portion of debt service from the Institution or, if deposited in the Redemption Fund, shall be applied either to the purchase or redemption of Bonds as provided in Section 5.7 of the Indenture.

Completion of the Project shall be determined by certificates signed by the architect for the Project and an Authorized Officer of the Institution and delivered after the date of completion to the Trustee, the Authority and the Institution. Such certificate signed by the architect for the Project shall state that the Project has been completed, describe it in terms sufficient for identification, and specify the date of completion. In the case of the acquisition of the Project or any part thereof, completion of such acquisition shall be evidenced by a certificate signed by an Authorized Officer of the Institution and delivered within ten (10) days after the date of completion of such acquisition to the Authority and to the Trustee.

The Authority shall transfer to the Trustee from moneys, if any, on deposit in the Capitalized Interest Account for deposit by the Trustee to the Interest Account of the Debt Service Fund, on the second Business Day next preceding each Interest Payment Date the amounts therein which are to be applied to the payment of interest on the Bonds on such date in accordance with a schedule therefor set forth in a certificate of an Authorized Officer of the Authority delivered at or prior to the issuance of the Bonds.

The Authority, in its discretion if and when requested by the Institution, may also transfer to the Trustee, from moneys on deposit in the Capitalized Interest Account for deposit to the Construction Account of the Construction Fund or to the Interest Account of the Debt Service Fund, and in such case a revised schedule for payments of interest from the Capitalized Interest Account shall be provided, or caused to be provided, to the Trustee by the Authority. (Indenture, Section 5.3)

Deposit of Revenues and Allocation thereof

The Revenues received pursuant to the Loan Agreement and any other moneys required by any of the provisions of the Indenture to be paid or transferred to the Trustee shall be promptly paid or transferred to the Trustee.

D-5 Notwithstanding any other provisions of the Indenture, moneys received by the Trustee as an optional prepayment pursuant to Section 2.4 of the Loan Agreement shall be applied in the following order: first,ifa deficiency then exists in the Debt Service Reserve Fund as determined pursuant to Section 5.10 of the Indenture, such moneys shall be deposited in the Debt Service Reserve Fund up to the amount of any such deficiency; second, after any of the above deposits are made, then deposited in the Redemption Fund if the Bonds are then subject to redemption, or otherwise in the Debt Service Fund for payment of the next due principal of or interest on the Bonds.

Subject to the prior paragraph, moneys paid or transferred to the Trustee shall on or before the next Business Day after receipt thereof be applied as follows and in the following order of priority:

FIRST: To the Interest Account, the amount equal to one-sixth (1/6) of the interest becoming due on the Outstanding Bonds on the next Interest Payment Date of the Bonds after taking into account available funds, if any, on deposit in the Capitalized Interest Account of the Construction Fund which are scheduled to be transferred to the Trustee pursuant to Section 5.3(e) of the Indenture prior to such Interest Payment Date);

SECOND: To the Principal Account, the amount equal to one-twelfth (1/12) of the principal amount becoming due on the Bonds on the next succeeding principal payment date, after taking into account any amounts on deposit therein available for the payment thereof;

THIRD: To the Sinking Fund Account, the amount equal to one-twelfth (1/12) of the next succeeding Sinking Fund Installment applicable to the Bonds, after taking into account any amounts on deposit therein available for the payment thereof;

FOURTH: To the Rebate Fund to the extent required, amounts necessary in any year so as to meet the Rebate Requirement of the Rebate Fund, as directed in writing by the Authority to the Trustee;

FIFTH: To the Debt Service Reserve Fund, the amount, if any, required by the Loan Agreement to be paid by the Institution to replenish any “deficiency” in the Debt Service Reserve Fund, as is necessary to make the total of the amounts on deposit (including a Reserve Fund Letter of Credit) in the Debt Service Reserve Fund equal to the Debt Service Reserve Fund Requirement; and

SIXTH: To the Authority, unless otherwise paid, such amounts as are payable to the Authority for: (i) any expenditure of the Authority for insurance, fees and expenses of auditing, and fees and expenses of the Trustee, all as required by the Indenture and not otherwise paid or caused to be paid or provided for by the Institution; (ii) all other expenditures reasonably and necessarily incurred by the Authority in connection with the loan to the Institution and the issuance of the Bonds, including penalties for late payments and all expenses incurred by the Authority to compel full and punctual performance of all the provisions of the Loan Agreement in accordance with the terms thereof; (iii) the Annual Administrative Fee; and (iv) any other amounts due and payable by the Institution to the Authority pursuant to the Loan Agreement - but only upon receipt by the Trustee from the Authority of a certificate signed by an Authorized Officer of the Authority, stating in reasonable detail the amounts payable to the Authority pursuant to this paragraph SIXTH.

After making the payments required by paragraphs FIRST, SECOND, THIRD, FOURTH, FIFTH and SIXTH above, any balance remaining shall be paid, as the Authority may direct, to the Debt Service Fund and credited against the next due payment of debt service from the Institution (provided the amount in the Debt Service Fund may not exceed the amount of debt service due on the Bonds during the next twelve months) or to the Redemption Fund and applied by the Trustee to the purchase or redemption of Bonds.

Notwithstanding the foregoing provisions, but subject to Section 5.9 of the Indenture, in lieu of the required deposits of Revenues into the Debt Service Reserve Fund, the Authority, upon request of the Institution, may cause to be deposited into the Debt Service Reserve Fund a Reserve Fund Letter of Credit for the benefit of the Bondowners in an amount equal to the difference between the Debt Service Reserve Fund Requirement and all or a portion of the sums then on deposit in the Debt Service Reserve Fund, if any. Any such Reserve Fund Letter of

D-6 Credit shall be payable or available to be drawn upon, as the case may be (upon the giving of notice as required thereunder), on any interest or principal payment date for the Bonds on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to the Indenture and available for such purpose. If a disbursement is made under a Reserve Fund Letter of Credit, the Institution shall be obligated to either reinstate the maximum limits of such Reserve Fund Letter of Credit immediately following such disbursement equal to the Debt Service Reserve Fund Requirement or to deposit into the Debt Service Reserve Fund from the Revenues, as provided in the Indenture, funds in the amount of the disbursement made under such Reserve Fund Letter of Credit, or a combination of such alternatives as shall equal the Debt Service Reserve Fund Requirement. Any amounts released from the Debt Service Reserve Fund by virtue of a deposit of a Reserve Fund Letter of Credit shall be transferred to the Authority and deposited into the Construction Fund and applied to the payment of Costs of the Project until the Project is complete. Thereafter, any such released amounts shall be transferred to the Debt Service Fund for payment of principal next due on the Bonds or to the Redemption Fund for the purchase or redemption of Bonds in such manner as the Authority, at the written direction of an Authorized Officer of the Institution, may direct.

In lieu of redeeming Bonds through Sinking Fund Installments as provided in clause THIRD above and Section 2.6 of the Indenture, the Authority may elect to do either of the following:

(A) The Authority may direct the Trustee in writing or by Electronic Means to apply moneys from time to time on deposit in the Sinking Fund Account to the purchase of an equal principal amount of Bonds (of the maturity and in amounts then subject to redemption through Sinking Fund Installments) at prices not higher than the principal amount to be redeemed plus accrued interest, provided that firm commitments to sell Bonds are received at leastfive(5)BusinessDaysbeforethenoticeofredemptionwouldotherwiseberequiredtobegiven;provided further, that in the event of purchases at purchase prices less than the principal amount to be redeemed plus accrued interest, the difference between the amount in the Sinking Fund Account representing the principal amount of the Bonds purchased and the purchase price (exclusive of accrued interest) shall be deposited in the Debt Service Fund for application pursuant to the paragraphs SECOND or THIRD above as directed by the Authority; provided further, that prior to any such purchase, the Authority shall give written directions to the Trustee to purchase such Bonds; or

(B) The Authority (upon request therefor from the Institution or as the Authority shall so determine) may deliver to the Trustee for cancellation Bonds of the maturity then subject to redemption by Sinking Fund Installments at least five (5) Business Days before the notice of redemption would otherwise be required to be given, in which event to the extent of the principal amount of Bonds so surrendered (i) no deposit from the Authority into the Sinking Fund Account need be made and (ii) no such redemption from Sinking Fund Installments shall occur.

So long as beneficial ownership interests in the Bonds are held through the book-entry-system, any purchase or delivery of such Bonds as set forth in such clauses (A) and (B) above shall be deemed to have occurred upon the purchase or delivery of beneficial ownership interests in such Bonds made pursuant to the provisions of the Indenture. (Indenture, Section 5.4)

Application of Moneys in the Debt Service Fund

The Trustee shall transfer moneys out of the Interest Account on each Interest Payment Date for the payment of interest then due on the Bonds. The Trustee shall pay out of such Interest Account any amounts required for the payment of accrued interest upon any redemption or purchase of the Bonds.

The Trustee shall transfer moneys out of the Principal Account or the Sinking Fund Account on each principal maturity date or Sinking Fund Installment date for the payment of the principal amount of the Bonds or Sinking Fund Installment then due. The Trustee shall pay out of the Sinking Fund Account any amounts directed by the Authority for the purchase of Bonds pursuant to Section 5.4 of the Indenture. (Indenture, Section 5.5)

Application of Moneys in the Debt Service Reserve Fund

If on any Interest Payment Date the amount in the Interest Account shall be less than the amount of interest due on the Bonds or if on any July 1 the amount in the Principal Account or Sinking Fund Account, as the case may

D-7 be, shall be less than the amount of principal or Sinking Fund Installment, as the case may be, then due on the Bonds, the Trustee forthwith shall transfer moneys from the Debt Service Reserve Fund, first, to the Interest Account, and second, to the Principal Account or Sinking Fund Account, as the case may be, to the extent necessary to make good the deficiency or deficiencies. Any such application of moneys shall also be deemed to include a withdrawal or claim on a Reserve Fund Letter of Credit.

AtthetimeofanywithdrawalfromtheDebtServiceReserveFund,theTrusteeshallpromptlynotifythe Authority and the Institution of the amount of any such withdrawal.

Notwithstanding Section 5.4 of the Indenture and Section 2.2 of the Loan Agreement, in the event that any moneys shall be withdrawn from the Debt Service Reserve Fund for payments into the Interest Account, Principal Account or Sinking Fund Account and a “deficiency” as defined in Section 5.10 of the Indenture exists therein, such withdrawals shall be subsequently restored by the Institution as provided in Section 2.2 of the Loan Agreement and otherwise from the first Revenues or funds available after all required payments have been made into the Interest Account, Principal Account and Sinking Fund Account, including any deficiencies for prior payments.

Each Reserve Fund Letter of Credit shall require the issuer thereof to promptly notify the Trustee, the Authority and the Institution of any downgrade of such issuer, and shall authorize, permit or provide that the Trustee shall draw upon such facility in full promptly, and in no event later than three (3) Business Days after, the Trustee has obtained actual knowledge of the downgrading of the issuer of such facility below the requirements for such facility set forth in the Indenture. The Trustee agrees to promptly draw upon such facility in full upon obtaining knowledge or notice of any such downgrade. The Trustee shall accept notice of such downgrade from the provider thereof, the Authority, the Institution, any Bondholder, or any generally available financial publications or financial information services, but the Trustee shall have no duty to monitor the rating of the issuer of any such facility. Any funds received upon a drawing by the Trustee on any such facility shall be credited to the Debt Service Reserve Fund and applied accordingly. If the drawing upon any such facility results in a deficiency in the Debt Service Reserve Fund, the Trustee shall promptly notify the Authority and the Institution thereof, and the Institution shall replenish any such deficiency within the time period required by Section 2.2 of the Loan Agreement after the receipt of notice of such deficiency (treating any drawing because of a downgrade as if it were a drawing resulting from a decline in market value). (Indenture, Section 5.6)

Application of Moneys in the Redemption Fund

If the Trustee at any time shall determine by computation that a “deficiency,” as that term is used in Section 5.10 of the Indenture, exists in the Debt Service Reserve Fund, the Trustee shall transfer from moneys in the Redemption Fund (other than moneys required to pay the Redemption Price of any Bonds theretofore called for redemption and moneys required for the purchase of any Bonds theretofore contracted to be purchased), to the Debt Service Reserve Fund the amount, to the extent available, necessary to make the amount on deposit in the Debt Service Reserve Fund equal to the Debt Service Reserve Fund Requirement.

Moneys in the Redemption Fund derived from optional prepayment of the loan pursuant to Section 2.4 of the Loan Agreement shall, at the written direction of the Authority, at the direction of the Institution, be applied to payment of the Redemption Price of Bonds, plus accrued interest, if any, thereon to the date set for redemption, in accordance with the Indenture.

Moneys in the Redemption Fund derived from insurance or condemnation proceeds pursuant to Section 4.2 of the Loan Agreement or from transfers from the Construction Fund pursuant to Section 5.3 of the Indenture shall be applied to payment of the Redemption Price of Bonds, plus accrued interest on any Interest Payment Date, if any, thereon to the date set for redemption, in accordance with of the Indenture.

Subject to the provisions described above, moneys in the Redemption Fund may be applied to the purchase of Bonds at purchase prices not exceeding the Redemption Price applicable to the Bonds to be purchased plus accrued interest due, in such manner as the Authority may direct. Bonds so purchased shall be cancelled by the Trustee. If sixty (60) days prior to any Interest Payment Date on which Bonds are subject to optional redemption, moneys in excess of $25,000 shall then remain on deposit in such Redemption Fund, the Trustee shall apply such

D-8 moneys to the redemption of such Bonds as provided in Article IV of the Indenture, at the Redemption Prices specified in the Indenture.

Moneys in the Redemption Fund may be applied to the purchase of Bonds in lieu of redemption in accordance with the Indenture.

Any excess moneys on deposit in the Redemption Fund and not needed to pay the Redemption Price of Bonds called for redemption shall be paid to the Institution or deposited to the Principal Account of the Debt Service Fund, the Interest Account of the Debt Service Fund, or the Sinking Fund Account of the Debt Service Fund, or applied to the optional redemption of Bonds in accordance with the Indenture, as the Authority shall direct in writing. (Indenture, Section 5.7)

Investment of Moneys

Any moneys held in any of the funds or accounts established under the Indenture shall be invested by the Trustee, as directed by the Authority in a written order signed by an Authorized Officer thereof, or by the Authority, but only as follows:

(a) Moneys in the Debt Service Fund only in Qualified Investments, except those listed in items C, I, K, M and N of the definition thereof, maturing in such amounts and on such dates as may be necessary to provide moneys to meet the payments from such Fund;

(b) Moneys in the Redemption Fund only in Qualified Investments, except those listed in items C, I, K, M and N of the definition thereof, maturing or redeemable at the option of the owner not later than the next succeeding date on which the Bonds are subject to redemption;

(c) Moneys in the Debt Service Reserve Fund only in obligations maturing or redeemable at the option of the owner not later than five years after their deposit into the Debt Service Reserve Fund, and in any event not later than the last maturity date of the Bonds, which are Qualified Investments, except those listed in items C, I, K and N of the definition thereof; the Authority, upon the written request of the Institution, may cause to be deposited in the Debt Service Reserve Fund a Reserve Fund Letter of Credit;

(d) Notwithstanding anything to the contrary in the Indenture, moneys in the Rebate Fund only in Qualified Investments listed in items A, D, E, F and L of the definition thereof maturing or redeemable at the option of the owner not later than the date the next payment of rebate is due and only in accordance with the Tax Regulatory Agreement; and

(e) Subject to the provisions of the Act, any moneys held by the Authority in the Construction Fund may be invested by an Authorized Officer of the Authority only in Qualified Investments.

Notwithstanding any other provisions of the Indenture concerning the requirement that all investment instructions shall be given to the Trustee or any depository by the Authority, in the event that the Trustee has not received instructions from the Authority to invest any moneys remaining in any Fund or Account under the Indenture, the Trustee or any such depository shall daily deposit such moneys in Qualified Investments listed in item D of the definition thereof.

The Trustee is authorized, in making or disposing of any investment permitted under the Indenture, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as principal for its own account.

Any securities or investments held by the Trustee shall be transferred by the Trustee, if requested in writing by an Authorized Officer of the Authority, from any of the funds or accounts mentioned in this Section to any other of the funds or accounts mentioned in this Section at the then current market value thereof without having to be sold and purchased or repurchased; provided, however, that after any such transfer or transfers the investments in each such fund or account shall be in accordance with the provisions as stated in this Section.

D-9 Unless otherwise directed by the Authority, interest earned, profits realized and losses suffered by reason of any investment shall be credited or charged, as the case may be, to the Fund or Account for which such investment shall have been made, except that, prior to the earlier of completion of the Project or two (2) years after the date of issuance of the Bonds, investment income on amounts, if any, on deposit in the Debt Service Reserve Fund shall be transferred to the Construction Account of the Construction Fund. After such date, investment income from the Debt Service Reserve Fund shall be transferred to the Interest Account of the Debt Service Fund.

Notwithstanding the foregoing, the Authority reserves the right to direct the transfer of arbitrage interest earned on Bond proceeds to the Rebate Fund, which amounts shall be applied in accordance with Section 5.8 of the Indenture.

The Trustee and the Authority may sell or redeem any obligations in which moneys shall have been invested, to the extent necessary to provide cash in the respective funds or accounts, to make any payments required to be made therefrom, or to facilitate the transfers of moneys, securities or investments between various funds and accounts as may be required or permitted from time to time pursuant to the provisions of this Article.

In computing the value of the assets in any fund or account under the Indenture, the Trustee and the Authority, if required under the Indenture to value any fund or account under its control, shall value such assets at the current market value thereof; provided, however, a Reserve Fund Letter of Credit, unless disaffirmed or terminated, as applicable, shall be valued at the face amount thereof. In computing such value, accrued interest on any investment shall be deemed a part thereof.

Neither the Trustee nor the Authority shall be liable for any depreciation in the value of any obligations in which moneys of the funds or accounts shall be invested, as aforesaid, or for any loss arising from any investment permitted under the Indenture. (Indenture, Section 5.9)

Deficiencies and Surpluses in Debt Service Reserve Fund

For the purposes of this Section: (i) a “deficiency” shall mean in the case of the Debt Service Reserve Fund, that the amount on deposit therein is less than the Debt Service Reserve Fund Requirement, and (ii) a “surplus” shall mean in the case of the Debt Service Reserve Fund, that the amount on deposit therein is in excess of theDebtServiceReserveFundRequirement.

At the time of any withdrawal from the Debt Service Reserve Fund the Trustee shall promptly compute, in the manner set forth in Section 5.9 of the Indenture, the value of the remaining assets thereof, and the Trustee shall promptly notify the Authority and the Institution of the amount of any deficiency.

The Trustee, as of the close of business on each June 30 and December 31, shall compute, in the manner set forth in Section 5.9 of the Indenture, the value of the assets of the Debt Service Reserve Fund. The Trustee shall as promptly as practicable after such June 30 and December 31, but in any case not later than the first Business Day subsequent to such valuation, notify the Authority and the Institution in writing as to the result of such computation and the amount of any surplus or deficiency as of June 30 and December 31 in the Debt Service Reserve Fund. The Trustee shall as promptly as practicable, but only after direction from the Authority, transfer the amount directed by the Authority up to the amount of any surplus, which as the result of such computation may be shown to exist in such Fund as of such June 30 and December 31, from the Debt Service Reserve Fund for application as Revenues as provided for in Section 5.4 of the Indenture. The Authority shall have complete discretion as to whether or not it directs that any such surplus be so transferred.

The Authority covenants that the amount of any deficiency existing as of June 30 and December 31 and following any withdrawal, as mentioned in the two preceding paragraphs, shall be included as a part of the payments due to the Trustee for the account of the Authority for the portion of the Bond Year immediately succeeding such valuation date or withdrawal payable in accordance with the Loan Agreement.

Deficiencies in the amount on deposit in the Debt Service Reserve Fund shall be restored by the Institution as provided in Section 2.2 of the Loan Agreement.

D-10 The Trustee shall, promptly after obtaining actual knowledge of a downgrade of a Reserve Fund Letter of Credit to a rating below one of the two highest long-term rating categories by any two national ratings services, notify the Authority and the Institution of any such downgrade. (Indenture, Section 5.10)

Application of Moneys in Certain Funds for Retirement of Bonds

Notwithstanding any other provisions of the Indenture and any Supplemental Indenture, if at any time the amounts held in the Debt Service Fund, the Debt Service Reserve Fund (except for any Reserve Fund Letter of Credit) and the Redemption Fund are sufficient to pay the principal or Redemption Price of all Outstanding Bonds and the interest accruing on such Bonds to the next date when all such Bonds are redeemable, the Trustee shall so notify the Authority and the Institution. Upon receipt of such notice, the Authority may request the Trustee to redeem all such Outstanding Bonds. The Trustee shall, upon receipt of such request in writing by the Authority, proceed to redeem all such Outstanding Bonds in the manner provided for redemption of such Bonds by the Indenture and any Supplemental Indenture, and in such event all provisions of Section 12.1 of the Indenture shall be operative. (Indenture, Section 5.11)

Payment of Principal and Interest

The Authority shall pay or cause to be paid the principal or Redemption Price of and interest on every Bond on the date and at the places and in the manner mentioned in such Bonds according to the true intent and meaning thereof solely from the sources provided in the Indenture, and to the extent moneys are available from Revenues. (Indenture, Section 6.1)

Revenues

The Authority covenants that the Loan Agreement shall provide that the Institution shall pay amounts sufficient to provide Revenues sufficient at all times: (i) to pay the principal of and interest on the Bonds as the same respectively become due and payable by redemption or otherwise; (ii) to maintain the Debt Service Reserve Fund at the Debt Service Reserve Fund Requirement to the extent required in the Indenture; and (iii) to pay the expenditures of the Authority and the Trustee incurred in relation to the Indenture. (Indenture, Section 6.2)

Accounts

The Authority shall keep proper books of records and accounts in which complete and correct entries shall be made of its transactions relating to the Institution’s facilities and the Indenture, which books and accounts, at reasonable hours and subject to the reasonable rules and regulations of the Authority, shall be subject to the inspection of the Trustee, the Institution or of any owner of a Bond or of the owner’s representative duly authorized in writing. (Indenture, Section 6.3)

Indebtedness and Liens

The Authority, so long as any Bonds shall be Outstanding, shall not issue any bonds, notes or other evidence of indebtedness, other than Bonds issued in accordance with the provisions of Article III of the Indenture, secured on a parity with the Bonds by any pledge of or other lien or charge on the Revenues or other moneys, securities or funds paid or to be paid to or held or set aside or to be held or set aside by the Authority or the Trustee under the Indenture and any Supplemental Indenture. The Authority shall not create or cause to be created any lien or charge on the Revenues or such moneys or securities or funds, other than the lien and pledge on the Revenues or such moneys, securities or funds created or permitted by the Indenture and any Supplemental Indenture. Notwithstanding the foregoing and subject to compliance by the Institution with the provisions of the Loan Agreement relating to the incurrence of Indebtedness, the Authority may issue other bonds, notes and other evidences of indebtedness on behalf of the Institution pursuant to one or more trust indentures, other than the Indenture, which are on a parity with or subordinate to the Bonds and any other indebtedness of the Authority issued on behalf of the Institution on a parity or subordinate basis therewith. (Indenture, Section 6.4)

D-11 The Loan Agreement and the Mortgage; Amendment and Execution

The Loan Agreement and the Mortgage and any supplements or modifications thereto shall be executed in at least three counterparts. An executed counterpart shall be filed in the office of the Authority and in the office of the Trustee, and an executed counterpart delivered to the Institution. The Loan Agreement and the Mortgage may be amended or supplemented, without Bondowner consent, provided such amendment or supplement does not cause the Authority to violate any of its covenants and agreements under the Indenture. The Authority agrees not to enter into any amendment or supplement to the Loan Agreement or consent to any amendment or supplement to the Mortgage, which amendment or supplement would materially prejudice the rights and interests of the Owners of the Bonds, without the consent of the Owners, obtained as provided in the Indenture, of at least a majority in aggregate principal amount of all Outstanding Bonds affected thereby; provided, however, that no such amendment or supplement which would change the amount or time as to which loan payments are required to be paid under the Loan Agreement shall be entered into without the consent of the Owners of all of the then Outstanding Bonds who would be affected by such amendment. Notwithstanding the foregoing, the Authority reserves the right to waive any provision of the Loan Agreement provided such waiver does not cause the Authority to violate any of its covenants or agreements under the Indenture. The Authority covenants not to enter into any amendment or modification of the Loan Agreement without filing an executed copy thereof with the Trustee. The Authority covenants for the benefit of the Bondowners not to void the Loan Agreement or any other Institution Document pursuant to the provisions of Connecticut Public Act No. 07-1. (Indenture, Section 6.5)

Tax Covenants

The Authority covenants to comply with the Tax Regulatory Agreement.

