PUBLIC FINANCE AUTHORITY Price: ___

This Preliminary Limited Offering Memorandum and certain of the information contained herein is in a form deemed final for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (except for the omission of certain information permitted to be omitted under Rule 15c2- 12(b)(1)). The information herein is subject to revision, completion or amendment in a final Limited Offering Memorandum. The Bonds may not be sold, nor may an offer to buy be accepted prior to the time the Limited Offering Memorandum is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. “Project”) and(b)paycertainexpensesincurredinconnectionwiththeauthorizationissuanceofBonds. and ProvidenceRoad,neartheTempleIsraelsynagogue(the“Temple”)withinShalomPark(asdescribedherein)inCharlotte,MecklenburgCounty,NorthCarolina building fromtheindependentlivingapartmentsand(iii)aclubhouse,locatedonapproximately11.5acresofland(the“Property”)cornerJeffersonRoad independent livingapartmentslocatedin5buildingswithstructuredparking,(ii)8assistedunitsandmemorysupportsuitesaseparate pre- the of portion a refinance or pay (a) to monies, available other with construction anddevelopmentcostsofacquiring,constructing,installingequippinganew“LifePlanCommunity”initiallyexpectedtoconsist(i)approximately125 along used, be to funds providing of purpose the for Corporation the and Authority the between of theBondsarebeingloanedtoAldersgateatShalomPark,Inc.(the“Corporation”)pursuantaLoanAgreementdatedasNovember1,2019“LoanAgreement”) (the “TrustAgreement”)betweentheAuthorityandTheBankofNewYorkMellonTrustCompany,NationalAssociation,asbondtrustee“BondTrustee”).proceeds * Dated: ______,2019 It isexpectedthattheBondswillbeavailable fordeliverythroughthefacilitiesofDTConorabout______,2019. matters will be passed upon for the legal Corporation Certain by Parker Counsel. Bond Poe Carolina, Adams North & Raleigh, LLP, Bernstein Bernstein LLP, & Raleigh, Adams Poe North Parker Carolina of approval and the for to the subject “Underwriters”), Underwriters (the by Inc. Butler Company, & Snow Sims LLP, J. Atlanta, Herbert Georgia. PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER. FAITH ANDCREDITOFTHEAUTHORITY,ANYSPONSORORAUTHORITY INDEMNIFIEDPARTY,SHALLBEPLEDGEDTOTHEPAYMENTOF OR ANYPOLITICALSUBDIVISIONAGENCYTHEREOF SUBDIVISIONAPPROVINGTHEISSUANCEOFBONDS,NOR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDITNOR THE TAXING POWER OF ANYMEMBER,SPONSOR,THE STATE TO LEVYANYTAXORMAKEAPPROPRIATIONFORPAYMENT OFTHEPRINCIPALOF,PREMIUM,IFANY,ORINTERESTONBONDS THE STATEORANYPOLITICALSUBDIVISIONAGENCYTHEREOF ORANYPOLITICALSUBDIVISIONAPPROVINGTHEISSUANCEOFBONDS THE BONDS ARE NOT A DEBTOFTHE STATE AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY,OBLIGATE,INANY MANNER,ANYMEMBER, OF THEBONDSSHALLBEOBLIGATEDTOPAYPRINCIPALOF,PREMIUM, IFANY,ORINTERESTTHEREONANYCOSTSINCIDENTALTHERETO. WISCONSIN (THE “STATE”) OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE HEREIN), ANYMEMBER(ASDEFINEDAUTHORITYINDEMNIFIED PARTY(ASDEFINEDINTHETRUSTAGREEMENT),STATEOF IN ACCORDANCEWITHTHETRUSTAGREEMENTAND,EXCEPTFROM SUCHSOURCE,NONEOFTHEAUTHORITY,ANYSPONSOR(ASDEFINED Memorandum toobtaininformationessentialthemakingofaninformedinvestment decision. cover page contains certain information for quick reference only. It is not a summary of this Limited Offering Memorandum. Investors should read the entire Limited Offering defined herein. See “THE BONDS – Restrictions on Ownership and Transfer of the Bonds” and “RISK FACTORS – Limited Market for the Bonds” herein. investor letterintheformattachedtothisLimited Offering Memorandum asAppendixHhereto.TheBondsaresubjecttofurthertransferrestrictions defined in Rule 501(a) under the Securities Act). Each initial purchaser of the Bonds that is an Accredited Investor will be required to complete and sign an (as Investors” “Accredited to or Act) Securities the of 144A Rule in defined (as Buyers” Institutional “Qualified to only hereby sold and offered being are SHOULD BECONSIDEREDINCONNECTIONWITHANINVESTMENTTHEBONDS.TherearerestrictionsonwhomaypurchasetheBonds. TheBonds “SECURITY ANDSOURCESOFPAYMENTFORTHEBONDS”“RISKFACTORS”HEREINADISCUSSIONCERTAINRISKFACTORS WHICH ADVISED TOREADTHEENTIRELIMITEDOFFERINGMEMORANDUM,INCLUDINGAPPENDICESHERETO.SPECIALREFERENCEIS MADETO CORPORATION, SHALLREMAININTHEABSOLUTEANDEXCLUSIVEDISCRETIONOFAUTHORITY. THE BY SO DO TO REQUESTED WHEN AND IF BONDS, PERMANENT ISSUE TO WHETHER OF AUTHORITY THE BY DETERMINATION THE ALL. AT OR FINANCING TO, OR REPRESENTATION OR PROMISE BY THE AUTHORITY THAT IT WILL, ISSUE PERMANENT BONDS IN AN AMOUNT SUFFICIENT TO PROVIDE REPLACEMENT payment of,andsecurityfor,theBondsaremorefullydescribedinthisLimitedOfferingMemorandum. THE CORPORATIONATINTERESTRATESANDUPONOTHERTERMSTHATWILLPERMITPROJECTTOBEFINANCIALLYVIABLE. PERMANENT BONDSOROTHERREPLACEMENTFINANCINGWILLCANBEOBTAINEDBYTHECORPORATION, BY another (or Authority the purpose. such of for financing replacement Bonds”) other obtaining “Permanent by or Bonds) (the the issue to bonds agreeing issuer revenue governmental qualified tax-exempt of $135,495,000 approximately of issuance the through the date Indenture, redemption Trust earlier upon Master or the with together and, 1” No. (“Supplement 2019 1, Date November Maturity the at Bonds the of principal the of payment the for provide to of intends Corporation The Trustee. Master the and Corporation the between Indenture”), “Master as dated 1, No. Obligation for Indenture Supplemental (2) a and Trustee”), terms, the“MasterTrustIndenture”),betweenCorporationandTheBankofNewYorkMellonCompany,NationalAssociation,asmastertrustee (the“Master herein. TheBondsarenotsecuredbyrealestate.See“RISKFACTORS–NoRealEstateSecuringtheBonds;InadequacyofSecurity” described as Agreement Trust the under pledged moneys from and herein) defined (as Contracts of Assignment the and Indenture Master the to pursuant pledged collateral the to recourse by herein), described (as 1 No. Obligation and Agreement Loan the under payments certain of out solely payable be will therefrom, income investment any or because ofaDeterminationTaxability).See“THEBONDS–RedemptionProvisions”herein. to earlieroptionalormandatoryredemptionpriormaturityatapriceequaltheirAccretedValue,asdescribedherein(pluspremiumifthe occurs and redemptionpriceoftheBondsarerequiredtobemadeBeneficialOwnersbyDTC(asdefinedbelow)th

Preliminary, subjecttochange In theopinionofParkerPoeAdams&BernsteinLLP,BondCounsel,underexistinglawandassumingcompliancebyAuthorityCorporation The Bonds will be issued as fully registered bonds in denominations of $25,000 and any integral multiple of $5,000 in excess thereof. Purchases of the Bonds will be made The abovereferencedbonds(the“Bonds”)arebeingissuedbythePublicFinanceAuthority“Authority”)pursuanttoaTrustAgreementdatedasofNovember1,2019 The Bonds are offered subject to prior sale, when, as and if issued by the Authority and accepted by BB&T Capital Markets, division of BB&T Securities, LLC, and LLC, Securities, BB&T of division Markets, Capital BB&T by accepted and Authority the by issued if and as when, sale, prior to subject offered are Bonds The THE BONDSARESPECIALLIMITEDOBLIGATIONSOFAUTHORITY PAYABLESOLELYFROMTHEFUNDSPLEDGEDFORTHEIRPAYMENT THE BONDSARENOTRATED.ANINVESTMENTININVOLVESASIGNIFICANTDEGREEOFRISK.PROSPECTIVEBONDHOLDERS ARE THE AUTHORITY’S ISSUANCE OF THE BONDS SHALL NOT BE DEEMED OR CONSTRUED TO BE AN EXPLICIT OR IMPLICIT UNDERTAKING BY THE AUTHORITY its to pursuant supplemented (as 2019 1, November of as dated Indenture, Trust Master (1) a to pursuant No. 1 Obligation deliver and execute will Corporation The The Bonds will be special limited obligations of the Authority and, except to the extent thatpayment thereof may be made from the proceedsof the sale of the Bonds The Bonds will not bear interest on a current basis. The principal amount of the Bonds will be due on December 31, 2024 (the “Maturity Date”). The Bonds will be subject ‑ entry form only, and individual purchasers will not receive physical delivery of bond certificates. So long as Cede & Co. is the registered owner of the Bonds, principal

PRELIMINARY LIMITED OFFERING MEMORANDUM DATED SEPTEMBER 25, 2019

RETIREMENT FACILITYREVENUEANTICIPATIONBONDS (SHALOM PARKPRE-DEVELOPMENTPROJECT) PUBLIC FINANCE AUTHORITY Price: ___

$13,000,000 SERIES 2019

* CUSIP No.______

NO ASSURANCECANBEGIVENTHATTHE Due: December31,2024 Thesourcesof NOT RATED This

PRELIMINARY NOTICES

No dealer, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Limited Offering Memorandum, and if given or made, such information or representations must not be relied upon as having been authorized by the Corporation, the Authority or the Underwriters. The information set forth herein concerning the Corporation has been furnished by the Corporation and is believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the Authority or the Underwriters. This Limited Offering Memorandum does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any state to any person to whom it is unlawful to make such offer in such state. Except where otherwise indicated, this Limited Offering Memorandum speaks as of its date. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Limited Offering Memorandum nor any sale hereunder will under any circumstances create any implication that there has been no change in the affairs of the Corporation since the date hereof.

In making an investment decision, investors must rely on their own examination of the Bonds, the Corporation and the terms of the offering, including the merits and risks involved. The Bonds have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, no such commission or regulatory authority has confirmed the accuracy or determined the adequacy of this Limited Offering Memorandum. Any representation to the contrary is a criminal offense. The Underwriters have provided the following sentence for inclusion in this Limited Offering Memorandum. The Underwriters have reviewed the information in this Limited Offering Memorandum in accordance with, and as part of, their responsibilities 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 contained in this Limited Offering Memorandum has been furnished by the Corporation, the Authority, DTC and other sources that are believed to be reliable, but such information is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Underwriters. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Limited Offering Memorandum nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the parties referred to above since the date hereof.

The Bank of New York Mellon Trust Company, N.A. (i) has not provided or undertaken to determine the accuracy of any of the information contained in the Limited Offering Memorandum, and (ii) makes no representation or warranty, express or implied, of any kind as to any matters set for in this Limited Offering Memorandum, including, but not limited, to (a) the accuracy or completeness of such information, (b) the validity of the Bonds or Obligation No. 1, or (c) the tax-exempt status of the interest on the Bonds.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE TRUST AGREEMENT HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF LAWS OF THE STATES IN WHICH BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS LIMITED OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) NOR ANY OTHER FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE BONDS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS LIMITED OFFERING MEMORANDUM.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS

AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT NOTICE.

The Preliminary Limited Offering Memorandum has been deemed final by the Authority and the Corporation for purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, except for the permitted omissions described in paragraph (b)(1) of Rule 15c2-12.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS IN THIS LIMITED OFFERING MEMORANDUM

Certain statements included or incorporated by reference in this Limited Offering Memorandum, including Appendix A through C hereto, constitute “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD LOOKING STATEMENTS INVOLVES KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS. THE CORPORATION DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED, DO OR DO NOT OCCUR.

[Remainder of Page Intentionally Left Blank]

TABLE OF CONTENTS

Page SHORT STATEMENT ...... 1 The Authority ...... 1 The Corporation ...... 1 Description of the Bonds ...... 2 Security and Sources of Payment for the Bonds ...... 3 Plan of Financing ...... 4 The Market Study ...... 5 The Developer and the Manager ...... 5 Development Consultant ...... 5 Marketing Program and Ongoing Marketing Effort ...... 5 The Real Estate Purchase Agreement ...... 5 Risk Factors ...... 6 INTRODUCTION ...... 7 THE AUTHORITY ...... 8 Formation and Governance ...... 8 Powers ...... 9 Governing Body ...... 9 Resolutions; Approval ...... 9 Special Limited Obligations ...... 10 No Undertaking to Provide Additional Financing ...... 10 Other Obligations ...... 10 Limited Involvement of the Authority ...... 10 THE CORPORATION ...... 10 THE PROJECT ...... 11 General ...... 11 The Developer and the Manager ...... 11 The Development Consultant ...... 11 The Construction Manager ...... 11 The Architect ...... 11 The Civil Engineer ...... 12 The Marketing Consultant ...... 12 The Owner’s Representative ...... 12 THE BONDS ...... 12 General Description ...... 12 Restrictions on Ownership and Transfer of the Bonds ...... 12 Book-Entry-Only System ...... 12 Sources of Payment ...... 13 Redemption Provisions ...... 13 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS ...... 15 General ...... 15 Security for Obligation No. 1 ...... 16 Bankruptcy ...... 16 The Holder Representative ...... 16 Pre-Development and Sales Milestones ...... 17 Reports ...... 19 ESTIMATED SOURCES AND USES OF FUNDS ...... 20

RISK FACTORS ...... 21 No Assurance that the Permanent Bonds Will Be Issued to Repay Bonds ...... 21 No Real Estate Securing the Bonds; Inadequacy of Security ...... 21 No Feasibility Study of the Project or the Bonds Has Been Conducted ...... 22 Management’s Compilation of a Financial Projection ...... 22 The Dependence on a Significant Number of Non-Jewish Residents in a Jewish – Focused Community ...... 22 Limited Market for the Bonds ...... 22 Risks Related to the Purchase Agreement ...... 23 Scope of Project ...... 23 Tax-Exempt Market Conditions ...... 23 Failure to Meet Pre-Development Milestones or Sales Milestones ...... 23 Permits ...... 24 Housing Demand ...... 24 Construction Costs ...... 24 Regulation Affecting Construction and Financing ...... 24 Corporation’s Lack of Operating History; Need to Market Units ...... 24 Competition ...... 24 Possible Limitations of Certain Remedies Upon Bankruptcy ...... 25 Budgeted Development and Operations Costs May Prove Insufficient ...... 25 Amounts Held under the Liquidity Account Are Not Pledged to Bondholders ...... 25 Liquidity Support Agreement May be Required for Issuance of Permanent Bonds, and No Liquidity Support Provider Has Been Identified ...... 25 Termination of Reservation Agreements and Refunds ...... 26 Environmental Matters ...... 26 Federal Tax Related Risks ...... 26 CONTINUING DISCLOSURE ...... 27 LITIGATION ...... 28 The Authority ...... 28 The Corporation ...... 28 UNDERWRITING ...... 28 LEGAL MATTERS ...... 28 TAX TREATMENT ...... 28 General ...... 28 Original Issue Discount ...... 30 Premium Bonds ...... 30 NO RATING ON THE BONDS ...... 31 RELATIONSHIP OF PARTIES ...... 31 MISCELLANEOUS ...... 31

APPENDIX A - Certain Information Concerning the Project APPENDIX B - Compilation of a Financial Projection APPENDIX C - Market Study APPENDIX D - Forms of Principal Bond Documents APPENDIX E - Proposed Form of Bond Counsel Opinion APPENDIX F - Form of Continuing Disclosure Certificate APPENDIX G - Book-Entry Only System APPENDIX H - Form of Investor Letter

SHORT STATEMENT

The information set forth in this short statement is subject in all respects to more complete information set forth elsewhere in this Limited Offering Memorandum. The offering of the Bonds to potential investors is made only by means of this entire Limited Offering Memorandum. No person is authorized to detach this Short Statement from this Limited Offering Memorandum or otherwise to use it without this entire Limited Offering Memorandum. For the definitions of certain words and terms used in this Short Statement, see Appendix D – “FORMS OF PRINCIPAL BOND DOCUMENTS” attached hereto.

The Authority

The Public Finance Authority (the “Authority”) proposes to issue its $13,000,000 Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019 (the “Bonds”). The Bonds are being issued under a Trust Agreement dated as of November 1, 2019 (the “Trust Agreement”), between the Authority and The Bank of New York Mellon Trust Company, National Association, as bond trustee (the “Bond Trustee”), and the proceeds will be applied to make a loan to Aldersgate at Shalom Park, Inc. (the “Corporation”) pursuant to the terms of a Loan Agreement dated as of November 1, 2019 (the “Loan Agreement”) by and between the Authority and the Corporation. The Authority is authorized by Section 66.0304 of the Wisconsin Statutes (the “Statute”) to issue the Bonds to provide funds in order to make a loan to the Corporation to finance certain pre- development costs of the Project (as defined below).

THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE TRUST AGREEMENT AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY SPONSOR (AS DEFINED HEREIN), ANY MEMBER (AS DEFINED HEREIN), ANY AUTHORITY INDEMNIFIED PARTY (AS DEFINED IN THE TRUST AGREEMENT), THE STATE OF WISCONSIN (THE “STATE”) OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE BONDS ARE NOT A DEBT OF THE STATE OR ANY MEMBER AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, ANY SPONSOR, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY, ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PARTY, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

THE AUTHORITY’S ISSUANCE OF THE BONDS SHALL NOT BE DEEMED OR CONSTRUED TO BE AN EXPLICIT OR IMPLICIT UNDERTAKING BY THE AUTHORITY TO, OR REPRESENTATION OR PROMISE BY THE AUTHORITY THAT IT WILL, ISSUE ADDITIONAL BONDS IN AN AMOUNT SUFFICIENT TO PROVIDE REPLACEMENT FINANCING OR AT ALL. THE DETERMINATION BY THE AUTHORITY OF WHETHER TO ISSUE ADDITIONAL BONDS, IF AND WHEN REQUESTED TO DO SO BY THE CORPORATION, SHALL REMAIN IN THE ABSOLUTE AND EXCLUSIVE DISCRETION OF THE AUTHORITY.