The Authority covenants that it shall not knowingly make nor direct the Trustee to make any investment or other use of the proceeds of the Bonds issued under the Indenture that would cause such Bonds to be “arbitrage bonds” as that term is defined in Section 148(a) of the Code. The Trustee covenants that in those instances after the occurrence of an Event of Default where it exercises discretion over the investment of funds, it shall not knowingly make any investment inconsistent with the foregoing covenants.

The Authority covenants that it (i) will take, or use its best efforts to require to be taken, all actions that may be required of the Authority for the interest on the Bonds to be and remain not included in gross income for federal income tax purposes and (ii) will not take or authorize to be taken any actions within its control that would adversely affect such status under the provisions of the Code. (Indenture, Section 6.6)

Obligation of Trustee

Except as specifically set forth in the Indenture, the Trustee shall be under no obligation to institute any suit, or to take any action or proceeding under the Indenture or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the execution of the trusts created by the Indenture or in the enforcement of any rights and powers under the Indenture, including, without limitation, pursuant to the direction of, or on behalf of, any of the Bondowners, until it shall be paid or reimbursed or indemnified to its satisfaction against any and all reasonable costs and expenses, outlays, liabilities, damages and counsel fees and expenses and other reasonable disbursements. The Trustee may nevertheless begin suit, or appear in and defend suit, or do anything else in its judgment proper to be done by it as the Trustee, and in such case the Authority shall reimburse the Trustee but only from the Revenues for all costs and expenses, outlays, liabilities, damages and counsel fees and expenses and other reasonable disbursements properly incurred in connection therewith. If the Authority shall fail to make such reimbursement, the Trustee may reimburse itself from any moneys in its possession under the provisions of the Indenture (other than money on deposit in the Rebate Fund or any money on deposit in any irrevocable trust or escrow fund established with respect to any defeased Bonds) upon notice to the Institution and the Authority of its intention to reimburse itself and the Trustee shall be entitled to a preference therefor over any of the Bonds Outstanding under the Indenture. (Indenture, Section 7.2)

D-12 Responsibilities of Trustee

The recitals contained in the Indenture, any Supplemental Indenture and in the Bonds shall be taken as the statements of the Authority and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of the Indenture, any Supplemental Indenture or of the Bonds or in respect of the security afforded by the Indenture or any Supplemental Indenture and the Trustee shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty with respect to: (i) the issuance of the Bonds for value; or (ii) the application of the proceeds thereof except to the extent that such proceeds are received by it in its capacity as Trustee; or (iii) the application of any moneys paid to the Authority or others in accordance with the Indenture except as to the application of any moneys paid to it in its capacity as Trustee; or (iv) the recording or rerecording, registration or reregistration, filing or refiling of the Indenture or any security documents contemplated thereby, provided, however, the Trustee shall be responsible for the filing of Uniform Commercial Code continuation statements; or (v) the validity of the execution by the Authority of the Indenture; or (vi) compliance by the Authority with the terms of the Indenture. The Trustee may require of the Authority full information and advice regarding the performance of the covenants, conditions and agreements contained in the Indenture. The Trustee shall not be liable in connection with the performance of its duties under the Indenture except for its own negligence, misconduct, or failure to comply with the provisions of the Indenture.

Except as otherwise provided in the Indenture, the Trustee shall not be bound to recognize any person as a holder of any Bond or to take action at such person’s request, unless such person shall be the Bondowner of such Bond. Any action duly taken by the Trustee pursuant to the Indenture upon the request, authority or consent of any person who at the time of making such request or giving such authority or consent is the Bondowner of any Bond secured by the Indenture shall be conclusive and binding upon all future Bondowners of such Bond.

The duties and obligations of the Trustee shall be determined by the express provisions of the Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in the Indenture. In the case of an event of default specified in Article VIII of the Indenture, which event of default has not been cured or waived and of which the Trustee is deemed to have knowledge, the Trustee shall exercise such of the rights and powers vested in it by the Indenture and shall use the same degree of care and skill in its exercise thereof as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

The Trustee shall not be charged with knowledge of any event under the Indenture unless an officer or administrator in the Trustee’s corporate trust department has actual knowledge of such event.

The Trustee, upon receipt of documents furnished to it by or on behalf of the Authority or the Institution pursuant to the Indenture, shall examine the same to determine whether or not such documents conform to the requirements of the Indenture.

Except as otherwise expressly provided by the provisions of the Indenture, the Trustee shall not be obligated and may not be required to give or furnish any notice, demand, report, request, reply, statement, advice or opinion to the Bondowner of any Bond and the Trustee shall not incur any liability for its failure or refusal to give or furnishthesameunlessobligatedorrequiredtodosobyanexpressprovisionoftheIndenture.TheTrusteeshall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Indenture. The Trustee shall incur no liability in respect of any action taken or omitted by it in good faith without negligence in accordance with the direction of the Bondowners of the percentage of the Bonds specified in the Indenture relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee under the Indenture.

Subject to Section 8.6 of the Indenture, in the event the Trustee shall receive inconsistent or conflicting requests and indemnity from two or more groups of Bondowners, each representing less than a majority of the aggregate principal amount of the Bonds then Outstanding, the Trustee, in its sole discretion, may determine what action, if any, shall be taken.

D-13 The Trustee shall not be liable for interest on any funds deposited with it under the Indenture, except as provided in the Indenture or as the Trustee may otherwise specifically agree in writing.

In acting or in omitting to act pursuant to the provisions of the Loan Agreement, the Intercreditor Agreement, or the Mortgage, the Trustee shall be entitled to the rights and immunities accorded by the terms of the Indenture. (Indenture, Section 7.3)

Property Held in Trust

All moneys and securities held by the Trustee at any time pursuant to the terms of the Indenture shall be and are assigned, transferred and set over unto the Trustee in trust for the purposes and under the terms and conditions of the Indenture. (Indenture, Section 7.4)

Evidence on which Trustee May Act

The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may or may not be counsel to the Authority, and may rely on an Opinion of Counsel. Any such Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered, or any action not taken, by it in good faith and in accordance therewith, and the Trustee shall not be liable for any action taken or omitted in good faith in reliance on such Opinion of Counsel. Whenever the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or not taking any action under the Indenture, such matter (unless other evidence in respect thereof be specifically prescribed by the Indenture) may be deemed to be conclusively proved and established by a certificate signed by an Authorized Officer of the Authority or, if applicable, the Institution. Such certificate shall be full warrant for any action taken or suffered, or any action not taken, in good faith under the provisions of the Indenture, but the Trustee may (but shall not be required to) in addition thereto or in lieu thereof require or accept other evidence of such fact or matter or may require such further or additional evidence as it may deem reasonable. Except as otherwise expressly provided in the Indenture, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision of the Indenture by the Authority to the Trustee shall be sufficiently executed if executed in the name of the Authority by an Authorized Officer. (Indenture, Section 7.5)

Permitted Acts

The Trustee may become the owner of or may deal in Bonds or may deal with the Authority or with the Institution as fully and with the same rights as if it were not the Trustee. The Trustee may act as depository for, and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, the Authority or any committee formed to protect the rights of Bondowners or to effect or aid in any reorganization growing out of the enforcement of the Bonds or the Indenture, whether or not such committee shall represent the Owners of a majority in principal amount of the Outstanding Bonds in respect of which any such action is taken. (Indenture, Section 7.7)

Resignation of Trustee

The Trustee, or any successor thereof, may at any time resign and be discharged of its duties and obligations under the Indenture by giving not less than thirty (30) days’ written notice to the Authority, the Institution and the Bondowners, specifying the date when such resignation shall take effect, provided such resignation shall not take effect until a successor shall have been appointed by the Authority or a court of competent jurisdiction as provided in Section 7.10 and shall have accepted such appointment. (Indenture, Section 7.8)

D-14 Removal of Trustee

The Trustee, or any successor thereof, may be removed with or without cause at any time by the Authority, if no Event of Default under the Indenture shall have occurred and be continuing, or upon an Event of Default under the Indenture by the owners of a majority in principal amount of Outstanding Bonds, excluding any Bonds held by or for the account of the Authority, by an instrument or concurrent instruments in writing signed and acknowledged by such Bondowners or by their attorneys-in-fact duly authorized and delivered to the Authority, provided that such removal shall not take effect until a successor is appointed. Such removal shall take effect upon the date a successor shall have been appointed by the Authority or a court of competent jurisdiction as provided in Section 7.10 of the Indenture and shall have accepted such appointment. Copies of each instrument providing for any such removal shall be delivered by the Authority to the Institution and the Trustee and any successor thereof. (Indenture, Section 7.9)

Successor Trustee

In case the Trustee, or any successor thereof, shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee or of its property shall be appointed, or if any public officer shall take charge of control of the Trustee, or of its property or affairs, the Authority shall forthwith appoint a Trustee to act. Notice of any such appointment shall be delivered by the Authority to the Trustee so appointed, the predecessor Trustee and the Institution. The Authority shall give or cause to be given written notice of any such appointment to the Bondowners.

If in a proper case no appointment of a successor shall be made within forty-five (45) days after the giving of written notice in accordance with Section 7.8 of the Indenture or after the occurrence of any other event requiring or authorizing such appointment, the Trustee or any Bondowner may apply to any court of competent jurisdiction for the appointment of such a successor, and such court may thereupon, after such notice, if any, as such court may deem proper, appoint such successor.

Any successor appointed under the provisions of this Section shall be a bank or trust company or national banking association which is able to accept the appointment on reasonable and customary terms and authorized by law to perform all the duties required by the Indenture, which is approved by the Authority (unless an event of default under Section 8.1 of the Indenture exists, in which case a successor shall be appointed by the owners of a majority in principal amount of Outstanding Bonds or by a court pursuant to the above paragraph, or unless a successor is appointed by a court pursuant to the above paragraph) and which has a combined capital and surplus aggregating at least $50,000,000 (or such other financial resources acceptable to the Authority in its sole discretion), if there be such a bank or trust company or national banking association willing to serve as Trustee under the Indenture. (Indenture, Section 7.10)

Events of Default

Each of the following events constitutes an “Event of Default” under the Indenture:

(a) Payment of the principal of any of the Bonds shall not be made when the same shall become due and payable, either at maturity or by proceedings for redemption or otherwise; or

(b) Payment of an installment of interest on any Bonds shall not be made when the same shall become due and payable; or

(c) Any proceeding shall be instituted, with the consent or acquiescence of the Authority, for the purpose of effecting a composition between the Authority and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statute now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Revenues; or

(d) The Authority shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in the Indenture on the part of the Authority to be

D-15 performed and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Authority by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of the owners of not less than twenty-five percent (25%) in principal amount of the Outstanding Bonds; or

(e) An Event of Default shall have occurred under the Loan Agreement or under any other Institution Document (other than the Continuing Disclosure Agreement). (Indenture, Section 8.1)

Acceleration of Maturity

Upon the happening of any Event of Default specified in Section 8.1 of the Indenture, the Trustee may, and shall, upon the written request of the owners of not less than a majority in principal amount of the Outstanding Bonds, declare an acceleration of the payment of principal on the Bonds. All such declarations shall be by a notice in writing to the Authority and the Institution, declaring the principal of all of the Outstanding Bonds to be due and payable immediately. Upon the giving of notice of such declaration of acceleration such principal shall become and be immediately due and payable, and interest on the Bonds shall accrue until the principal of such Bonds shall be paid in full. At any time after the principal of the Bonds shall have 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 default, or before the completion of the enforcement of any other remedy under the Indenture, the Trustee may, with the written consent of the owners of not less than a majority in principal amount of the Bonds not then scheduled to be due by their terms and then Outstanding and by written notice to the Authority, annul such declaration and its consequences if: (i) moneys shall have accumulated in the Debt Service Fund sufficient to pay all arrears of principal and interest, if any, upon all of the Outstanding Bonds (except the interest accrued on such Bonds since the last Interest Payment Date and the principal of such Bonds then due only because of a declaration under this Section); (ii) moneys shall have accumulated and be available sufficient to pay the charges, compensation, expenses, disbursements, advances and liabilities of the Trustee; (iii) all other amounts then payable by the Authority under the Indenture shall have been paid or a sum sufficient to pay the same shall have been deposited with the Trustee; and (iv) every other default known to the Trustee in the observance or performance of any covenant, condition or agreement contained in the Bonds or in the Indenture (other than a default in the payment of the principal of such Bonds then due only because of a declaration under this Section) shall have been remedied to the satisfaction of the Trustee or waived pursuant to Section 8.10 of the Indenture. No such annulment shall extend to or affect any subsequent default or impair any right consequent thereon. (Indenture, Section 8.2)

Enforcement of Remedies

Upon the happening and continuance of any Event of Default specified in Section 8.1 of the Indenture, then and in every such case, the Trustee may proceed, and upon the written request of the Owners of not less than a majority in principal amount of the Outstanding Bonds shall proceed (subject to the provisions of Sections 7.2 and 8.6 of the Indenture), to protect and enforce its rights and the rights of the owners of the Bonds under the laws of the State of Connecticut or under the Indenture, the Bonds, the Loan Agreement, the Mortgage, or the Note by such suits, actions or special proceedings in equity or at law, either for the specific performance of any covenant contained under the Indenture or in aid or execution of any power granted in the Indenture, or for the enforcement of the Loan Agreement, the Note or the Mortgage, or for an accounting against the Authority as if the Authority were the trustee of an express trust, or for the enforcement of any proper legal or equitable remedy as the Trustee shall deem most effectual to protect and enforce such rights.

In the enforcement of any remedy under the Indenture, the Trustee shall be entitled to sue for, enforce payment of, and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Authority for principal or interest or otherwise under any of the provisions of the Indenture or of the Bonds, with interest on overdue payments at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings under the Indenture and under such Bonds, without prejudice to any other right or remedy of the Trustee or of the Owners of such Bonds, and to recover and enforce any judgment or decree against the Authority but solely as provided in the Indenture and in such Bonds, for any portion of such amounts remaining unpaid, with interest, cost and expenses, and to collect in any manner provided by law, the moneys adjudged or decreed to be payable. (Indenture, Section 8.3)

D-16 Priority of Payments after Default

If at any time the moneys held by the Trustee under the Indenture shall not be sufficient to pay the principal of and interest on the Bonds as the same become due and payable (either by their terms or by acceleration of maturity under the provisions of Section 8.2 of the Indenture), such moneys together with any moneys then available or thereafter becoming available for such purpose, whether through exercise of the remedies provided for in this Article or otherwise, shall be applied (after payment of all amounts owing to the Trustee from moneys under the Indenture other than from moneys in the Rebate Fund or any irrevocable trust or escrow fund established with respect to any defeased Bonds) as follows:

Unless the principal of all the Bonds shall have become due and payable, all such moneys shall be applied:

FIRST: To the payment to the persons entitled thereto of all installments of interest on any of the Bonds then due, in the order of the maturity of the installments of such interest, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference;

SECOND: To the payment to the persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due (other than Bonds called for redemption or contracted to be purchased for the payment of which moneys are held pursuant to the provisions of the Indenture) with interest upon such Bonds from the respective dates upon which they shall have become due, in the order of their due dates, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular due date, together with such interest, then to the payment ratably, according to the amount of 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 the Bonds as the same become due and payable.

If the principal of all the Bonds shall have become due and payable, either by their terms or by a declaration of acceleration, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto, without any discrimination or preference.

Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section, such moneys shall be applied by the Trustee at such times, and from time to time, as the Trustee in its sole discretion shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. The setting aside of such moneys in trust for the proper purpose shall constitute proper application by the Trustee, and the Trustee shall incur no liability whatsoever to the Authority, to any Bondowner or to any other person for any delay in applying any such moneys, so long as the Trustee acts with reasonable diligence, having due regard to the circumstances, and ultimately applies the same in accordance with such provisions of the Indenture as may be applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such moneys it shall fix the date (which shall be an Interest Payment Date unless the Trustee shall deem another date more suitable) upon which such application is to be made, and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the fixing of any such date. The Trustee shall not be required to make payment to the owner of any unpaid interest or any Bond unless such Bond shall be presented to the Trustee for appropriate endorsement. (Indenture, Section 8.4)

Effect of Discontinuance of Proceedings

In case any proceedings taken by the Trustee on account of any default in respect of Bonds shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee, then and in every such case the Authority, the Trustee and the Bondowners shall be restored to their former positions and rights under

D-17 the Indenture, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken. (Indenture, Section 8.5)

Control of Proceedings

Anything in the Indenture to the contrary notwithstanding, the owners of a majority in principal amount of the Outstanding Bonds shall have the right, subject to the provisions of Section 7.2 of the Indenture, by an instrument in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee under the Indenture, provided such direction shall not be otherwise than in accordance with law and the provisions of the Indenture. (Indenture, Section 8.6)

Restrictions Upon Action by Individual Bondowners

No Owner of any of the Bonds shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust under the Indenture or for any other remedy under the Indenture unless such Owner previously shall have given to the Trustee written notice of the event of default on account of which such suit, action or proceeding is to be instituted, and unless also the owners of not less than a majority in principal amount of all Outstanding Bonds shall have made written request to the Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted by the Indenture or to institute such action, suit or proceeding in its or their name, and unless, also, there shall have been offered to the Trustee security and indemnity as required by Section 7.2 of the Indenture against the costs, expenses, and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time. 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 for any other remedy under the Indenture. It is understood and intended that no one or more Owners of the Bonds secured by the Indenture shall have any right in any manner whatever by his 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 in the Indenture, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided in the Indenture and for the benefit of all Owners of the Outstanding Bonds. (Indenture, Section 8.7)

Remedies Not Exclusive

No remedy conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute. (Indenture, Section 8.9)

Waiver and Non-Waiver

No delay or omission of the Trustee or of any Owner of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein. Every power and remedy given by Article VIII of the Indenture to the Trustee and the Owners of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient.

The Trustee may, and upon written request of the Owners of not less than a majority of the principal amount of the Outstanding Bonds shall, waive any default with respect to the Bonds which in its opinion shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of the Indenture or before the completion of the enforcement of any other remedy under the Indenture; but no such waiver shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. (Indenture, Section 8.10)

D-18 Notice of Default

The Trustee shall mail or cause to be mailed to all Bondowners written notice of the occurrence of any Event of Default set forth in clause (a) or (b) of Section 8.1 of the Indenture promptly after any such Event of Default shall have occurred of which the Trustee has actual knowledge. If in any Bond Year the total amount of deposits to the credit of the Debt Service Fund or the Debt Service Reserve Fund shall be less than the amounts required so to have been deposited under the provisions of the Indenture and any Supplemental Indenture, the Trustee, on or before the thirtieth (30th) day of the next succeeding Bond Year, shall mail to all Bondowners a written notice of the failure to make such deposits. The Trustee shall not, however, be subject to any liability to any such Bondowner by reason of its failure to mail or cause to be mailed any notice required by this Section. (Indenture, Section 8.11)

Supplemental Indentures without Consent of Bondowners

Notwithstanding any other provisions of Article X of the Indenture, the Authority and the Trustee may at any time or from time to time enter into a Supplemental Indenture supplementing the Indenture or any Supplemental Indenture so as to modify or amend such indentures, for one or more of the following purposes:

(a) To add to the covenants and agreements of the Authority contained in the Indenture or any Supplemental Indenture, other covenants and agreements thereafter to be observed relative to the acquisition, construction, reconstruction, renovation, equipment, operation, maintenance, development or administration of any project under the Act or relative to the application, custody, use and disposition of the proceeds of the Bonds; or

(b) To confirm, as further assurance, any pledge under and the subjection to any lien on or pledge of the Revenues created or to be created by the Indenture or a Supplemental Indenture; or

(c) To cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent provision in the Indenture; or

(d) To grant to or confer on the Trustee for the benefit of the Bondowners any additional rights, remedies, powers, authority, or security which may lawfully be granted or conferred and which are not contrary to or inconsistent with the Indenture as theretofore in effect; or

(e) To amend any provisions of the Indenture if, prior to the execution of any such amendment there shall be delivered to the Trustee an Opinion of Bond Counsel to the effect that such amendment will not have a material adverse affect on the security, remedies or rights of the Bondholders.

Supplemental Indentures for the above purposes may be adopted and executed without the consent of any Bondowner. (Indenture, Section 10.1)

Supplemental Indentures with Consent of Bondowners

At any time or from time to time but subject to the conditions or restrictions contained in the Indenture and each Supplemental Indenture, a Supplemental Indenture may be entered into by the Authority and the Trustee amending or supplementing the Indenture, any Supplemental Indenture or any of the Bonds or releasing the Authority from any of the obligations, covenants, agreements, limitations, conditions or restrictions therein contained. However, no such Supplemental Indenture shall be effective unless such Supplemental Indenture is approved or consented to by the Owners, obtained as provided in the Indenture, of at least a majority in aggregate principal amount of all Outstanding Bonds affected thereby. In computing any such required percentage there shall be excluded from such consent, and from such Outstanding Bonds, any such Outstanding Bonds owned or held by or for the account of the Authority or the Institution.

Notwithstanding the provisions of the preceding paragraph, except as provided in Section 10.3 of the Indenture, no such modification changing any terms of redemption of Bonds, due date of principal of or interest on

D-19 Bonds or making any reduction in principal or Redemption Price of and interest on any Bonds shall be made without the consent of the affected Bondowner.

Notwithstanding any other provisions of the Indenture, no Supplemental Indenture shall be entered into by the Authority and the Trustee, except as provided in Section 10.3 of the Indenture, reducing the percentage of consent of Bondowners required for any modification of the Indenture or any Supplemental Indenture or diminishing the pledge of the Revenues securing the Bonds. (Indenture, Section 10.2)

Supplemental Indentures by Unanimous Action

Notwithstanding anything contained in the Indenture, the rights and obligations of the Authority and of the owners of the Bonds and the terms and provisions of the Indenture, any Supplemental Indenture or the Bonds may be modified or amended in any respect upon the adoption of a Supplemental Indenture by the Authority with the consent of the owners of all the Outstanding Bonds affected by such modification or amendment, such consent to be given as provided in the Indenture, except that no notice to Bondowners by mailing shall be required; provided, however, that no such modification or amendment shall change or modify any of the rights or obligations of the Trustee without its written consent thereto in addition to the consent of the Bondowners so affected. (Indenture, Section 10.3)

Defeasance

If the Authority shall pay or cause to be paid, or there shall be otherwise paid, to the owners of all or any of the Bonds then Outstanding, the principal or Redemption Price of and interest thereon, at the times and in the manner stipulated therein and in the Indenture and any Supplemental Indenture, and all fees and expenses of the Trustee and the Authority, then the pledge of any Revenues or other moneys and securities pledged to such Bonds under the Indenture and all other rights granted by the Indenture to such Bonds shall be discharged and satisfied. In such event, the Trustee shall, upon the request of the Authority, execute and deliver to the Authority all such instruments as may be desirable to evidence such discharge and satisfaction and the Trustee or other fiduciary shall pay or deliver to the Authority all moneys or securities held by it pursuant to the Indenture and any Supplemental Indenture which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption to be used by the Authority in any lawful manner including distribution to the Institution.

Any Bonds for which moneys shall then be held by a trustee, which may be the Trustee (through deposit by the Authority or the Institution of funds for such payment or redemption or otherwise), whether at or prior to the maturity or the redemption date of such Bonds, shall be deemed to have been paid within the meaning and with the effect expressed in this Section. Any Outstanding Bonds shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in the preceding paragraph if: (i) in case any of such Bonds are to be redeemed on any date prior to their maturity, the Authority shall have given to the Trustee, in form satisfactory to the Trustee, irrevocable instructions to give notice of redemption on such date of such Bonds; (ii) there shall have been deposited with the Trustee either moneys in an amount which shall be sufficient, or Defeasance Obligations the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient, to pay when due the principal or Redemption Price, if applicable, and interest due and to become due on such Bonds on and prior to the redemption date or maturity date thereof, as the case may be; (iii) there shall have been filed with the Trustee and the Authority (x) a report of a firm of certified public accountants, acceptable to the Authority, confirming the arithmetical accuracy of the computations showing the cash or Defeasance Obligations, the principal of and interest on which, together with cash, if any, deposited at the same time will be sufficient to pay when due, the principal or Redemption Price, if applicable, and interest due or to become due on such Bonds, on and prior to the redemption date or maturity date thereof, as the case may be and (y) an Opinion of Bond Counsel, acceptable to the Authority, to the effect that upon provision for the payment of the principal or Redemption Price, if applicable, of, and interest due or to become due on such Bonds, the pledge of Revenues and other moneys and securities under the Indenture and the grant of all rights to the Owners of such Bonds under the Indenture shall be discharged and satisfied; and (iv) in the event such Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Authority shall have given the Trustee, in form satisfactory to the Trustee, irrevocable instructions to mail, as soon as practicable, a notice to the owners of such Bonds that the deposit required by (ii) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with the Indenture and stating such

D-20 maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price, if applicable, on such Bonds. Neither Defeasance Obligations deposited with the Trustee as described herein nor principal or interest payments on any such securities shall be withdrawn or used for any purpose other than the payment of the principal or Redemption Price, if applicable, and interest on such Bonds; provided that any cash received from such principal or interest payments on such Defeasance Obligations deposited with the Trustee, if not then needed for such purpose, may, to the extent practicable, be reinvested in Defeasance Obligations maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if applicable, and interest to become due on such Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestment shall be paid over to the Authority to be used by it in any lawful manner including a distribution to the Institution provided all amounts owing to the Authority and the Trustee have been satisfied, free and clear of any trust, lien or pledge. Nothing in this paragraph shall be, or be deemed to be, a restriction on the Authority’s ability to provide for Defeasance Obligation substitutions or restructuring provided that the Defeasance Obligations shall at all times be in compliance with clause (ii) above, as evidenced by a report of a firm of certified public accountants in compliance with clause (iii)(x) above; and if the interest on Bonds which have been defeased pursuant to this paragraph is excludable from gross income for federal income tax purposes, the Authority shall provide an Opinion of Bond Counsel that the substitution or restructuring will not adversely affect such exclusion. Notwithstanding any provision of the Indenture, the Trustee shall have no right of set off against any moneys and securities deposited as described in this paragraph.

Anything in the Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Bonds which remain unclaimed for two (2) years after the date when all of the Bonds have become due and payable either at their stated maturity dates or by a call for earlier redemption, if such moneys were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys if deposited with the Trustee after such date when all of the Bonds become due and payable, shall, at the written request of the Authority be repaid by the Trustee to the Authority as its absolute property and free from trust (to the extent permitted by law) to be used by the Authority in any lawful manner including a distribution to the Institution, and the Authority and the Trustee shall thereupon be released and discharged of its obligations with respect to the Bonds; provided, however, that, before being required to make any such payment to the Authority, the Trustee shall mail to the Bondowners a notice that such moneys remain unclaimed and that, after a date named in such notice, which date shall be not less than forty (40) nor more than ninety (90) days after the date of mailing of such notice, the balance of such moneys then unclaimed shall be returned to the Authority to be used by the Authority in any lawful manner including a distribution to the Institution. (Indenture, Section 12.1)

No Recourse on the Bonds

No recourse shall be had for the payment of the principal or Redemption Price of and interest on the Bonds or for any claims based thereon or on the Indenture against any member or other officer of the Authority or any person executing the Bonds, all such liability, if any, being expressly waived and released by every Bondowner by the acceptance of the Bond. The Bonds are payable solely from the Revenues and neither the faith and credit nor the taxing power of the State of Connecticut or any political subdivision thereof is pledged to the payment of the principal of or interest on the Bonds.

The Authority shall be conclusively deemed to have complied with all of its covenants and other obligations under the Indenture, upon requiring the Institution in the Loan Agreement to agree to perform such Authority covenants and other obligations (excepting only any approvals or consents permitted or required to be given the Authority under the Indenture, and any exceptions to the performance by the Institution of the Authority’s covenants and other obligations under the Indenture, as may be contained in the Loan Agreement). However, nothing contained in the Loan Agreement shall prevent the Authority from time to time, in its discretion, from performing any such covenants or other obligations. The Authority shall have no liability for any failure to fulfill, or breach by the Institution of, the Institution’s obligations relating to or under, as the case may be, the Bonds, the Indenture, the Loan Agreement or otherwise, including without limitation the Institution’s obligation to fulfill the Authority’s covenants and other obligations under the Indenture. (Indenture, Section 13.9)

D-21 (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX E

SUMMARY OF CERTAIN PROVISIONS OF THE LOAN AGREEMENT

The following is a brief summary of certain provisions of the Loan Agreement. This summary does not purport to be complete and reference is made to the Loan Agreement for full and complete statements of such and all provisions.

The Loan; Issuance of Bonds and Application of Proceeds

The Authority agrees, upon the delivery of the Bonds and the execution and recording of the Mortgage, to loan to the Institution the proceeds of the Bonds in order to provide funds to finance and refinance the Project, to refund the Refunded Bonds, to pay a portion of the interest on the Bonds, to fund the Debt Service Reserve Fund, and to pay costs related to the issuance of the Bonds upon the terms and conditions set forth or referred to in the Loan Agreement. The Institution agrees to borrow and agrees to repay the loan upon the terms and conditions set forth or referred to in the Loan Agreement. The Loan Agreement shall constitute a general obligation of the Institution. To provide funds to finance the loan to the Institution, the Authority agrees to use its best efforts to issue the Bonds in accordance with the Indenture. The Institution agrees that the proceeds of the Bonds to be made available to finance the loan to the Institution shall be deposited with the Trustee, the Refunding Escrow Deposit Agent and the Authority and applied as provided in the Indenture and the Refunding Escrow Deposit Agreement. The Institution acknowledges and agrees that it shall have no interest in the proceeds of the Bonds equal to or greater than that of the Bondowners who shall have a first and prior beneficial interest in such money until it is applied in accordance with the Loan Agreement, the Indenture and the Refunding Escrow Deposit Agreement. (Loan Agreement, Section 2.1)

Payment Obligations

Notwithstanding any provision of the Loan Agreement or any other Institution Documents, as and for repayment of the loan made to the Institution by the Authority pursuant to Section 2.1 of the Loan Agreement, the Institution shall pay to the Trustee for the account of the Authority the amounts, including without limitation the amounts described in the second and third paragraphs in this Section, required at all times for the payment of the principal of, and premium if any, and interest on the Bonds when due, whether at maturity, upon redemption, by acceleration or otherwise; provided, however, that the obligation of the Institution to make any such payment under the Loan Agreement shall be reduced by any amount held by the Trustee in the Debt Service Fund for such payment of the Bonds pursuant to the terms of the Indenture. All amounts received by the Trustee pursuant to the first three paragraphs of this Section shall be deposited into the Debt Service Fund.

The Institution shall repay the principal of the loan in consecutive monthly installments on the first day of each month of each Bond Year (or if such date is not a Business Day, the next succeeding Business Day), commencing July 1, 2011, in an amount equal to one-twelfth (1/12) of the principal or Sinking Fund Installment, as the case may be, of the Bonds becoming due on the July 1 immediately succeeding the expiration of such Bond Year (provided, however, in all events, the payment made on June 1 of each Bond Year shall provide for sufficient funds necessary to make payment in full of the principal or Sinking Fund Installment becoming due on the July 1 immediately succeeding the expiration of such Bond Year) after crediting to such amount becoming due any amount in the Principal Account or the Sinking Fund Account, as the case may be, prior to such July 1 available for the payment of such principal or Sinking Fund Installment.

The Institution shall pay the interest on the loan in consecutive monthly installments on the first day of each month of each Bond Year (or if such date is not a Business Day, the next succeeding Business Day), commencing July 1, 2011, in an amount equal to (after taking into account any available amounts on deposit in the Capitalized Interest Account of the Construction Fund) one-sixth (1/6) of the interest coming due on the Bonds on the next succeeding Interest Payment Date after crediting to such amount becoming due any amount in the Interest Account available for the payment of such interest (provided, however, in all events, the payment due immediately prior to each Interest Payment Date shall provide for sufficient funds necessary to make payment in full of the interest becoming due on the Bonds on such next succeeding Interest Payment Date).

E-1 If required to be funded in accordance with the Loan Agreement, the Institution agrees that it shall deposit or cause to be deposited in the Debt Service Reserve Fund an amount in cash or in such other manner acceptable and agreed to in writing by the Authority (which may include a Reserve Fund Letter of Credit, to the extent otherwise permitted by the terms of the Indenture) which in the aggregate shall be equal to the Debt Service Reserve Fund Requirement. The Institution agrees that it shall replenish any “deficiency” (as defined in Section 5.10 of the Indenture) in the Debt Service Reserve Fund, to the extent such deficiency shall not be replenished under the terms of a Reserve Fund Letter of Credit, if any, from first available moneys after required deposits to the Debt Service Fund (i) within ninety (90) days, in three (3) substantially equal payments every thirty (30) days, in the event such deficiency results from a decrease in the market value of the permitted investments on deposit in the Debt Service Reserve Fund and (ii) over a twelve (12) month period, in twelve (12) substantially equal monthly payments on the first day of each month, as the case may be, in the event such deficiency results from a withdrawal from the Debt Service Reserve Fund.

The Institution shall promptly after obtaining actual knowledge of a downgrade of a Reserve Fund Letter of Credit to a rating below one of the two highest long-term rating categories by Moody’s and Standard & Poor’s, notify the Authority and the Trustee of any such downgrade. In accordance with Section 5.6 of the Indenture, the Trustee shall draw upon such Reserve Fund Letter of Credit promptly, within three Business Days. Subsequent to such draw in accordance with Section 5.6 of the Indenture, the Institution may cause such downgraded Reserve Fund Letter of Credit to be replaced within ninety (90) days with either (i) a Reserve Fund Letter of Credit rated in one of the two highest long-term rating categories of Moody’s and Standard & Poor’s, (ii) cash, (iii) other funds permitted to be deposited in the Debt Service Reserve Fund, or (iv) any combination of the items listed in (i) through (iii) above.

The Institution agrees to pay to the Authority an amount equal to the sum of the following three (3) items: (i) any expenditures of the Authority for fees and expenses of auditing, and fees and expenses of the Trustee, all as required by the Indenture and not otherwise paid or provided for by the Institution; (ii) all other expenditures reasonably and necessarily incurred by the Authority with respect to the loan to the Institution and the issuance of the Bonds, including Cost of Issuance to the extent amounts on deposit in the Cost of Issuance Fund are insufficient for the payment thereof and also including interest on overdue payments at the rate or rates of interest specified in the Bonds, penalties for late payments and all expenses incurred by the Authority to compel full and punctual performance of all the provisions of the Loan Agreement, any other Institution Document, and each other document executed by the Institution in connection with the Authority’s loan to the Institution or the issuance of the Bonds, in accordance with the terms of the Loan Agreement and thereof; and (iii) the Annual Administrative Fee. Any expenditures of the Authority made pursuant to items (i) and (ii) of this paragraph shall be billed by the Authority to the Institution in writing as soon as practicable and shall be paid or caused to be paid by the Institution within five (5) Business Days of each request for payment. The Institution shall pay one-half of the Annual Administrative Fee for each Bond Year on or before June 20 and December 20 of each calendar year.

The Institution agrees to provide amounts that shall be sufficient to meet the Rebate Requirement of the Rebate Fund. The Institution agrees that this obligation of the Institution shall survive the payment in full of the Bonds or the refunding and defeasance of the Bonds pursuant to the provisions of Section 12.1 of the Indenture.

The Institution agrees to pay to the Authority or to such party as the Authority shall direct in writing the payments required by the Loan Agreement from its general funds or any other moneys legally available to the Institution in the manner and at the times provided by the Loan Agreement. (Loan Agreement, Section 2.2)

Payments Due on Days other than Business Days

If the date for payment of amounts due under the Loan Agreement shall not be a Business Day, such payment may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date provided in the Loan Agreement. (Loan Agreement, Section 2.3)

Optional Prepayment

The Authority and the Institution agree that the Institution shall have the right to make voluntary payments to the Trustee for the account of the Authority, if the Bonds are then subject to redemption, which voluntary

E-2 payments shall be deposited in the Redemption Fund. If the Institution is not in default under the Loan Agreement, upon notification by the Institution to the Authority of any such voluntary payment which is deposited in the Redemption Fund, the Authority agrees that it shall direct the Trustee to purchase or redeem Bonds in accordance with Section 2.5 and Section 5.7 of the Indenture. (Loan Agreement, Section 2.4)

Defeasance of Bonds

The Authority and the Institution agree that, upon sixty (60) days’ written notice to the Authority, with a copy to the Trustee, the Institution shall have the right to satisfy its loan repayment obligations under the Loan Agreement by paying to the Trustee for the account of the Authority an amount which shall effectuate a defeasance, in accordance with Section 12.1 of the Indenture, of the Bonds issued to make a loan to the Institution under the Loan Agreement and by paying all costs of the Authority and the Trustee in connection with such defeasance and by otherwise satisfying all other conditions to effect a defeasance of the Bonds in accordance with Section 12.1 of the Indenture. (Loan Agreement, Section 2.5)

Assignment and Pledge

The Institution agrees that the principal and Redemption Price of and the interest on the Bonds shall be payable in accordance with the Indenture and the right, title and interest of the Authority in and to the Loan Agreement, the Mortgage and the Note shall be assigned to the Trustee, subject to certain conditions and reservations, and certain payments received by or for the account of the Authority from the Institution with respect thereto shall be assigned and pledged by the Authority to the Trustee to secure the payment of the Bonds. The Institution agrees that all of the rights accruing to or vested in the Authority with respect to the Loan Agreement, the Mortgage and the Note may be exercised, protected and enforced by the Trustee for or on behalf of the Bondowners in accordance with the provisions of the Loan Agreement, thereof, and of the Indenture. (Loan Agreement, Section 2.6(a))

Pledge of Gross Receipts

In order to secure the prompt payment of the principal of, Redemption Price, if any, and interest on the Bonds and the performance by the Institution of its obligations under the Loan Agreement, the Mortgage and the Note, the Institution pledges and assigns to the Authority, and grants to the Authority a security interest in, for the equal and ratable benefit of the Holders from time to time of the Bonds, all of its Gross Receipts, but the existence of such pledge, assignment and security interest shall not prevent the expenditure, deposit or commingling of Gross Receipts by the Institution so long as no Event of Default has occurred and is continuing under Section 8.1(a) or (b) of the Loan Agreement. Without limiting the generality of the foregoing, such security interest shall apply to all rights to receive Gross Receipts whether in the form of accounts, accounts receivable, contract rights or other rights, and to the proceeds of such rights. Such security interest shall apply to all of the foregoing, whether now existing or hereafter coming into existence and whether now owned or held or hereafter owned or acquired by the Institution. The Institution represents that as of the date of the delivery of the Loan Agreement, except as set forth in Schedule B hereto, it has granted no security interest in Gross Receipts prior or equal to the security interest granted by this Section. This pledge shall be on a parity with the pledge of Gross Receipts securing the Institution’s Outstanding Parity Debt described and defined below and any other Parity Debt of the Institution. The Loan Agreement is intended to be a security agreement pursuant to the Connecticut Uniform Commercial Code. The Institution agrees to deliver and/or authorize the filing of such financing statements covering the Gross Receipts from time to time and in such form as may be required to perfect and continue a security interest in the Gross Receipts. The Institution shall pay all costs of filing such financing or continuation statements and any continuations, amendments or renewals thereof and shall pay all reasonable costs and expenses of any record searches for financing statements that may be required. Upon the occurrence of an Event of Default under the Loan Agreement, the Mortgage or the Note, the Trustee will have the remedies of a secured party under the Connecticut Uniform Commercial Code and, at its option, may also pursue the remedies permitted under applicable law as to such Gross Receipts. The Institution further covenants and agrees that it will not pledge, suffer to exist, or grant a security interest in the Gross Receipts except for Liens permitted under Section 5.14(a) or (b) of the Loan Agreement. The Institution further covenants that if an Event of Default of the type described in Section 8.1(a) or (b) of the Loan Agreement shall occur and be continuing, any Gross Receipts then received and any Gross Receipts thereafter received, shall not be commingled or deposited but shall immediately, or upon receipt, be transferred (giving recognition to any other Indebtedness

E-3 secured on a parity by a pledge of Gross Receipts and to any amounts deposited with the Trustee or another party with respect to any Parity Debt) by the Institution on a daily basis to the Trustee for deposit in a Gross Receipts Fund to be established by the Authority and the Trustee under the Indenture. Such daily deposits shall continue until such Event of Default described in the preceding sentence has been fully cured. All amounts deposited into the Gross Receipts Fund shall be applied by the Trustee for application pro rata, based upon the outstanding principal amount of the Bonds and any Parity Debt, with respect to Gross Receipts deposited with the Trustee or another party as security for any Parity Debt, as if such deposited amounts were aggregated and without regard to the amount held by the Trustee or any such other party, (i) to the payment of the reasonable and necessary cost of operations of the Institution’s facilities, including the Premises, all in accordance with budgeted amounts proposed by the Institution and approved by the Authority, (ii) to the payment of the principal of, Redemption Price of, and interest on the Bonds and any other Parity Debt in accordance with their respective terms, and (iii) to such other purposes as may be required by the Loan Agreement, the Mortgage or the Indenture and approved by the Authority. The Institution shall give prompt written notice to the Authority and the Trustee if it grants a lien on Gross Receipts to another party to secure any Parity Debt, which notice shall identify (i) the Parity Debt; (ii) the initial principal amount of such Parity Debt; (iii) the scheduled amortization of such Parity Debt; (iv) the incurrence date and maturity date of such Parity Debt; (v) the corporate or proper name of the party secured by such parity pledge of Gross Receipts; and (vi) the name and address of any party designated to hold Gross Receipts as security for any such Parity Debt.

The following shall apply to the pledge of Gross Receipts created by the Loan Agreement:

(1) Creation: The Loan Agreement creates a valid and binding pledge of, assignment of, lien on and security interest in the Gross Receipts in favor of the Authority, for assignment to the Trustee, as security for payment of the Bonds, enforceable by the Trustee in accordance with the terms of the Loan Agreement.

(2) Perfection: Under the laws of the State of Connecticut, such pledge, assignment, lien and security interest, and each pledge, assignment, lien, or other security interest made to secure any prior obligations of the Institution which, by the terms of the Loan Agreement, ranks on a parity with or prior to the pledge, assignment, lien and security interest granted by the Loan Agreement, is and shall be prior to any judicial lien hereafter imposed on such collateral to enforce a judgment against the Institution on a simple contract. By the date of issuance of the Bonds, the Institution will have filed or caused to be filed all financing statements describing, and transferred such possession or control over, such collateral (and for so long as any Bond is outstanding under the Indenture the Institution will cause the Trustee to file, continue, and amend all such financing statements and transfer such possession and control) as may be necessary to establish and maintain such priority in each jurisdiction in which the Institution is organized or such collateral may be located or that may otherwise be applicable pursuant to Uniform Commercial Code §§9.301--9.306 of such jurisdiction.

(3) Priority: The Institution has not heretofore made a pledge of, granted a lien on or security interest in, or made an assignment or sale of such collateral that ranks on a parity with or prior to the pledge, assignment, lien and security interest granted by the Loan Agreement, except for the parity pledge, assignment, lien and security interest in Gross Receipts granted to secure the following obligations of the Institution (of which not more than the following principal amounts will be outstanding upon issuance of the Bonds): (i) the Authority’s $58,310,000 currently outstanding principal amount of Revenue Bonds, Sacred Heart University Issue, Series E, dated December 1, 1998 (the “Series E Bonds”); and (ii) the Authority’s $19,845,000 currently outstanding principal amount of Variable Rate Demand Revenue Bonds, Sacred Heart University Issue, Series F, dated December 11, 2003 (the “Series F Bonds”) (collectively, the “Institution’s Outstanding Parity Debt”). The Institution has not described such collateral in a Uniform Commercial Code financing statement that will remain effective when the Bonds are issued, except in connection with the foregoing parity pledges, assignments, liens and security interests in Gross Receipts securing the Institution’s Outstanding Parity Debt. The Institution shall not hereafter make or suffer to exist any pledge or assignment of, lien on, or security interest in such collateral that ranks prior to or on a parity with the pledge, assignment, lien and security interest granted by the Loan Agreement, or file any financing statement describing any such pledge, assignment, lien, or security interest, except as expressly permitted under the Loan Agreement. (Loan Agreement, Section 2.6(b))

E-4 Bondowners Beneficiaries

The Loan Agreement is executed in part to induce the purchase by others of the Bonds, and, accordingly, all covenants and agreements on the part of the Institution and the Authority, as set forth in the Loan Agreement, are declared to be for the benefit of the owners from time to time of the Bonds. (Loan Agreement, Section 2.6(c))

Compliance

The Institution agrees to do all things within its power in order to comply with, and to enable the Authority to comply with, all requirements, and to fulfill and to enable the Authority to fulfill all covenants of, the Resolution of the Authority, the Tax Regulatory Agreement and the Indenture. (Loan Agreement, Section 2.6(d))

Mortgage

The Institution agrees that it shall mortgage to the Authority, for assignment to the Trustee for the benefit of the owners of the Bonds, the Premises in the manner set forth in the Mortgage, subject only to those encumbrances set forth in Schedule A to the Mortgage. The Mortgage and the Mortgaged Premises shall serve to secure the Note issued under the Loan Agreement as security for the Bonds on a parity basis with the Authority’s Series E Bonds and Series F Bonds and any Parity Debt of the Institution. So long as no Event of Default under the Loan Agreement or any other Institution Documents has occurred and is continuing, the Authority and the Trustee may release any portion of the Mortgaged Premises from the Lien of the Mortgage pursuant to Section 5.16(a) or (b) of the Loan Agreement. (Loan Agreement, Section 2.6(e))

Title Insurance

The Institution agrees to deliver to the Authority a policy or policies of title insurance or endorsements to such policies insuring the Mortgage as a first mortgage lien on the real property as described in Schedule A to the Mortgage in such form and with such exception for title as shall be approved by the Authority, including any Liens set forth in Schedule A to the Mortgage. (Loan Agreement, Section 2.6(f))

Assignment of Contract Documents and Consents

The Institution agrees to deliver to the Trustee on behalf of the Authority as security for its obligations under the Loan Agreement, the Mortgage, and the Note, the Assignment of Contract Documents and Consents. (Loan Agreement, Section 2.6(g))

Funding of Debt Service Reserve Fund

The Authority agrees that, from the proceeds of the Bonds and other available funds, it shall deposit in the Debt Service Reserve Fund an amount, if any, which, when added to the amount of money or securities deposited by the Institution in the Debt Service Reserve Fund on or before the date of delivery of the Bonds (including a Reserve Fund Letter of Credit, if any, as provided in the Indenture), shall be equal to the Debt Service Reserve Fund Requirement giving effect to the issuance of the Bonds. It is further agreed that the aforementioned sum to be deposited in the Debt Service Reserve Fund from the proceeds of the Bonds shall be deemed to be part of the loan by the Authority to the Institution. (Loan Agreement, Section 2.7)

Issuance of Note

Pursuant to the Loan Agreement and in consideration of the issuance by the Authority of the Bonds and the application of the proceeds thereof as provided in the Loan Agreement and in the Indenture, and as security for the loan referred to in Section 2.1 of the Loan Agreement, the Institution agrees to issue to the Authority and to cause to be delivered to the Trustee (as assignee of the Authority) concurrently with the delivery of the Bonds to the original purchaser(s) thereof, the Note in substantially the form set forth in Schedule A to the Loan Agreement, with such necessary and appropriate omissions, insertions and variations as are permitted or required by the Loan Agreement.

E-5 The Authority agrees that the Note shall be assigned to the Trustee in trust as security for the Bonds. (Loan Agreement, Section 2.8)

Construction Contracts; Control of the Project

The Institution covenants to carry out the Project and that all actions taken by the Institution to carry out the Project, including the making of contracts for such Project and all actions, recommendations or requests of any Authorized Officer of the Institution have been and will be in full compliance with the Indenture, the Loan Agreement and all other Institution Documents as well as the laws of the State of Connecticut. The Institution acknowledges that any review of any such actions heretofore or hereafter taken by the Authority’s staff or counsel has been or will be solely for the protection of the Authority. Neither such review nor any action taken by the Authority to carry out the Project shall stop the Authority from enforcing the foregoing covenant. The Authority makes no representations whatsoever in connection with the condition of the Project, or the improvements, fixtures or equipment thereof, and the Authority shall not be liable for latent or patent defects therein. Subject to the rights of the Authority under the Loan Agreement, the Institution shall have sole and exclusive control of, possession of and responsibility for (i) such Project; (ii) the operation of such Project and supervision of the activities conducted therein or in connection with any part thereof; and (iii) the maintenance, repair and replacement of such Project. (Loan Agreement, Section 3.1)

Amendment or Modification of Project

The Project, pending its completion, may be amended or modified by the Institution with the prior written consent of an Authorized Officer of the Authority to decrease, increase or otherwise modify the scope of the Project during the acquisition, construction and equipping of the Project. Any such amendment or modification may provide for the addition of any further acquisition, design, construction, reconstruction, rehabilitation, improving, or otherwise providing, furnishing and equipping of the Project which the Authority is authorized to undertake. The Institution shall provide funds to pay for any amendments or modifications to the Project, or change orders with respect thereto, which increase the cost of the Project.