See “THE AUTHORITY” herein.

The Corporation

The Corporation is a North Carolina nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) created to assist in the development of a senior living facility which, upon receipt of necessary regulatory approval, will be operated as a “Life Plan

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Community” initially expected to consist of (i) approximately 125 independent living apartments (the “Independent Living Apartments”) located in 5 buildings with structured parking, (ii) 8 assisted living units (the “Assisted Living Units”) and 8 memory support assisted living suites (the “Memory Support Suites” and, together with the Assisted Living Units, the “Assisted Living Center”) located in a separate building from the Independent Living Apartments and (iii) a clubhouse, located on approximately 11.5 acres of land (the “Property”) located on the corner of Jefferson Road and Providence Road, near the Temple Israel synagogue (the “Temple”) and within Shalom Park (as described herein) in Charlotte, Mecklenburg County, North Carolina (the “Project”). See Appendix A attached hereto for more information about the Corporation and the Project.

Description of the Bonds

Redemption. The Bonds are subject to optional and mandatory redemption prior to their stated maturity. See “THE BONDS” herein.

Denominations. The Bonds are issuable in the denominations of $25,000 or any integral multiple of $5,000 in excess thereof. See “THE BONDS” herein.

Registration, Transfers and Exchanges. The Bonds are issuable only as fully registered bonds in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”) and will be available to ultimate purchasers (“Beneficial Owners”) under the book-entry only system maintained by DTC, only through brokers and dealers who are, or act through, DTC Participants. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of DTC Participants acting on behalf of Beneficial Owners. See “BOOK-ENTRY ONLY SYSTEM” in Appendix G hereto.

Restrictions on Sale. There are restrictions on who may purchase the Bonds. The Bonds are being offered and sold hereby only to “Qualified Institutional Buyers” (as defined in Rule 144A of the Securities Act) or to “Accredited Investors” (as defined in Rule 501(a) under the Securities Act). Each initial purchaser of the Bonds that is an Accredited Investor will be required to complete and sign an investor letter in the form attached to this Limited Offering Memorandum as Appendix H hereto. The Bonds are subject to further transfer restrictions as defined herein. See “THE BONDS – Restrictions on Ownership and Transfer of the Bonds” and “RISK FACTORS – Limited Market for Bonds” herein.

Payments. The Bonds will not bear interest on a current basis. The principal of the Bonds will be due on December 31, 2024 (the “Maturity Date”). The Bonds will be subject to earlier optional or mandatory redemption prior to maturity at a redemption price equal to their Accreted Value (as defined herein) (plus a premium if the redemption occurs because of a Determination of Taxability). See “THE BONDS” herein.

So long as Cede & Co. is the registered owner of the Bonds, payments of the principal and redemption price of the Bonds are required to be made to Beneficial Owners by DTC (as defined below) through its participants. See “THE BONDS – Book-Entry-Only System herein and Appendix G hereto.

Tax Exemption. In the opinion of Bond Counsel, under existing law and assuming compliance by the Authority and the Corporation with certain requirements of the Code (1) interest on the Bonds (a) is excludable from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax and (2) interest on the Bonds is not exempt from State of Wisconsin or North Carolina income taxation. See “TAX TREATMENT” herein.

Holder Representative. By purchasing the Bonds, the registered owner and any beneficial owners thereof appoint BB&T Capital Markets, division of BB&T Securities, LLC, and HJS Advisors, Inc., an affiliate of Herbert J. Sims & Company, Inc., as their attorney-in-fact (the “Holder Representative”) for the purpose of giving any consents or directions, including the pursuit of remedial actions, contemplated under the Trust Agreement, or exercising any voting rights given to Holders under the Trust Agreement. The Holder Representative will be deemed to be the Holder of the Bonds for such purposes unless the Bond Trustee has been notified in writing by the beneficial owners of at least seventy-five percent (75%) of the principal amount of the Bonds outstanding that the

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position of Holder Representative has been suspended or eliminated. In such event, the beneficial owners of at least seventy-five percent (75%) of the principal amount of the Bonds outstanding may appoint a new Person to serve as the Holder Representative by giving written notice thereof to the Bond Trustee, the Authority and the Corporation.

The Holder Representative has certain rights relating to the Bonds, the use of the proceeds therefrom, and the development of the Project which are contained in Supplement No. 1 described below, the Trust Agreement and the Assignment of Contracts described below including but not limited to (i) the right to approve requests from the Corporation for disbursements from the Project Fund (as defined in the Trust Agreement), (ii) certain consent rights to other actions and requests of the Corporation under Supplement No. 1 and the Trust Agreement, (iii) the right to review certain of the Corporation’s financial statements and other books and records, and (iv) the right to develop the Project in place of the Corporation and its subsidiaries upon the occurrence of an Event of Default under the Trust Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – The Holder Representative” herein.

Compilation of a Financial Projection

CliftonLarsonAllen LLP, independent certified public accountants, Charlotte, North Carolina, has prepared a Compilation of a Financial Projection, dated September 25, 2019 (the “Financial Projection”), for the Corporation as of December 31, 2019, 2020, 2021, 2020, 2023, 2024, 2025 and 2026 and for each of the years then ending (the “Projection Period”). The compilation includes management’s financial projection and summary of key projection assumptions. The Projection Period includes periods prior to and following the date that the Permanent Financing is obtained, which is assumed to occur in June 2021 for purposes of the Financial Projection. This compilation report should be read in its entirety for an understanding of the assumptions of the Corporation used in the planning and development of the Project. Inevitably, some of the assumptions used in the Financial Projection will not be realized and unanticipated events and circumstances may occur. The actual financial results achieved will vary from those in the Financial Projection and the variations may be material. See “RISK FACTORS – Management’s Compilation of a Financial Projection” herein and Appendix B – “COMPILATION OF A FINANCIAL PROJECTION” attached hereto.

Security and Sources of Payment for the Bonds

The primary, expected source of payment of the principal of the Bonds on the Maturity Date or the redemption price of the Bonds on an earlier redemption date is the proceeds of the Permanent Bonds (as hereinafter defined) or alternate replacement financing for the Project.

The Bonds are not secured by any real or personal property.

See “RISK FACTORS – No Assurance that the Permanent Bonds Will Be Issued to Repay Bonds” and “RISK FACTORS – No Real Estate Securing the Bonds; Inadequacy of Security” herein.

THE AUTHORITY’S ISSUANCE OF THE BONDS SHALL NOT BE DEEMED OR CONSTRUED TO BE AN UNDERTAKING BY THE AUTHORITY TO, OR REPRESENTATION OR PROMISE BY THE AUTHORITY THAT IT WILL, ISSUE PERMANENT BONDS IN AN AMOUNT SUFFICIENT TO PROVIDE REPLACEMENT FINANCING OR AT ALL. THE DETERMINATION BY THE AUTHORITY OF WHETHER TO ISSUE PERMANENT BONDS, IF AND WHEN REQUESTED TO DO SO BY THE CORPORATION, SHALL REMAIN IN THE ABSOLUTE AND EXCLUSIVE DISCRETION OF THE AUTHORITY.

Trust Agreement. Pursuant to the Trust Agreement, the Authority will pledge and assign to the Bond Trustee (i) all right, title and interest of the Authority in and to Obligation No. 1 described below and all its rights under the Master Indenture described below and the Assignment of Contracts as owner of Obligation No. 1; (ii) all right, title and interest of the Authority in and to the Loan Agreement (except for the Authority’s Unassigned Rights); (iii) all money and securities held by the Bond Trustee in the Bond Fund and the Redemption Fund (each as defined in the Trust Agreement) and, until applied in payment of the Cost of the Project in accordance with Article IV of the Trust Agreement, all money and securities in the Project Fund (as hereinafter defined) and in any other funds or accounts established under the Trust Agreement, other than the Liquidity Account.

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Loan Agreement. Pursuant to the Loan Agreement, the Corporation agrees to make loan payments to the Bond Trustee in such amounts as will be sufficient to pay, when due, the principal of the Bonds. The Corporation’s payment obligations with respect to the Bonds under the Loan Agreement will be evidenced and secured by Obligation No. 1 issued under the Master Indenture.

Master Indenture. Simultaneously with the issuance of the Bonds, the Corporation will issue its Obligation No. 1 in the form of a promissory note in the principal amount of the Bonds payable to the Authority (“Obligation No. 1”) pursuant to (1) a Master Trust Indenture, dated as of November 1, 2019 (the “Master Trust Indenture”), between the Corporation and The Bank of New York Mellon Trust Company, National Association, Jacksonville, Florida, as master trustee (the “Master Trustee”), and (2) a Supplemental Indenture for Obligation No. 1, dated as of November 1, 2019 (“Supplement No. 1” and together with the Master Trust Indenture, the “Master Indenture”), between the Corporation and the Master Trustee. In addition, pursuant to the Master Indenture, The Authority will assign, and cause the Master Trustee to deliver, Obligation No. 1 to the Bond Trustee, to provide payment for, and secure the payment of, the Bonds. Obligation No. 1 will be secured equally and ratably with all other Obligations issued or to be issued under the Master Indenture. Obligation No. 1 will constitute an unconditional promise by each Obligated Group Member (as defined in the Master Indenture) to pay amounts sufficient to pay principal of (whether at maturity, by acceleration or call for redemption) and premium, if any, and interest on the Bonds. As of the date of this Limited Offering Memorandum, the Corporation is the only Member of the Obligated Group. The Corporation and each Member of the Obligated Group admitted in the future will be jointly and severally liable for the payment for all Obligations entitled to the benefits of the Master Indenture and will be subject to the covenants thereunder.

Assignment of Contracts. As additional security for all Obligations issued under the Master Indenture, the Corporation will collaterally assign to the Master Trustee all of its rights under the Purchase Agreement, the Development Agreement, the Management Agreement, the Development Consulting Agreement, the Preconstruction Services Agreement, the Architect Agreement, the Civil Engineer Agreement, the Marketing Agreement, the Release and Termination Agreement and the Owner’s Representative Agreement (each as described herein) and all of its right, title and interest in all other contracts for design and development of the Project, any and all other documents, instruments and agreements, including any payment and performance bonds, whether now or hereafter existing, relating to the design, development, construction, renovation, installation and equipping of the Project pursuant to an Assignment of Contracts dated as of November 1, 2019 (the “Assignment of Contracts”) from the Corporation to the Master Trustee. See Appendix D – “FORMS OF PRINCIPAL BOND DOCUMENTS– Assignment of Contracts” attached hereto.

Plan of Financing

The Bonds. The Bonds are being issued for the purpose of providing funds to the Corporation to be used, along with other available monies, to (a) finance the Project and (b) pay certain expenses incurred in connection with the authorization and issuance of the Bonds.

Liquidity Account. Aldersgate Life Plan Services, Inc. (the “Parent”), the parent of the Corporation, will deposit $500,000 into the Liquidity Account at the time of the issuance of the Bonds held by the Trustee to pay operating, marketing and other expenses related to the Project, if needed, after all bond proceeds of the Bonds have been utilized.

Amounts held in the Liquidity Account will not be used to pay principal or interest on the Bonds.

See “RISK FACTORS – Amounts Held in the Liquidity Account Are Not Pledged to Bondholders” herein.

Permanent Bonds. Upon the fulfillment of certain minimum sales parameters set by North Carolina law, and other financing requirements, and subject to satisfaction of certain conditions precedent, the Corporation, through the Authority (or another qualified governmental issuer agreeing to issue the Bonds), intends to issue approximately $135,495,000 of tax-exempt revenue bonds (the “Permanent Bonds”) to finance the repayment of the principal (or payment of the redemption price) of the Bonds and to finance the construction of the Project. NO ASSURANCE CAN BE GIVEN THAT THE PERMANENT BONDS WILL BE ISSUED OR OTHER REPLACEMENT FINANCING WILL OR CAN BE OBTAINED BY THE CORPORATION OR WILL OR CAN BE OBTAINED BY THE CORPORATION AT INTEREST RATES AND UPON OTHER TERMS

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THAT WILL PERMIT THE PROJECT TO BE FINANCIALLY VIABLE. Additionally, no assurance can be given that the assumptions on which the financial projections are based will be valid at the time of proposed issuance of the Permanent Bonds. If events, including market conditions, adversely affect any or all of these assumptions, the projected financial performance of the Project will be adversely affected, which may in turn adversely affect the marketability of the Permanent Bonds. Accordingly, no assurance can be given that the Permanent Bonds will be issued as assumed in the financial projections. See “RISK FACTORS” herein for a description of certain risk factors affecting the issuance of the Bonds.

The Market Study

On the Corporation’s behalf, GlynnDevins, Inc. (the “Marketability Consultant”) prepared a Market Analysis and Feasibility Update For a New Senior Housing Development at Shalom Park (the “Market Study”) for the Project, which the Marketability Consultant completed in August 2019 and is attached hereto in its entirety. See Appendix C – “MARKET STUDY” and Appendix A – “CERTAIN INFORMATION CONCERNING THE PROJECT – THE MARKET STUDY”.

The Developer and the Manager

The Parent is the developer and manager of the Project. Under the Project Development and Construction Management Agreement between the Parent and the Corporation (the “Development Agreement”), the Parent will administer, manage and supervise the development and construction of the Project on behalf of the Corporation. Upon completion of the Project, under the Life Plan Community Management Agreement between the Corporation and the Parent (the “Management Agreement”), the Parent is responsible for operating, maintaining and servicing the Project. Management responsibilities of the Parent include, but are not limited to, staffing, accounting, billing, collections, setting of rates and charges and general administration. See Appendix A – “CERTAIN INFORMATION CONCERNING THE PROJECT – the Developer and Manager” attached hereto.

Development Consultant

Brian Schiff & Associates LLC (the “Development Consultant”) has been engaged by the Parent pursuant to a Development Consulting Services Letter Agreement (the “Development Consulting Agreement”), to provide development advisory and consulting services for the Project. See Appendix A – “CERTAIN INFORMATION CONCERNING THE PROJECT – DEVELOPMENT AND MARKETING OF THE PROJECT” attached hereto.

Marketing Program and Ongoing Marketing Effort

The Corporation will engage the Marketing Consultant for the ongoing marketing efforts of the Project.

See Appendix A – “CERTAIN INFORMATION CONCERNING THE PROJECT – CERTAIN PROJECT CONTRACTS – The Marketing Agreement and Ongoing Marketing Efforts” hereto.

Supplement No. 1 contains Pre-Development Milestones and Sales Milestones (as defined in Supplement No. 1) that are required to be met with respect to the development of the Project throughout the term of the Bonds. In the event of a failure to comply with the Pre-Development Milestones or Sales Milestones, the Holder Representative will have the rights and remedies described in the Master Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Pre-Development Milestones and Sales Milestones” herein and “FORMS OF PRINCIPAL BOND DOCUMENTS – The Master Indenture” and “– Supplement No. 1” in Appendix D attached hereto.

The Real Estate Purchase Agreement

The Corporation has entered into the Purchase Agreement with the Temple and The Shalom Park Foundation of Shalom Park, Inc., a 501(c)(3) nonprofit corporation (the “Foundation”) for the purchase of the Property. Although the Purchase Agreement is currently effective, the sale and transfer of the Property will not take place until certain conditions are met prior to the sale and transfer of the Property, including that the Corporation

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must obtain necessary and appropriate government approvals with respect to the Project and enter into various additional agreements relating to the Temple’s and the Foundation’s rights that continue beyond the sale and transfer of the Property. The sale and transfer will not take place at the time of issuance of the Bonds. See “RISK FACTORS – Risks Related to the Purchase Agreement” herein.

Investors may request a copy of the Purchase Agreement by submitting a written request to Michael Sulhan, Chief Financial Officer of the Main Affiliate, at [email protected], with a copy to [email protected]. Investors will need to sign a confidentiality agreement.

Deed Restrictions

Risk Factors

PROSPECTIVE INVESTORS SHOULD BE AWARE THAT INVESTMENT IN THE BONDS INVOLVES A HIGH DEGREE OF RISK. ANY OF THESE RISKS, IF MATERIALIZED, COULD DELAY OR PREVENT PAYMENT OF THE BONDS. SEE “RISK FACTORS” HEREIN FOR A SUMMARY OF CERTAIN OF THESE RISKS.

[Remainder of Page Intentionally Left Blank]

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LIMITED OFFERING MEMORANDUM

$13,000,000∗ PUBLIC FINANCE AUTHORITY RETIREMENT FACILITY REVENUE ANTICIPATION BONDS (SHALOM PARK PRE-DEVELOPMENT PROJECT) SERIES 2019

INTRODUCTION

This Limited Offering Memorandum, including the cover page and the appendices, furnishes information regarding the offering by the Public Finance Authority (the “Authority”) of its $13,000,000* Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019 (the “Bonds”). The Bonds are being issued pursuant to the provisions of Wisconsin law, including without limitation, Section 66.0304 of the Wisconsin Statutes (as amended, the “Statute”), and a Trust Agreement, dated as of November 1, 2019 (the “Trust Agreement”), between the Authority and The Bank of New York Mellon Trust Company, National Association, Jacksonville, Florida, as bond trustee (the “Bond Trustee”).

Concurrently with the issuance of the Bonds, the Authority will enter into a Loan Agreement, dated as of November 1, 2019 (the “Loan Agreement”), with Aldersgate at Shalom Park, Inc., a North Carolina nonprofit corporation (the “Corporation”). The Bonds are being issued for the purpose of providing funds to the Corporation to be used, along with other available monies, to (a) pay or refinance a portion of the pre-construction and development costs of acquiring, constructing, installing and equipping a new continuing care retirement community to be located at the corner of Providence Road and Jefferson Drive near the Temple Israel synagogue in Charlotte, Mecklenburg County, North Carolina (the “Project”) and (b) pay certain expenses incurred in connection with the authorization and issuance of the Bonds.