The Institution shall promptly notify the Authority in writing of all change orders, changes in plans and specifications and changes in contracts, whether or not such changes involve additional expenditures or increase in Costs, which would change the use of such part of the Project or of such Project. The Institution represents that it has filed a detailed budget for the Project with the Authority. All requests for (i) change orders or changes in plans and specifications for any part of the Project during the acquisition, construction and equipping of the Project which would change the use of such part of the Project or of such Project and (ii) changes in any contracts made by the Institution to carry out any part of the Project during the acquisition, construction and equipping of the Project which would involve any additional expenditure in excess of the moneys in the Construction Fund available for such Project or part thereof above the guaranteed maximum price contingency budget for the Construction Fund or would increase the total Cost of the Project shall be in writing and shall be subject to approval by the Authority. Such approval shall not be unreasonably withheld by the Authority but may be subject to such conditions and qualifications as the Authority in its sole discretion may prescribe. Further, it is understood that the Authority at all times has the right to require compliance with the original plans, specifications and contracts for the Project; provided, however, the Authority shall consent to changes required by governmental entities having jurisdiction over the Project to conform the Project to life safety codes and land use permits and approvals for the Project or to the requirements of any applicable governmental entities having jurisdiction over the provision of higher educational facilities in the State of Connecticut. (Loan Agreement, Section 3.2)

Conditions for Advances

The obligation of the Authority to make any disbursement of moneys held in the Construction Fund with respect to a particular component of the Project for the acquisition, construction, renovation, installation or equipment of the Project shall be subject to the provisions of Section 5.3 of the Indenture relating to the disbursement of moneys held in the Construction Account and shall be further subject to the satisfaction of the following conditions, as well as any others set forth in the Loan Agreement:

E-6 (i) An Event of Default, or an event which with the passage of time or the giving of notice would constitute an Event of Default, shall not have occurred and be continuing and all terms of the Loan Agreement and the other Institution Documents, and other undertakings and obligations of the Institution in connection with such Project shall have been fully complied with in all material respects;

(ii) Unless the written consent of the Authority is obtained, there shall be no lien or encumbrance other than Permitted Encumbrances upon, nor any deed, transfer or conveyance of, the Project or the Premises; and

(iii) The acquisition, construction, renovation, installation or equipping of the Project shall have progressed with due diligence to the reasonable satisfaction of the Authority.

Prior to the Authority making any disbursement for Costs of the Project from the Construction Account (other than with respect to interest on the Bonds), the Institution shall deliver to the Authority the following:

(i) copies of all invoices, paid or unpaid, if any, relating to such disbursement;

(ii) a requisition submitted to the Authority by the Institution, in accordance with Section 5.3 of the Indenture, signed by an Authorized Officer of the Institution, substantiated by a certificate filed with the Authority describing in reasonable detail the purpose for which such moneys were used and the amount thereof, and further stating the opinion that such purposes constitute a necessary part of the Cost of such Project to which such certificate relates, such substantiating certificate to be signed by: (A) the architect for the Project, in the case of payments for constructing the Project; or (B) an Authorized Officer of the Institution in the case of the acquisition or refinancing of, or equipping the Project and other expenses and reimbursements;

(iii) a certificate of an Authorized Officer of the Institution certifying that the amount of money for which payment is requisitioned has been incurred or expended for Costs of the Project (including proof of payment thereof) and has not been the subject of a previous requisition and is in full compliance with the Tax Regulatory Agreement and certifying and containing such other information as may be required by the Indenture;

(iv) a certificate of an Authorized Officer of the Institution certifying that amounts then on deposit in the Construction Fund are sufficient to complete all parts of the Project with respect to which the Institution has entered into contracts; and

(v) any other certificates or documents reasonably requested by the Authority.

Notwithstanding the above, the Authority and the Institution, with the written consent of the other, may direct that funds on deposit in the Construction Account be applied to the payment of interest due on the Bonds.

In addition to the foregoing requirements, the Institution and the Authority shall provide the certifications specified in Section 5.3(d) of the Indenture upon the completion of the Project.

If the Institution abandons the Project or otherwise ceases to diligently continue with the construction thereof, or fails to meet in all material respects the conditions precedent to the full disbursement by the Authority of monies held in the Construction Fund with respect to the Project, an Event of Default under the Loan Agreement may be deemed to have occurred, in which case the obligation of the Authority to make or approve further disbursements in connection with such Project shall cease and the Project shall be deemed complete. In such event the Authority may elect, at its sole discretion, (i) to apply moneys remaining on deposit in the Construction Fund in accordance with Section 5.3(d) of the Indenture, and (ii) to declare an amount equal to the sum of all such disbursements previously made from the Construction Fund to be immediately due from and payable by the Institution in accordance with the rights reserved in the Mortgage, provided, however, the Authority, at its sole discretion, may waive any of the foregoing requirements in writing. (Loan Agreement, Section 3.3)

E-7 Construction

The Institution agrees that it shall require any general contractor and construction manager, if applicable, engaged in the construction of any component of the Project which involves payment directly from the Construction Account to any contractor or supplier or any contract of $50,000 or more to provide, or cause to be provided, a letter of credit or dual obligee payment and performance bond in an aggregate amount equal to the contract price, as security for the faithful performance of its contract and payment of all obligations arising under its contract. The Institution shall provide the Authority with copies of all such letters of credit and payment and performance bonds as in effect on the date of delivery of the Bonds and shall provide additional payment and performance bonds to the Authority as soon as available and prior to requesting payment for, or reimbursement for payment of, costs incurred under such contracts. The Institution shall require each general contractor and each construction manager engaged in the construction of any component of the Project to employ construction techniques which will tend to minimize detrimental environmental impact, and shall require that the contract with each such general contractor and each such construction manager and the contract with each architect or licensed professional engineer for the Project, be assignable to the Authority, and shall collaterally assign its rights under such contracts to the Authority as a condition to receiving the loan from the Authority under the Loan Agreement. Such contracts shall be based on a guaranteed maximum price basis, or, in the alternative, a fixed price contract acceptable to the Authority. The Authority, at its sole discretion, may waive any of the foregoing requirements. (Loan Agreement, Section 3.4)

Institution to Provide Moneys to Complete Project

The Institution agrees that in the event moneys on deposit in the Construction Fund are insufficient to pay all Costs of the Project, the Institution will apply sufficient moneys of its own to complete the Project. The Institution further agrees that, at the request of the Authority, the Institution will apply moneys of its own to pay Costs of the Project until such time as moneys on deposit in the Construction Fund are sufficient to pay all Costs of the Project. (Loan Agreement, Section 3.5)

Insurance

The Institution shall, at all times specified in the Loan Agreement, maintain a program of insurance for general liability, automobile liability, worker’s compensation, umbrella or excess liability, directors’ and officers’ liability, builders’ risk, all risk property and business interruption, subject to the approval of the Authority. The Institution shall keep its property, including the Premises, and all buildings and improvements now or hereafter erected on its property, including the Premises, insured in the amounts and of the nature described in the Loan Agreement and shall comply with any requirements of the insurance company writing such insurance. (Loan Agreement, Section 4.1)

Application of Property Insurance and Condemnation Proceeds

In case the whole or any part of the Project or the Premises is taken by eminent domain or damaged or destroyed or is otherwise rendered incapable of being used to its fullest extent for the purposes of the Institution or to meet the Institution’s obligations under the Loan Agreement and the other Institution Documents by any cause whatsoever, then and in such event:

A. Except as provided in paragraph B below, the Institution shall proceed to replace or restore or cause to be replaced or restored such part of the Project or the Premises, including all fixtures, furniture, equipment and effects, to its original condition insofar as possible or with such changes and modifications as would not have an adverse effect on the operations of the Institution. The moneys required for such replacement or restoration shall be paid from the proceeds of insurance or any award or payment in connection with the condemnation of the Project or the Premises received by reason of such occurrence and to the extent such proceeds are not sufficient, from funds to be provided by the Institution.

E-8 B. If no decision for the restoration or replacement of all or such part of the Project or the Premises shall be reached by the Institution within 120 days after such damage or taking, or if the Institution fails to proceed with due diligence to restore or replace such part of the Project or the Premises, all respective insurance or condemnation proceeds (after giving appropriate recognition to any similar requirements with respect to any Indebtedness ranking on a parity with the Bonds) shall be paid to the Trustee for deposit in the Redemption Fund for application to the purchase or redemption of Bonds in accordance with the Indenture or used as otherwise agreed to by the Authority and the Institution.

Notwithstanding any such taking, or other injury to, or decrease in the value of the Project or the Premises, the Institution shall continue to pay interest on the principal payable under the Loan Agreement and under the other Institution Documents as provided in the Loan Agreement and therein, and to make any and all other payments required by the Loan Agreement and by the other Institution Documents. Any reduction in the principal payable under the Loan Agreement and under the other Institution Documents resulting from the application by the Authority of such award or payment to the redemption of Bonds shall be deemed to take effect only on the date of such application. (Loan Agreement, Section 4.2)

Cooperation with Authority

The Institution agrees to do all things within its power in order to enable the Authority to comply with all requirements and to fulfill all covenants of the Indenture. (Loan Agreement, Section 5.1)

Obligation Absolute

The obligation of the Institution to make payments to the Authority or on its order to the Trustee under the Loan Agreement and the Note is absolute and unconditional and shall not be subject to setoff, recoupment or counterclaim. The Institution agrees that payments required by the Loan Agreement and the Note shall be paid when due by the Institution to the Trustee for deposit in the Debt Service Fund whether or not any student, occupant or user of the Institution is delinquent in the payment of his or her tuition fees, room charges, rentals or other charges owed to the Institution, whether or not any student, user or occupant receives either partial or total reimbursement as a credit against such payment, and whether or not the Institution receives either partial or total reimbursement as a credit against such payment.

The agreements, covenants, representations and indemnifications of the Institution in the Loan Agreement and the other Institution Documents executed and delivered in connection with the Loan Agreement shall be a full faith and credit obligation of the Institution. (Loan Agreement, Section 5.2)

Covenant as to Rates and Charges

The Institution agrees, to the extent permitted by law, to charge tuition, rates, fees, rentals and charges which, together with its general funds and any other moneys legally available to it, shall provide moneys sufficient at all times to make all payments under the Loan Agreement and the other Institution Documents and to pay all other obligations of the Institution as the same become due and payable. The Institution covenants to maintain its tuition, rates, fees, rentals and charges to provide Operating Revenues which, together with its general funds and other moneys legally available to the Institution, shall be sufficient for the payment of (i) Operating Expenses; (ii) debt service when due on the Bonds and all other Indebtedness; and (iii) all other amounts due under the Loan Agreement, including but not limited to amounts required to be deposited into the Debt Service Reserve Fund. (Loan Agreement, Section 5.3)

Contracts and Agreements

Except as permitted by the Loan Agreement and the other Institution Documents, the Institution agrees that it shall not enter into any contracts or agreements, perform any acts or request the Authority to enter into any

E-9 contracts or agreements or perform any acts which may adversely affect any of the assurances or rights of the Authority. (Loan Agreement, Section 5.5)

Operation of Institution

The Institution agrees that it shall use its best efforts to operate the Institution in a prudent and efficient manner. The Institution further agrees that it shall employ, at all times, administrative personnel experienced and well qualified in the field of higher educational administration.

The Institution agrees to operate its facilities properly and in a sound and economical manner. The Institution agrees to maintain, preserve and keep its facilities, with the appurtenances and every part and parcel thereof, in good repair, working order and condition and to make all necessary and proper repairs, replacements and renewals so that at all times the operation of the Institution and its facilities may be properly and advantageously conducted.

The Institution agrees that it will procure and maintain all necessary licenses and permits and maintain accreditation of its higher educational facilities (other than those of a type for which accreditation is not then available) by the New England Association of Schools and Colleges as long as, in the opinion of the Institution, such accreditation is in the best interests of the Institution; provided, that if the Institution shall determine that such accreditation is not in its best interests, it shall cause an independent consultant to deliver a report to the Authority indicating the likely operational and economic effect on the Institution of discontinuance of such accreditation.

The Institution covenants that it shall correct all deficiencies found by each governmental authority with jurisdiction over the operation of the Project and the Premises, including any inspection in connection with the implementation of the Project and the Premises by the Institution, in accordance with the requirements of the appropriate governmental or accrediting entity. (Loan Agreement, Section 5.6)

Payment of Obligations, Taxes, Assessments and Charges

The Institution agrees to pay promptly all charges, judgments and other obligations incurred or imposed on the Institution. The Institution shall pay all taxes and assessments or other municipal or governmental charges, if any, lawfully levied or assessed upon or in respect of the Institution’s facilities, or upon any part thereof or upon the Revenues, when the same shall become due, and shall duly comply with all valid requirements of any municipal or governmental authority relative to any part of the Institution’s facilities. The Institution shall pay or cause to be paid or cause to be discharged, or shall make adequate provisions to satisfy and discharge, within sixty (60) days after the same shall become due and payable, all lawful claims and demands for labor, materials, equipment, supplies or other objects which, if unpaid, might by law become a lien upon the facilities of the Institution, the Premises, or the Revenues; provided, however, that, subject to the other requirements of the Loan Agreement and the Mortgage, nothing in the Loan Agreement shall require the Institution to pay or cause to be paid or cause to be discharged, any such tax, assessment, valid requirement, claim, demand, lien or charge, so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings by the Institution. (Loan Agreement, Section 5.7)

Tax Covenant

The Institution covenants that it and each person related to it within the meaning of Section 147(a)(2) of the Code will comply with each requirement of the Code necessary to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes.

In furtherance of the covenant contained in the preceding sentence, the Institution agrees to comply with the provisions of the Tax Regulatory Agreement.

The Institution covenants that it will not take any action or fail to take any action with respect to the Bonds which would cause such Bonds to be “arbitrage bonds,” within the meaning of such term as used in Section 148 of the Code and the regulations promulgated thereunder, as amended from time to time.

E-10 The Institution covenants that: (i) it shall not perform any acts nor enter into any agreements which shall cause any revocation or adverse modification of its status as an organization exempt from Federal income taxes pursuant to Section 501(a) of the Code; and (ii) it shall not carry on or permit to be carried on any trade or business the conduct of which is not substantially related (aside from the need of the Institution for income or funds or the use it makes of the profits derived) to the exercise or performance by the Institution of the purposes or functions constituting the basis for its exemption under Section 501 of the Code if such use would result in the loss of the Institution’s exempt status under Section 501 of the Code or would cause the interest on the Bonds to be included in gross income and subject to Federal income taxation.

The Institution agrees that neither the Institution, nor any person related to it within the meaning of Section 147(a)(2) of the Code, pursuant to an arrangement, formal or informal, shall purchase the Bonds upon their initial issuance in an amount related to the amount of the Bonds secured by the Loan Agreement.

Notwithstanding any other provision of the Indenture or the Loan Agreement to the contrary, so long as necessary in order to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes, the foregoing tax covenants shall survive the discharge and satisfaction of the Bonds (in accordance with Section 12.1 of the Indenture) and the termination of the Loan Agreement. (Loan Agreement, Section 5.8)

Premises

The Institution covenants that, except as set forth in the Hazardous Substance Agreement, the Premises of the Institution will comply in all material respects with, all applicable restrictive covenants, applicable zoning and subdivision ordinances and building codes, all applicable health and environmental laws and regulations and all other applicable laws, rules and regulations. (Loan Agreement, Section 5.9)

General Compliance with Law

The Institution covenants that it will comply in all material respects with all federal, state and local laws, regulations and ordinances relating to its business, the Project, the Premises, and its facilities, including, but not limited to, the Employee Retirement Income Security Act of 1974, as amended, and all applicable laws and regulations relating to nondiscrimination in employment and employment opportunities, and all applicable Equal Employment and Opportunity Laws. (Loan Agreement, Section 5.11)

Financial Covenants

Long-Term Debt Service Coverage Ratio. The Institution shall maintain for each Fiscal Year its Long- Term Debt Service Coverage Ratio at least at 1.25 unless a lower level is consented to in writing by the Authority. If such Long-Term Debt Service Coverage Ratio, as calculated at the end of any Fiscal Year, is below the required level, the Institution covenants to retain a Consultant, within sixty (60) days after the end of such Fiscal Year, to make recommendations to increase such Long-Term Debt Service Coverage Ratio for subsequent Fiscal Years of the Institution at least to the required level, or, if in the opinion of the Consultant the attainment of such level is impracticable, to the highest practicable level and to provide a copy of the report of such Consultant to the Authority. The Institution agrees that it will, to the extent permitted by law, charter, by-laws or contract, follow the recommendations of the Consultant. So long as the Institution shall retain a Consultant and the Institution shall follow such Consultant’s recommendations to the extent permitted by law, charter, by-laws or contract, this covenant shall be deemed to have been complied with even if such Long-Term Debt Service Coverage Ratio for any subsequent Fiscal Year of the Institution is below the required level of 1.25; provided, however, that an Event of Default shall be deemed to have occurred under the Loan Agreement if any calculation of the Long-Term Debt Service Coverage Ratio for any subsequent Fiscal Year (subsequent to the Fiscal Year the results of which gave rise to the requirement that such Consultant be retained) indicates that such Long-Term Debt Service Coverage Ratio is less than 1.00. (Loan Agreement, Section 5.13(a))

Ratio of Expendable Funds to Total Debt. The Institution shall maintain for each Fiscal Year its ratio of Expendable Funds to Total Debt at least at .20 (calculated as of the close of such Fiscal Year), unless a lower level is consented to in writing by the Authority. (Loan Agreement, Section 5.13(b))

E-11 Permitted Encumbrances

The Institution covenants that, except for Permitted Encumbrances described below, the Institution shall not, without the prior written consent of the Authority, create, permit to be created, or suffer to be created, any Lien upon any of the Institution’s Property now owned or hereafter acquired.

Permitted Encumbrances shall include only the following:

(1) any Lien (i) for taxes, assessments or governmental charges or levies not yet delinquent, or which are being contested in good faith by appropriate proceedings so long as no foreclosure tax sale can occur during such proceedings and, if the amount exceeds one percent (1%) of the Institution’s Fixed Assets, adequate reserves have been established for the payment of such amounts; (ii) constituting an inchoate lien imposed by law but not yet having attached to any real property or leasehold, such as materialmen’s, mechanics’, carriers’, worker’s, employees’ and repairmen’s liens and other similar liens arising in the ordinary course of the Institution’s business and securing obligations that have not remained unpaid for more than thirty (30) days from the date the same shall have become due, except liens which are being contested in good faith by appropriate proceedings so long as no foreclosure sale can occur during such proceedings and, if the amount exceeds one percent (1%) of the Institution’s Fixed Assets, reserves adequate, in the judgment of the Authority, have been established for the payment of such amounts; (iii) constituting a pledge of deposits to secure obligations under worker’s compensation laws or similar legislation or to secure public or statutory obligations of the Institution; (iv) in favor of the Authority or the Trustee created pursuant to the Indenture, the Institution Documents, or any related documents; and (v) constituting utility, access and other easements and rights of way, mineral rights, encroachments and exceptions which will not interfere with or impair the present or future operation of the Institution, and minor defects, irregularities, encumbrances, easements, rights of way and clouds on title as normally exist with respect to properties similarly used for higher educational purposes which do not materially impair the use of the properties affected thereby;

(2) the Lien represented by the security interest to the Authority created upon the Gross Receipts by the Loan Agreement and the Mortgage and the Lien represented by the mortgage, liens, pledges and security interests to the Authority created upon the Premises and the equipment and fixtures located thereon by the Mortgage;

(3) with the prior written consent of the Authority, which consent shall not be unreasonably withheld if the Parity Debt is also Permitted Indebtedness under the Loan Agreement, any Lien in favor of the holder or holders of Parity Debt on a parity basis with the Liens and pledges in favor of the Authority created by the Loan Agreement and the Mortgage; provided, however, that the holder of such Parity Debt may not accelerate such Indebtedness or execute or foreclose upon the Gross Receipts or the Premises subject to the Mortgage unless the Trustee accelerates the Bonds and executes and forecloses upon the Gross Receipts and the Mortgage with respect to the Trustee’s parity position therein as well (and such Parity Debt must so indicate) and the holder of such Parity Debt must enter into an amendment of the Intercreditor Agreement that is acceptable to the other parties thereto;

(4) any Lien upon Property only if and to the extent that such portion of the Property has been released as a Permitted Release under Section 5.16 of the Loan Agreement;

(5) any Lien upon Property only if and to the extent that such Property could have been disposed of as a Permitted Disposition under Section 5.15 of the Loan Agreement;

(6) any Lien upon the Premises or Gross Receipts given to secure Subordinated Indebtedness that is by its terms specifically junior and subordinate to the mortgage on the Premises, security interest in the equipment located on the Premises, and security interest in the Gross Receipts given by the Institution to the Authority under the Loan Agreement and the Mortgage; provided, however that the holder of such Subordinated Indebtedness may not accelerate such Indebtedness or execute or foreclose upon the Gross Receipts or the Premises subject to the Mortgage unless the Trustee accelerates the Bonds and executes and forecloses upon the Gross Receipts and the Mortgage with respect to the Trustee’s senior position therein as well;

E-12 (7) any Lien in the form of a Purchase Money Mortgage given to secure Permitted Indebtedness described in Section 5.17 of the Loan Agreement;

(8) any Lien arising by reason of good faith deposits with the Institution in connection with leases of real estate, bids or contracts (other than contracts for the payment of money), deposits by the Institution to secure public or statutory obligations, or to secure, or given in lieu of, surety, stay or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges;

(9) any Lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Institution to maintain self-insurance or to participate in any funds established to cover any insurance risks or in connection with worker’s compensation, unemployment insurance, pension or profit sharing plans or other social security, or to share in the privileges or benefits required for companies participating in such arrangements;

(10) any Lien in the form of a judgment lien or notice of pending action against the Institution so long as such judgment or pending action is being contested and execution thereon is stayed or while the period for responsive pleadings has not lapsed;

(11) any choate or inchoate Lien in the form of (A) rights reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license, permit or provision of law, affecting any Property, to (1) terminate such right, power, franchise, grant, license or permit, provided that the exercise of such right would not materially impair the use of such Property or materially and adversely affect the value thereof, or (2) purchase, condemn, appropriate or recapture, or designate a purchaser of, such Property; (B) any liens on any Property for taxes, assessments, levies, fees, water and sewer rents, and other governmental and similar charges and any liens of mechanics, materialmen, laborers, suppliers or vendors for work or services performed or materials furnished in connection with such Property, which liens have not been perfected or if such liens have been perfected, and are being contested, and the Institution has posted security for the payment of such liens in an amount satisfactory to the Authority; (C) easements, rights-of-way, servitudes, restrictions and other minor defects, encumbrances, and irregularities in the title to any Property which do not materially impair the use of such Property or materially and adversely affect the value thereof; and (D) rights reserved to or vested in any municipality or public authority to control or regulate any Property or to use such Property in any manner, which rights do not materially impair the use of such Property or materially and adversely affect the value thereof;

(12) any Lien on Property described on Schedule B to the Loan Agreement which is existing on the date of the execution and delivery of the Loan Agreement, including renewals or refinancings thereof, provided that no such Lien may be extended or modified to apply to any Property of the Institution not subject to such Lien on such date, unless such Lien as so extended or modified otherwise qualifies as a Permitted Encumbrance under the Loan Agreement;

(13) any Lien (other than a Lien (i) on Property which is part of the Premises, (ii) on current assets, (iii) on Gross Receipts or (iv) on accounts receivable) securing Non-Recourse Indebtedness incurred in compliance with Section 5.17 of the Loan Agreement;

(14) any Lien on Property (other than a Lien on Property which is part of the Premises) acquired by the Institution if the assumption of the Indebtedness secured by the Lien by the Institution is Permitted Indebtedness permitted under the provisions of Section 5.17 of the Loan Agreement, and if an Officer’s Certificate is delivered to the Authority and the Trustee certifying that (A) the Lien and the Indebtedness secured thereby were created and incurred by a Person other than the Institution prior to the acquisition of such Property by the Institution, (B) the Lien was created prior to the decision of the Institution to acquire the Property and was not created for the purpose of enabling the Institution to avoid the limitations of the Loan Agreement on the creation of Liens on Property of the Institution and (C) the Lien attaches solely to the Property acquired and such Lien does not by its terms extend, automatically or otherwise, to any other Property of the Institution;

E-13 (15) any Lien on Property, other than a Lien on the Property described in the following paragraph, if, prior to the creation of such Lien or the acquisition of Property subject to such Lien, an Officer’s Certificate is delivered to the Authority and the Trustee certifying that after giving effect to the Lien, the value of all Property which is subject to a Lien permitted in accordance with this paragraph will not exceed five percent (5%) of the value of all Property of the Institution at the close of the immediately preceding Fiscal Year;

(16) any Lien on inventory, accounts receivable, Gross Receipts, or pledges of gifts or grants to be received in the future, which Lien secures either Short-Term Indebtedness incurred in compliance with the provisions of Section 5.17 of the Loan Agreement or Non-Recourse Indebtedness incurred in compliance with the provisions of Section 5.17 of the Loan Agreement if, prior to the creation of such Lien or the acquisition of Property subject to such Lien an Officer’s Certificate is delivered to the Authority and the Trustee certifying that after giving effect to the Lien, the value of the Property which is subject to such Lien will not exceed five percent (5%) of the value of all Property of the Institution at the close of the immediately preceding Fiscal Year;

(17) any Lien representing rights of setoff and banker’s liens with respect to funds on deposit in a financial institution in the ordinary course of business;

(18) any Lien on Property received by the Institution through gifts, grants or bequests, such Liens being due to restrictions imposed by the donor on such gifts, grants or bequests of Property or the income thereon;

(19) any Lien in favor of a trustee on the proceeds of Indebtedness prior to the application of such proceeds;

(20) any Lien on accounts receivable securing or deemed to secure any Indebtedness incurred in accordance with Section 5.17 of the Loan Agreement.