The Bonds will be special limited obligations of the Authority, payable solely from money to be received from the Corporation, pursuant to the terms of the Loan Agreement and the Corporation’s promissory note, dated as of the date of delivery of the Bonds and designated Obligation No. 1 (“Obligation No. 1”). The Corporation will execute and deliver Obligation No. 1 pursuant to (1) a Master Trust Indenture, dated as of November 1, 2019 (as supplemented pursuant to its terms, the “Master Indenture”), between the Corporation and The Bank of New York Mellon Trust Company, National Association, Jacksonville, Florida, as master trustee (the “Master Trustee”), and (2) a Supplemental Indenture for Obligation No. 1, dated as of November 1, 2019 (“Supplement No. 1”), between the Corporation and the Master Trustee. Payments on Obligation No. 1 will be required to be sufficient to pay, when due, the principal of the Bonds. Obligation No. 1 will be a joint and several general obligations of the Members of the Obligated Group, as described below. Upon issuance of the Bonds, the Corporation will be the sole member of the Obligated Group. To secure payment of the Bonds, the Authority will assign to the Bond Trustee (a) all right, title and interest in and to Obligation No. 1 and (b) substantially all right, title and interest in and to the Loan Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein.

As security for all Obligations issued under the Master Indenture, including Obligation No. 1, the Corporation will collaterally assign to the Master Trustee all of its rights under the Purchase Agreement, the Project Development and Construction Management Agreement (the “Development Agreement”), the Life Plan Community Management Agreement between the Corporation and the Parent (the “Management Agreement”), the Development Consulting Agreement, the Preconstruction Services Agreement, the Architect Agreement, the Civil Engineer Agreement, the Marketing Agreement, the Release and Termination Agreement and the Owner’s Representative Agreement (each as described herein), and all of its right, title and interest in all other contracts for design and development of the Project, any and all other documents, instruments and agreements, including any payment and performance bonds, whether now or hereafter existing, relating to the design, construction, renovation, installation and equipping of the Project, pursuant to an Assignment of Contracts dated as of November 1, 2019 (the “Assignment of Contracts”) from the Corporation to the Master Trustee. Appendix D – “FORMS OF PRINCIPAL

∗ Preliminary, subject to change

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BOND DOCUMENTS – Assignment of Contracts” attached hereto. In addition, pursuant to the Master Indenture, each Member of the Obligated Group has granted to the Master Trustee a first priority security interest in its Pledged Assets, subject to Permitted Liens. All Obligations issued under the Master Indenture, including Obligation No. 1 are secured pari passu by the collateral assignment created by the Assignment of Contracts and the security interest in the Pledged Assets created by the Master Indenture. The Members of the Obligated Group are subject to certain covenants under Supplement No. 1 restricting, among other things, existence of Liens, consolidation or merger and disposition of assets.

The Master Indenture permits any persons that are not Members of the Obligated Group and other corporations that are successor corporations to any Member of the Obligated Group through merger or consolidation as permitted by the Master Indenture to become Members of the Obligated Group upon compliance with certain financial and other requirements. The Master Indenture also permits, upon compliance with certain requirements, any Member of the Obligated Group to withdraw from the Obligated Group. Supplement No. 1, however, prohibits the withdrawal of the Corporation from the Obligated Group without the prior written consent of the Holder Representative.

This introduction provides summary information and is qualified by reference to the entire Limited Offering Memorandum. Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Master Indenture, the Loan Agreement and the Trust Agreement. Forms of the of the Master Indenture, the Loan Agreement, the Trust Agreement and the Assignment of Contracts are included in Appendix E, attached hereto. Such descriptions and summaries do not purport to be comprehensive or definitive, and all references in this Limited Offering Memorandum to the Master Indenture, the Loan Agreement, the Trust Agreement and the Assignment of Contracts are qualified in their entirety by reference to such documents, and all references to the Bonds are qualified by reference to the definitive forms of the Bonds contained in the Trust Agreement.

THE AUTHORITY

The following information has been provided by the Authority for use herein. While the information is believed to be reliable, none of the Bond Trustee, the Master Trustee, the Corporation, the Underwriters nor any of their respective counsel, members, officers or employees make any representations as to the accuracy, sufficiency or completeness of such information.

Formation and Governance

In early 2010, both houses of the Wisconsin Legislature passed 2009 Wisconsin Act 205 (“Act 205”), which was signed into law by the Governor of the State on April 21, 2010. Act 205 added the Statute authorizing two or more political subdivisions to create a commission to issue bonds under the Statute. Before an agreement for the creation of such a commission could take effect, Act 205 required that such agreement be submitted to the Attorney General of the State to determine whether the agreement is in proper form and compatible with the laws of the State. The Authority was formed upon execution of a Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated as of June 30, 2010 as amended by an Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated September 28, 2010 (as so amended and as may be further amended from time to time, the “Joint Exercise Agreement”) among Adams County, Wisconsin, Bayfield County, Wisconsin, Marathon County, Wisconsin, Waupaca County, Wisconsin and the City of Lancaster, Wisconsin (each a “Member” and, collectively, the “Members,” which term shall include any political subdivision designated in the future as a “Member” of the Authority pursuant to the Joint Exercise Agreement). The Joint Exercise Agreement was approved by the Wisconsin Attorney General on September 30, 2010. The Statute also provides that only one commission may be formed thereunder.

Pursuant to the Statute, the Authority is a unit of government and a body corporate and politic separate and distinct from, and independent of, the State and the Members. The Authority was established by local governments, primarily for local governments, for the public purpose of providing local governments a means to efficiently and reliably finance projects that benefit local governments, and nonprofit organizations and other eligible private borrowers in the State and throughout the country.

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Powers

Under the Statute, the Authority has all of the powers necessary or convenient to any of the purposes of Act 205, including the power to issue bonds, notes or other obligations or refunding obligations to finance or refinance a project, make loans to, lease property from or to, and enter into agreements with a participant or other entity in connection with financing a project. The proceeds of bonds issued by the Authority may be used for a project in the State or any other state or territory of the United States, or outside the United States if a participating borrower is incorporated and maintains its principal place of business in, the United States or its territories. The Statute defines “project” as any capital improvement, purchase of receivables, property, assets, commodities, bonds or other revenue streams or related assets, working capital program, or liability or other insurance program, located within or outside of the State.

Governing Body

The Joint Exercise Agreement provides for a Board of Directors of the Authority (the “Board”) consisting of seven directors (each a “Director” and collectively, the “Directors”), a majority of whom are required to be public officials or current or former employees of a political subdivision located in the State. The Directors serve staggered three-year terms. The Directors are selected by majority vote of the Board based upon nomination by the organization that nominated the predecessor Director. Four Directors are nominated by the Wisconsin Counties Association, and one Director is nominated from each of the National League of Cities, the National Association of Counties and the League of Wisconsin Municipalities (collectively the “Sponsors,” and each, a “Sponsor”). Each of the nominating organizations may also nominate an alternate Director for each Director it nominates to serve on the Board in the place of and in the absence or disability of a Director. Directors and alternate Directors may be removed and replaced at any time by the Board upon recommendation of the Sponsor that nominated such Director.

As of the date of this Limited Offering Memorandum, the Authority’s Directors are as set forth in the table below. There is currently one vacant Board seat (representing the nominee of the National League of Cities) and one Alternate Director (nominated by the Wisconsin Counties Association).

Name Title Position

William Kacvinsky Chair Former Board Chair--Bayfield County, Wisconsin Jerome Wehrle Vice Chair Former Mayor–City of Lancaster, Wisconsin Heidi Dombrowski Treasurer Finance Director –Waupaca County, Wisconsin, Allen Buechel Secretary County Executive–Fond du Lac County, Wisconsin Del Twidt Director Former Board Chair–Buffalo County, Wisconsin, Michael Gillespie Director Former Chair–Madison County, Alabama Board of Commissioners John West** Alternate Director Board Chair–Adams County, Wisconsin

**Mr. West is an alternate for Directors Buechel, Dombrowski and Twidt.

The Authority has no employees and contracts with a full-service program management firm, GPM Municipal Advisors, LLC, to manage the day-to-day operations of the Authority including but not limited to staff and administrative support and ongoing compliance matters. All of the services provided by GPM Municipal Advisors, LLC are subject to review and approval by the Board.

Resolutions; Approval

The Board adopted the Resolution approving the issuance of the Bonds on September 4, 2019.

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Special Limited Obligations

THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE TRUST AGREEMENT AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY SPONSOR (AS DEFINED HEREIN), ANY MEMBER (AS DEFINED HEREIN), ANY AUTHORITY INDEMNIFIED PARTY (AS DEFINED IN THE TRUST AGREEMENT), THE STATE (AS DEFINED HEREIN) OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE BONDS ARE NOT A DEBT OF THE STATE OR ANY MEMBER AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, ANY SPONSOR, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY, ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PARTY, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

No Undertaking to Provide Additional Financing

Other Obligations

The Authority has issued, sold and delivered in the past, and expects to issue, sell and deliver in the future, obligations other than the Bonds, which other obligations are and will be secured by instruments separate and apart from the Trust Agreement and the Bonds. The holders of such other obligations of the Authority will have no claim on the security for the Bonds, and the owners of the Bonds will have no claim on the security for such other obligations issued by the Authority.

Limited Involvement of the Authority

The Authority has not participated in the preparation of or reviewed any appraisal for the Project or any feasibility study or other financial analysis of the Project and has not undertaken to review or approve expenditures for the Project, to supervise the construction of the Project, or to review the financial statements of the Corporation.

The Authority has not participated in the preparation of or reviewed this Limited Offering Memorandum and is not responsible for any information contained herein, except for the information in this Section (“THE AUTHORITY”) and under the caption “LITIGATION – The Authority.”

THE CORPORATION

The Corporation is a North Carolina nonprofit corporation exempt from income taxation under Section 501(a)(3) of the Code. For more information on the Corporation, see Appendix A – “CERTAIN INFORMATION CONCERNING THE PROJECT – THE CORPORATION” attached hereto.

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THE PROJECT

General

The Project will be operated as a “Life Plan Community” initially expected to consist of 125 Independent Living Apartments located in 5 buildings with structured parking, (ii) 8 Assisted Living Units and 8 Memory Support Suites located in a separate building from the Independent Living Apartments and (iii) a clubhouse, located on approximately 11.5 acres of land on the corner of Jefferson Road and Providence Road, near the Temple Israel synagogue and within Shalom Park in Charlotte, Mecklenburg County, North Carolina.

The Project is expected to be culturally Jewish, although it is open to all faiths and the success of the Project is dependent upon having a significant number of non-Jewish residents.

The Developer and the Manager

The Development Consultant

The Parent has engaged the Development Consultant for the Project pursuant to a Development Consulting Services Letter (the “Development Consulting Agreement”) dated as of August 15, 2019. The Development Consultant will assist with certain development activities for the Project including assisting the Parent with implementation of the Business Plan, preparation of detailed budgets, and assistance in securing the issuance of the Bonds and Permanent Bonds, if any.

The Construction Manager

Frank L. Blum Construction Corporation (the “Construction Manager”) will be engaged to provide preconstruction services for the Project under the Preconstruction Services Agreement between the Corporation and the Construction Manager (the “Preconstruction Services Agreement”). Headquartered in Winston-Salem, North Carolina, Construction Manager will have primary responsibility for pre-construction services, including estimating, scheduling analysis, and design constructability reviews. Incorporated in 1923, Construction Manager provides construction management “at risk,” general contracting, pre-construction and design-build services to clients in the athletic facilities, biotechnology and research facilities, financial institutions, healthcare facilities, K-12 and higher education, hospitality, manufacturing, mission critical data centers/power plants, multi-family, museum, galleries and performing arts, not-for-profits, corporate, religious facilities, and senior living community markets.

The Architect

The Corporation will engage RLPS Architects II, LLP (the “Architect”) to serve as the architect for the Project under the AIA Document B133-2014 Standard Form of Agreement Between Owner and Architect (the “Architect Agreement”). Founded in 1954, the Architect has significant experience in the planning and design of more than 125 retirement communities and 1,525 projects including clients in North Carolina and requiring involvement the Department of Health Services Regulation (“DHSR”). The Architect team assisted in preparation of the Business Plan and the rezoning of the Property and will lead and prepare all the necessary architectural and design documents for the Project.

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The Civil Engineer

The Corporation will engage Landworks Design Group, PA (the “Civil Engineer”) for the Project under a civil engineer agreement (the “Civil Engineer Agreement.” The Civil Engineer is a full-service landscape architecture and civil engineering ﬁrm offering a wide range of land planning and development services to both public and private sector clients throughout the Southeast. The Civil Engineer has extensive experience in Senior Living design, including master planning. The Civil Engineer is a certiﬁed Small Business Enterprise by the City of Charlotte and is currently working with the four largest Life Plan Communities in the Charlotte area, each with coordination through DHSR. The Civil Engineer will be engaged to assist in the preparation of the schematic design drawings, including utility demolition, proposed utilities and approximate grade relationships, rezoning plans, construction documents for the site-related elements of the Project to obtain site development plan approval and sewer and water permits.

The Marketing Consultant

Under a marketing agreement (the “Marketing Agreement”), the Corporation will engage Love & Company, Inc. (the “Marketing Consultant”) for marketing and other services, including project validation research, brand development, marketing and sales services, development team support and integrated media services.

The Owner’s Representative

Under an Owner’s Representative agreement (the “Owner’s Representative Agreement”), the Corporation has also engaged Construction Practices, LLC (“Construction Practices”) to provide as the owner’s representative services acting as a third-party member of the development team acting on the owner’s behalf and, in the owner’s best interest across all phases of development from planning and design through construction and completion.

THE BONDS

General Description

The Bonds will be issued as one series designated as “Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019.” The Bonds will be issued in the aggregate principal amount of $13,000,000∗. The Bonds will be issuable only as fully registered bonds without coupons and may be purchased in minimum denominations of $25,000 or any integral multiple of $5,000 in excess thereof. The Bonds will be dated their date of issuance, will mature on December 31, 2024 (the “Maturity Date”) and are subject to the optional and mandatory redemption provisions of the Trust Agreement described below.

The Bonds will not bear interest on a current basis.

Restrictions on Ownership and Transfer of the Bonds

THE BONDS ARE OFFERED ONLY TO AND MAY BE OWNED ONLY BY “ACCREDITED INVESTORS,” AS DEFINED IN RULE 501 UNDER THE SECURITIES ACT AND “QUALIFIED INSTITUTIONAL BUYERS,” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT. The Bonds may only be transferred to certain Accredited Investors or Qualified Institutional Buyers. In addition, each initial purchaser of the Bonds that is an Accredited Investor will be required to deliver an Investor Letter in the form attached to this Limited Offering Memorandum as Appendix H hereto.

Book-Entry-Only System

The Depository Trust Company, New York, New York (“DTC”), will act as securities depository for the Bonds. The Bonds will be issued as fully-registered bonds registered in the name of Cede & Co., DTC’s partnership nominee. One fully-registered Bond certificate will be issued for the Bonds in the aggregate principal amount of the

∗ Preliminary, subject to change

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Bonds, and will be deposited with DTC. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS DTC’S PARTNERSHIP NOMINEE, REFERENCE HEREIN TO THE HOLDERS OR REGISTERED OWNERS OF THE BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS. See “BOOK-ENTRY ONLY SYSTEM” in Appendix G hereto for more information regarding the book entry-only system.

Sources of Payment

Payment of the principal of the Bonds is dependent upon the Corporation’s successful development and marketing of the Project and the sale of the Permanent Bonds. If the principal of the Bonds is not paid on the Maturity Date, an Event of Default will occur under the Trust Agreement and the Master Indenture, in which case the Master Trustee can foreclose upon collateral pledged as security under the Master Indenture and the Assignment of Contracts. The amount that may be realized from such security in the event of a default is not expected to be sufficient to pay the principal or redemption price of the Bonds in full. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – ASSIGNMENT OF CONTRACTS,” “RISK FACTORS – No Real Estate Securing the Bonds; Inadequacy of Security” and Appendix D – “FORMS OF PRINCIPAL BOND DOCUMENTS – Assignment of Contracts” herein. Accordingly, if the Permanent Bonds are not issued (and no assurance can be given that the Permanent Bonds can or will be issued), investors in the Bonds may not be repaid in full or full repayment may occur many years after the Maturity Date. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein. See “RISK FACTORS” herein for a description of certain risk factors affecting the issuance of the Bonds.

Redemption Provisions

The Bonds may not be called for redemption by the Authority except as provided below.

Optional Redemption. If the Corporation exercises its option to prepay the Loan pursuant to the Loan Agreement, the Bonds are required to be redeemed by the Authority, upon the direction of the Obligated Group Representative, in whole or in part on any date on or after ______at their Accreted Value as of the redemption date.

Mandatory Redemption. The Bonds are required to be redeemed in whole from the proceeds of the Permanent Bonds or other source of permanent financing for the Project, at their Accreted Value as of the redemption date.

Mandatory Redemption Upon Determination of Taxability. Upon the occurrence of a Determination of Taxability, the Bonds are required to be redeemed on any date selected by the Bond Trustee, upon the direction of the Obligated Group Representative, which date shall be no later than 120 days after the date of the occurrence of the Determination of Taxability, at their Accreted Value as of the redemption date, plus a premium equal to 3% of the outstanding principal amount of the Bonds.

Accreted Value. “Accreted Value” means, with respect to Bonds or a portion thereof, (i) if calculated on a Calculation Date, the dollar amount per $1,000 due at maturity of the Bonds set forth in the table below for such Calculation Date and (ii) if calculated on a date other than a Calculation Date, the dollar amount per $1,000 due at maturity of the Bonds, such amount being determined conclusively by the Bond Trustee or a certified public accountant selected by the Bond Trustee, by interpolating such dollar amount, using the straight-line method, by reference to the dollar amounts for the Calculation Dates listed on the table set forth below which are immediately prior to and immediately subsequent to such date, and the number of calendar days elapsed since the date listed which is immediately prior to such date.

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Calculation Date Accreted Value per $1,000 Due at Maturity of the Bonds * November 6, 2019 $576.10 December 1, 2019 580.40 June 1, 2020 612.32 December 1, 2020 646.00 June 1, 2021 681.53 December 1, 2021 719.01 June 1, 2022 758.56 December 1, 2022 800.28 June 1, 2023 844.30 December 1, 2023 890.73 June 1, 2024 939.73 December 1, 2024 991.22 December 31, 2024 1,000.00 ______* Preliminary, subject to change.

General Redemption Provisions. The Bonds shall be redeemed only in amounts of $25,000 and any integral multiple of $5,000 in excess thereof. The Bond Trustee shall select the Bonds to be redeemed in accordance with the terms and provisions of the Trust Agreement. If less than all of the Bonds of any maturity are to be called for redemption, the Bond Trustee shall select by lot the Bonds (or portions thereof) to be redeemed, each $25,000 portion of principal being counted as one Bond for this purpose; provided that for so long as the Holder is a Securities Depository Nominee, such selection shall be made by the Securities Depository.