In addition to the foregoing provisions, the Institution may create or suffer to be created or exist a Lien upon the Premises, or the equipment located on the Premises, in favor of the holder of any Indebtedness, without the consent of the Authority, if a Lien on a parity therewith is effectively granted in favor of the Holders of all Bonds and Parity Debt. (Loan Agreement, Section 5.14)

Permitted Dispositions

The Institution covenants that, except for Permitted Dispositions described below, the Institution shall not, without the prior written consent of the Authority, sell, lease (as lessor), remove, transfer, convey or otherwise dispose of any of the Institution’s Property.

Permitted Dispositions shall include only the following:

(1) the disposition of Property if the value of such Property disposed of in any one Fiscal Year is less than five percent (5%) of the value of all Property at the close of the immediately preceding Fiscal Year;

(2) the disposition of Property if the value of such Property disposed of in any one Fiscal Year equals or exceeds five percent (5%) of the value of all Property at the close of the immediately preceding Fiscal Year; provided, however, that an Officer’s Certificate is delivered to the Authority demonstrating that (i)(A) such Property has become inadequate, obsolete, worn out, unprofitable or unnecessary for the Institution’s operations; or (B) such Property shall be disposed of at not less than one hundred percent (100%) of the greater of the full book value or fair market value thereof; and (ii) such disposition will not materially impair the ability of the Institution to provide adequate higher educational facilities and services and will not impair the ability of the Institution to make full and timely payments when due under the Loan Agreement and the other Institution Documents;

(3) the disposition of Property in the case of any proposed or potential condemnation or taking for public or quasi-public use of the Property or any portion thereof; provided that the proceeds of any such condemnation or taking shall be applied in the manner set forth in Section 4.2 of the Loan Agreement;

E-14 (4) the disposition of Property in the ordinary course of business;

(5) the disposition of Property if such Property is replaced promptly by other Property of comparable utility or worth or if the Institution otherwise receives fair market value therefor;

(6) with the prior written consent of the Authority, which consent shall not be unreasonably withheld, the disposition of Property to any Person, provided that prior to the disposition the Authority shall have been provided with evidence to the effect that one of the provisions of the Transaction Test shall have been satisfied; provided, that in calculating the Transaction Test, income or other revenues derived from the Property to be disposed of, and such Property, shall not be included in calculating such test;

(7) the disposition of Property constituting the sale, assignment or other disposition of accounts receivable to a Person, provided that the transaction is commercially reasonable and for consideration deemed reasonably fair and adequate, both as certified in an Officer’s Certificate delivered to the Authority and the Trustee. (Loan Agreement, Section 5.15)

Permitted Releases

The Authority and the Institution covenant that, except for Permitted Releases described below, the Institution shall not, without the prior written consent of the Authority, release any of the Premises from the mortgage lien created by the Mortgage, or any of the Gross Receipts from the security interest created by the Loan Agreement and the Mortgage or release any of the Property from the covenants against Liens set forth in Section 5.14 of the Loan Agreement.

Permitted Releases shall include only the following:

(1) with the prior written consent of the Authority, which consent shall not be unreasonably withheld, a release made with respect to the Premises or Gross Receipts that are to be disposed of in conjunction with a Permitted Disposition of the Premises or Gross Receipts;

(2) with the prior written consent of the Authority, which consent shall not be unreasonably withheld, a release made with respect to the Premises or Gross Receipts that are permitted to be disposed of, but in fact are not to be disposed of, in accordance with the provisions of the Loan Agreement relating to Permitted Dispositions;

(3) with the prior written consent of the Authority, which consent shall not be unreasonably withheld, a release made with respect to the Property; provided that prior to the effective date of such release the Authority and the Trustee shall have been provided with evidence to the effect that one of the provisions of the Transaction Test shall have been satisfied, calculated with respect to any applicable Historic Test Period as if the release had occurred at the beginning of such Historic Test Period.

The Trustee is authorized to cooperate with the Authority and the Institution to implement any such Permitted Release. (Loan Agreement, Section 5.16)

Permitted Indebtedness

The Institution covenants that, except for Permitted Indebtedness described below, the Institution shall not, without the prior written consent of the Authority, incur any Indebtedness, directly, indirectly or contingently.

Permitted Indebtedness shall include only the following:

(1) Long-Term Indebtedness, if prior to incurrence of the Long-Term Indebtedness, there is delivered to the Authority and the Trustee:

E-15 (i) With the prior written consent of the Authority, which consent shall not be unreasonably withheld evidence that at least one of the components of the Transaction Test shall have been satisfied; or

(ii) An Officer’s Certificate (A) to the effect that the total principal amount of Long-Term Indebtedness to be incurred at such time, when added to the aggregate principal amount of all other Long-Term Indebtedness theretofore issued pursuant to this paragraph and then outstanding, will not exceed fifteen percent (15%) of the Operating Revenues of the Institution for the Historic Test Period and (B) projecting that the Long-Term Debt Service Coverage Ratio provisions of Section 5.13 of the Loan Agreement shall be complied with for the Future Test Period, taking into consideration projected revenues and the proposed Indebtedness. Any Long-Term Indebtedness or portion thereof incurred under this paragraph (ii) which is outstanding at any time shall be deemed, with the prior written consent of the Authority, to have been incurred under one of the clauses of the definition of Transaction Test if at any time subsequent to the incurrence thereof there shall be filed with the Authority and the Trustee an Officer’s Certificate to the effect that such outstanding Indebtedness or portion thereof would satisfy such other provision, specifying such other provision, and thereupon the amount deemed to have been incurred and to be outstanding under this paragraph (ii) shall be deemed to have been reduced by such amount and to have been incurred under such other provision. If the terms of such other provision require a Consultant’s opinion, report or certificate, such opinion, report or certificate shall also be obtained and filed with the Authority and the Trustee.

(2) Short-Term Indebtedness, provided that immediately after the incurrence of such Indebtedness the aggregate outstanding principal amount of all Short-Term Indebtedness does not exceed fifteen percent (15%) of the aggregate Operating Revenues of the Institution for the Historic Test Period; provided that for a period of at least thirty (30) days in each Fiscal Year, the principal amount of all such Indebtedness shall be reduced to not in excess of five percent (5%) of the aggregate Operating Revenues of the Institution for the Historic Test Period;

(3) Permitted Guarantees;

(4) any Indebtedness represented by a letter of credit reimbursement agreement or other similar reimbursement agreement entered into by the Institution and a financial institution providing either a liquidity or credit support with respect to any other Indebtedness incurred in accordance with any other provision of Section 5.17 of the Loan Agreement;

(5) any interim Indebtedness with respect to the Project for which money is available therefor in the Construction Fund;

(6) any Indebtedness (or obligations not for borrowed money), which Indebtedness or obligation is not generally treated as indebtedness, such as obligations for employee benefit plans, social security alternative plans, self-insurance programs, captive insurance companies and unemployment insurance liabilities;

(7) Completion Indebtedness, to the extent that there is submitted to the Authority and the Trustee a certificate of an architect to the effect that the net proceeds of such proposed Completion Indebtedness is needed for the completion of the construction or equipping of the facilities in question;

(8) Long-Term Indebtedness incurred for the purpose of refunding, including advance refunding, any Outstanding Long-Term Indebtedness; provided that there is delivered to the Authority and the Trustee an Officer’s Certificate to the effect that either (i) such refunding will not increase Maximum Annual Debt Service by more than ten percent (10%) during the years that the Indebtedness to be refunded would have been Outstanding but for such proposed refunding or (ii) such refunding will result in a present value savings in the Long-Term Debt Service Requirement;

(9) any Indebtedness not mentioned above incurred in the ordinary course of business;

E-16 (10) Non-Recourse Indebtedness, in a principal amount Outstanding at any one time not in excess of fifteen percent (15%) of Operating Revenues for the Historic Test Period;

(11) Subordinated Indebtedness; and

(12) Indebtedness in the form of installment purchase contracts, leases, purchase money mortgages, loans, sale agreements or other typical borrowing instruments; provided that the aggregate annual debt service on the Indebtedness permitted under this paragraph (12) shall not in any Fiscal Year exceed five percent (5%) of total Operating Revenues for the Historic Test Period.

Notwithstanding the provisions described above, in no event without the prior written consent of the Authority shall the aggregate principal amount of Indebtedness outstanding at any one time that has been incurred pursuant to the provisions of paragraph (1)(ii), (2), (7), (9), (10), (11) and (12) above exceed fifteen percent (15%) of the aggregate Operating Revenues of the Institution for the Historic Test Period. (Loan Agreement, Section 5.17)

Permitted Guarantees

The Institution covenants that, except for Permitted Guarantees described below, the Institution shall not, without the prior written consent of the Authority, guarantee the payment of Indebtedness of third parties.

Permitted Guarantees shall include only the following:

(1) with the prior written consent of the Authority, which consent shall not be unreasonably withheld, the Guaranty of Indebtedness if such Guaranty could then be incurred by the Institution as Long-Term Indebtedness or Short-Term Indebtedness under Section 5.17 of the Loan Agreement, in each case taking the following into account. For purposes of any covenants or computations provided for in this paragraph, the aggregate annual principal and interest payments on, and the principal amount of, any Indebtedness of a Person which is the subject of a Guaranty under the Loan Agreement and which would, if such obligation were incurred by the Institution, constitute Long-Term Indebtedness, shall be deemed equivalent to twenty percent (20%) of the actual Annual Debt Service on, and principal amount of, such Indebtedness (assuming the definitions of the Loan Agreement apply to such Indebtedness), so long as such Guaranty constitutes a contingent liability under generally accepted accounting principles, provided, however, that the Annual Debt Service on, and principal amount of, any Long-Term Indebtedness represented by a Guaranty shall be deemed equivalent to all of the actual Annual Debt Service, and principal amount of, such Indebtedness, if a payment has been made by the Institution on such Guaranty within three (3) years of the date of any computation to be made under this paragraph (assuming the definitions of the Loan Agreement apply to such Indebtedness). Also for purposes of any covenants or computations provided for in the Loan Agreement, the aggregate annual principal and interest payments on, and principal amount of, any Short-Term Indebtedness represented by a Guaranty of Indebtedness of a Person shall be deemed equivalent to the actual principal and interest payments on the Indebtedness which is the subject of the Guaranty (assuming the definitions of the Loan Agreement apply to such Indebtedness). (Loan Agreement, Section 5.18)

Permitted Reorganizations

The Institution covenants that, except for Permitted Reorganizations described below, the Institution shall not, without the prior written consent of the Authority, merge, consolidate or reorganize with any other corporation, have its members or sole member replaced, replace its members or sole member, or otherwise change or transfer or allow the change or transfer of control of the Institution, or transfer all or substantially all Property of the Institution to any other corporation or entity.

Permitted Reorganizations shall include only the following:

(1) with the prior written consent of the Authority, which consent shall not be unreasonably withheld, a merger, consolidation or reorganization in which (i) the corporation (the “Surviving Institution”) surviving such merger or resulting from such consolidation or transfer of assets and owning and operating the Project (if other than the Institution) has expressly assumed in writing all of the obligations of and restrictions on the Institution contained

E-17 in the Loan Agreement and the other Institution Documents; (ii) the Surviving Institution is incorporated under the laws of the State of Connecticut, organized in accordance with Section 501(c)(3) of the Code, and qualifies as a “participating institution for higher education” under the Act; (iii) the Surviving Institution shall have a net worth (excluding restricted fund balances) of not less than ninety percent (90%) of the net worth (excluding restricted fund balances) of the Institution prior to the consolidation, merger, or transfer of assets; (iv) the Transaction Test shall have been satisfied; (v) confirmation to the effect that the rating(s) on the Bonds shall not be lowered or withdrawn as a result of the implementation of such Permitted Reorganization shall have been received by the Authority and the Trustee; (vi) immediately prior to, and after giving effect to, the transaction, no Event of Default shall exist; (vii) the Institution, at its own expense, shall furnish the Authority with an Opinion of Bond Counsel to the effect that such merger, consolidation or sale of assets does not adversely affect the exclusion of the interest on the Bonds from gross income for Federal income tax purposes; (viii) the liens created by the Loan Agreement and the Mortgage shall be in full force and effect and will not in any manner be affected thereby; and (ix) all licenses then currently in existence for the Project will be maintained by the Surviving Institution after giving effect to the transaction.

In case of any such consolidation, merger or reorganization and upon any such assumption by the Surviving Institution, such Surviving Institution shall succeed to and be substituted for its predecessor, with the same effect as if it had been named in the Loan Agreement as the Institution.

In case of any such consolidation, merger or reorganization such changes in phraseology and form (but not in substance) may be made in any Notes thereafter to be issued as may be appropriate. (Loan Agreement, Section 5.19)

Debt Service on Balloon Indebtedness

For purposes of the computation of the Long-Term Debt Service Requirement or Annual Debt Service, whether historic or projected, Balloon Indebtedness shall be deemed to be Indebtedness which, at the later of the date of its original incurrence or the date of calculation, amortized, on a level debt service basis, over twenty (20) years, with level annual debt service, at a rate of interest equal to that derived from the Bond Index, as determined by an Officer’s Certificate. (Loan Agreement, Section 5.20)

Debt Service on Variable Rate Indebtedness

For purposes of the computation of the projected (but not historic) Long-Term Debt Service Requirement or Annual Debt Service, Variable Rate Indebtedness shall be deemed Indebtedness which bears interest at a rate derived from the Bond Index, all as determined by an Officer’s Certificate. (Loan Agreement, Section 5.21)

Debt Service on Discount Indebtedness

For purposes of the computation of the Long-Term Debt Service Requirement or Annual Debt Service, whether historic or projected, the amount of principal represented by Discount Indebtedness shall, at the election of the Institution, be deemed to be the accreted value of such Indebtedness computed on the basis of a constant yield to maturity. (Loan Agreement, Section 5.22)

Additional Parity Debt

The Institution, with the consent and approval of the Authority, which consent shall not be unreasonably withheld, and subject to the satisfaction of the applicable provisions of Section 5.17 of the Loan Agreement, reserves the right to issue additional Indebtedness as Parity Debt or otherwise and, subject to the satisfaction of the applicable provisions of Section 5.14 of the Loan Agreement, to pledge its Gross Receipts and mortgage the Premises to secure additional Indebtedness on a parity with or subordinate to the Note, the Institution’s Outstanding Parity Debt, or any other Indebtedness of the Institution with respect to any bonds issued through the Authority or its successors. (Loan Agreement, Section 5.23)

E-18 Negative Pledge

The Institution shall not at any time, without the prior written consent of the Authority, incur, permit, grant or suffer to exist any lien or other encumbrance securing indebtedness or other obligations on the real property of the Institution described in Schedule C to the Loan Agreement (constituting all of the buildings and property at the Institution’s main campus located at 5151 Park Avenue in Fairfield, Connecticut, excluding the library) (except for certain Permitted Encumbrances described in Section 5.14 of the Loan Agreement), unless such lien or other encumbrance also secures the Bonds. (Loan Agreement, Section 5.24)

Notice of Default

The Institution shall notify the Authority and the Trustee promptly of any condition, event, action or failure to take any action which constitutes or would constitute, with notice or the passage of time, an Event of Default under the Loan Agreement or a default or violation of any of the agreements of the Institution contained in the Institution Documents. (Loan Agreement, Section 6.1)

Financial Statements

The Institution shall furnish to the Authority, the Trustee (for the end of each Fiscal Year only) (a) within 45 days after the close of each quarter of each Fiscal Year, quarterly unaudited financial statements and operating data of the Institution with respect to such fiscal quarter and for the portion of the Fiscal Year ending with such quarter, and (b) within 120 days after the end of each Fiscal Year, audited financial statements and operating data of the Institution for the most recent prior Fiscal Year prepared in accordance with generally accepted accounting principles (or describing any exceptions therefrom), together with an Officer’s Certificate demonstrating the calculation required by, and compliance or noncompliance with, the requirements of Section 5.13 of the Loan Agreement. (Loan Agreement, Section 6.2)

Continuing Disclosure

The Institution shall furnish, in a timely manner, to the Authority, the Trustee and the Municipal Securities Rulemaking Board (“MSRB”) as provided in the Continuing Disclosure Agreement (1) notice of any of the events, if material, described in subsection (b)(5)(i)(C) of Rule 15c2-12 adopted by the Securities and Exchange Commission (the “Rule”), as such Rule may be amended from time to time, and (2) notice of the failure of the Institution to provide the annual financial information in the manner and as described in the Loan Agreement.

The Institution shall furnish, and shall cause each “obligated person” as defined in the Rule to furnish to the Authority, the Trustee, the MSRB, and upon request, the owners of the Bonds and such other parties as the Authority may designate, at the times required by the Continuing Disclosure Agreement, financial information (including operating data) of the Institution, of the type included in the final Official Statement for the Bonds, including but not limited to audited financial statements of the Institution for the most recent prior Fiscal Year prepared in accordance with generally accepted accounting principles (or describing any exceptions therefrom) and the information set forth in the Continuing Disclosure Agreement. The Institution shall take all actions and furnish any other information necessary to comply with the Rule and the Continuing Disclosure Agreement. (Loan Agreement, Section 6.3)

Annual Accountants’ Letter; Officer’s Compliance Certificate

The Institution shall furnish or cause to be furnished annually, no later than 120 days after the end of each Fiscal Year (1) to the Authority, a letter from the independent public accountants of the Institution stating in substance that during the course of such accountants’ examination in connection with preparation of the audited financial statements of the Institution for such Fiscal Year, nothing came to their attention which caused them to believe that the Institution failed to comply with the terms, covenants or provisions of the Loan Agreement insofar as they relate to accounting matters; and (2) to the Authority and the Trustee, a certificate signed by an Authorized Officer of the Institution stating that under his supervision the Institution has made a review of its activities during the preceding Fiscal Year for the purpose of determining whether or not the Institution has complied with all of the

E-19 terms, provisions and conditions of the Institution Documents, and to the best of his knowledge the Institution has kept, observed, performed and fulfilled each and every covenant, provision and condition of the Institution Documents, on its part to be performed, and that the Institution is not in default in the performance or observance of any of the terms, covenants, provisions or conditions of the Loan Agreement or thereof, or if the Institution shall be in default, such certificate shall specify all such defaults, the nature and status thereof and any remedial steps taken or proposed to correct such default. (Loan Agreement, Section 6.4)

Annual Certificate as to Equal Employment Opportunity Compliance

The Institution shall furnish to the Authority, within 120 days after the end of each Fiscal Year, a certificate signed by an Authorized Officer of the Institution stating that the Institution is and, to the best of its knowledge after making due inquiry all contractors and subcontractors working in connection with the Project are, in compliance with all applicable Equal Employment Opportunity Laws. If the Institution receives notice from any federal, State or other governmental body that it is not in compliance with such laws, the Institution will provide the Authority with a copy of such notice promptly. (Loan Agreement, Section 6.5)

Annual Project Certificate; Notice as to Project Completion; Notice of Project Noncompliance

The Institution shall furnish to the Authority and the Trustee within 120 days after the end of each Fiscal Year, a certificate of an Authorized Officer of the Institution (A) describing the condition and status of the construction, maintenance and operation of the Project and the Premises including particularly (i) if the Project is still under construction, whether the construction is proceeding in accordance with the most recent schedule therefor provided to the Authority and whether amounts on deposit in the Construction Fund and funds of the Institution available therefor are expected to be sufficient to complete the portions of the Project for which construction contracts are in place and other portions of the Project; (ii) as to maintenance and operation of the Project, whether the Project is being maintained, with regard to ordinary expenses and capital repairs, and whether it is being operated in accordance with the purpose for which it was constructed; and (iii) a report as to the physical condition of the Premises during the preceding annual period; and (B) stating that the Premises are in compliance with all applicable materially restrictive covenants, ordinances, codes, laws and regulations and other requirements of the Hazardous Substance Agreement, or, if not, listing any deficiencies with respect thereto.

The Institution agrees to furnish to the Authority upon completion of the Project a certificate signed by an Authorized Officer of the Institution and stating that the Project has been constructed in compliance with all applicable restrictive covenants, ordinances, codes, laws and regulations.

If the Institution receives notice from any federal, state or other governmental body that it is not in compliance with any such restrictive covenant, ordinance, code, law or regulation, the Institution will provide the Authority with a copy of such notice promptly. (Loan Agreement, Section 6.6)

Annual Budget

The Institution agrees that it shall submit, for each Fiscal Year of the Institution during the period when the Bonds are Outstanding, to the Authority and, after the occurrence of an Event of Default or if requested by the Trustee, the Trustee, final budgets for the operation and cash flow of the Institution for each such Fiscal Year, within thirty (30) days after the beginning of each Fiscal Year with respect to the final, Board approved budget. (Loan Agreement, Section 6.7)

Events of Default

As used in the Loan Agreement an “Event of Default” exists if any of the following occurs and is continuing:

(a) Principal, Interest, Premium, etc. Failure by the Institution to make when due any payment required in respect of principal of and interest on the loan made under the Loan Agreement or failure by the Institution to pay in full any payment of principal of or interest on the Note when due; or

E-20 (b) Other Payments. Failure by the Institution to pay when due any amount required to be paid under the Loan Agreement or the Mortgage (other than any amount referred to in (a) above), which failure continues for a period of ten (10) days; or

(c) Covenants, Representations, etc. Failure by the Institution to observe and perform any covenant, condition or agreement in the Institution Documents (other than the Continuing Disclosure Agreement) on its part to be observed or performed, or failure of any representation made by the Institution in the Institution Documents (other than the Continuing Disclosure Agreement) to be correct in all material respects, which failure shall continue for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, shall have been given to the Institution by the Trustee or to the Institution and the Trustee by the Authority; provided, however, that if such performance, observation or compliance requires work to be done, action to be taken, or conditions to be remedied which by their nature cannot reasonably be done, taken or remedied, as the case may be, within such 30-day period, no Event of Default shall be deemed to have occurred or to exist if, and so long as, in the sole judgment of the Authority, the Institution shall in good faith commence such performance, observation or compliance within such period and shall diligently and continuously prosecute the same to completion; or

(d) Bankruptcy, Insolvency, etc. The Institution shall make an assignment for the benefit of creditors or be generally unable to pay its debts as they become due; or a decree or order appointing a receiver, custodian or trustee for the Institution, for the Premises, or for substantially all of the Institution’s properties shall be entered and, if entered without its consent, remain in effect for more than sixty (60) days; or the Institution shall commence a voluntary case under any law relating to bankruptcy, insolvency, reorganization or other relief of debtors or any such case of an involuntary nature is filed against it and is consented to by it or, if not consented to, is not dismissed within sixty (60) days; or

(e) Undischarged Final Judgment. Final judgment for the payment of money in an aggregate amount at least equal to two percent (2%) of the Institution’s Operating Revenues at the end of the most recent Fiscal Year, shall be rendered against the Institution and at any time after thirty (30) days from the entry thereof, (a) such judgment shall not have been discharged, or (b) the Institution shall not have taken and be diligently prosecuting an appeal therefrom or from the order, decree or process upon which or pursuant to which such judgment shall have been granted or entered, and have caused the execution of or levy under such judgment, order, decree or process or the enforcement thereof to have been stayed pending determination of such appeal; or

(f) Liquidation, etc. Except to the extent permitted by Section 5.19 of the Loan Agreement, the Institution shall liquidate or dissolve its affairs, or dispose of or transfer all or substantially all of its assets; or

(g) Default Under Other Agreements. An event of default shall have occurred under any other agreement or lease (after the expiration of any applicable grace periods) to which the Authority and the Institution are parties; or

(h) Indenture Event of Default. An Event of Default (as defined in the Indenture) shall have occurred under the Indenture; or

(i) Default With Respect to Other Indebtedness. The Institution shall default in the payment of any other Indebtedness (other than the Note), whether such Indebtedness now exists or shall hereafter be created, and any period of grace with respect thereto shall have expired, or an event of default as defined in any mortgage, indenture or instrument, under which there may be issued, or by which there may be secured or evidenced, any Indebtedness, whether such Indebtedness now exists or shall hereafter be created, shall occur, which default in payment or event of default shall be in respect of (a) any Parity Debt or (b) an Indebtedness in an aggregate principal amount of at least two percent (2%) of the Institution’s Operating Revenues at the end of the most recent Fiscal Year, where the effect of such default is to accelerate the maturity of such Indebtedness or to permit the holders thereof (or a trustee on behalf of such holders) to cause such Indebtedness to become due prior to its stated maturity; provided, however that such default shall not constitute an Event of Default within the meaning of this Section if within the time allowed for service of a responsive pleading in any proceeding to enforce payment of such Indebtedness under the laws of Connecticut or other laws governing such proceeding (i) the Institution in good faith commences proceedings to contest the existence or payment of such Indebtedness, (ii) sufficient moneys are escrowed with a bank or trust corporation for the payment of such Indebtedness, and (iii) the Institution delivers an

E-21 Officer’s Certificate to the Authority and the Trustee certifying that the Institution has complied with clauses (i) and (ii); or

(j) Liens, etc. Except as consented to by the Authority in writing, any lien, encumbrance or other charge (other than a Permitted Encumbrance) is created, granted or suffered by the Institution against the Premises of the Institution, including statutory and other liens of mechanics, workers, contractors, subcontractors, suppliers, or taxing authorities; provided, however, that tax or other liens shall not constitute an Event of Default under the Loan Agreement (a) if the Institution is contesting the imposition of such tax or lien in good faith and in accordance with law and if the Institution takes measures reasonably necessary to protect the Authority’s Lien on the Premises created by the Mortgage and the Institution delivers an Officer’s Certificate to the Authority and the Trustee so certifying; or (b) if the amounts secured by any such lien for taxes or special assessments, is not then delinquent; or

(k) Delay or Discontinuance. The acquisition, construction, improvement, equipping, renovation or repair of the Project is abandoned or discontinued or delayed for a length of time or in a manner which the Authority believes threatens the ability of the Institution to repay the loan made under the Loan Agreement or threatens the exclusion from gross income of the interest on the Bonds. (Loan Agreement, Section 8.1)

Remedies

Upon the occurrence and continuance of any Event of Default under the Loan Agreement and further upon the condition that, in accordance with the terms of the Indenture, the Bonds shall have been declared to be immediately due and payable pursuant to any provision of the Indenture, the loan payments required by Section 2.2 of the Loan Agreement and the payments required by the Note shall, without further action, become and be immediately due and payable.