Not less than thirty (30) days (fifteen (15) days in the event of a mandatory redemption from proceeds of permanent financing pursuant to the Trust Agreement) but not more than sixty (60) days before the redemption date of any Bonds, whether such redemption be in whole or in part, the Bond Trustee shall cause a notice of any such redemption to be mailed, first-class, postage prepaid (or sent by Electronic Means if so required or requested by a Holder), to all Holders of Bonds to be redeemed in whole or in part. Not less than thirty (30) days (fifteen (15) days in the event of a mandatory redemption from proceeds of permanent financing pursuant to the Trust Agreement) prior to the date of redemption, notice of such redemption shall be given by the Bond Trustee to the Municipal Securities Rulemaking Board (the “MSRB”) using the MSRB’s Electronic Municipal Market Access system or such other means permitted by the rules of the MSRB. Failure by the Bond Trustee to give notice pursuant to the preceding sentence shall not affect the sufficiency of the proceedings for redemption. Failure of the Bond Trustee to give notice to a Holder or any defect in such notice shall not affect the validity of the proceedings for redemption of the Bonds of any Holder to whom notice shall have been properly given.

On the date fixed for redemption, notice having been given as provided above, the Bonds or portions thereof called for redemption will be due and payable at the redemption price provided therefor. If, on the date fixed for redemption, money or Defeasance Obligations, or a combination of both, sufficient to pay the redemption price of the Bonds to be redeemed are held by the Bond Trustee in trust for the Holders of the Bonds to be redeemed, such Bonds will cease to be entitled to any benefit or security under the Trust Agreement or to be deemed Outstanding, and the Holders of such Bonds will have no rights in respect thereof except to receive payment of the redemption price thereof.

In the case of an optional redemption of the Bonds, the redemption notice may state that (a) it is conditioned upon the deposit of moneys or Defeasance Obligations, or a combination of both, in an amount equal to the amount necessary to effect the redemption, with the Bond Trustee no later than the scheduled redemption date or (b) the Corporation retains the right to rescind such notice on or prior to the scheduled redemption date (in either case, a “Conditional Redemption”), and such notice and optional redemption shall be of no effect if such moneys are not so deposited or if the notice is rescinded as provided in the Trust Agreement. In the case of a Conditional Redemption subject to the deposit of moneys or Defeasance Obligations, the failure of the Corporation or any other Person to make such moneys or obligations available in part or in whole on or before the scheduled redemption date shall not constitute an Event of Default under the Trust Agreement and any Bonds subject to such Conditional Redemption shall remain Outstanding. Any Conditional Redemption subject to rescission may be rescinded in whole or in part at any time on or prior to the scheduled redemption date if an Obligated Group Representative instructs the

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Bond Trustee in writing to rescind the redemption notice. Any Bonds subject to Conditional Redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an Event of Default hereunder. If a Conditional Redemption for which notice has been sent to Holders will not occur, either because moneys or obligations to effect such redemption are not available on or before the scheduled redemption date or the Corporation has rescinded such notice in accordance with the Trust Agreement, the Bond Trustee shall immediately give notice by Electronic Means to the Securities Depository if all of the Bonds are Book Entry Bonds or to the affected Holders of any Bonds that the redemption will not occur and that the Bonds called for redemption and not so paid will remain Outstanding.

So long as a book-entry system is being used for determining beneficial ownership of Bonds, the Bond Trustee will send such notice with respect to the redemption of such Bonds to DTC (or its nominee). Any failure of DTC to notify any DTC Participant of any such notice, or of any Direct Participant or Indirect Participant to notify the beneficial owner of any such notice, will not affect the validity of the redemption of such Bonds.

SECURITY AND SOURCES OF PAYMENT FOR THE BONDS

General

The principal of the Bonds will be payable from moneys paid by the Corporation and any other Members of the Obligated Group pursuant to the Loan Agreement and Obligation No. 1. Obligation No. 1 is a joint and several general obligation of each Member of the Obligated Group. Upon the issuance of the Bonds, the Corporation will be the sole Member of the Obligated Group. The Authority will assign to the Bond Trustee the Trust Estate which includes (1) all right, title and interest of the Authority in and to Obligation No. 1 and all its rights under the Master Indenture and the Assignment of Contracts as owner of Obligation No. 1; (2) all right, title and interest of the Authority in and to the Loan Agreement (except for the Authority’s Unassigned Rights); and (3) all money and securities held by the Bond Trustee in the Bond Fund and the Redemption Fund (each as defined in the Trust Agreement) and, until applied to payment of the Cost of the Project in accordance with Article IV of the Trust Agreement, all money and securities in the Project Fund (as hereinafter defined) and in any other funds or accounts established under the Trust Agreement, other than the Liquidity Account.

THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE FUNDS PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE TRUST AGREEMENT AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY SPONSOR (AS DEFINED HEREIN), ANY MEMBER (AS DEFINED HEREIN), ANY AUTHORITY INDEMNIFIED PARTY (AS DEFINED IN THE TRUST AGREEMENT), THE STATE (AS DEFINED HEREIN) OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. THE BONDS ARE NOT A DEBT OF THE STATE OR ANY MEMBER AND DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY MEMBER, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY MEMBER, ANY SPONSOR, THE STATE OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY, ANY SPONSOR OR ANY AUTHORITY INDEMNIFIED PARTY, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS AGAINST ANY AUTHORITY INDEMNIFIED PARTY, UNDER ANY RULE OF LAW OR EQUITY, STATUTE, OR CONSTITUTION OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR OTHERWISE.

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Security for Obligation No. 1

As security for all Obligations issued under the Master Indenture, including Obligation No. 1, the Corporation will collaterally assign to the Master Trustee all of its rights under the Purchase Agreement, the Development Agreement, the Management Agreement, the Development Consulting Agreement, the Preconstruction Services Agreement, the Architect Agreement, the Civil Engineer Agreement, the Marketing Agreement, the Release and Termination Agreement and the Owner’s Representative Agreement and all of its right, title and interest in all other contracts for design and development of the Project, any and all other documents, instruments and agreements, including any payment and performance bonds, whether now or hereafter existing, relating to the design, development, construction, renovation, installation and equipping of the Project, pursuant to an Assignment of Contracts dated as of November 1, 2019 from the Corporation to the Master Trustee. See Appendix D – “FORMS OF PRINCIPAL BOND DOCUMENTS – Assignment of Contracts” attached hereto.

Pursuant to the Master Indenture, the Corporation will grant to the Master Trustee a security interest in its Pledged Assets as security for the payment of amounts due on any Obligations issued thereunder, including Obligation No. 1. Pledged Assets consist of all Gross Receipts, Accounts, general intangibles, inventory, documents, instruments and chattel paper of each Member of the Obligated Group, now owned or hereafter acquired, and all proceeds thereof; provided, however, that Pledged Assets shall not include contract rights consisting of charitable pledges.

The security interest in the Pledged Assets will be perfected to the extent, and only to the extent, that such security interest may be perfected by filing financing statements under the UCC. Continuation statements with respect to such filings must be filed as required by law to continue the perfection of such security interest. The security interest in the Pledged Assets is subject to Permitted Liens that exist prior to or that may be created subsequent to the time the security interest in the Pledged Assets attaches.

Bankruptcy

Title 11 of the United States Code (the “Bankruptcy Code”) permits a bankruptcy court to modify the rights of a creditor holding a secured claim under certain circumstances. In the event of a bankruptcy proceeding involving the Corporation or any other Member of the Obligated Group, by virtue of the Master Indenture, the Master Trustee should be treated under the Bankruptcy Code as one holding a secured claim to the extent provided in the Master Indenture.

The potential effects of bankruptcy of the Corporation or any other Member of the Obligated Group could be, among other things, (1) to delay enforcement of remedies otherwise available to the Master Trustee and allow the bankruptcy court, under certain circumstances, to substitute other assets of the Corporation or any other Member of the Obligated Group for collateral under the Master Indenture or the Assignment of Contracts, (2) to sell all or part of the collateral under the Master Indenture or the Assignment of Contracts without application of the proceeds to the payment of the Obligations, including Obligation No. 1, (3) to subordinate the rights and liens created by the Master Indenture and the Assignment of Contracts to liens securing borrowing approved by the bankruptcy court, (4) to permit the Corporation or any other Member of the Obligated Group to cure defaults and reinstate the Master Indenture and the Assignment of Contracts, (5) to compel release of the Assignment of Contracts or termination of the Master Indenture by payment of an amount determined by the bankruptcy court to be the value of the collateral thereunder (even though less than the total of the Obligations thereunder) or (6) to modify the terms of or payments due under the Obligations, including Obligation No. 1.

For additional detail, reference is made to the Bankruptcy Code, 11 U.S.C. 101 et seq.

The Holder Representative

By purchasing the Bonds, the initial purchasers thereof will appoint BB&T Capital Markets, division of BB&T Securities, LLC, and HJS Advisors, Inc., an affiliate of the Underwriter, as the initial “Holder Representative.” The Holder Representative has certain rights relating to the Bonds, the use of the proceeds therefrom, and the development of the Project which are contained in Supplement No. 1, the Trust Agreement, and

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the Assignment of Contracts including but not limited to (i) the right to approve requests from the Corporation for disbursements from the Project Fund (as defined in the Trust Agreement), (ii) certain consent rights to other actions and requests of the Corporation under Supplement No. 1 and the Trust Agreement, (iii) the right to review certain of the Corporation’s financial statements and other books and records, and (iv) the right to develop the Project in place of the Corporation and its subsidiaries upon the occurrence of an event of default under the Trust Agreement or the Master Indenture

Under Supplement No. 1, the Holder Representative shall have the right to approve certain major decisions of the Corporation, including:

(a) Approval of all budgets and any modifications to same, and the establishment of any budgeted reserves;

(b) Transfers, including, among other things, a sale of the project site (except if Bonds are being fully repaid in connection therewith), or transfer of a majority of ownership or control in the Corporation, or a material modification, termination or surrender of all or any part of the Corporation’s ownership or in any licenses, permits or approvals relating to the Facility (as defined in the Loan Agreement);

(c) Material change of use, proposed use or request by the Corporation for a change in zoning of any portion of the real estate acquired or to be acquired with respect to the Facility;

(d) Retention or replacement, as applicable, of the Development Consultant, marketing consultant, the architect, or any contractor, engineer or other professional services provider for the Facility, or any material modification or termination of any agreements with any of the foregoing;

(e) Changes in material programs or services offered or to be offered to residents of the Facility;

(f) Approval of all forms of leases and sales contracts (other than residency agreements/sales contracts) for the independent living units that are executed on an approved form in accordance with the pricing schedule approved by the Holder Representative; and

(g) Approval of any contracts (or modification thereto) entered into between the Corporation or the Development Consultant, or any successor, or any entity affiliated with either relating to the operation of the Facility.

Pursuant to the terms of the Trust Agreement, the Holder Representative will act on behalf of the holders of the Bonds in exercising certain rights related to the Bonds and, except as expressly provided in the Trust Agreement, such holders shall have no right to exercise such rights, individually or otherwise, except through the Holder Representative. The Trust Agreement provides that the Holder Representative shall be deemed to be the holder of the Bonds for purposes of giving any consent or directions, including the pursuit of remedial actions contemplated under the Trust Agreement or exercising any voting rights given to holders of the Bonds under the Trust Agreement.

Pre-Development and Sales Milestones

Under Supplement No. 1, a series of pre-development objectives (“Pre-Development Milestones”) and sales objectives (“Sales Milestones,” and together with the Pre-Development Milestones, collectively, the “Milestones”) have been established representing major development events to be accomplished within the time indicated. These are set forth below:

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PRE-DEVELOPMENT AND SALES MILESTONE DUE DATE 1. Submit Step 1 to NC Department of Insurance*** 3 months after Effective Date** 2. Start taking Priority Deposits* 3 months after Effective Date 3. Complete Schematic Design 4 months after Effective Date 4. Begin Development Design 6 months after Effective Date 5. Submit Step 2 to NC Department of Insurance 7 months after Effective Date 6. Complete Development Design 10 months after Effective Date 7. Begin taking 10% Deposits* 12 months after Effective Date 8. Begin Construction Drawings 12 months after Effective Date 9. Achieve 40% Pre-Sales* 16 months after Effective Date 10. Achieve 60% Pre-Sales* 19 months after Effective Date 11. Complete Real Estate Due Diligence relating to PSA 20 months after Effective Date 12. Achieve 70% Pre-Sales* 20 months after Effective Date 13. GMP Execution 20 months after Effective Date ______* Indicates Sales Milestones; all other are Pre-Development Milestones. ** The Effective Date is November 1, 2019. *** Completed.

If the Corporation fails to achieve a Pre-Development Milestone or Sales Milestone within 60-days (the “Grace Period”) from the Due Date, then the Holder Representative may, at its election and upon notice to the Corporation no later than 5 days after the end of the Grace Period, require:

(a) that the Corporation provide a plan to remedy its failure to achieve the Milestone and otherwise overcome obstacles to achieving the issuance of the Permanent Bonds in an amount sufficient to allow for the repayment of the Bonds in full on or before the maturity date of the Bonds, or to overcome obstacles to achieving the issuance of the Permanent Bonds; or

(b) that (i) the Corporation shall cause the Parent to terminate the Development Services Agreement and the Corporation shall cause the Parent to replace the Development Consultant with a consultant reasonably recommended by the Holder Representative and approved by the Parent, also acting reasonably, or (ii) as it relates to the Sales Milestone, terminate the Marketing Agreement and replace the Marketing Consultant with a consultant reasonably recommended by the Holder Representative and approved by the Corporation, also acting reasonably or (iii) the Corporation terminate any agreement with any applicable consultant and replace Consultant with a reasonable recommendation by the Holder Representative and approved by the Corporation, also acting reasonably.

If the Corporation fails to comply with the requirements of the Holder Representative under clauses (a) and/or (b) above, as applicable, the Holder Representative shall have the discretion to approve disbursements from the Project Fund and, if the Holder Representative shall so elect, notify the Corporation and the Bond Trustee that it will not approve any portion of or all of one or more future requisitions from the Project Fund.

Notwithstanding the foregoing paragraph, if within 5 days after the notice from the Holder Representative that the Corporation or Parent shall terminate and replace the Development Consultant, Marketing Consultant or any other applicable consultant, the Corporation provides a notice to the Holder Representative intends to provide a written report prepared by a qualified, independent consultant reasonably acceptable to the Holder Representative stating that the failure of the Corporation to comply with the required Pre-Development Milestone or Sales Milestone was (1) primarily due to factors outside the control of the Corporation, or (2) that replacing the Development Consultant, Marketing Consultant or other consultant, respectively, is not likely to improve the ability of the Corporation to comply with such required Pre-Development Milestone or Sales Milestone, the Holder Representative shall have 5 days to approve or disapprove of the independent consultant chosen by the Corporation. If the Holder Representative disapproves of the independent consultant, the Corporation may nevertheless use such independent consultant if 66.6 percent of the actual owners of the Bonds approve of such consultant. Such approval must be received within 5 days after the initial disapproval by the Holder Representative. If approval is given by

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either the Holder Representative or 66.6 percent of the actual owners of the Bonds, such written report must contain sufficient detail to support the conclusions made therein and be delivered within the next 60 days. If such report is not delivered within the next 60 days, the Development Consultant, Marketing Consultant or other consultant shall be terminated promptly thereafter. If the Holder Representative and at least 33.5 percent of the actual owners of the Bonds disapprove of the proposed independent consultant, the Development Consultant, Marketing Consultant or other consultant shall be terminated promptly after notice of such disapproval.

If the Corporation (i) in response to a demand from the Holder Representative pursuant to subsection (a) above provides the plan as required, or (ii) in response to a demand pursuant to subsection (b) above, (1) provides a report from an approved independent consultant that the replacement of the consultant(s) required to be removed would not be likely to improve the ability of the Corporation to comply with such required Pre-Development Milestone or Sales Milestone, or (2) with respect to any consultant(s) required to be removed for which no report is given, replace such consultant(s) with consultant(s) recommended by the Holder Representative and approved by the Corporation, the Corporation will be permitted to obtain further disbursements from the Project Fund as though the failure to meet the Milestone(s) had not occurred.

Notwithstanding anything in Section 4 to Appendix B of Supplemental No. 1 to the contrary, if an event of default occurs under Section 6(c) of Appendix B of Supplemental No. 1 or in the Related Trust Agreement, in addition to exercising its right to cause an Event of Default under the Master Indenture, the Holder Representative shall have the right to continue to (a) obligate the Corporation to comply with Section 4 of Appendix B of Supplemental No. 1, including but not limited to the authority to approve any and all future requisitions from the Project Fund and (b) direct the Master Trustee to assign it all documents under the Assignment of Contracts and then develop the Project in place of the Corporation and its subsidiaries to the extent permitted under the contracts so assigned.

Reports

Pursuant to Supplement No. 1, the Corporation will provide to the Holder Representative the following information, which shall be furnished to the beneficial owners of the Bonds upon request:

(a) Within 15 days of the end of each month, monthly sales and marketing reports, including, at a minimum: reservations received, contracts signed, visits, waiting list, and marketing office activity;

(b) Within 30 days of the end of each month, monthly and year-to-date statements of income and development expenses comparing such expenses to the Pre-Construction Budget;

(c) Within 150 days of the end of each Fiscal Year, unaudited annual financial statements the Corporation (which shall include schedules showing, in a separate column, the balance sheet and statement of operations for the Corporation);

(d) Within 30 days of the end of each fiscal quarter, quarterly narrative and statistical assessment of progress of the pre-development of the Facility in achieving Milestones; and

(e) Notification of failure to achieve any Milestones within 15 days of the date such Milestone should have been met pursuant to Section 4 of Appendix B of the Supplemental Indenture.

(f) Six months after the Effective Date (hereinafter defined), updated internally prepared financial model that is based off schematic design pricing;

(g) Twelve months after the Effective Date, updated internally prepared financial model that incorporates final design drawings;

(h) Prompt notice of receipt of construction permit letter;

(i) Prompt notice of receipt of the closed Certificate of Need;

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(j) Prompt notice of any amendment to the Project Documents or any proposed material change to the Corporation’s development plan for the Facility; and

(k) Prompt notice if the Corporation plans to delay or abandon development of the Facility or is seriously considering such actions.

ESTIMATED SOURCES AND USES OF FUNDS

The estimated sources and uses of funds* in connection with the issuance of the Bonds are as follows:

Sources: (1) Par Amount of the Bonds $13,000,000 Less Original Issue Discount (5,510,700) Equity Contribution 670,514 Total $8,159,814

Uses: (1) Land Related Costs $650,000 Indirect Construction and Technology 118,941 Design and Engineering 2,644,877 Zoning, Legal and Consultants 619,926 Marketing Costs 2,583,150 Project Management 542,620 Project Contingency 180,000 Financing and Issuance Costs(2) 820,300 Total $8,159,814 ______* Preliminary, subject to change

(1) Amounts are rounded to the nearest dollar. (2) Includes Underwriter’s discount, legal fees, accounting fees, printing costs, fees and expenses of the Bond Trustee and the Master Trustee and other miscellaneous fees and expenses related to the issuance and sale of the Bonds. See the section herein “UNDERWRITING.”

[Remainder of Page Intentionally Left Blank]

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RISK FACTORS

THIS LIMITED OFFERING MEMORANDUM SHOULD BE READ IN ITS ENTIRETY FOR AN UNDERSTANDING OF THE RISKS THAT MAY BE ASSOCIATED WITH OWNERSHIP OF THE BONDS. SET FORTH UNDER THIS HEADING IS A BRIEF SUMMARY OF SELECTED FACTORS THAT MAY BE OF PARTICULAR SIGNIFICANCE TO AN INVESTOR IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE BONDS. SUCH FACTORS ARE NOT INTENDED TO BE AN EXCLUSIVE LIST OF ALL FACTORS WHICH MAY BE MATERIAL TO SUCH DECISION.

AN INVESTMENT IN THE BONDS IS HIGHLY SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. BONDS SHOULD NOT BE PURCHASED BY ANY PERSON WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. PURCHASERS SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AS WELL AS THE OTHER INFORMATION IN THE LIMITED OFFERING MEMORANDUM WHEN EVALUATING WHETHER TO MAKE AN INVESTMENT IN THE BONDS. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY RISKS ASSOCIATED WITH AN INVESTMENT IN THE BONDS. PROSPECTIVE PURCHASERS SHOULD CONSULT WITH THEIR OWN LEGAL, TAX AND FINANCIAL ADVISORS ABOUT AN INVESTMENT IN THE BONDS. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, THE RETURN ON AN INVESTMENT IN THE BONDS COULD BE MATERIALLY AND ADVERSELY AFFECTED AND INVESTORS IN THE BONDS COULD LOSE ALL OR PART OF THEIR INVESTMENTS IN THE BONDS.

LEGAL COUNSEL TO THE CORPORATION, THE AUTHORITY, AND THE UNDERWRITERS DO NOT REPRESENT POTENTIAL INVESTORS IN THE BONDS, AND SUCH INVESTORS MUST RELY UPON THEIR OWN LEGAL, TAX AND FINANCIAL ADVISORS WHEN EVALUATING AN INVESTMENT IN THE BONDS.

No Assurance that the Permanent Bonds Will Be Issued to Repay Bonds

Investment in the Bonds should be considered highly speculative in nature and involves a substantial degree of risk. Payment of the principal of the Bonds is dependent upon the availability of sufficient moneys from the Permanent Bonds upon issuance thereof, or other long-term financing for the Project. No assurance can be given that the Permanent Bonds will be issued or that other long-term financing will be obtained, or that the Permanent Bonds will be issued or such long-term financing obtained in time to repay the Bonds prior to their Maturity Date. As of the date hereof, the Corporation does not intend to obtain any long-term financing other than the Permanent Bonds. Factors that could adversely affect the Project and delay (or prevent) the issuance of the Permanent Bonds or other long-term financing include, but are not limited to, factors described under this “RISK FACTORS” heading. The Authority’s issuance of the Bonds does not constitute an explicit or implicit undertaking by the Authority to, or representation or promise by the Authority that it will, issue Permanent Bonds in an amount sufficient to provide replacement financing or at all. The determination by the Authority of whether to issue Permanent Bonds, if and when requested to do so by the Corporation, shall remain in the absolute and exclusive discretion of the Authority.

No Real Estate Securing the Bonds; Inadequacy of Security

The Bonds are not secured by any real estate (other than any rights granted in the Purchase Agreement). The collateral securing the Bonds may have limited value or no value if an Event of Default occurs, and no assurance can be given that any significant amount of funds will be realized by the exercise of remedies available to the Master Trustee.

Although the Bonds and Obligation No. 1 are secured by the Master Indenture and the Assignment of Contracts, the amount that may be realized in the event of a default is not expected to be sufficient to pay the Bonds and the then outstanding balance of Obligation No.1 in full. Accordingly, if the Permanent Bonds are not issued (and no assurance can be given that the Permanent Bonds can or will be issued), the Bonds may not be repaid in full.

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Moreover, the obligation of the Corporation to pay the Bonds may be limited by the following: (i) constructive trusts, equitable liens or other rights impressed or conferred by any state or federal court in the exercise of its equitable jurisdiction; (ii) federal bankruptcy or insolvency proceedings by or against the Project; (iii) rights of third parties in any revenues, including revenues converted to cash, not in possession of the Bond Trustee or the Master Trustee; and (iv) the requirement that appropriate continuation statements be filed in accordance with the North Carolina Uniform Commercial Code.

No Feasibility Study of the Project or the Bonds Has Been Conducted

No feasibility study related to the Project and the ability of such Project to support the issuance and repayment of the Bonds has been conducted by any party. Although the Marketability Consultant has completed a Market Study of the Project which is described herein, such study does not constitute a feasibility study. If such a feasibility study is performed as a prerequisite to the issuance of the Permanent Bonds, such study may determine that assumptions that have been made with respect to the Project are incorrect or incomplete. See “SHORT STATEMENT – The Market Study” herein.

Management’s Compilation of a Financial Projection

Management’s projected financial statements included in the Financial Projection attached as Appendix B hereto were compiled by CliftonLarsonAllen LLP, independent certified public accountants, and are based upon assumptions made by the management of the Corporation. As stated in the Financial Projection, there will usually be differences between the projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. CliftonLarsonAllen LLP did not audit or review management’s projection nor did such firm perform any procedures to verify the accuracy or completeness of management’s information. Appendix B should be read in its entirety.

BECAUSE THERE IS NO ASSURANCE THAT ACTUAL EVENTS WILL CORRESPOND WITH THE ASSUMPTIONS MADE, NO GUARANTEE CAN BE MADE THAT MANAGEMENT’S PROJECTION WILL CORRESPOND WITH THE RESULTS ACTUALLY ACHIEVED IN THE FUTURE. ACTUAL OPERATING RESULTS MAY BE AFFECTED BY MANY UNCONTROLLABLE FACTORS, INCLUDING BUT NOT LIMITED TO FAILURE BY MANAGEMENT TO EXECUTE ITS PLANS, INCREASED COSTS, LOWER THAN ANTICIPATED REVENUES, EMPLOYEE RELATIONS, TAXES, GOVERNMENTAL CONTROLS, CHANGES IN APPLICABLE GOVERNMENTAL REGULATION, CHANGES IN DEMOGRAPHIC TRENDS, CHANGES IN THE RETIREMENT LIVING AND HEALTH CARE INDUSTRIES, AND GENERAL ECONOMIC CONDITIONS.

The Dependence on a Significant Number of Non-Jewish Residents in a Jewish – Focused Community

In its initial response to a request for proposals, the Marketing Consultant identified challenges with attracting and retaining non-Jewish residents to the Project. The Project may require a significant number of non- Jewish residents to be successful. The Corporation believes that the Project will be able to attract and retain non- Jewish residents to the Project in line with its Business Plan, however, if indeed the Project needs to attract non- Jewish residents and is unable to do so, the Corporation may not be able to secure to Permanent Financing.

Limited Market for the Bonds

No ratings have been requested for the Bonds. The absence of a rating adversely affects the market for Bonds. Although the Underwriters intend to create and maintain a secondary market for the purchase and sale of Bonds, there can be no assurance that there will always be a secondary market for purchase or sale of Bonds. From time to time there may be no market for the Bonds depending upon prevailing market conditions, the financial condition or market position of the firm or firms who may make the secondary market and the financial condition and results of operations of the Corporation. The Bonds should therefore be considered long-term investments in which funds are committed to maturity. The Trust Agreement also requires that future purchasers of the Bonds that are Accredited Investors to deliver an investment letter in the form attached hereto as Appendix H.

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Risks Related to the Purchase Agreement

The Project will be built on property currently owned by the Temple and the Foundation (collectively, the “Sellers”). During construction and operation of the Project, the Temple and the Foundation will have certain contractual rights with respect to the Project, including the right to approve the final design of the Project. The Corporation, the Foundation and the Temple will enter into agreements for (i) compensation paid for programming and membership, (ii) an easement and cost sharing agreement providing for easements for ingress, egress, utilities, stormwater drainage, and parking and to provide for the sharing of costs related to the maintenance, repair, replacement, and insurance of shared portions of the property, and (iii) a memorandum of repurchase rights providing for the Temple’s and the Foundation’s right of first refusal for the property and providing that the Temple and Foundation have the right to repurchase the property in the event the Corporation defaults on the permanent financing.

The property is currently subject to the terms of a joint venture agreement and Title Restrictions that do not permit the Project to be developed as a “Life Plan Community.” The Corporation has been working with the Sellers and the title company to obtain a release of the Title Restrictions under an Agreement to Release and Terminate Terms, Conditions, Restrictions and Reversionary Rights with seller und the Purchase Agreement and certain related parties (“Release and Termination Agreement”). To date, the Release and Termination Agreement has been signed by 4 of the 5 entities (or their successors) that were beneficiaries to the Title Restrictions. The Sellers have indicated that the 5th entity is a non-profit corporation that has been inactive for approximately 25 years and has not filed any reports with the North Carolina Secretary of State’s Office since its original incorporation filing in 1970. The Corporation is currently pursuing solutions with the Sellers and the title company with regard to the 5th entity.

The success of the Project may depend, in part, on the continued good relations between the Corporation, the Temple and the Foundation. No assurances can be made about the future relations between these entities.

Scope of Project

There are many factors beyond the control of the Corporation or the Authority that could occur, including but not limited to, the inability to achieve the required level of interest in the reservation of units, competition from other newly constructed CCRCs, the state of the capital markets at the time the Permanent Bonds are proposed to be issued and other national and local economic conditions, any of which could have a material impact on the ability of the Permanent Bonds to be issued in the amounts necessary to finance the repayment of the Bonds and finance the construction of the phase of the Project as currently planned. Although it is not possible to predict at this time what course of action the Corporation would take under such circumstances, a modification to the plan and scope of the development of the Project would be one option that could be considered.

Tax-Exempt Market Conditions

Increases in market interest rates for tax-exempt obligations, or other factors adversely affecting the market for tax-exempt obligations generally, may affect the ability of the Authority (at the Corporation’s request) to issue the Permanent Bonds on terms acceptable to the Corporation or at all. Market conditions have recently been uncertain and volatile, and have resulted in some projects being postponed in the hope that more favorable conditions – greater market demand and more favorable interest rates – will exist in the future.

Failure to Meet Pre-Development Milestones or Sales Milestones

The Project may fail to meet the Pre-Development Milestones or the Sales Milestones described above under “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS.” While this covenant is intended to require the Corporation to take corrective action in the event of certain delays with respect to the pre-development of the Project, no assurance can be given that such corrective action, if required, will be successful. Failure to meet Pre- Development Milestones or Sales Milestones may also adversely affect the ability of the Corporation, through the Authority (or another qualified governmental issuer agreeing to issue the Bonds), to obtain issuance of the Permanent Bonds. If an Event of Default occurs under the Master Indenture, an Event of Default also will occur

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under the Trust Agreement and the Bond Trustee may declare the principal of the Bonds to be immediately due and payable.

Permits

Failure to obtain the permits required for construction and operation of the Project on a timely basis, in accordance with the schedule set forth in the list of Pre-Development Milestones, will delay the ability of the Corporation to obtain long-term financing for the Project, including the Permanent Bonds or other long-term financing. If such delays are material, it may adversely affect the marketability of the Permanent Bonds or other financing. See Appendix A – “CERTAIN INFORMATION CONCERNING THE PROJECT – THE PROJECT – Permits and Approvals” attached hereto.

Housing Demand

Lack of market demand for retirement housing in the area to be served by the Project, as a result of which insufficient deposits are collected from prospective residents to meet the requirements for receipt of an underwriting commitment on the Permanent Bonds may delay or prevent the issuance of the Bonds, or affect the terms upon which the Permanent Bonds are issued.

Additionally, to the extent that demand for housing in general decreases in the PMA for the Project, the ability of local potential residents to sell their primary residence to finance the payment of entrance fees may be adversely affected.

Construction Costs

Increases in construction costs or other costs of the Project, which may adversely affect the financial feasibility of the Project may affect the ability of the Corporation to obtain long-term financing for the Project, including the Permanent Bonds or other long-term financing.

Regulation Affecting Construction and Financing

The introduction of legislation adversely affecting the construction or financing of projects such as the Project may delay or prevent the issuance of the Bonds, or affect the terms upon which the Bonds are issued.

Corporation’s Lack of Operating History; Need to Market Units

The Corporation has no assets other than those financed by, or pledged as collateral for, the Bonds and will have no revenues (except those derived from deposits from prospective residents which are held in escrow, and will not be available for repayment of the Bonds). As a practical matter, the Bonds will be payable solely from the proceeds of the Permanent Bonds or other financing the Corporation may be able to arrange. The availability of financing in the amounts necessary to pay the Bonds will be dependent on continued progress in the development of the Project and the Corporation’s ability to obtain sufficient deposits for residential units in the Project to demonstrate viability of the Project. Typically, pre-sales of 70% of the residential units are required to obtain construction financing. The realization of these goals is dependent upon, among other things, the capabilities of management of the Corporation and its agents, advisors and consultants, future state and federal funding of health care reimbursement programs, and future economic and other conditions that are unpredictable. Any of these factors may affect payment of debt service on the Bonds. No assurance can be given that long-term financing will be arranged by the Corporation in amounts sufficient to make the required payments with respect to debt service on the Bonds.

Competition

The Project is located in an area where competitive facilities exists and may face additional competition in the future as a result of the construction of new facilities in the area. There may also arise in the future competition

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from other forms of housing for the elderly or continuing care facilities, some of which may be designed to offer similar facilities at lower prices.

Possible Limitations of Certain Remedies Upon Bankruptcy

The remedies granted to the Master Trustee upon an Event of Default under the Master Indenture and the Assignment of Contracts may be dependent upon judicial actions, which are often subject to discretion and delay. Under existing law, the remedies specified therein may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the provisions of the various financing documents, by limitations imposed by state and federal laws, rulings and decisions affecting remedies and by bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the rights of creditors generally.

If the Corporation were to file a petition for relief under Chapter 11 of the Federal Bankruptcy Code, its revenues and certain of its accounts receivable and other property acquired after the filing may not be subject to the security interests created under the Master Indenture. The filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the Corporation and its property and as an automatic stay of any act or proceeding to enforce a lien upon its property. If the bankruptcy court so ordered, the Corporation’s property, including its accounts receivable and proceeds thereof, may be used for the benefit of the Corporation despite the security interest of the Master Trustee and the holders of the Bonds, provided that “adequate protection” is given to the lienholder.

In a bankruptcy proceeding, the petitioner may file a plan for the adjustment of its debts which modifies the rights of creditors generally, or any class of creditors, secured or unsecured. The plan, when confirmed by the court, binds all creditors who had notice or knowledge of the plan and discharges all claims against the debtor provided for in the plan. No plan may be confirmed unless, among other conditions, the plan is in the best interests of creditors, is feasible and has been accepted by each class of claims impaired thereunder. Each class of claims has accepted the plan if at least two-thirds in dollar amount and more than one-half in number of the allowed claims of the class that are voted with respect to the plan are cast in its favor. Even if the plan is not so accepted, it may be confirmed if the court finds that the plan is fair and equitable with respect to each class of non-accepting creditors impaired thereunder and does not discriminate unfairly in favor of junior creditors.

Budgeted Development and Operations Costs May Prove Insufficient

Budgets for the Project, including budgeted real estate taxes, insurance expenses, and other related costs, include assumptions made by the Corporation with respect to the likely treatment of the project site property for real estate tax purposes and the likely costs of insurance and other costs that will be incurred with respect to the Project. Such assumptions and projections could prove, in whole or in part, to be inaccurate and there may be differences between budgeted expenses and the actual expenses of the Project, and those differences may be material.

Amounts Held under the Liquidity Account Are Not Pledged to Bondholders

Bondholders have no rights in any amounts held under the Liquidity Account.

Liquidity Support Agreement May be Required for Issuance of Permanent Bonds, and No Liquidity Support Provider Has Been Identified

Under current market conditions, the Liquidity Support Agreement is required by the Underwriters to provide credit support for the Project. While the Corporation does not know what future market conditions will require when the Permanent Bonds are issued or when other replacement financing for the Project is obtained, including whether or not a new liquidity support agreement (“LSA”) will be required, a LSA requirement for the Permanent Bonds has been assumed and has been taken into consideration in determining the budget of the Project. A potential liquidity source has not yet been identified for any needed LSA. Absent a liquidity source, it may be impossible for the Permanent Bonds to be issued or for any other financing to be obtained for the Project, and to repay the Bonds.

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Termination of Reservation Agreements and Refunds

Pursuant to Article 64 of Chapter 58 of the North Carolina General Statutes (the “CCRC Act”), potential residents may terminate their respective Reservation Agreements or Residency Agreements prior to occupancy with limited penalties and, in some instances, with no penalties at all. Accordingly, no assurance can be made at any time, regardless of the expressions of interest received by the Corporation or the number of actual Reservation Agreements entered into from time to time, that necessary reservation levels (after taking into account any resident terminations) will be sufficient to support issuance of the Permanent Bonds in accordance with the schedule currently contemplated for the Project.

Environmental Matters

A Phase I Environmental Site Assessment (the “Environmental Assessment”) was prepared for the Project Site on September 3, 2019 by an engineering company. Although three underground storage tanks were found on the Property, Environmental Assessment concluded that there were no recognized environmental conditions in association with the Property. However, plans are currently in motion to remove the underground storage tanks. There can be no assurances that additional environmental conditions are subsequently discovered on the Property.