Upon the occurrence and continuance of any Event of Default under the Loan Agreement, the Authority may, and the Trustee shall at the direction of the Authority, subject to the terms of the Indenture, take any action at law or in equity to collect any payments then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Institution under the Loan Agreement or to protect the interests securing the same, and the Authority may, and the Trustee shall at the direction of the Authority, without limiting the generality of the foregoing, exercise any or all rights and remedies given by the Loan Agreement or available under the Loan Agreement and may take any action at law or in equity to collect any payments then due or thereafter to become due, or to enforce performance of any obligation, agreement or covenant of the Institution under the Loan Agreement, the Note or the Mortgage.

Any amounts collected from the Institution pursuant to the exercise of any of the foregoing remedies shall be applied in accordance with the Indenture.

The Authority and the Institution agree that, upon the occurrence of an Event of Default, the Authority shall have the right of foreclosure under the Mortgage, and in addition the Authority is authorized to and may enter the Premises without being liable for any prosecution or damages therefor, and may let the Premises, and receive the rent therefor, upon such terms as shall be satisfactory to the Authority, and all rights of the Institution to repossess the Premises shall be forfeited. Such entry by the Authority shall not operate to release the Institution from any payments or covenants to be performed under the Loan Agreement or under the Mortgage during the full term of the Mortgage. For the purpose of letting, the Authority shall be authorized to make such repairs or alterations in or to the Premises as may be necessary to place the same in good order and condition. Upon entering the Premises, the Authority may, in its sole discretion, inspect the Premises and check all fixtures, furniture, equipment and effects on the Premises and the Authority may, in its sole discretion, expend such monies as may be necessary to restore or repair the Premises. The Institution shall pay to the Authority, upon receipt of vouchers therefor, all sums owing to the Authority by the Institution for any repairs, replacements or renovations made to the Premises to protect the lien and security interest under the Loan Agreement or under the Mortgage. The Institution shall be liable to the Authority for the cost of such repairs or alterations and all expenses of such letting subject to any limitation with respect thereto as set forth in the Connecticut General Statutes. If the sum realized or to be realized from the letting is insufficient to satisfy the payments required by the Loan Agreement, the Mortgage and the Note, the Authority, at its option, may require the Institution to pay such deficiency month by month, or may hold the Institution liable in advance for the entire deficiency arising during the term of the letting of the Premises. Notwithstanding such entry

E-22 by the Authority, the Institution agrees that: (i) all rights-of-way, easements or other rights in land provided in accordance with the Loan Agreement shall be continued in full force and effect; and (ii) any utility services furnished to the Premises prior to such entry shall continue to be furnished by the Institution to the Premises at the expense of the Institution. The Authority also may pursue such other remedies as are available to it under the Loan Agreement and under Connecticut law.

Upon the occurrence and continuance of any Event of Default under the Loan Agreement, any and all amounts due under the Loan Agreement may be declared by the Authority to be immediately due and payable whether or not the Bonds shall have been declared to be due and payable; provided that if the Bonds have been declared to be due and payable in accordance with the terms of the Indenture, the amounts due under Section 2.2 of the Loan Agreement shall, without further action, become and be immediately due and payable. (Loan Agreement, Section 8.2)

Remedies Not Exclusive

All rights and remedies in the Loan Agreement given or granted to the Authority are cumulative, non-exclusive and in addition to any and all rights and remedies that the Authority may have or be given by reason of any law, statute, ordinance or otherwise. (Loan Agreement, Section 8.3)

Indemnification

The Institution agrees to indemnify the Authority, the Trustee and their members, directors, officers, officials, employees, counsels, consultants and agents for certain untrue or misleading statements of material facts in portions of the Official Statement or omissions of certain material facts from portions of the Official Statement and from other information required to be provided by the Institution under the Loan Agreement. (Loan Agreement, Section 9.1)

Amendment

Subject to certain provisions of the Loan Agreement, the Authority hereby reserves the right, together with the Institution, with the consent of the Trustee (given at the direction of the Authority, but the Trustee need not consent if the Trustee’s duties, obligations or liabilities are affected thereby) and to the extent permitted by Section 6.5 of the Indenture: (i) to amend or modify the terms of the Loan Agreement, the Mortgage and the Note in any respect consistent with the Act, (ii) to extend the term of the Loan Agreement, the Mortgage or the Note or the time for making any payment under the Loan Agreement or thereunder, or (iii) to continue to make construction advances after the initial completion date for the Project. The Institution covenants and agrees to send a copy of each amendment or modification of the Loan Agreement, the Mortgage and the Note to the Trustee. (Loan Agreement, Section 10.2)

Term of Loan Agreement

The Loan Agreement shall remain in full force and effect from the effective date of the Loan Agreement, which shall be the date of delivery of the Bonds authorized under the Indenture, until the date on which the principal of and redemption premium, if any, and interest on the Bonds and any other costs of the Authority and the Trustee with respect to the Bonds shall have been fully paid or provision for the payment thereof shall have been made as provided by the Indenture, at which time the Authority shall release and cancel the Loan Agreement, the Mortgage and the Note. The foregoing shall not affect the validity and continuing effectiveness of any of the provisions of the Loan Agreement which by their terms survive the expiration of the Loan Agreement. (Loan Agreement, Section 10.4)

Third Party Beneficiary

The Institution agrees that the Trustee shall be a third party beneficiary of the Loan Agreement to the extent that any of the provisions of the Loan Agreement relate to or provide rights to the Trustee. (Loan Agreement, Section 10.7)

E-23 Waivers and Consents by Authority

The Authority reserves the right to give its consent or waive any provision of the Loan Agreement or the Mortgage without Bondowner consent, provided such waiver does not cause the Authority to violate any of its covenants or agreements under the Indenture, and provided further that the Authority shall not waive any provision of the Loan Agreement relating to indemnification rights of the Trustee without the prior written consent of the Trustee. Any waiver, consent, notice or request authorized to be given by the provisions of the Loan Agreement may be given by an Authorized Officer of the Authority in writing. (Loan Agreement, Section 10.8)

E-24 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING

University of Hartford Issue, Series A dated July 1, 1966 $4,100,000 $4,100,000 $0

Middlesex Memorial Hospital Issue, Series A dated July 1, 1967 9,300,000 9,300,000 0

Danbury Hospital Issue, Series A dated July 1, 1968 8,500,000 8,500,000 0

Mount Sinai Hospital Issue, Series A dated July 1, 1968 11,450,000 11,450,000 0

New Britain General Hospital Issue, Series A dated July 1, 1968 5,540,000 5,540,000 0

New Haven College Issue, Series A dated July 1, 1968 2,950,000 2,950,000 0

Rockville General Hospital Issue, Series A dated July 1, 1968 3,400,000 3,400,000 0

Lawrence and Memorial Hospitals Issue, Series A dated July 1, 1969 5,380,000 5,380,000 0

University of Hartford Issue, Series B dated July 1, 1969 6,680,000 6,680,000 0

Danbury Hospital Issue, Series B dated July 1, 1970 1,500,000 1,500,000 0

Waterbury Hospital Issue, Series A dated July 1, 1970 10,950,000 10,950,000 0

Windham Hospital Issue, Series A dated July 1, 1970 3,860,000 3,860,000 0

Yale University Issue, Series A dated July 1, 1970 2,440,000 2,440,000 0

Yale University Issue, Series B dated July 1, 1970 12,300,000 12,300,000 0

Charlotte Hungerford Hospital Issue, Series A dated July 1, 1971 2,400,000 2,400,000 0

St. Francis Hospital Issue, Series A dated July 1, 1971 16,700,000 16,700,000 0

University of Bridgeport Issue, Series A dated July 1, 1971 7,500,000 7,500,000 0

Yale-New Haven Hospital Issue, Series A dated July 1, 1971 9,250,000 9,250,000 0

Wesleyan University Issue, Series A dated July 1, 1972 30,550,000 30,550,000 0

Yale University Issue, Series C dated July 1, 1972 2,780,000 2,780,000 0

St. Vincent's Hospital Issue, Series A dated July 1, 1973 23,450,000 23,450,000 0

Middlesex Memorial Hospital Issue, Series B dated July 1, 1974 8,220,000 8,220,000 0

Norwalk Hospital Issue, Series A dated March 1, 1976 13,800,000 13,800,000 0

Danbury Hospital Issue, Series C-1976 dated July 1, 1976 19,750,000 19,750,000 0

F- 1 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Yale University Issue, Series D dated July 1, 1976 16,400,000 16,400,000 0

Fairfield University Issue, Series A dated July 1, 1977 4,150,000 4,150,000 0

Trinity College Issue, Series A dated July 1, 1977 6,000,000 6,000,000 0

Yale-New Haven Hospital Issue, Series B-1979 dated July 1, 1979 59,500,000 59,500,000 0

Hartford Hospital Issue, Series A dated September 12, 1979 1,800,000 1,800,000 0

St. Mary's Hospital Issue, Series A dated January 1, 1980 25,985,000 25,985,000 0

Fairfield University Issue, Series B dated July 1, 1980 4,680,000 4,680,000 0

Connecticut Hospice Issue, Series A dated July 16, 1980 1,450,000 1,450,000 0

Quinnipiac College Issue, Series A dated October 22, 1980 1,900,000 1,900,000 0

University of New Haven Issue, Series B dated April 15, 1981 5,210,000 5,210,000 0

Manchester Memorial Hospital Issue, Series A dated June 1, 1981 14,800,000 14,800,000 0

Meriden-Wallingford Hospital Issue, Series A dated July 1, 1981 24,200,000 24,200,000 0

Fairfield University Issue, Series C dated November 12, 1981 3,500,000 3,500,000 0

Yale-New Haven Hospital Issue, Series C-1981 dated March 1, 1982 6,500,000 6,500,000 0

Community Health Care Center Plan Issue, Series A dated December 22, 1982 2,500,000 2,500,000 0

Yale University Issue, Series E dated February 9, 1983 28,500,000 28,500,000 0

Yale University Issue, Series F dated March 1, 1983 30,250,000 30,250,000 0

Wesleyan University Issue, Series B dated March 15, 1983 16,175,000 16,175,000 0

Danbury Hospital Issue, Series D dated April 15, 1983 49,995,000 49,995,000 0

William W. Backus Hospital Issue, Series A dated November 22, 1983 3,060,000 3,060,000 0

Connecticut College Issue, Series A dated January 1, 1984 4,250,000 4,250,000 0

Stamford Hospital Issue, Series A dated May 1, 1984 19,410,000 19,410,000 0

Hospital of St. Raphael Issue, Series A dated October 1, 1984 45,030,000 45,030,000 0

Fairfield University Issue, Series D dated November 20, 1984 2,300,000 2,300,000 0

Hospital Equipment Issue, Series A dated March 1, 1985 14,530,000 14,530,000 0

F- 2 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING

University of New Haven Issue, Series C dated June 27, 1985 2,275,000 2,275,000 0

Yale-New Haven Hospital Issue, Series D dated July 1, 1985 45,900,000 45,900,000 0

Yale University Issue, Series G,H,I and J dated October 15, 1985 90,400,000 90,400,000 0

Yale-New Haven Hospital Issue, Series E dated November 1, 1985 15,000,000 15,000,000 0

William W. Backus Hospital Issue, Series B dated November 15, 1985 4,860,000 4,860,000 0

Hartford Graduate Center Issue, Series A dated November 20, 1985 5,700,000 5,700,000 0

Trinity College Issue, Series B dated December 30, 1985 10,700,000 10,700,000 0

Center for Continuing Care Center of Greater Stamford Issue, Series A dated May 1, 1986 8,015,000 8,015,000 0

Manchester Memorial Hospital Issue, Series B dated November 15, 1986 15,325,000 15,325,000 0

Hebrew Home and Hospital Issue, Series A dated January 1, 1987 21,760,000 21,760,000 0

Yale University Issue, Series K dated March 1, 1987 34,290,000 34,290,000 0

Fairfield University Issue, Series E dated July 1, 1987 15,575,000 15,575,000 0

Capital Asset Pool Issue, Series A dated February 1, 1988 10,930,000 10,930,000 0

University of Hartford Issue, Series C dated April 1, 1988 61,915,000 61,915,000 0

Yale University Issue, Series L,M,N,O dated July 28, 1988 90,000,000 90,000,000 0

St. Mary's Hospital Issue, Series B dated August 15, 1988 33,645,000 33,645,000 0

Wesleyan University Issue, Series C dated September 22, 1988 38,300,000 38,300,000 0

Bradley Health Care Issue, Series A dated December 1, 1988 7,385,000 7,385,000 0

Hospital of Saint Raphael Issue, Series B & C dated December 1, 1988 72,440,000 72,440,000 0

Kingswood-Oxford School Issue, Series A dated April 15, 1989 2,800,000 2,800,000 0

Lutheran General Health Care System dated April 15, 1989 10,650,000 10,650,000 0

Stamford Hospital Issue, Series B dated June 1, 1989 10,450,000 10,450,000 0

Yale University Issue, Series P dated September 27, 1989 6,350,000 6,350,000 0

Fairfield University Issue, Series F dated October 1, 1989 11,700,000 11,700,000 0

F- 3 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Capital Asset Pool Issue, Series B dated November 1, 1989 23,275,000 23,275,000 0

Quinnipiac College Issue, Series B dated November 15, 1989 11,340,000 11,340,000 0

Manchester Memorial Hospital Issue, Series C dated January 15, 1990 5,005,000 5,005,000 0

Lawrence and Memorial Hospital Issue, Series B dated February 1,1990 9,295,000 9,295,000 0

Bristol Hospital Issue, Series A dated March 1, 1990 18,250,000 18,250,000 0

Taft School Issue, Series A dated April 15, 1990 11,870,000 11,870,000 0

Windham Hospital Issue, Series B dated June 13, 1990 20,600,000 20,600,000 0

Loomis Chaffee School Issue, Series A dated June 28, 1990 7,000,000 7,000,000 0

St. Mary's Hospital Issue, Series C dated August 1, 1990 18,980,000 18,980,000 0

Charlotte Hungerford Hospital Issue, Series B dated September 20, 1990 10,900,000 10,900,000 0

Quinnipiac College Issue, Series C dated November 1, 1990 4,000,000 4,000,000 0

Waterbury Hospital Issue, Series B dated November 1, 1990 20,130,000 20,130,000 0

Yale-New Haven Hospital Issue, Series F dated November 1, 1990 124,395,000 124,395,000 0

Kent School Issue, Series A dated December 1, 1990 26,000,000 26,000,000 0

Capital Asset Issue, Series C dated December 1, 1990 13,180,000 13,180,000 0

Hospital of Saint Raphael Issue, Series D & E dated April 1, 1991 20,280,000 20,280,000 0

Stamford Hospital Issue, Series C, D & E dated May 1, 1991 22,240,000 22,240,000 0

Connecticut College Issue, Series B dated August 31, 1991 5,800,000 5,800,000 0

Danbury Hospital Issue, Series E dated September 1, 1991 37,620,000 37,620,000 0

Sharon Health Care, Inc. Issue, Series A dated November 1, 1991 7,290,000 7,290,000 0

New Britain Memorial Hospital Issue, Series A dated December 1, 1991 44,805,000 44,805,000 0

Tolland County Health Care, Inc. Issue, Series A dated December 1, 1991 8,900,000 8,900,000 0

Johnson Evergreen Corporation Issue, Series A dated January 1, 1992 8,590,000 8,590,000 0

Saint Francis Hospital Issue, Series B dated January 1, 1992 27,845,000 27,845,000 0

Hospital of Saint Raphael Issue, Series F & G dated January 1, 1992 28,025,000 28,025,000 0

F- 4 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Middlesex Hospital Issue, Series C,D,E,F & G dated March 1, 1992 38,940,000 38,940,000 0

Bridgeport Hospital Issue, Series A dated March 1, 1992 25,890,000 13,250,000 12,640,000

Yale-New Haven Hospital Issue, Series G dated April 1, 1992 34,315,000 34,315,000 0

Lawrence and Memorial Hospital, Series C dated April 1, 1992 51,950,000 51,950,000 0

Norwalk Health Care Issue, Series A dated May 1, 1992 13,060,000 13,060,000 0

Norwalk Hospital Issue, Series B, C & D dated May 15, 1992 23,100,000 23,100,000 0

Trinity College Issue, Series C dated July 1, 1992 20,370,000 20,370,000 0

Yale University Issue, Series Q & R dated August 3, 1992 87,600,000 87,600,000 0

William W. Backus Hospital Issue, Series C dated September 1, 1992 14,700,000 14,700,000 0

University of Hartford Issue, Series D dated October 1, 1992 76,720,000 76,720,000 0

Sacred Heart University Issue, Series A dated November 1, 1992 6,160,000 6,160,000 0

Manchester Memorial Hospital Issue, Series D dated February 1, 1993 8,430,000 8,430,000 0

Griffin Hospital Issue, Series A dated March 1, 1993 30,285,000 30,285,000 0

The Taft School Issue, Series B dated July 1, 1993 13,425,000 13,425,000 0

Quinnipiac College Issue, Series D dated August 1, 1993 50,700,000 50,700,000 0

Fairfield University Issue, Series G dated September 15, 1993 25,255,000 25,255,000 0

Sacred Heart University Issue, Series B dated October 1, 1993 12,500,000 12,500,000 0

Saint Francis Hospital Issue, Series C dated October 1, 1993 110,505,000 104,245,000 6,260,000

Forman School Issue, Series A dated November 12, 1993 4,000,000 3,300,000 700,000

Hospital of Saint Raphael Issue, Series H & I dated November 1, 1993 73,575,000 57,005,000 16,570,000

Lawrence and Memorial Hospital Issue, Series D dated December 1, 1993 58,165,000 15,545,000 42,620,000

New Britain General Hospital Issue, Series B dated April 1, 1994 48,870,000 48,870,000 0

Trinity College Issue, Series D dated April 1, 1994 17,000,000 17,000,000 0

Newington Children's Hospital Issue, Series A dated August 15, 1994 53,750,000 53,750,000 0

Choate Rosemary Hall Issue, Series A dated November 15, 1994 25,070,000 25,070,000 0

F- 5 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Pomfret School Issue, Series A dated January 25, 1995 7,785,000 2,685,000 5,100,000

The Loomis Chaffee School Issue, Series B dated January 1, 1995 10,260,000 10,260,000 0

Bridgeport Hospital Issue, Series B dated April 12, 1995 31,500,000 31,500,000 0

Kent School Issue, Series B dated July 1, 1995 26,915,000 26,915,000 0

Day Kimball Hospital Issue, Series A dated November 1, 1995 19,150,000 5,530,000 13,620,000

Bridgeport Hospital Issue, Series C dated December 1, 1995 54,805,000 17,355,000 37,450,000

Danbury Hospital Issue, Series F dated January 1, 1996 20,000,000 20,000,000 0

Greenwich Academy Issue, Series A dated March 1, 1996 16,000,000 16,000,000 0

Greenwich Hospital Issue, Series A dated March 1, 1996 62,905,000 62,905,000 0

Sacred Heart University Issue, Series C dated April 1, 1996 35,395,000 31,210,000 4,185,000

Westminster School Issue, Series A dated May 1, 1996 10,195,000 10,195,000 0

University of New Haven Issue, Series D dated May 1, 1996 24,400,000 24,400,000 0

Taft School Issue, Series C dated June 1, 1996 16,730,000 16,730,000 0

Trinity College Issue, Series E dated July 1, 1996 35,000,000 35,000,000 0

Yale-New Haven Hospital Issue, Series H dated July 1, 1996 120,240,000 120,240,000 0

Veterans Memorial Medical Center, Series A dated August 1, 1996 69,785,000 31,305,000 38,480,000

The Loomis Chaffee School Issue, Series C dated August 1, 1996 11,435,000 11,435,000 0

Stamford Hospital Issue, Series F dated October 15, 1996 23,645,000 23,645,000 0

Windham Hospital Issue, Series C dated December 1, 1996 20,200,000 20,200,000 0

Connecticut College Issue, Series C dated January 1, 1997 33,620,000 33,620,000 0

Yale University Issue, Series S dated April 3, 1997 135,865,000 0 135,865,000

Sacred Heart University Issue, Series D dated April 1, 1997 6,185,000 6,185,000 0

William W. Backus Hospital Issue, Series D dated April 1, 1997 17,240,000 17,240,000 0

St. Mary's Hospital Issue, Series D & E dated May 1, 1997 47,150,000 20,720,000 26,430,000

Choate Rosemary Hall Issue, Series B dated June 15, 1997 33,075,000 33,075,000 0

F- 6 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Edgehill Issue, Series A & B dated July 1, 1997(Ser. A) July 23, 1997(Ser. B) 84,370,000 84,370,000 0

Suffield Academy Issue, Series A dated September 1, 1997 8,070,000 8,070,000 0

Sharon Hospital Issue, Series A dated September 30,1997 7,610,000 7,610,000 0

Middlesex Hospital Issue, Series H & I dated September 1, 1997 55,440,000 14,225,000 41,215,000

Yale University Issue, Series T dated November 5, 1997 250,000,000 0 250,000,000

Hospital for Special Care Issue, Series B dated December 1, 1997 69,795,000 69,795,000 0

Masonicare Issue, Series A dated December 1, 1997 53,045,000 53,045,000 0

Bradley Health Care Issue, Series B Jerome Home Issue, Series C dated December 22, 1997 23,410,000 7,730,000 15,680,000

Hospital of St. Raphael Issue, Series J & K dated January 8, 1998 28,800,000 28,800,000 0

Trinity College Issue, Series F dated April 1, 1998 41,570,000 31,765,000 9,805,000

Masonicare Issue, Series B dated May 1, 1998 11,085,000 11,085,000 0

Taft School Issue, Series D dated May 1, 1998 17,060,000 14,850,000 2,210,000

New Opportunities for Waterbury Issue, Series A & B dated April 15, 1998 5,795,000 1,175,000 4,620,000

Hopkins School Issue, Series A dated June 1, 1998 10,000,000 10,000,000 0

Canterbury School Issue, Series A dated August 1, 1998 10,230,000 2,190,000 8,040,000

Charlotte Hungerford Hospital Issue, Series C dated August 14, 1998 14,340,000 10,865,000 3,475,000

William W. Backus Hospital Issue, Series E dated August 1, 1998 13,655,000 5,030,000 8,625,000

Fairfield University Issue, Series H dated July 15, 1998 28,000,000 28,000,000 0

Salisbury School Issue, Series A dated October 1, 1998 16,135,000 16,135,000 0

Sacred Heart University Issue, Series E dated December 1, 1998 76,020,000 17,710,000 58,310,000

Quinnipiac College Issue, Series E dated December 1, 1998 59,660,000 59,660,000 0

Hebrew Home and Hospital Issue, Series B dated January 1, 1999 19,215,000 19,215,000 0

(Charity Obligated Group) St. Vincent's Medical Center/Hall-Brooke Issue, Series 1999B dated February 4, 1999 45,000,000 45,000,000 0

Stamford Hospital Issue, Series G & H dated March 1, 1999(Ser G) March 24, 1999(Se 97,440,000 97,440,000 0

F- 7 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Norwalk Hospital Issue, Series E & F dated April 1, 1999 31,480,000 13,300,000 18,180,000

Westminster School Issue, Series B dated April 1, 1999 7,960,000 7,960,000 0

Yale University Issue, Series U dated April 29, 1999 250,000,000 0 250,000,000

Saint Joseph College Issue, Series A dated May 1, 1999 11,400,000 11,400,000 0

Brunswick School Issue, Series A dated May 1, 1999 44,635,000 21,175,000 23,460,000

The University of Connecticut Foundation Issue, Series A, dated August 1, 1999 8,000,000 8,000,000 0

Miss Porter's School Issue, Series A dated August 15, 1999 10,000,000 10,000,000 0

Fairfield University Issue, Series I dated August 1, 1999 70,000,000 70,000,000 0

The Horace Bushnell Memorial Hall Issue, Issue, Series A, dated September 1, 1999 15,000,000 2,745,000 12,255,000

Danbury Hospital Issue, Series G dated September 1, 1999 43,240,000 2,590,000 40,650,000

Catholic Health East Issue, Series 1999F dated September 15, 1999 18,610,000 18,610,000 0

Ascension Health Issue, Series A dated November 1, 1999 44,500,000 11,300,000 33,200,000

Covenant Retirement Communities Issue, Series A dated December 2, 1999 10,040,000 2,340,000 7,700,000

Waterbury Hospital Issue, Series C dated December 1, 1999 27,140,000 27,140,000 0

Summerwood at University Park Issue, Series A dated February 3, 2000 11,200,000 11,200,000 0

Gaylord Hospital Issue, Series A dated February 22, 2000 12,920,000 12,920,000 0

Eastern Connecticut Health Network Issue, Series A dated February 1, 2000 58,170,000 46,750,000 11,420,000

The Ethel Walker School Issue, Series A dated March 1, 2000 8,500,000 8,500,000 0

Community Renewal Team Issue, Series A dated March 16, 2000 4,325,000 2,010,000 2,315,000

Taft School Issue, Series E dated April 27, 2000 12,000,000 0 12,000,000

Lauralton School Issue, Series A dated June 14, 2000 3,400,000 705,000 2,695,000

Connecticut College Issue, Series D dated June 1, 2000 12,000,000 7,815,000 4,185,000

The Marvelwood School Issue, Series A dated June 29, 2000 5,535,000 5,535,000 0

The Hotchkiss School Issue, Series A dated August 3, 2000 35,000,000 0 35,000,000

Hartford Hospital Issue, Series B dated August 3, 2000 31,175,000 0 31,175,000

F- 8 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING The Rectory School Issue, Series A dated November 9, 2000 7,100,000 1,295,000 5,805,000

Westover School Issue, Series A dated November 1, 2000 10,000,000 10,000,000 0

Edgehill Issue, Series C dated December 13, 2000 22,000,000 4,400,000 17,600,000

Kent School Issue, Series C dated February 15, 2001 10,500,000 10,500,000 0

Trinity College Issue, Series G dated March 1,2001 50,000,000 50,000,000 0

Loomis Chaffee School Issue, Series D dated May 1, 2001 27,625,000 27,625,000 0

The Gunnery School Issue, Series A dated May 1, 2001 11,455,000 1,595,000 9,860,000

Greenwich Academy Issue, Series B dated May 1, 2001 32,920,000 31,035,000 1,885,000

United Methodist Home of Sharon Issue, Series A, dated June 1, 2001 7,740,000 1,735,000 6,005,000

Wesleyan University Issue, Series D dated June 7, 2001 93,000,000 93,000,000 0

Yale University Issue, Series V dated July 12, 2001 200,000,000 0 200,000,000

Middlesex Hospital Issue, Series J dated July 25, 2001 11,895,000 11,895,000 0

The Whitby School Issue, Series A dated August 3, 2001 6,000,000 1,900,000 4,100,000

Fairfield University Issue, Series J dated August 1, 2001 18,000,000 17,580,000 420,000

Taft School Issue, Series F dated August 15,2001 11,480,000 11,480,000 0

The Williams School Issue, Series A dated October 18, 2001 5,500,000 925,000 4,575,000

Loomis Chaffee School Issue, Series E dated October 1, 2001 11,155,000 1,675,000 9,480,000

Quinnipiac University Issue, Series F dated October 31, 2001 60,000,000 60,000,000 0

Washington Montessori School Issue, Series A, dated November 30, 2001 7,990,000 7,990,000 0

Bristol Hospital Issue, Series B dated January 31, 2002 38,000,000 7,645,000 30,355,000

Westminster School Issue, Series C dated February 20, 2002 8,250,000 700,000 7,550,000

Greater Hartford YMCA Issue, Series A dated March 28, 2002 16,180,000 16,180,000 0

University of Hartford Issue, Series E dated April 1, 2002 75,000,000 10,360,000 64,640,000

Yale University Issue, Series W dated May 1, 2002 89,520,000 89,520,000 0

F- 9 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Health Care Capital Asset Program Issue, Series A-1, dated May 16, 2002 36,110,000 500,000 35,610,000

Saint Francis Hospital Issue, Series D dated May 1, 2002 25,250,000 10,120,000 15,130,000

Kingswood-Oxford School Issue, Series B dated June 5, 2002 12,000,000 1,235,000 10,765,000

Connecticut College Issue, Series E dated July 1, 2002 17,785,000 4,130,000 13,655,000

The Village for Families and Children Issue, Series A & B, dated November 1, 2002 14,000,000 1,960,000 12,040,000

Middlesex Hospital Issue, Series K dated November 15, 2002 15,500,000 15,500,000 0

Klingberg Family Centers Issue, Series A dated December 4, 2002 6,750,000 6,750,000 0

Yale University Issue, Series X-1, X-2 & X-3 dated January 8, 2003 350,000,000 0 350,000,000

Brunswick School Issue, Series B dated April 1, 2003 17,500,000 535,000 16,965,000

Boys & Girls Club of Greenwich Issue, Series A dated May 29, 2003 14,800,000 14,800,000 0

Wesleyan University Issue, Series E dated July 17, 2003 62,000,000 62,000,000 0

King & Low-Heywood Thomas School Issue, Series A, dated August 27, 2003 11,005,000 1,360,000 9,645,000

Central Connecticut Coast YMCA Issue, Series A, dated September 11, 2003 4,500,000 900,000 3,600,000

Quinnipiac University Issue, Series G dated November 18, 2003 16,340,000 16,340,000 0

Sacred Heart University Issue, Series F dated December 11, 2003 21,700,000 1,855,000 19,845,000

Salisbury School Issue, Series B dated February 19, 2004 5,510,000 5,510,000 0

Fairfield University Issue, Series K dated April 14, 2004 38,075,000 38,075,000 0

University of Hartford Issue, Series F dated May 6, 2004 25,000,000 25,000,000 0

Connecticut Children's Medical Center Issue, Series B & C, dated May 13, 2004 44,985,000 12,210,000 32,775,000

Lawrence and Memorial Hospital Issue, Series E dated June 24, 2004 22,990,000 0 22,990,000

Greenwich Academy Issue, Series C dated June 25, 2004 11,770,000 1,500,000 10,270,000

Norwich Free Academy Issue, Series A dated June 1, 2004 18,740,000 2,105,000 16,635,000

Trinity College Issue, Series H dated July 8, 2004 33,370,000 5,950,000 27,420,000

Eastern Connecticut Health Network Issue, Series B, dated July 21, 2004 20,000,000 20,000,000 0

F- 10 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Greenwich Academy Issue, Series D dated September 1, 2004 15,490,000 3,135,000 12,355,000

Kent School Issue, Series D dated October 6, 2004 21,725,000 4,705,000 17,020,000

Trinity College Issue, Series I dated December 9, 2004 15,000,000 15,000,000 0

Hospital of Saint Raphael Issue, Series L&M dated December 16, 2004 59,945,000 0 59,945,000

Griffin Hospital Issue, Series B dated February 1, 2005 24,800,000 5,310,000 19,490,000

Eagle Hill School Issue, Series A dated May 11, 2005 5,990,000 585,000 5,405,000

Avon Old Farms School Issue, Series A dated May 12, 2005 21,670,000 1,820,000 19,850,000

Westminster School Issue, Series D dated June 1, 2005 9,260,000 1,570,000 7,690,000

Ridgefield Academy Issue, Series A dated June 17, 2005 12,000,000 975,000 11,025,000

Greenwich Family YMCA Issue, Series A dated August 4, 2005 20,165,000 1,140,000 19,025,000

William W. Backus Hospital Issue, Series F&G dated August 10, 2005 58,135,000 3,635,000 54,500,000

University of New Haven Issue, Series E&F dated August 17, 2005 32,350,000 7,980,000 24,370,000

Wesleyan University Issue, Series F dated September 1, 2005 48,000,000 48,000,000 0

Yale University Issue, Series Y dated October 5, 2005 300,000,000 0 300,000,000

The Loomis Chaffee School Issue, Series F dated October 27, 2005 34,135,000 560,000 33,575,000

Fairfield University Issue, Series L1&2 dated November 3, 2005 106,575,000 106,575,000 0

Eastern Connecticut Health Network Issue, Series C, dated November 9, 2005 37,065,000 1,465,000 35,600,000

Mansfield Center for Nursing and Rehabilitation Issue, Series B, dated December 15, 2005 7,095,000 1,320,000 5,775,000

Fairfield University Issue, Series L-1(2nd Tranche) dated December 15, 2005 10,000,000 10,000,000 0

Avon Old Farms School Issue, Series B dated March 9, 2006 7,000,000 550,000 6,450,000

Danbury Hospital Issue, Series H&I dated March 16, 2006 81,560,000 40,000,000 41,560,000

Greenwich Hospital Issue, Series B dated April 6, 2006 56,600,000 56,600,000 0

Yale-New Haven Hospital Issue, Series I dated April 7, 2006 111,800,000 111,800,000 0

Miss Porter's School Issue, Series B dated June 16, 2006 18,130,000 0 18,130,000

F- 11 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING University of Hartford Issue, Series G dated June 22, 2006 50,000,000 2,550,000 47,450,000

Greenwich Adult Day Care Issue, Series A dated June 29, 2006 4,030,000 780,000 3,250,000

The Children's School Issue, Series A dated July 24, 2006 6,835,000 375,000 6,460,000

Canterbury School Issue, Series B dated July 27, 2006 11,805,000 220,000 11,585,000

University of New Haven Issue, Series G dated August 29, 2006 15,890,000 1,520,000 14,370,000

Yale-New Haven Hospital Issue, Series J dated September 26, 2006 280,855,000 111,465,000 169,390,000

Middlesex Hospital Issue, Series L&M dated December 7, 2006 39,380,000 3,280,000 36,100,000

Quinnipiac University Issue, Series H dated December 13, 2006 67,495,000 0 67,495,000

The UConn Foundation Issue, Series B dated January 23, 2007 7,290,000 785,000 6,505,000

Trinity College Issue, Series J&K dated March 7, 2007 74,805,000 1,310,000 73,495,000

Greenwich Academy Issue, Series E dated March 22, 2007 26,435,000 0 26,435,000

Jerome Home Issue, Series D Mulberry Gardens Issue, Series E dated March 29, 2007 16,050,000 820,000 15,230,000

Connecticut College Issue, Series F&G dated April 4, 2007 40,855,000 0 40,855,000

The Stanwich School Issue, Series A dated May 3, 2007 15,500,000 0 15,500,000

Griffin Hospital Issue, Series C&D dated May 15, 2007 34,050,000 0 34,050,000

Chase Collegiate School Issue, Series A dated June 7, 2007 11,060,000 395,000 10,665,000

Choate Rosemary School Issue, Series C dated June 21, 2007 42,000,000 42,000,000 0

Hospital for Special Care Issue, Series C&D dated June 28, 2007 61,635,000 17,255,000 44,380,000

Gaylord Hospital Issue, Series B dated July 3, 2007 21,530,000 1,755,000 19,775,000

Westover School Issue, Series B dated July 11, 2007 9,180,000 710,000 8,470,000

University of Bridgeport Issue, Series B dated August 10, 2007 21,175,000 21,175,000 0

Renbrook School Issue, Series A dated September 13, 2007 8,000,000 275,000 7,725,000

F- 12 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Yale University Issue, Series Z dated October 4, 2007 600,000,000 0 600,000,000

Masonicare Issue, Series C&D dated October 31, 2007 116,065,000 5,395,000 110,670,000

Hoffman SummerWood Issue, Series B dated November 7, 2007 17,055,000 0 17,055,000

Suffield Academy Issue, Series B dated November 8, 2007 12,640,000 1,650,000 10,990,000

Westminster School Issue, Series E dated November 9, 2007 19,230,000 0 19,230,000

Windham Hospital Issue, Series D dated November 15, 2007 19,745,000 395,000 19,350,000

Quinnipiac College Issue, Series I-K dated December 20, 2007 416,465,000 7,000,000 409,465,000

Pierce Memorial Baptist Home Issue, Series A dated January 17, 2008 8,575,000 275,000 8,300,000

Choate Rosemary Hall Issue, Series D dated April 2, 2008 42,415,000 2,505,000 39,910,000

St. Joseph College Issue, Series B dated April 3, 2008 15,000,000 875,000 14,125,000

Fairfield University Issue, Series M dated April 10, 2008 39,440,000 4,125,000 35,315,000

Greenwich Hospital Issue, Series C dated May 7, 2008 53,630,000 6,365,000 47,265,000

Yale-New Haven Hospital Issue, Series K&L dated May 14, 2008 216,565,000 7,700,000 208,865,000

Salisbury School Issue, Series C dated May 22, 2008 48,160,000 0 48,160,000

Saint Francis Hospital Issue, Series E dated May 29, 2008 39,745,000 0 39,745,000

Healthcare Capital Asset Program Issue, Series B-1, dated June 18, 2008 30,000,000 0 30,000,000

Hopkins School Issue, Series B dated June 26, 2008 9,240,000 170,000 9,070,000

Danbury Hospital Issue, Series J dated June 27, 2008 35,580,000 3,115,000 32,465,000

Saint Francis Hospital Issue, Series F dated June 30, 2008 175,000,000 0 175,000,000

University of New Haven Issue, Series H dated July 2, 2008 46,000,000 0 46,000,000

Loomis Chaffee School Issue, Series G dated July 22, 2008 25,745,000 395,000 25,350,000

F- 13 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Hamden Hall Country Day School Issue, Series A, dated July 31, 2008 18,235,000 0 18,235,000

Trinity College Issue, Series L dated August 5, 2008 15,345,000 880,000 14,465,000

Hospital of Central Connecticut, Series A dated August 8, 2008 33,690,000 3,145,000 30,545,000

Taft School Issue, Series G dated August 13, 2008 16,905,000 3,280,000 13,625,000

Fairfield University Issue, Series N dated August 21, 2008 108,210,000 3,670,000 104,540,000

Greater Hartford YMCA Issue, Series B dated December 1, 2008 26,580,000 200,000 26,380,000

Kent School Issue, Series E dated December 17, 2008 10,155,000 400,000 9,755,000

Taft School Issue, Series H dated December 23, 2008 8,500,000 0 8,500,000

Eastern Connecticut Health Network, Series D dated May 14, 2009 15,250,000 516,000 14,734,000

Ethel Walker School Issue, Series B dated October 5, 2009 8,220,000 0 8,220,000

Hopkins School Issue, Series C dated December 10, 2009 7,930,000 150,000 7,780,000

Yale University Issue, Series 2010-A dated February 24, 2010 529,975,000 0 529,975,000

Fairfield University Issue, Series O&P dated March 17, 2010 84,915,000 345,000 84,570,000

Ascension Health Issue, Series 2010 dated March 25, 2010 93,265,000 0 93,265,000

Catholic Health East Issue, Series 2010 dated April 7, 2010 19,560,000 45,000 19,515,000

Westminster School Issue, Series F dated April 14, 2010 6,350,000 0 6,350,000

Wesleyan University Issue, Series G&H dated May 18, 2010 206,580,000 0 206,580,000

Stamford Hospital Issue, Series I dated May 27, 2010 132,990,000 0 132,990,000

Trinity College Issue, Series M dated June 29, 2010 22,230,000 0 22,230,000

Hospital for Special Care Issue, Series E dated July 15, 2010 20,185,000 0 20,185,000

St. Francis Hospital Issue, Series G dated September 30, 2010 29,870,000 145,000 29,725,000

F- 14 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING Mitchell College Issue, Series A dated November 2, 1010 14,300,000 112,394 14,187,606

University of Bridgeport Issue, Series C dated December 9, 2010 30,000,000 0 30,000,000

Norwalk Hospital Issue, Series G, H & I dated December 9, 2010 46,840,000 0 46,840,000

Eastern Connecticut Health Network Issue, Series E, dated 12/21/10 20,145,000 0 20,145,000

Yale-New Haven Hospital Issue, Series M dated December 22, 2010 104,390,000 0 104,390,000

Waterbury Hospital Issue, Series D dated December 22, 2010 25,918,000 104,715 25,813,285

Seabury Retirement Community Issue, Series A dated December 23, 2010 21,000,000 730,000 20,270,000

Special Capital Reserve Fund Program

Cherry Brook Nursing Center Project 9,380,000 3,485,000 5,895,000 dated January 15, 1993

Mansfield Center for Nursing and Rehabilitatio 10,045,000 10,045,000 0 Project, dated January 15, 1993

Noble Horizons Project 6,435,000 6,435,000 0 dated January 15, 1993

St. Joseph's Living Center Project 13,385,000 6,595,000 6,790,000 dated January 15, 1994

Sharon Health Care Project 8,975,000 8,975,000 0 dated April 1, 1994

Maefair Health Care Center Project 12,705,000 12,705,000 0 dated June 15, 1994

Saint Joseph's Manor Project 12,805,000 12,805,000 0 dated July 1, 1994

The Pope John Paul II Center for Health Care 9,450,000 9,450,000 0 Project, dated July 1, 1994

St. Camillus Health Care Center Project 14,020,000 14,020,000 0 dated July 1, 1994

The Jewish Home for the Elderly of Fairfield 7,750,000 7,750,000 0 County Project, dated August 15, 1994

Shady Knoll Health Center, Inc. Project 10,460,000 10,460,000 0 dated September 1, 1994

Wadsworth Glen Health Care Center Project 7,445,000 7,445,000 0 dated October 13, 1994

Highland View Manor, Inc. Project 10,010,000 10,010,000 0 dated October 13, 1994

AHF/Hartford, Inc. Project 45,495,000 45,495,000 0 dated November 15, 1994

AHF/Windsor, Inc. Project 16,020,000 16,020,000 0 dated November 15, 1994

F- 15 Appendix F

INDEBTEDNESS OF THE AUTHORITY SERIES OF BONDS ISSUED, RETIRED, AND OUTSTANDING AS OF APRIL 30, 2011

AMOUNT AMOUNT AMOUNT SERIES ISSUED RETIRED OUTSTANDING

New Horizons Village Project 10,050,000 5,725,000 4,325,000 dated November 15, 1994

Laurelwood Rehabilitation and Skilled Nursing Center Project 13,800,000 13,800,000 0 dated November 15, 1994

Sheriden Woods Health Care Center, Inc. Proj 9,915,000 9,915,000 0 dated March 15, 1995

Abbott Terrace Health Center Project 13,430,000 13,430,000 0 dated April 15, 1996

3030 Park Fairfield Health Center Project 18,825,000 18,825,000 0 dated May 1, 1996

Connecticut State University System Issue, 44,580,000 44,580,000 0 Series A, dated November 1, 1995

Connecticut State University System Issue, 38,995,000 37,135,000 1,860,000 Series B, dated March 15, 1997

Connecticut State University System Issue, 23,000,000 23,000,000 0 Series C, dated November 15, 1999

Connecticut State University System Issue, 76,150,000 72,305,000 3,845,000 Series D, dated March 15, 2002

Connecticut State University System Issue, 142,090,000 74,130,000 67,960,000 Series E, dated May 15, 2003

Connecticut State University System Issue, 49,475,000 19,600,000 29,875,000 Series F, dated February 18, 2004

Connecticut State University System Issue, 99,110,000 16,865,000 82,245,000 Series G&H, dated June 17, 2005

Connecticut State University System Issue, 62,760,000 245,000 62,515,000 Series I, dated April 18, 2007

Child Care Facilities Program Series A & B 10,520,000 4,050,000 6,470,000 dated November 1, 1998

Series C 18,690,000 4,780,000 13,910,000 dated September 1, 1999

Series D 3,940,000 690,000 3,250,000 dated August 1, 2000

Series E 3,865,000 625,000 3,240,000 dated April 1, 2001

Series F 19,165,000 715,000 18,450,000 dated December 20, 2006

Series G 16,875,000 240,000 16,635,000 dated October 23, 2008 $13,613,373,000 $6,139,263,109 $7,474,109,891

F- 16 APPENDIX G

PROPOSED FORM OF APPROVING OPINION OF BOND COUNSEL

Upon issuance and delivery of the Bonds, Harris Beach PLLC, Bond Counsel, proposes to deliver its final approving opinion in substantially the following form:

[Date of Closing]

State of Connecticut Health and Educational Facilities Authority 10 Columbus Boulevard, 7th Floor Hartford, Connecticut 06106-1976

Members of the Board of Directors:

We have examined certified copies of the proceedings of the State of Connecticut Health and Educational Facilities Authority (the “Authority”), a body politic and corporate constituting a public instrumentality of the State of Connecticut created and established pursuant to the State of Connecticut Health and Educational Facilities Authority Act, being Chapter 187 of the General Statutes of the State of Connecticut, as amended (the “Act”), and other proofs submitted to us relative to the issuance and sale of $43,905,000 aggregate principal amount of State of Connecticut Health and Educational Facilities Authority Revenue Bonds, Sacred Heart University Issue, Series G (the “Bonds”).

The Bonds are issued under and pursuant to the Act, a bond resolution of the Authority adopted on March 29, 2011 (the “Bond Resolution”), and a Trust Indenture, dated as of June 1, 2011 (the “Trust Indenture”), by and between the Authority and U.S. Bank National Association (the “Trustee”).

The Bonds delivered on the date hereof shall be dated and bear interest from June 29, 2011. The Bonds are issuable only in the form of fully registered Bonds, in denominations of $5,000 or any integral multiple of $5,000. Each of the Bonds are numbered separately from one upward preceded by the letters “G-R” prefixed to the number.

The Bonds bear interest at the rates per annum and mature on July 1 of each year in the years and principal amounts as follows:

G-1

Principal Interest Principal Interest Year Amount Rate Year Amount Rate

2012 $ 915,000 2.00% 2019 $ 1,190,000 4.25 % 2013 945,000 3.00 2020 1,240,000 5.00 2014 980,000 2.25 2021 1,305,000 5.00 2015 1,000,000 4.00 2022 1,370,000 4.75 2016 1,040,000 4.00 2026 4,325,000 5.125 2017 1,080,000 5.00 2031 6,805,000 5.375 2018 1,135,000 5.00 2041 20,575,000 5.625

The Bonds are subject to redemption prior to maturity in the manner and upon the terms and conditions as described in the Trust Indenture.

Principal of the Bonds is payable when due upon presentation and surrender thereof at the principal corporate trust office of U.S. Bank National Association, or its successor as paying agent of the Authority (the “Paying Agent”), except as otherwise provided in the Trust Indenture for the payment of Bonds registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Interest on the Bonds is payable semi-annually on January 1 and July 1, commencing January 1, 2012, by check of the Paying Agent mailed to the owner of record as of the fifteenth day of the month immediately preceding the Interest Payment Date, except as otherwise provided in the Trust Indenture for the payment of Bonds registered in the name of Cede & Co., as nominee of DTC.

We have examined a certified copy of the resolution adopted by the Authority relating to the Bonds, an executed copy of the Loan Agreement, dated as of June 1, 2011 (the “Loan Agreement”), by and between the Authority and Sacred Heart University, Incorporated (the “Institution”), an executed copy of the Open-End Mortgage (Security Agreement and Financing Statement), dated as of June 1, 2011 (the “Mortgage”), from the Institution to the Authority, whereby the Institution has mortgaged to the Authority the Mortgaged Premises (as defined in the Mortgage), and the Series G Mortgage Note, dated as of June 29, 2011 (the “Note”), which the Institution has issued pursuant to the Loan Agreement and the Mortgage to the Authority to secure the Institution’s obligation to make payments under the Loan Agreement, and the Authority has assigned to the Trustee pursuant to the Indenture and an Assignment of Mortgage and Series G Mortgage Note, dated as of June 29, 2011 (the “Assignment”), from the Authority to the Trustee. We have also examined the Tax Regulatory Agreement, dated as of June 29, 2011, by and between the Authority and the Institution (the “Tax Regulatory Agreement”), and an executed copy of the Trust Indenture.