Federal Tax Related Risks

Possible Changes in Tax Status. The possible modification or repeal of certain existing federal income or state tax laws or other loss by the Corporation of the present advantages of certain provisions of the federal income or state tax laws could materially and adversely affect the status of the Corporation and thereby the revenues of the Corporation. The Corporation has obtained a determination letter from the Internal Revenue Service to the effect that the Corporation is exempt from federal income taxation under Section 501(a) of the Code by virtue of being an organization described in Section 501(c)(3) of the Code. As an exempt organization, the Corporation is subject to a number of requirements affecting its operation. The failure of the Corporation to remain qualified as an exempt organization would affect the funds available to the Corporation for payments to be made pursuant to the Loan Agreement and Obligation No. 1. Failure of the Corporation or the Authority to comply with certain requirements of the Code, or adoption of amendments to the Code to restrict the use of tax-exempt bonds for facilities such as those being financed with Bond proceeds, could cause interest on the Bonds to be included in the gross income of holders of the Bonds or former holders of the Bonds for federal income tax purposes.

It is not possible to predict the scope or effect of future legislative or regulatory actions with respect to taxation of charitable organizations. There can be, however, no assurance that future changes in the laws and regulations of the federal, state or local governments will not materially and adversely affect the operations and revenues of the Corporation by requiring it to pay income taxes.

The Bonds are intended to be repaid from proceeds of the Permanent Bonds, which cannot be issued unless the Corporation continues to be an organization described in Section 501(c)(3) of the Code.

Intermediate Sanctions. Section 4958 of the Code provides the Internal Revenue Service with an “intermediate” tax enforcement tool to combat violations by tax-exempt organizations of the private inurement prohibition of the Code. Previous to the “intermediate sanctions law,” the Internal Revenue Service could punish such violations only through revocation of an entity’s tax-exempt status. Intermediate sanctions may be imposed where there is an “excess benefit transaction,” defined to include a disqualified person (i.e., a director, officer or other related party) (1) engaging in a non-fair market value transaction with the tax-exempt organization; (2) receiving excessive compensation from the tax-exempt organization; or (3) receiving payment in an arrangement that violates the private inurement proscription. A disqualified person who benefits from an excess benefit transaction will be subject to a “first tier” penalty excise tax equal to 25% of the amount of the excess benefit. Organizational managers who participate in an excess benefit transaction knowing it to be improper are subject to a first-tier penalty excise tax of 10% of the amount of the excess benefit, subject to a maximum penalty of $10,000. A “second tier” penalty excise tax of 200% of the amount of the excess benefit may be imposed on the disqualified person (but not the organizational manager) if the excess benefit transaction is not corrected in a specified time period.

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Bond Audit. Internal Revenue Service officials have stated that more resources will be allocated to audits of tax-exempt bonds in the charitable organization sector. The Bonds may be subject to audit, from time to time, by the Internal Revenue Service. The Corporation believes that the Bonds properly comply with applicable tax laws and regulations. In addition, Bond Counsel will render an opinion with respect to the tax-exempt status of the Bonds, as described under the heading “TAX TREATMENT.” No ruling with respect to the tax-exempt status of the Bonds has been or will be sought from the Internal Revenue Service, however, and opinions of counsel are not binding on the Internal Revenue Service or the courts, and are not guarantees. There can be no assurance, therefore, that an audit of the Bonds will not adversely affect the Bonds.

Other Tax Status Issues. The Internal Revenue Service has also issued Revenue Rulings dealing specifically with the manner in which a facility providing residential services to the elderly must operate in order to maintain its exemption under Section 501(c)(3). Revenue Rulings 61-72 and 72-124 hold that, if otherwise qualified, a facility providing residential services to the elderly is exempt under Section 501(c)(3) if the organization (1) is dedicated to providing, and in fact provides or otherwise makes available services for, care and housing to aged individuals who otherwise would be unable to provide for themselves without hardship, (2) to the extent of its financial ability, renders services to all or a reasonable proportion of its residents at substantially below actual cost, and (3) renders services that minister to the needs of the elderly and relieve hardship or distress. Revenue Ruling 79- 18 holds that a facility providing residential services to the elderly may admit only those tenants who are able to pay full rental charges, provided that those charges are set at a level that is within the financial reach of a significant segment of the Project’s elderly persons, and that the organization is committed by established policy to maintaining persons as residents, even if they become unable to pay the monthly charges after being admitted to the facility.

Loss on Sale of a Bond. There can be no assurance that upon a sale of a Bond prior to maturity a holder will be able to realize an amount equal to the principal amount of the Bond. If the amount realized is less than the principal amount of the Bond plus accrued interest, the holder may realize a capital loss. Non-corporate holders generally can deduct capital losses only to the extent of the holder’s capital gains for the taxable year (plus $3,000 in the case of individuals). Any excess capital losses can be carried forward to subsequent taxable years and deducted subject to this limitation. Different limitations apply to corporate holders and special rules apply if the Bonds were treated as contingent debt obligations.

Changes in Tax Law. There can be no assurance that there will not be adverse changes in the Code or in the administrative or judicial interpretations thereof during the period the Bonds are outstanding that would materially and adversely affect the United States federal income tax consequences of an investment in the Bonds. In addition, it is expected that the Authority (or another qualified governmental issuer agreeing to issue the Permanent Bonds) will issue the Permanent Bonds on a tax-exempt basis. There can be no assurances given that at the time the Permanent Bonds are issued that such issuer will have the ability under then-current federal income tax law to issue the Permanent Bonds whereby the interest thereon would be excludable from gross income for federal income tax purposes. The inability to issue the Permanent Bonds on a tax-exempt basis would have a material impact on the feasibility and terms of financing the Project.

THE “TAX TREATMENT” SECTION OF THIS LIMITED OFFERING MEMORANDUM SHOULD BE CAREFULLY READ BY THE INVESTOR FOR A MORE COMPLETE UNDERSTANDING OF THE TAX RISKS INVOLVED IN THIS TRANSACTION. THE INVESTOR SHOULD ALSO CONSULT WITH THE INVESTOR’S PERSONAL TAX ADVISER TO DETERMINE THE TAX CONSEQUENCES OF AN INVESTMENT IN THE BONDS, AND TO EVALUATE AND RELATE THE INFORMATION CONTAINED HEREIN TO THE INVESTOR’S INDIVIDUAL TAX POSITION AND INVESTMENT OBJECTIVES. NO REPRESENTATION OR WARRANTY OF ANY KIND IS MADE WITH RESPECT TO THE TAX CONSEQUENCES TO AN INVESTOR OF AN INVESTMENT IN THE BONDS.

CONTINUING DISCLOSURE

To permit the Underwriters to comply with Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange Commission (the “SEC”), the Corporation will execute and deliver a Continuing Disclosure Certificate to cause certain information about the Corporation and the Project to be provided. The form of the Continuing Disclosure Certificate has been included as Appendix F hereto.

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Under the Continuing Disclosure Certificate, only the Corporation is providing continuing disclosure to bondholders including Operating and Financial Data and Events Notices. Neither the Authority nor the Underwriters have any obligations with respect to the Continuing Disclosure Certificate. The Corporation not been previously subject to the Rule.

LITIGATION

The Authority

From time to time, the Authority receives inquiries and requests for documents and information pertaining to unrelated bond issues from various regulatory agencies, including the Securities & Exchange Commission, and in connection with audits by the Internal Revenue Service. To the Authority’s knowledge, as of the date of this Limited Offering Memorandum, there is not pending or threatened any litigation restraining or enjoining the issuance or delivery of the Bonds or questioning or affecting the validity of the Bonds or the proceedings or authority under which they are to be issued or which in any manner questions the right of the Authority to enter into the Trust Agreement or the Loan Agreement, or to secure the Bonds in the manner provided therein.

The Corporation

No action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body is pending or, to the best knowledge of the Corporation, threatened against or affecting the Corporation wherein an unfavorable decision, ruling or finding would have a material adverse effect on the financial condition of the Corporation or would adversely affect (1) the transactions contemplated by, or the validity or enforceability of, the Bonds, the Trust Agreement, the Loan Agreement, the Master Indenture or Obligation No. 1, or described in this Limited Offering Memorandum, or (2) the tax-exempt status of interest on the Bonds.

UNDERWRITING

Pursuant to a contract of purchase (the “Bond Purchase Agreement”) among the Underwriters, the Authority and the Corporation, the Underwriters will purchase the Bonds at a purchase price equal to the aggregate principal amount of the Bonds less original issue discount of $______. The Underwriters will be paid a fee of $______. The Bond Purchase Agreement provides that the Underwriters will purchase all of the Bonds.

The obligation of the Underwriters to pay for the Bonds is subject to certain terms and conditions set forth in the Purchase Agreement, including specified opinions of counsel and a certificate of the Corporation that there has been no material adverse change in its condition (financial or otherwise) from that set forth in this Limited Offering Memorandum. The Corporation has agreed in the Purchase Agreement to indemnify the Underwriters and the Authority against certain liabilities relating to this Limited Offering Memorandum.

LEGAL MATTERS

Legal matters incident to the authorization and validity of the Bonds are subject to the approving opinion of Parker Poe Adams & Bernstein LLP, Raleigh, North Carolina, Bond Counsel. The proposed form of such opinion is contained in Appendix E. Certain legal matters will be passed on for the Corporation by Parker Poe Adams & Bernstein LLP, Raleigh, North Carolina, and for the Underwriters by Butler Snow LLP, Atlanta, Georgia.

TAX TREATMENT

General

On the date of issuance of the Bonds, Parker Poe Adams & Bernstein LLP (“Bond Counsel”) will render an opinion that, under existing law and assuming compliance by the Authority and the Corporation with certain provisions of the Internal Revenue Code of 1986, as amended (the “Code”), (1) interest on the Bonds (a) is excludable from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes

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of the federal alternative minimum tax and (2) interest on the Bonds is not exempt from State of North Carolina or State of Wisconsin income taxation.

The Code imposes various restrictions, conditions and requirements relating to the exclusion of interest on obligations, such as the Bonds, from gross income for federal income tax purposes, including, but not limited to, the requirement that the Authority rebate certain excess earnings on proceeds and amounts treated as proceeds of the Bonds to the United States Treasury, restrictions on the investment of such proceeds and other amounts, and restrictions on the ownership and use of the facilities financed or refinanced with proceeds of the Bonds. The foregoing is not intended to be an exhaustive listing of the post-issuance tax compliance requirements of the Code, but is illustrative of the requirements that must be satisfied by the Authority and the Corporation subsequent to issuance of the Bonds to maintain the excludability of the interest on the Bonds from gross income for federal income tax purposes. Bond Counsel’s opinion is given in reliance on certifications by representatives of the Authority and the Corporation as to certain facts material to the opinion and the requirements of the Code.

The Authority and the Corporation have covenanted to comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that the interest on the Bonds be, or continue to be, excludable from gross income for federal income tax purposes. The opinion of Bond Counsel assumes compliance by the Authority and the Corporation with such covenants, and Bond Counsel has not been retained to monitor compliance by the Authority or the Corporation with such covenants subsequent to the date of issuance of the Bonds. Failure to comply with certain of such requirements may cause the interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. No other opinion is expressed by Bond Counsel regarding the federal tax consequences of the ownership of or the receipt or accrual of interest with respect to the Bonds.

If the interest on the Bonds subsequently becomes includable in gross income for federal income tax purposes due to a failure by the Authority or the Corporation to comply with any requirements described above, neither the Authority nor the Corporation is required to redeem the Bonds or to pay any additional interest or penalty.

The Internal Revenue Service has established an ongoing program to audit tax-exempt obligations to determine whether interest on such obligations is includable in gross income for federal income tax purposes. Bond Counsel cannot predict whether the Internal Revenue Service will commence an audit of the Bonds. Prospective purchasers and owners of the Bonds are advised that, if the Internal Revenue Service does audit the Bonds, under current Internal Revenue Service procedures, at least during the early stages of an audit, the Internal Revenue Service will treat the Authority as the taxpayer, and the owners of the Bonds may have limited rights, if any, to participate in such audit. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome.

Prospective purchasers of the Bonds should be aware that ownership of the Bonds and the accrual or receipt of interest on the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property or casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain Subchapter S Corporations with “excess net passive income,” foreign corporations subject to the branch profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Bond Counsel does not express any opinion as to any such collateral tax consequences. Prospective purchasers of the Bonds should consult their own tax advisors as to the collateral tax consequences.

Proposed legislation is considered from time to time by the United States Congress that, if enacted, would affect the tax consequences of owning the Bonds. No assurance can be given that any future legislation, or clarifications or amendments to the Code, if enacted into law, will not contain provisions which could cause the interest on the Bonds to be subject directly or indirectly to federal or state income taxation, adversely affect the market price or marketability of the Bonds or otherwise prevent the owners of the Bonds from realizing the full current benefit of the status of the interest on the Bonds.

Bond Counsel’s opinion is based on existing law, which is subject to change. Such opinion is further based on factual representations made to Bond Counsel as of the date thereof. Bond Counsel assumes no duty to update or supplement its opinion to reflect any facts or circumstances that may thereafter come to Bond Counsel’s attention, or

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to reflect any changes in law that may thereafter occur or become effective. Moreover, Bond Counsel’s opinion is not a guarantee of a particular result, and is not binding on the Internal Revenue Service or the courts; rather, such opinion represents Bond Counsel’s professional judgment based on its review of existing law, and in reliance on the representations and covenants that Bond Counsel deems relevant to such opinion. Bond Counsel’s opinion expresses the professional judgment of the attorneys rendering the opinion regarding the legal issues expressly addressed therein. By rendering its opinion, Bond Counsel does not become an insurer or guarantor of the result indicated by that expression of professional judgment, of the transaction on which the opinion is rendered, or of the future performance of the Authority or the Corporation, nor does the rendering of such opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

Original Issue Discount

As indicated on the cover page, the Bonds maturing on ______, 20______(the “OID Bonds”), are being sold at initial offering prices which are less than the principal amount payable at maturity. Under the Code, the difference between (a) the initial offering prices to the public (excluding bond houses and brokers) at which a substantial amount of each maturity of the OID Bonds is sold and (b) the principal amount payable at maturity of such OID Bonds, constitutes original issue discount treated as interest which will be excluded from the gross income of the owners of such OID Bonds for federal income tax purposes.

In the case of an owner of the OID Bond, the amount of original issue discount on such OID Bond is treated as having accrued daily over the term of such OID Bond on the basis of a constant yield compounded at the end of each accrual period and is added to the owner’s cost basis of such OID Bond in determining, for federal income tax purposes, the gain or loss upon the sale, redemption or other disposition of such OID Bond (including its sale, redemption or payment at maturity). Amounts received upon the sale, redemption or other disposition of an OID Bond which are attributable to accrued original issue discount on such OID Bonds will be treated as interest exempt from gross income, rather than as a taxable gain, for federal income tax purposes, and will not be a specific item of tax preference for purposes of the federal alternative minimum tax.

Original issue discount is treated as compounding semiannually (which yield is based on the initial public offering price of such OID Bond) at a rate determined by reference to the yield to maturity of each individual OID Bond. The amount treated as original issue discount on an OID Bond for a particular semiannual accrual period is equal to (a) the product of (i) the yield to maturity for such OID Bond (determined by compounding at the close of each accrual period) and (ii) the amount which would have been the tax basis of such OID Bond at the beginning of the particular accrual period if held by the original purchaser, less (b) the amount of interest payable on such OID Bond during the particular accrual period. The tax basis is determined by adding to the initial public offering price on such OID Bond the sum of the amounts which have been treated as original issue discount for such purposes during all prior accrual periods. If an OID Bond is sold between semiannual compounding dates, original issue discount which would have accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period.

The Code contains additional provisions relating to the accrual of original issue discount in the case of owners of the OID Bonds who subsequently purchase any OID Bonds after the initial offering or at a price difference from the initial offering price during the initial offering of the Bonds. Owners of OID Bonds should consult their own tax advisors with respect to the precise determination for federal and state income tax purposes of the amount of original issue discount accrued upon the sale, redemption or other disposition of an OID Bond as of any date and with respect to other federal, state and local tax consequences of owning and disposing of an OID Bond. It is possible that under the applicable provisions governing the determination of state or local taxes, accrued original issue discount on an OID Bond may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment attributable to such original issue discount until a later year.

Premium Bonds

As indicated on the cover page, the Bonds maturing on ____ 1, 20______(the “Premium Bonds”), are being sold at initial offering prices which are in excess of the principal amount payable at maturity. The difference between (a) the initial offering prices to the public (excluding bond houses and brokers) at which a substantial amount of the Premium Bonds is sold and (b) the principal amount payable at maturity of such Premium Bonds constitutes original issue premium, which original issue premium is not deductible for federal income tax purposes.

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In the case of an owner of a Premium Bond, however, the amount of the original issue premium which is treated as having accrued over the term of such Premium Bond is reduced from the owner’s cost basis of such Premium Bond in determining, for federal income tax purposes, the taxable gain or loss upon the sale, redemption or other disposition of such Premium Bond (whether upon its sale, redemption or payment at maturity). Owners of Premium Bonds should consult their tax advisors with respect to the determination, for federal income tax purposes, of the “adjusted basis” of such Premium Bonds upon any sale or disposition and with respect to any state or local tax consequences of owning a Premium Bond.

NO RATING ON THE BONDS

No party involved in the issue of the Bonds has applied to Moody’s Investors Service, Inc., Standard & Poor’s Rating Services, Fitch, Inc. or any other similar rating service for any rating of the Bonds.

RELATIONSHIP OF PARTIES

Bond Counsel has represented, continues to represent or expects to represent in the future BB&T Capital Markets in unrelated matters.

MISCELLANEOUS

The Corporation has furnished all information herein relating to the Corporation. Any statements involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. The Authority and its staff assume no responsibility for the accuracy or completeness of any representation or statement in this Limited Offering Memorandum except for material with respect to them included under the sections entitled “THE AUTHORITY” and “LITIGATION.” Neither this Limited Offering Memorandum nor any statement that may have been made orally or in writing is to be construed as a contract with the owner of any of the Bonds.

[Remainder of Page Intentionally Left Blank]

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The Corporation has deemed this Preliminary Limited Offering Memorandum “final” as of its date within the meaning of the Rule, except for the omission of certain pricing and other information permitted to be omitted by the Rule.

ALDERSGATE AT SHALOM PARK, INC.