We have also examined an opinion of Shipman & Goodwin LLP, Hartford, Connecticut, as to matters concerning the Authority, and the opinions of Robinson & Cole LLP, Hartford, Connecticut, as to certain matters concerning the Institution.

As to the questions of fact material to our opinion, we have relied upon representations of the Authority and the Institution contained in the Trust Indenture and the Loan Agreement, the certified proceedings and other certifications of public officials furnished to us, and certifications by officers of the Authority and the Institution without undertaking to verify the same by independent investigations.

The Internal Revenue Code of 1986, as amended (the “Code”), sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds will be and remain not includable in gross income of the owners thereof under Section 103 of the Code. Included among these continuing requirements are certain restrictions and prohibitions on the use

G-2

and investment of proceeds and other amounts, required ownership of a facility by a Section 501(c)(3) organization or governmental unit, limits on the amount of tax-exempt financing from which certain users of the bond-financed facility (and related parties) may benefit, and the rebate to the United States of certain earnings in respect of investments. Failure to comply with such continuing requirements may cause the interest on the Bonds to be includable in gross income for Federal income tax purposes retroactively to the date of issue of the Bonds. In the Trust Indenture, the Loan Agreement and the Tax Regulatory Agreement, the Authority and the Institution have covenanted to maintain the exclusion of interest on the Bonds from gross income for Federal income tax purposes pursuant to Section 103(a) of the Code. The Authority and the Institution have also covenanted to comply with certain procedures, and have made certain representations and certifications, designed to assure satisfaction of the requirements of the Code. The opinion set forth herein as to federal and state income tax matters assumes continuing compliance with such covenants and the accuracy, in all material aspects, of such representations and certifications.

Based upon and subject to the foregoing, we are of the opinions that:

1. The Authority has been duly created and is a validly existing body politic and corporate constituting a public instrumentality of the State of Connecticut and has good right and lawful authority to loan funds to the Institution and to receive and pledge the repayments of such loan and other amounts therefrom in accordance with the terms of the Loan Agreement and as provided in the Trust Indenture.

2. The Authority has the right and power pursuant to the Act to enter into the Loan Agreement, the Mortgage, the Trust Indenture and the Assignment. The Loan Agreement, the Mortgage, the Trust Indenture and the Assignment have each been duly authorized, executed and delivered, are in full force and effect, and constitute valid and binding agreements of the Authority enforceable against the Authority in accordance with their terms.

3. The Bonds have been duly authorized and issued by the Authority in accordance with law and the terms of the Trust Indenture and are valid and legally binding special obligations of the Authority payable solely out of the revenues and other receipts, funds or moneys of the Authority pledged therefor pursuant to the Trust Indenture, and from any amounts otherwise available under the Trust Indenture for the payment thereof. The Bonds are enforceable in accordance with their terms and the terms of the Trust Indenture and are entitled to the benefit of the Act and the Trust Indenture.

4. The Trust Indenture creates the valid pledge and assignment which it purports to create of all of the Authority’s right, title and interest in the Revenues under and pursuant to the Loan Agreement, the Mortgage and the Note (except the rights specifically reserved thereunder) and all moneys and securities held by the Trustee under the Trust Indenture (except for moneys and securities held in the Rebate Fund created thereunder), subject only to the provisions of the Trust Indenture permitting the application thereof for or to the purposes and on the terms and conditions set forth therein.

5. Under statutes, regulations, administrative rulings and court decisions existing as of the date hereof, interest on the Bonds is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code and is not an "item of tax preference" for purposes of computing the federal alternative minimum tax imposed on individuals and corporations. Interest on the Bonds held by certain corporations is, however, included in the computation of "adjusted current earnings," a portion of which is taken into account in determining the federal alternative minimum tax imposed on such corporations. Corporate purchasers of the Bonds should consult their tax advisors regarding the computation of any alternative minimum tax.

G-3

6. The difference between the principal amount of the Bonds maturing in the years 2014, 2022, 2026 and 2031 (collectively, the “Discount Bonds”), and the initial offering price to the public (excluding bond houses, brokers and other intermediaries, or similar persons acting in the same capacity of underwriters or wholesalers), at which price a substantial amount of such Discount Bonds of the same maturity is first sold, constitutes original issue discount, which is not included in gross income for federal income tax purposes to the same extent as interest on the Discount Bonds. The Code provides that the amount of original issue discount accrues in accordance with a constant interest method based on the compounding of interest, and that the basis of a Discount Bond acquired at such initial offering price by an initial purchaser of such an owner’s adjusted basis for purposes of determining an owner’s gain or loss on the disposition of a Discount Bond will be increased by the amount of such accrued original issue discount. A portion of the original issue discount that accrues in each year to an owner of a Discount Bond that is a corporation will be included in the calculation of such corporation’s federal alternative minimum tax liability. Consequently, a corporate owner of any Discount Bond should be aware that the accrual of original issue discount in each year may result in a federal alternative minimum tax liability, even though the owner of such Discount Bond has not received cash attributable to such original issue discount in such year.

The Bonds maturing in the years 2012, 2013 and 2015 through 2021, inclusive (collectively, the “Premium Bonds”), are initially offered to the public at prices greater than the amounts payable thereon at maturity. As a result of the tax cost reduction requirements of the Code relating to amortization of bond premium, under certain circumstances, an initial owner of Premium Bonds may realize a taxable gain upon disposition of such Premium Bonds even though they are sold or redeemed for an amount equal to such owner’s original cost of acquiring such Premium Bonds. Owners of Premium Bonds are advised that they should consult with their own tax advisors with respect to the tax consequences of owning such Premium Bonds.

7. Under existing statutes, interest on the Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates, and interest on the Bonds is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the Federal alternative minimum tax.

Except as stated in paragraphs 5, 6 and 7 above, we express no opinion as to any Federal, state or local tax consequences arising with respect to the Bonds or the ownership or disposition thereof. We render our opinion under existing statutes and court decisions as of the issue date, and we assume no obligation to update, revise or supplement this opinion after the issue date to reflect any action hereafter taken or not taken, or any facts or circumstances, or any change in law or interpretations thereof, or otherwise, that may hereafter arise or occur, or for any other reason. We express no opinion as to any Federal, state or local tax consequences with respect to the Bonds, or the interest thereon, if any change occurs or action is taken or omitted under the Loan Agreement, the Tax Regulatory Agreement, or under any other relevant documents by the Authority or the Institution without the advice or approval of, or upon the advice or approval of any bond counsel other than, Harris Beach PLLC.

The foregoing opinions are qualified only to the extent that the enforceability of the Bonds, the Trust Indenture, the Loan Agreement, the Mortgage and the Assignment may be limited by bankruptcy, moratorium or insolvency or other laws affecting creditors’ rights generally and is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). In addition, we express no opinion as to the severability of any provisions of the Trust Indenture, the Loan Agreement and the Mortgage.

G-4

In rendering this opinion letter, we have assumed the power to enter into and perform, and the due authorization, execution and delivery, by all parties, other than the Authority, to the agreements to which the Authority is a party.

Your attention is called to the fact that we have not been requested to examine and have not examined any documents or information relating to the Institution other than the record of proceedings referred to above, and no opinion is expressed as to any financial or other information, or the adequacy thereof, which has been or may be supplied to the purchasers of the Bonds.

We have examined executed Bond numbered G-R-1 and, in our opinion, the form of the Bond and its execution are regular and proper.

Very truly yours,

G-5

(THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX H

FORM OF CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (the “Disclosure Agreement”) is dated as of June 1, 2011 and is executed and delivered by Sacred Heart University, Incorporated (the “Borrower”) and U.S. Bank National Association (the “Dissemination Agent”) in connection with the issuance of $______State of Connecticut Health and Educational Facilities Authority Revenue Bonds, Sacred Heart University Issue, Series G (the “Bonds”). The Bonds are being issued pursuant to a Trust Indenture, dated as of June 1, 2011 (the “Indenture”), between the State of Connecticut Health and Educational Facilities Authority (the “Authority”) and U.S. Bank National Association, as Trustee (the “Trustee”). The proceeds of the Bonds are being loaned by the Authority to the Borrower pursuant to a Loan Agreement, dated as of June 1, 2011, between the Authority and the Borrower (the “Loan Agreement”). For valuable consideration, the receipt of which is acknowledged, the Dissemination Agent and the Borrower covenant and agree as follows:

SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Borrower and the Dissemination Agent for the benefit of the Bondholders (defined below) and the beneficial owners of the Bonds, and in order to assist the Participating Underwriters (defined below) in complying with the Rule (defined below). The Borrower and the Dissemination Agent acknowledge that the Authority has undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Agreement, and has no liability to any person, including any Holder of the Bonds, with respect to any such reports, notices or disclosures.

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture and in the Loan Agreement, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section or in the first paragraph of this Disclosure Agreement, 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 Disclosure Agreement.

“Bondholder” or the term “Holder”, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Bond and any beneficial owner thereof.

“Disclosure Representative” shall mean the Chief Financial Officer of the Borrower or his or her designee, or such other person as the Borrower shall designate in writing to the Dissemination Agent from time to time.

“Dissemination Agent” shall mean the initial Dissemination Agent hereunder, which is U.S. Bank National Association, or any successor Dissemination Agent designated in writing by the Borrower and acceptable to the Authority and which has filed with U.S. Bank National Association a written acceptance of such designation.

“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement.

“MSRB” shall mean the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934, or any successor thereto or to the functions of the MSRB contemplated by this Disclosure Agreement.

“Participating Underwriters” shall mean any or all of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds.

“Quarterly Report” shall mean any Quarterly Report provided by the Borrower pursuant to and as described in, Sections 3 and 4 of this Disclosure Agreement.

H-1 “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.

“Tax-exempt” shall mean that interest on the Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax.

SECTION 3. Provision of Annual Reports and Quarterly Reports.

(a) The Borrower, commencing in 2012, shall, or shall cause the Dissemination Agent to, not later than 150 days after the end of the Borrower’s fiscal year), provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. On or prior to said date (except that in the event the Borrower elects to have the Dissemination Agent file such report, five (5) Business Days prior to such date) such Annual Report shall be provided by the Borrower to the Dissemination Agent together with either (i) a letter authorizing the Dissemination Agent to file the Annual Report with the MSRB, or (ii) a certificate stating that the Borrower has provided the Annual Report to the MSRB and the date on which such Annual Report was provided. 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 Disclosure Agreement; provided that the audited financial statements of the Borrower may be submitted separately from the balance of the Annual Report; and provided further that audited financial statements of the Borrower shall be submitted as soon as practicable after the audited financial statements become available. The Borrower shall promptly notify the Dissemination Agent of any change in the Borrower’s fiscal year.

(b) If by 15 days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Borrower to request a report regarding compliance with the provisions governing the Annual Report.

(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the date required in subsection (a), the Dissemination Agent shall send a reminder notice to the Borrower and the Authority and shall send a notice to the MSRB in substantially the form attached as Exhibit A hereto.

(d) The Dissemination Agent shall file a report with the Borrower, the Authority and the Trustee (if the Dissemination Agent is not the Trustee) certifying that the Borrower has filed a report (directly or through the Dissemination Agent) purporting to be an Annual Report pursuant to this Disclosure Agreement, and stating the date it was provided (if such report was provided).

(e) The Borrower shall, or shall cause the Dissemination Agent to, not later than 60 days after the end of each of the Borrower’s first three fiscal quarters, commencing with the fiscal quarter ending September 30, 2011, provide to the MSRB a Quarterly Report. On or prior to said filing date (except that in the event the Borrower elects to have the Dissemination Agent file such Quarterly Report, five (5) Business Days prior to such date) such Quarterly Report shall be provided by the Borrower to the Dissemination Agent together with either (i) a letter authorizing the Dissemination Agent to file the Quarterly Report with the MSRB, or (ii) a certificate stating that the Borrower has provided the Quarterly Report to the MSRB and the date on which such Quarterly Report was provided. In each case, the Quarterly Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement. The Borrower shall not be required to provide a Quarterly Report for the fourth fiscal quarter of any fiscal year.

SECTION 4. Content of Annual Reports and Quarterly Reports. (a) The Borrower’s Annual Report shall contain or incorporate by reference the following: audited financial statements (including footnotes) of the Borrower, which financial statements may be individual, combined or consolidated, prepared in accordance with generally accepted accounting/auditing principles as in

H-2 effect from time to time, consistently applied unless otherwise explained in footnotes to the financial statements provided, consisting of:

(i) statement of financial position as of the close of the most recent fiscal year of the Borrower (with comparative totals for the immediately preceding fiscal year);

(ii) statement of activities and changes in net assets (statement of activity) for the most recent fiscal year of the Borrower (with comparative totals for the immediately preceding fiscal year); and

(iii) statement of cash flows for the most recent fiscal year of the Borrower (with comparative totals for the immediately preceding fiscal year); and

(b) operating data of the Borrower for such preceding fiscal year, prepared from the records of the Borrower, regarding, without limitation, financial and operating data of the type included in the final Official Statement for the Bonds concerning the Borrower, which shall include annual or year end information for the Borrower as described in “Appendix A” of such final Official Statement including but not limited to the following:

(i) faculty and student statistics of the type set forth under the headings “FACULTY AND OTHER EMPLOYEES”, “STUDENT ENROLLMENT” and “STUDENT HOUSING”; and

(ii) revenue, expense and fund data of the type set forth under the headings “TUITION AND FEES”, “FINANCIAL OPERATIONS”, “ENDOWMENT AND SIMILAR FUNDS”, “COMMITMENTS” and “NOTES AND BONDS PAYABLE”. together with a narrative explanation, if necessary to avoid misunderstanding, regarding the presentation of financial and operating data concerning the Borrower and the financial and operating condition of the Borrower; provided, however, that the references above to specific section headings of Appendix A of the final Official Statement used in connection with the Bonds as a means of identification shall not prevent the Borrower from reorganizing such material in subsequent official statements.

(c) The Borrower’s Quarterly Report shall contain quarterly unaudited financial statements of the Borrower (including statement of financial position, statement of activities and changes in net assets and statements of cash flows), and quarterly operating data of the Borrower of the type described in Appendix A to the Official Statement under the headings “STUDENT ENROLLMENT” and “TUITION AND FEES”.

(d) Any or all of the items listed above may be incorporated by reference from other documents, including financial statements provided under (a) above, the original Official Statement for the Bonds, or other official statements of debt issues with respect to which the Borrower is an “obligated person” (as defined by the Rule), which have been (i) made available to the public on the MSRB’s Electronic Municipal Markets Access (EMMA) System, the current internet web address of which is www.emma.msrb.org, or (ii) filed with the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Borrower shall clearly identify each such other document so incorporated by reference.

SECTION 5. Reporting of Listed Events.

(a) The Borrower shall, or shall cause the Dissemination Agent to, give notice of the occurrence of any of the following Listed Events relating to the Bonds to the MSRB in a timely manner not later than ten (10) Business Days after the occurrence of any such Listed Event;

(1) principal and interest payment delinquencies;

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

H-3 (3) unscheduled draws on debt service reserves reflecting financial difficulties;

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

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

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

(7) modifications to the rights of holders of the Bonds, if material;

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

(9) defeasances;

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

(11) rating changes;

(12) bankruptcy, insolvency, receivership or similar event of the Borrower;

Note to clause (12): For the purposes of the event identified in clause (12) above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Borrower in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or government 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;

(13) 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

(14) appointment of a successor or additional trustee or the change of the name of the trustee, if material.

(b) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence or possible occurrence of any of the Listed Events set forth in subsection (a) above, contact the Disclosure Representative and inform such person of the event. “Actual knowledge” for purposes of this subsection (b) shall mean actual knowledge of an officer of the Corporate Trust Administration of the Dissemination Agent.

(c) Whenever the Borrower obtains knowledge of the occurrence of a Listed Event set forth in clauses (2), (7), (8) (relating to Bond calls only), (10), (13) or (14) of subsection (a) above, whether because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the Borrower shall as soon as possible determine if such event would constitute material information for Bondholders, and if such event is determined by the Borrower to be material, the Borrower shall, or shall cause the Dissemination Agent to, give notice of such event to the MSRB not later than ten (10) Business Days after the occurrence of such event.

H-4 (d) If the Borrower elects to have the Dissemination Agent file notice of any Listed Event, the Borrower will provide the notice to the Dissemination Agent within 5 Business Days after the occurrence of the Listed Event, along with an instruction to file the notice with the MSRB.

SECTION 6. Termination of Reporting Obligation.

(a) The Borrower’s and the Dissemination Agent’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the Borrower’s obligations under the Loan Agreement are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Agreement in the same manner as if it were the Borrower. The original Borrower shall have no further responsibility hereunder only to the extent that the Borrower ceases to be an obligated person with respect to the Bonds within the meaning of the Rule.

(b) In addition, the Borrower’s obligations under the provisions of this Disclosure Agreement shall terminate (in whole or in part, as the case may be) in the event that (1) the Borrower delivers to the Dissemination Agent, the Trustee, and the Authority an opinion of nationally recognized bond counsel or counsel expert in federal securities laws, addressed to the Dissemination Agent, the Trustee and the Authority, to the effect that those portions of the Rule which require the provisions of this Disclosure Agreement, or any of such provisions, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, or otherwise, as shall be specified in such opinion (but such termination of the Borrower’s obligations shall be effective only to the extent specifically addressed by such opinion), and (2) the Dissemination Agent delivers copies of such opinion to (i) the MSRB, (ii) the Authority, (iii) the Trustee (if other than the Dissemination Agent), and (iv) RBC Capital Markets, LLC, as Participating Underwriter. The Dissemination Agent shall so deliver such opinion promptly.

SECTION 7. Dissemination Agent.

(a) The Borrower may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent.

(b) The Dissemination Agent, or any successor thereof, may at any time resign and be discharged of its duties and obligations hereunder by giving not less than thirty (30) days written notice to the Authority, the Borrower and the registered owners of the Bonds, specifying the date when such resignation shall take effect. Such resignation shall take effect upon the date a successor shall have been appointed by the Borrower or by a court upon the application of the Dissemination Agent.

(c) In case the Dissemination Agent, or any successor thereof, shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Dissemination Agent or of its property shall be appointed, or if any public officer shall take charge of control of the Dissemination Agent, or of its property or affairs, the Borrower shall forthwith appoint a Dissemination Agent to act. The Borrower shall give or cause to be given written notice of any such appointment to the Owners (as such term is defined in the Loan Agreement), the Trustee (if the Trustee is not the Dissemination Agent), and the Authority.

(d) Any company into which the Dissemination Agent may be merged or with which it may be consolidated or any company resulting from any merger or consolidation to which it shall be a party or any company to which such Dissemination Agent may sell or transfer all or substantially all of its corporate trust business, shall be the successor to such Dissemination Agent, without any further act or deed.

H-5 SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Borrower and the Dissemination Agent may amend this Disclosure Agreement (and the Dissemination Agent shall agree to any amendment not modifying or otherwise affecting its duties, obligations or liabilities in such a way as they are expanded or increased) and any provision of this Disclosure Agreement may be waived, if all of the following conditions are satisfied: (1) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of the Borrower or the type of business conducted thereby, (2) this Disclosure Agreement as so amended would have complied with the requirements of the Rule as of the date of this Disclosure Agreement, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, (3) the Borrower shall have delivered an opinion of counsel, addressed to the Authority, the Borrower, the Dissemination Agent and the Trustee, to the same effect as set forth in clause (2) above, (4) either (i) the Borrower shall have delivered to the Authority, the Trustee and the Dissemination Agent an opinion of counsel, or a determination by a person, in each case unaffiliated with the Borrower (such as bond counsel) and acceptable to the Borrower, to the effect that the amendment does not materially impair the interests of the Holders of the Bonds or (ii) the Holders of the Bonds consent to the amendment to this Disclosure Agreement pursuant to the same procedures as are required for amendments to the Indenture with consent of the Holders of the Bonds pursuant to the Indenture as in effect on the date of this Disclosure Agreement, and (5) the Borrower shall have delivered copies of such opinion(s) and amendment to the MSRB. The Dissemination Agent may rely and act upon such opinions.

SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Borrower from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of the occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Borrower chooses to include any information in any Annual Report or notice of the occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Agreement, the Borrower shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of the occurrence of a Listed Event. Nothing in this Disclosure Agreement shall be deemed to prevent U.S. Bank National Association from providing a notice or disclosure as it may deem appropriate pursuant to any other capacity it may be acting in related to the Bonds.

SECTION 10. Default. In the event of a failure of the Borrower or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Dissemination Agent may (and, at the request of any of the Holders of at least 25% of the aggregate principal amount of Outstanding Bonds who have provided security and indemnity deemed acceptable to the Dissemination Agent, shall), or any party who can establish beneficial ownership of any of the Bonds, or any Bondholder may, after providing fifteen (15) days written notice to the Borrower to give the Borrower opportunity to comply within such fifteen-day period, take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Borrower to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture or under the Loan Agreement, and the sole remedy available to the Dissemination Agent, any beneficial owners of the Bonds or the Bondholders under this Disclosure Agreement in the event of any failure of the Borrower or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance.

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 Disclosure Agreement. To the extent that the Dissemination Agent is required under the terms of this Disclosure Agreement to report any information, it is only required to report information that it receives from the Borrower in the form in which it is received, and the Dissemination Agent shall be under no responsibility or duty with respect to the accuracy and content of the information which it receives from the Borrower. The Borrower agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including reasonable attorneys’ fees and expenses) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or misconduct. The obligations of

H-6 the Borrower under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

(b) Unless otherwise provided by contract with the Dissemination Agent, the Borrower shall pay or cause to be paid to the Dissemination Agent after reasonable notice to the Borrower in light of the reimbursement sought to be received, reasonable reimbursement for its reasonable expenses, charges, counsel fees and expenses and other disbursements and those of its attorneys, agents, and employees, incurred in and about the performance of its powers and duties hereunder. The Borrower shall indemnify and save the Dissemination Agent harmless against any expenses and liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or default. None of the provisions contained in this Disclosure Agreement shall require the Dissemination Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers. The obligations of the Borrower under this Section to compensate the Dissemination Agent, to pay or reimburse the Dissemination Agent for expenses, disbursements, charges and counsel fees and to indemnify and hold harmless the Dissemination Agent shall survive the termination of this Disclosure Agreement.

(c) In no event shall the Dissemination Agent be liable for incidental, indirect, special, consequential or punitive damages (including, but not limited to, lost profits), even if the Dissemination Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

SECTION 12. Transmission of Notices, Documents and Information. (a) Unless otherwise required by the MSRB, all notices, documents and information provided to the MSRB pursuant to this Disclosure Agreement shall be provided to the MSRB’s Electronic Municipal Markets Access (EMMA) system, the current internet web address of which is www.emma.msrb.org.

(b) All notices, documents and information provided to the MSRB shall be provided in an electronic format as prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.

SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Authority, the Borrower, the Trustee, the Dissemination Agent, the Participating Underwriters, parties who can establish beneficial ownership of the Bonds and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

SECTION 15. Notices. The parties hereto may be given notices required hereunder at the addresses set forth for them in the Loan Agreement or the Indenture.

H-7 SECTION 16. Applicable Law. This Disclosure Agreement shall be governed by the laws of the State of Connecticut, and by applicable federal laws.

Dated as of June 1, 2011

BORROWER:

SACRED HEART UNIVERSITY, INCORPORATED

By:______Name: Title:

DISSEMINATION AGENT:

U.S. BANK NATIONAL ASSOCIATION

By:______Name: Title:

H-8 EXHIBIT A To Continuing Disclosure Agreement

NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT

Name of Authority: State of Connecticut Health and Educational Facilities Authority (the “Authority”).

Name of Bond Issue: $______State of Connecticut Health and Educational Facilities Authority Revenue Bonds, Sacred Heart University Issue, Series G.

Name of Borrower: Sacred Heart University, Incorporated.

Date of Issuance: June __, 2011.

NOTICE IS HEREBY GIVEN that the Borrower has not yet provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement by and between Sacred Heart University, Incorporated (the “Borrower”) and U.S. Bank National Association (the “Dissemination Agent”) dated as of June 1, 2011. The Borrower has informed the Dissemination Agent that the Annual Report will be filed with the Dissemination Agent by .

Dated:______

U.S. BANK NATIONAL ASSOCIATION, as Dissemination Agent

By:______Name: Title: cc: Borrower Authority (THIS PAGE LEFT BLANK INTENTIONALLY)