By: Suzanne H. Pugh President

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APPENDIX A

CERTAIN INFORMATION CONCERNING THE PROJECT

APPENDIX A CERTAIN INFORMATION CONCERNING THE PROJECT

TABLE OF CONTENTS

THE CORPORATION ...... A-1 General ...... A-1 Neighborhood Collaboration ...... A-1 The Corporate Structure ...... A-2 THE PROJECT ...... A-5 General ...... A-5 Project Rationale ...... A-5 The Real Estate and Purchase Agreement and Deed Restriction ...... A-7 Overview of Project Development ...... A-8 Development Milestones ...... A-8 Environmental Site Assessment ...... A-9 Geotechnical Report ...... A-9 Survey ...... A-9 Permits and Approvals ...... A-9 Planned Operational Aspects of the Project ...... A-11 Residency Agreement ...... A-13 PLANS OF FINANCE ...... A-14 Plan of Finance: The Overall Project ...... A-14 Plan of Finance: Bond Proceeds ...... A-14 THE MARKET STUDY ...... A-14 THE PROJECT DEVELOPMENT TEAM ...... A-17 The Developer and Manager ...... A-17 The Development Consultant ...... A-17 The Construction Manager ...... A-18 The Architect ...... A-19 The Civil Engineer ...... A-20 The Marketing Consultant ...... A-20 The Owner’s Representative ...... A-20 CERTAIN PROJECT CONTRACTS ...... A-21 The Development Agreement and Management Agreement ...... A-21 The Development Consultant Agreement ...... A-21 The Preconstruction Services Agreement ...... A-23 The Architect Agreement ...... A-23 The Civil Engineer Agreement ...... A-23 The Marketing Agreement and Ongoing Marketing Efforts ...... A-24 The Owner’s Representative Agreement ...... A-25

THE CORPORATION

General

Aldersgate at Shalom Park, Inc. (the “Corporation”), is a North Carolina nonprofit corporation, the sole member of which is Aldersgate Life Plan Services, Inc (the “Parent”), a North Carolina nonprofit corporation. The Corporation was incorporated and organized on November 29, 2016. By letter dated December 14, 2017, the Internal Revenue Service (“IRS”) informed the Corporation that it had determined that the Corporation is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).

The Corporation was created to assist in the development of a senior living facility which, upon receipt of necessary regulatory approval, will be operated as a “Life Plan Community” initially expected to consist of (i) approximately 125 independent living apartments (the “Independent Living Apartments”) located in 5 buildings with structured parking, (ii) 8 assisted living units (the “Assisted Living Units”) and 8 memory support assisted living suites (the “Memory Support Suites” and, together with the Assisted Living Units, the “Assisted Living Center”) located in a separate building from the Independent Living Apartments and (iii) a clubhouse located on approximately 11.5 acres of land (the “Property”) at the corner of Jefferson Road and Providence Road, near the Temple Israel synagogue (the “Temple”) and within Shalom Park (as described herein) in Charlotte, Mecklenburg County, North Carolina (the “Project”).

Neighborhood Collaboration

The Project will be built on the Property, which is currently owned by the Temple and The Shalom Park Foundation of Shalom Park, Inc., a 501(c)(3) nonprofit corporation (the “Shalom Park Foundation” and together with the Temple, the “Sellers”). The Shalom Park Foundation owns and manages the properties and facilities for most of the organizations that are located in Shalom Park.

Shalom Park consists of approximately 50 acres of land, assembled to become a home for Jewish culture in the city. Currently, the (i) Temple, (ii) Temple Beth El, (iii) The Levine Jewish Community Center, (iv) Jewish Federation of Greater Charlotte, (v) Jewish Family Services, (vi) Temple Israel Religious School, (vii) Temple Beth El Religious School, (viii) Consolidated High School of Jewish Studies, (ix) Charlotte Jewish Preschool, (x) Charlotte Jewish Day School, (xi) Center for Jewish Education, (xii) Moishe House, (xiii) Hebrew Cemetery Association, (xiv) B’nai Brith Youth Organization, and (xv) The Charlotte Jewish News are located in Shalom Park. The Property provides easy access to shopping, dining, grocery, pharmacy and entertainment destinations in Charlotte.

The Corporation and the Sellers have entered into a Real Estate Purchase Agreement (the “Purchase Agreement”) for the Corporation’s purchase of the Property. Although the Purchase Agreement is currently effective, the sale and transfer of the Property will not take place until certain conditions are met prior to the sale and transfer of the Property, as further described herein. The sale and transfer of the Property will not take place at the time of issuance of the Bonds.

Under the Purchase Agreement, the Sellers have ongoing contractual rights with respect to the Project, as further described herein. In addition, as a condition to the sale of the Property under the Purchase Agreement, the Corporation’s bylaws have been amended to require that 40% of the members of the Corporation’s Board of Directors are chosen from candidates proposed by the Shalom Park Foundation. Such amended bylaws will take effect on November 15, 2019.

Preconstruction costs of the Project are being financed with bonds issued by the Public Finance Authority’s Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project),

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Series 2019 (the “Bonds”). Although the Corporation will be collaborating with the Sellers throughout the design, construction and operation of the Project, neither the Sellers nor any other party other than the Corporation, are responsible for payment of principal or interest on the Bonds.

The Corporate Structure

The Aldersgate Family (as defined herein) are organized as depicted as follows:

The Main Affiliate: Aldersgate United Methodist Retirement Community, Inc. Aldersgate United Methodist Retirement Community, Inc. (the “Main Affiliate”) is a North Carolina nonprofit corporation incorporated in 1945, which operates a Life Plan Community located in Charlotte, North Carolina which is also known as “Aldersgate.” Aldersgate began operations in 1945 and currently includes 309 independent living apartments and cottages, 47 traditional assisted living units, 61 memory support suites, 125 skilled nursing beds, and a new community center.

The Main Affiliate is an affiliate of the Western North Carolina Conference of the United Methodist Church (the “Conference”). Although all members of the governing board of the Main Affiliate are confirmed by the Conference, the Conference is not responsible in any way for the financial and contractual obligations of the Main Affiliate.

Beginning in early 2016, the Main Affiliate implemented a series of restructuring transactions involved the creation of new, distinct legal entities dedicated to specific proposed operating activities designed to facilitate its ability to expand services in furtherance of its charitable mission through new business opportunities while managing liability and financial risks associated with such opportunities.

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These new entities, along with the Main Affiliate, were consolidated under a new parent corporation (namely, the Parent) that provides management and certain administrative services (such as accounting and human resources) to each entity and shares the costs of such services pursuant to arms’s length management services or cost-sharing agreements. The Parent, the Corporation, the Main Affiliate and their affiliated entities (namely Aldersgate at Sharon, Inc., Aldersgate at Home, Inc., Aldersgate Holdings, Inc. and Aldersgate Foundation Inc.) are collectively referred to herein as the “Aldersgate Family.”

The Parent: Aldersgate Life Plan Services, Inc. The Parent is a North Carolina nonprofit corporation without members and has received a favorable determination of its 501(c)(3) and 509(a)(3) tax-exempt supporting organization under the Code. The Parent is the sole member of each of the supported organizations and, as such, elects the members of the Board of Directors of each such supported organization.

In addition, the Parent’s consent is required before any supported organization is permitted to take certain fundamental acts (e.g., dissolution, incurring certain indebtedness, approving budgets, etc.). The Parent’s corporate officers consist of a President & Chief Executive Officer, a Chief Operating Officer, a Secretary and a Treasurer & Chief Financial Officer. The Board of Directors of the Parent appoints these officers, and may also appoint additional officers such as an Executive Vice President, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers and other officers as it deems necessary.

The Conference does not have confirmation rights with respect to the Parent’s Board of Directors or the Board of Directors of any supported organization within the Aldersgate Family, other than the Main Affiliate and Aldersgate at Home, Inc. It is anticipated that as each supported organization develops its business and becomes operational, certain members of the existing management team of the Main Affiliate will eventually be migrated to positions within the Parent, allowing for the employment of individuals (including Executive Directors) specific to each business line at the supported organization level. As this operational and management plan unfolds, the Parent will focus on strategic opportunities for the Aldersgate Family, while the supported organizations will focus on managing the day-to-day operations of their individual communities or business lines.

Senior Management and Staff of the Parent. As of January 1, 2019, several senior managers of the Main Affiliate transferred from the Main Affiliate to the Parent. The following senior management and staff are employed by the Parent:

Suzanne Hodge Pugh, NHA, ALA, CMP – President and Chief Executive Officer (age 53). Ms. Pugh has been on staff at the Main Affiliate for over 21 years. Ms. Pugh served as the Director of Marketing for over ten years. In 2007, she received her Nursing Home Administrator's license and her certification as an Assisted Living Administrator, and was named the Chief Operating Officer at that time. In 2011, Ms. Pugh became President and CEO and continues to serve in that role today. Ms. Pugh is a 2012 alumnus of the LeadingAge Leadership Academy and currently serves on the Leadership Academy Alumni Board. Ms. Pugh was also a member of the national LeadingAge Task Force on Governance and serves as a member of the Board of Directors for LeadingAge North Carolina. Prior to joining the Main Affiliate, Ms. Pugh was the Director of Development and Church Relations for the United Methodist Agency for the Retarded and also served on the psychology staff in the prison system with the North Carolina Department of Corrections. Ms. Pugh is a graduate of University of North Carolina-Chapel Hill and was in the graduate program in Clinical Psychology at University of North Carolina-Charlotte.

Michael Sulhan– Chief Financial Officer (age 39). Mr. Sulhan joined the Main Affiliate in 2016 as Chief Financial Officer and Treasurer. Prior to joining the Main Affiliate, Mr. Sulhan served as the Chief Financial Officer & Treasurer of the Clemson University Foundation. Mr. Sulhan also previously served as Treasury Manager for the Children’s Hospital and Health System and as a Treasury Analyst for

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MillerCoors LLC. Mr. Sulhan has a bachelor’s degree in management-finance from Case Western Reserve University, an MBA from Marquette University and is a Certified Treasury Professional.

Jeffrey R. Weatherhead, Chief Operating Officer and interim Healthcare Administrator (age 51). Mr. Weatherhead is the Chief Operating Officer and interim Healthcare Administrator at the Main Affiliate. Within this position, Mr. Weatherhead oversees the skilled nursing and assisted living areas, in addition to overseeing the culinary department, life enrichment department, resident and family services, beauty shop, chaplain services, physician services, facilities services, environmental services, sales and marketing, and resident clinic for the community. Mr. Weatherhead has over twenty (20) years’ experience in the senior living field working in Ohio and Florida, including seven (7) years as Executive Director and Licensed Nursing Home Administrator of Mason Christian Village in Mason, Ohio and nine (9) years with Westminster Communities of Florida where Mr. Weatherhead served for seven (7) years as Executive Director of Westminster Shores in St. Petersburg, Florida and two (2) years as Executive Director of Westminster Woods on Julington Creek in Jacksonville, Florida. Mr. Weatherhead's career in senior living has been exclusively with not-for-profit and faith based organizations. Mr. Weatherhead is a licensed Nursing Home Administrator and Assisted Living Administrator in North Carolina. Mr. Weatherhead attained a bachelor's degree in Interpersonal and Public Communication from Bowling Green State University and a master's degree in Health Services Administration from Xavier University.

The Parent currently has 19 employees.

The Corporation: Aldersgate at Shalom Park, Inc. The Parent, as the sole member of Corporation, has the right to elect the members of the Corporation’s Board of Directors, subject to the requirement that 40% of the members must be selected from candidates proposed by the Shalom Park Foundation, and Conference confirmation is not required. In addition, the Parent’s consent is required before the Corporation may take certain fundamental actions (e.g., dissolution, incurring certain indebtedness, approving budgets, etc.). The Corporation’s corporate officers consist of a President and a Secretary. These positions are currently occupied by the President and Secretary of the Parent. The President may appoint one or more Assistant Secretaries and other officers as he or she deems necessary, and is also empowered to engage employees of Corporation, including an Executive Director, to manage the Corporation’s affairs. The President expects to hire an Executive Director in the future.

Board of Directors of the Corporation. Currently, the Corporation’s Board of Directors mirrors the Parent’s Board of Directors. As of November 15, 2019, it is expected that the Corporation’s Board of Directors will consist of the following individuals:

Name Occupation William Springs-Chair SVP, Regional Finance Leader, Wells Fargo Wealth Management

Susan Keever Senior Financial Advisor, Waddell and Reed – Retired.

Tommy Lawing Realtor and Property Manager, T.R. Lawing Realty, Inc.

Irene Vogelsong Practice Leader, Director of Interior Design, Perkins + Will

Jose Espaillat Associate Vice President, Diverse Client Segment Leader, Latino Market at Wells Fargo Advisors

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Name Occupation Sammy Jackson Real Estate Development, Charlotte Mecklenburg Housing Partnership

Barry Bobrow Managing Director, Wells Fargo Securities

Julie Levine Psychiatrist

Holly Levinson Attorney

Jonathan Howard Managing Director, MidAtlantic Capital Management, LLC

Marc Siverman Retired Attorney

Each of the directors on the Board of Directors as of November 15 will be elected to initial terms of between one and three years that result in those directors holding offices for staggered terms. Each of those directors may also to serve (if elected) for an additional two (2) consecutive, three (3) year terms following the initial term, after which such director will not be entitled to serve again for at least one year.

THE PROJECT

General

The Project is expected to be culturally Jewish, although it is open to all faiths and the success of the Project is dependent upon having a significant number of non-Jewish residents.

Project Rationale

Initial planning for the Project began in 2017 by a project team including members of organizations of Shalom Park, the Main Affiliate and consultants including RLPS Architects II, LLP (“the Architect”), GlynnDevins, Inc. (the “Marketability Consultant”), Landworks Design Group, PA (“the Civil Engineer”), Brian Schiff and Associates LLC (the “Development Consultant”) and a general contractor (who at the time provided construction cost estimates, but is no longer associated with the Project and has since been replaced by Frank L. Blum Construction Corporation (the “Construction Manager”)).

One of the key drivers behind the Project’s conception was the nonexistence of a Jewish life plan community between Atlanta, Georgia and Richmond, Virginia. Another driver was Shalom Park’s existing services and organizations and the potential benefits of having a life plan community integrated A-5

with these services, including wellness programs at the Jewish Community Center as well as intergenerational programs with Shalom Park’s day school and pre-school and spiritual support with Shalom Park’s two synagogues. With these drivers in mind, the Main Affiliate believes the Project has the potential to be a successful community.

During meetings, the Shalom Park organizations expressed their desire to work with an organization with experience developing and managing a life plan community. In addition, the Main Affiliate’s 120-bed skilled nursing facility with access for direct admit residents could be used to support the skilled nursing needs of residents of the Project, means the Project could be constructed without its own skilled nursing facility.

A Business Plan (the “Business Plan”) was completed and approved by the Parent in September 2018 that included a marketability study as further described herein, which has since been updated. See “Appendix C – MARKET STUDY” attached to the Limited Offering Memorandum. It indicated strong demand for independent living in the Jewish community and in South Charlotte as well.

Financial projections were developed and updated through the planning process and a compilation summarizing the assumptions for the financial projections was prepared. See “Appendix B – COMPILATION OF A FINANCIAL PROJECTION” attached to the Limited Offering Memorandum.

A master site plan for the Project was created by the Architect and Civil Engineer and amended and revised through the zoning process. The current site plan showing the locations of the approved independent living, assisted living, memory care and clubhouse buildings is included herein.

[Remainder of Page Intentionally Left Blank]

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The Real Estate and Purchase Agreement and Deed Restriction

The Purchase Agreement. The Corporation has entered into the Purchase Agreement with the Sellers for the purchase of the Property. Although the Purchase Agreement is currently effective, the sale and transfer of the Property will not take place until certain conditions are met prior to the sale and transfer of the Property, including that the Corporation must obtain necessary and appropriate government approvals with respect to the Project, and enter into various additional agreements relating to the Sellers’ rights that continue beyond the sale and transfer of the Property. The Property will not be sold and transferred at the time of issuance of the Bonds.

The Bonds must be issued no later than March 31, 2020, or Sellers may elect to terminate the Purchase Agreement. Although the Purchase Agreement retains flexibility as to when the transfer and sale of the Property may take place, such transfer and sale must take place no later than 1,320 days (approximately 3.6 years) after the issuance of the Bonds. Under the Purchase Agreement, the purchase price of the Property depends upon the length of time it takes the Corporation to pre-sell 70% of the units in the Project after the Bonds are issued. (“Pre-Sale Goal”). If the Corporation meets the Pre-Sale Goal within 630 days of the issuance of the Bonds, the purchase price of the Property is $6,500,000. If the Corporation meets the Pre-Sale goal between 631 days and 810 days of the issuance of the Bonds, the purchase price of the Property is $6,200,000. Finally, if the Corporation meets the Pre-Sale Goal after 811 days of the issuance of the Bonds, the purchase price of the Property is $5,900,000.

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The Deed Restriction. The Property is currently subject to the terms of a joint venture agreement and certain deed restrictions (“Title Restrictions”) that do not permit the Project to be developed as a “Life Plan Community.” The Corporation has been working with the Sellers and the title company to obtain a release of the Title Restrictions. To date, a release and termination of the Title Restrictions has been signed by 4 of the 5 entities (or their successors) that were beneficiaries to the Title Restrictions. The Sellers have indicated that the 5th entity is a non-profit corporation that has been inactive for approximately 25 years and has not filed any reports with the North Carolina Secretary of State’s Office since its original incorporation filing in 1970. The Corporation is currently pursuing solutions with the Sellers and the title company with regard to the 5th entity.

Overview of Project Development*

The following is an estimated timeline of the construction of the Project as well as the issuance of the Bonds and, upon the fulfillment of certain minimum sales parameters set by North Carolina law, and other financing requirements, and subject to satisfaction of certain conditions precedent, the issuance of approximately $135,490,000 of tax-exempt revenue bonds (the “Permanent Bonds”), if any. These dates are preliminary and subject to change. See “PLANS OF FINANCE” herein.

Project Development and Financing Schedule*

Estimated Date No. of Months No. of Years Issue the Bonds November 2019 -- -- Obtain Permanent Bonds, if any June 2021 19 1.6 Begin Construction of the Project June 2021 19 1.6 Complete Construction August 2023 45 3.7 Begin Occupancy of Independent Living Apartments September 2023 46 3.8 Begin Occupancy of Assisted Living Center October 2023 47 3.9 Achieve Stabilized Occupancy March 2025 64 5.3 of Assisted Living Center Achieve Stabilized Occupancy September 2025 70 5.8 of Independent Living Apartments

NO ASSURANCE CAN BE GIVEN THAT THE PERMANENT BONDS WILL BE ISSUED OR OTHER REPLACEMENT FINANCING WILL OR CAN BE OBTAINED BY THE CORPORATION OR WILL OR CAN BE OBTAINED BY THE CORPORATION AT INTEREST RATES AND UPON OTHER TERMS THAT WILL PERMIT THE PROJECT TO BE FINANCIALLY VIABLE

Development Milestones

Under the Master Indenture, the Corporation has covenanted to comply with the following pre- development objectives (“Pre-Development Milestones”) and sales objectives (“Sales Milestones” and together with the Pre-Development Milestones, collectively, the “Milestones”) set forth below within the time indicated. For purposes hereof, “Effective Date” shall mean November 1, 2019.

* Preliminary, subject to change.

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PRE-DEVELOPMENT AND SALES MILESTONE DUE DATE 1. Submit Step 1 to NC Department of Insurance* 3 months after Effective Date 2. Start taking priority deposits* * 3 months after Effective Date 3. Complete Schematic Design 4 months after Effective Date 4. Begin Development Design 6 months after Effective Date 5. Submit Step 2 to NC Department of Insurance 7 months after Effective Date 6. Complete Development Design 10 months after Effective Date 7. Begin taking 10% Deposits** 12 months after Effective Date 8. Begin Construction Drawings 12 months after Effective Date 9. Achieve 40% Pre-Sales** 16 months after Effective Date 10. Achieve 60% Pre-Sales** 19 months after Effective Date 11. Complete Real Estate Due Diligence relating to Purchase 20 months after Effective Date Agreement 12. Achieve 70% Pre-Sales** 20 months after Effective Date 13. GMP Execution 20 months after Effective Date ______* Completed. ** Indicates Sales Milestones; all other are Pre-Development Milestones.

If the Corporation has not achieved a Pre-Development Milestone or Sales Milestone within 60- days (the “Grace Period”) from the Due Date, then the Holder Representative has, at its election and upon notice to the Corporation no later than 5 days after the end of the Grace Period, various remedies under the Master Indenture. See “Appendix D – FORMS OF PRINCIPAL BOND DOCUMENTS – The Master Indenture” attached to the Limited Offering Memorandum.

Environmental Site Assessment

A Phase I Environmental Site Assessment (the “Environmental Assessment”) was prepared for the Project Site on September 3, 2019 by an engineering company. Although three underground storage tanks were found on the Property, Environmental Assessment concluded that there were no recognized environmental conditions in association with the Property. However, plans are currently in motion to remove the underground storage tanks. Copies are available upon request to the Underwriters during the offering of the Bonds.

Geotechnical Report

On August 29, 2019, a preliminary geotechnical subsurface exploration report was completed. In the report were several recommendations with respect to the soil conditions and its suitability for the Project. The Corporation intends to follow the recommendations of the report and has factored the costs of certain of these recommendations in its project budget. Copies are available upon request to the Underwriters during the offering of the Bonds.

Survey

A boundary survey of the Property has been prepared, dated March 5, 2019.

Permits and Approvals

The following is a list of the material permits and approvals required to be obtained prior to construction of the Project:

North Carolina Department of Insurance. The Project is a continuing care retirement community under North Carolina law. Before a continuing care retirement community (“CCRC”) can

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operate in North Carolina, it must be licensed by the North Carolina Department of Insurance (“NCDOI”). There are four steps to the licensing processing, which correlate to the discovery, pre- development, construction and operating phases generally associated with developing a CCRC.

Step 1: The first step, which the Corporation has already completed, involved submitting to the NCDOI its intent to market and develop the Project. On September 11, 2019, the NCDOI acknowledged completion of this first step, which allows the Corporation to disseminate materials describing its intent to develop the Project and enter into fully-refundable, non-binding reservation agreements and collect deposits of up to $1,000 under each reservation agreement.

Step 2: The second step, which is estimated to be approved in Spring 2020, is the submission by the Corporation to the NCDOI of a Start-Up Certificate Application. Upon the issuance of a Start-Up Certificate by NCDOI, the Corporation will be able to enter into binding reservation agreements and residency agreements (and accept deposits greater than $1,000), commence site work and construct model units for viewing by the public.

Step 3: Once the Corporation has entered into binding reservation/residency agreements for at least 50% of the proposed Independent Living Apartments, accompanied by 10% deposits, then the Corporation will apply for a Preliminary Certificate, which authorizes the construction of the Project.

Step 4: At least 60 days before the Project opens, the Corporation must apply for a permanent CCRC license. Upon issuance of the permanent license, the Project is able to operate and provide care for its residents.

Certificate of Need. The Project will require a Certificate of Need (“CON”) from the North Carolina Department of Health and Human Services. Under policy NH-2 of the State Medical Facilities Plan, qualified CCRC’s are exempt from the requirements to demonstrate need beyond that existing within their own community. The functional impact of this is that the CON for a qualified CCRC is a formality, but it must be obtained prior to the start of construction. The Parent filed the Certificate of Need application in July 2019, significantly in advance of initial construction.

Zoning. The Property is located in the City of Charlotte, Mecklenburg County, NC. In July 2019, it was rezoned to Institutional, Conditional District (INST(CD)) to allow a retirement community as a permitted use. The appeals period for the rezoning has expired. Water and sanitary sewer service will be provided by Charlotte Water.

Site Plan Approval. The July 2019 rezoning included a Conditional Site plan corresponding to the proposed project. The Civil Engineer will prepare detailed site construction plans in sufficient detail to obtain land development permit approvals from the City of Charlotte and North Carolina Department of Transportation, sufficient to develop the site-related portions of the Project (the “Site Plan”). The Site Plan submittal is anticipated to occur in late 2020.

Wetlands. The Property had a Preliminary Wetlands Assessment (“PWA”) performed in 2017 by Wetlands and Environmental Planning Group (“WEPG”). WEPG is currently reconfirming their PWA and will obtain a jurisdictional determination from the US Army Corps of Engineers as to the wetlands and streams on the Property.

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Planned Operational Aspects of the Project*

Entrance Fees and Monthly Service Fees. The Corporation will implement an entrance fee model for all of its Independent Living Apartments. Residents in the Independent Living Apartments will pay a one-time entrance fee (the “Entrance Fee”) upon admission into the Project. It is intended that three entrance fee plans (each an “Entrance Fee Plan” and collectively, the “Entrance Fee Plans”) will be offered: (i) a 90% refundable entrance fee plan (the “90% Refundable Entrance Fee”), (ii) a 50% refundable entrance fee plan (the “50% Refundable Entrance Fee”) and (iii) a fully amortizing entrance fee plan (the “Fully Amortizing Entrance Fee”). Residents in all Independent Living Apartments will pay a monthly fee (the “Monthly Fee”) for services provided by the Project.

The table below shows the planned number and approximate size of the Independent Living Apartments, anticipated Entrance Fees and estimated Monthly Fees for the Project, and also monthly or daily fees for the Assisted Living Center.

Independent Living Apartments* Anticipated Charter 2019 Pricing* Entrance Fee Plans Monthly Fees Number Square 90% & 90% & Unit Type of Units Footage 50% Plan 0% Plan 0% Plan 50% Plan One Bedroom/1.5 Bath 18 1,000 $435,000 $310,000 $4,445 $3,778 One Bedroom/1.5 Bath/Den 3 1,225 $535,000 $380,000 $5,150 $4,378 Two Bedroom/2 Bath 16 1,115 $485,000 $350,000 $4,650 $3,953 Two Bedroom/2 Bath/Den 18 1,225 $535,000 $380,000 $5,025 $4,271 Two Bedroom/2 18 1,325 $575,000 $410,000 $5,300 $4,505 Bath/Den/Deluxe Two Bedroom/2 Bath/Den 18 1,425 $625,000 $445,000 $5,575 $4,739 Two Bedroom/2 Bath/Den 16 1,525 $665,000 $475,000 $5,850 $4,973 Two Bedroom/2 Bath/Den 18 1,650 $715,000 $515,000 $6,250 $5,313 Total/Weighted Average 125 1,321 $575,480 $411,360 $5,297 $4,503 Second Person Fee $25,000 $25,000 $1,350 $1,350

* Preliminary, subject to change.

Number Square Unit Type of Units Footage Internal Transfer Monthly Fee Assisted Living Units* One Bedroom 8 550 $6,397

Memory Support Units* One Bedroom 8 300 $6,971

Services to be Provided. Upon payment in full of the Entrance Fee under the applicable Entrance Fee Plan and ongoing payment of the Monthly Fees, each Resident will be provided an Independent Living Apartment and receive certain basic services as described herein. The following services are preliminary and subject to change. The services proposed to be provided under the Residency Agreements (the “Residency Agreements”) (see the subheading “– Residency Agreement” herein) that are included in the Monthly Fee, or provided at an additional charge include the following:

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Independent Living Unit and Common Areas. The Corporation expects that each Independent Living Unit will be furnished with the following items: carpeting and wood floors, self-defrosting refrigerator and freezer with ice maker, range and oven, dishwasher, microwave oven, garbage disposal, washer, dryer, an emergency call system and a telephone/data communications port. Such appliances and services will be maintained, repaired and, if required, replaced by the Corporation. Any upgrading of such appliances desired by the Resident will be at the Resident’s sole expense. Residents provide their own furniture. Structural changes to any Independent Living Unit or redecoration of any Independent Living Unit, other than those undertaken by the Corporation, will require the written approval of the Corporation and, if approved by the Corporation, will be at the Resident’s expense. The Corporation plans to provide a Clubhouse to include common areas that are anticipated to include the main kitchen, living areas, various activity rooms, dining rooms, and a beauty/barber parlor. It is expected that residents will have access to the Levine Jewish Community Center as an amenity.

Healthcare Services. Basic assisted living and memory care services, as needed, will be provided to residents as described in the Residency Agreements and subject to changes in law at a discounted fee of 10% of the then marketed rates. If a Resident requires nursing care, the Resident will have priority and discounted access to the Asbury Health and Rehabilitation Center (“Asbury”) on a temporary or permanent basis. Asbury, located on the Main Affiliate’s campus, is a 120-bed licensed nursing care facility of which 100 beds are Medicare certified and 20 beds are dually certified for Medicare and Medicaid. Use of these nursing services requires the certification of such need by the Resident's attending physician and shall be subject to availability of an appropriate accommodation at the Project.

Food and Meal Service. The Project expects to offer several dining options to be located in the Clubhouse including formal table service in a main dining room and casual cafe bistro and bar. Residents residing in the Independent Living Apartments would be offered a declining balance meal plan for use in any of the dining areas. Residents residing in the Assisted Living Center would receive three meals per day. In addition, Kosher style meals, if available from a third-party vendor, would be available to all residents at an additional charge, however the Project is not planning to be a full Kosher facility.

Housekeeping and Laundry Services. Weekly scheduled housekeeping services will be provided, including vacuuming and light housekeeping and laundry and changing of bed linens. Laundry and changing of bed linens is available in Assisted Living and Memory Care.

Utilities. Sewer, water, waste disposal, electricity, heat and air-conditioning, local telephone and basic television services will be provided to residents at no additional cost. Units will also be wired for cable television, telephone and data/communications, premium cable television and internet.

Security and Emergency Alert Systems. All units and living areas in the Project will be equipped with smoke detectors, a sprinkler system and an emergency alert system, which the Corporation will monitor on a 24-hour basis and coordinate emergency responses as appropriate.

Maintenance. Common areas and grounds will be maintained. In addition, repairs, maintenance and replacement of appliances will be provided to each Resident’s unit, provided such repairs are not required as a result of the Resident’s negligence.

Transportation. Local group transportation to designated shopping, social and cultural events, medical facilities, and other local destinations will be provided on a regularly scheduled basis. In addition, regularly scheduled transportation will be provided to the residents to other locations on the Shalom Park campus.

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Social and Recreational Programs. The Life Enrichment Coordinator for the Project will coordinate a variety of social, recreational, educational and cultural programs for those residents wishing to participate. Specific programs will be based on residents’ interests.

Wellness Programming. The Project will coordinate educational and screening programs promoting wellness and preventive health maintenance.

Residency Agreement

General. The Project will accept residents who are capable of living independently as outlined in the Residency Agreement and who have financial resources sufficient to pay the initial deposit, the Entrance Fee, the ongoing Monthly Fees and all other daily personal living expenses. The Project does have a minimum age requirement of 62 years old. The services provided at the Project and the related fees will be defined in the Residency Agreement.

Financial Policy Regarding Residents. If a Resident becomes unable to pay the Monthly Fee or any other charges required under the Residency Agreement, and to the extent Medicare benefits or any other insurance benefits are not available or are not sufficient to cover the amounts due from the resident, the refund on the Entrance Fee may be reduced by any amounts due from the Resident. The Resident may also be required to move to a smaller or less expensive unit. The Residency Agreement will not be terminated if the Resident’s inability to pay is not the result of negligent, willful or unreasonable dissipation of their assets and does not jeopardize the financial security of the Corporation or other residents.

Termination of the Residency Agreement and Refunds. Residents may rescind the Residency Agreement within thirty (30) days after executing the Residency Agreement or receipt of the disclosure statement required under North Carolina law, if later, as required by law. Upon rescission, the Corporation shall refund to the Resident, or the Resident's legally-authorized representative, any portion of Entrance Fees the Resident paid to the Corporation less (i) per diem or monthly charges specified in the Residency Agreement for the Residence applicable to the period the Residence was actually occupied by the Resident; (ii) those nonstandard costs specifically incurred by the Corporation at the request of Resident which are not covered by the per diem or monthly charges applicable to Resident; and (iii) the lesser of two percent (2%) of the Entrance Fee or One Thousand Dollars ($1,000.00). Any such refund shall be paid by the Corporation within sixty (60) days following receipt of written notification of such termination.

Following occupancy, the Residency Agreement may be terminated by the Resident with 14 days’ prior written notice. The Residency Agreement may be terminated for certain “good cause” reasons defined in the Residency Agreement. Refunds due to the Resident following termination after occupancy will be based on the Entrance Fee Plan selected and will be paid to the Resident from the Entrance Fee paid subject to the right of other former residents who have priority to receive a refund and available funds from the Project at that time.

Property Rights. The Residency Agreement will provide the Resident with the right to receive services, with a contractual right of occupancy. Nothing contained in the Residency Agreement will be construed to create the relationship of landlord and tenant between the Corporation and the Resident. The rights and privileges granted to the Resident by the Residency Agreement do not include any right, title, or interest in any part of the real or personal property, buildings and improvements owned, leased or administered by the Corporation.

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PLANS OF FINANCE

Plan of Finance: The Overall Project

Upon the fulfillment of certain minimum sales parameters set by North Carolina law, and other financing requirements, and subject to satisfaction of certain conditions precedent, the Corporation, through the Authority, intends to request the issuance of the Permanent Bonds to finance the repayment of the Accreted Value of the Bonds and to finance, in part, the construction of the Project. NO ASSURANCE CAN BE GIVEN THAT THE PERMANENT BONDS WILL BE ISSUED OR OTHER REPLACEMENT FINANCING WILL OR CAN BE OBTAINED BY THE CORPORATION OR WILL OR CAN BE OBTAINED BY THE CORPORATION AT INTEREST RATES AND UPON OTHER TERMS THAT WILL PERMIT THE PROJECT TO BE FINANCIALLY VIABLE.

The estimated sources and uses of proceeds of the Permanent Bonds for the overall Project are set forth in “Appendix B – COMPILATION OF A FINANCIAL PROJECTION.”

Plan of Finance: Bond Proceeds

The estimated uses of proceeds of the Bonds for pre-construction and development costs of the Project are set forth in the front part of the Limited Offering Memorandum.

UNDER THE MASTER INDENTURE, THE CORPORATION IS THE ONLY MEMBER OF THE OBLIGATED GROUP AND THERE ARE CURRENTLY NO PLANS TO ADD ANY FURTHER MEMBERS THERETO. NO OTHER MEMBER OF THE ALDERSGATE FAMILY IS IN ANY WAY RESPONSIBLE FOR PAYMENT OF THE BONDS. NEITHER THE CONFERENCE NOR THE SELLERS ARE IN ANY WAY RESPONSIBLE FOR PAYMENT OF THE BONDS. INVESTORS SHOULD RELY SOLELY ON THE ISSUANCE OF PERMANENT BONDS, IF ANY, FOR REPAYMENT OF THE BONDS. THE MAIN AFFILIATE ITSELF CAN ONLY MAKE LIMITED CONTRIBUTIONS DUE TO COVENANTS RELATED TO ITS OWN INDEBTEDNESS AND HAS NOT COVENENTED TO DO SO.

THE MARKET STUDY

A market study was prepared by the Marketability Consultant to determine the demand for a Life Plan Community in Charlotte and has been updated in August 2019 (the “Market Study”). See “Appendix C – MARKET STUDY” attached to the Limited Offering Memorandum. For purposes of its analysis, the primary market area, or “PMA” (i.e. the geographic area from which most of the residents in the Project would originate), is defined as an area consisting of an approximately 22-minute drive time from the Project (the “PMA”). In addition, a “Care Market Area” was also defined to delineate an appropriate area from which the Project would likely draw residents for higher levels of care (Assisted Living, Memory Care). Further, it is expected that the Project would draw residents from beyond the boundaries of the market area, as is typical with a proposed community of this type. Reasonable “outside fill” assumptions are applied to estimate total market depth.

The Market Study estimates that residents of the Project would likely be willing to spend approximately 60% of their pre-tax monthly income for services at the Project. Based on the entry-level, single-person monthly fee of $3,778 for a 50%-refundable contract and $4,445 for a 0%- or 90%- refundable contract, per unit (and given the assumption regarding the percentage of income potential residents would be willing to spend), an assumption is that a minimum pre-tax income of $75,000 will generally be required for admission (primary market with $100,000+). Based on a 2024 projection by

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Nielsen Claritas, Inc., there will be an estimated 9,054 age- and income-qualified households that live in the PMA by 2024 (6,030 from the primary income market with $100,000+).

There are five Life Plan Communities located in the PMA which have been accounted for in the Market study). Information regarding these primary competitors, as reported by its marketing staff in 2019 is below:

For comparison purposes, 2019 numbers are shown above; however, the Project will market pre-sales at 2019 pricing.

Based on an understanding of the demographics in the PMA and SMA and an evaluation of the competitive units within the PMA, a penetration analysis was prepared to understand demand for Life Plan Communities’ Independent Living Apartments within the PMA:

Age and Income Qualified Household. Based on a 2024 projection by Nielsen Claritas, Inc., there will be approximately 9,054 households within the PMA age 75 years or older with annual income greater than $75,000 (the minimum required income). Assuming similar demographic and economic characteristics for residents within existing communities as within the overall PMA, there would be an estimated 3,556 households within other communities that are age 75 years or older with annual incomes greater than $75,000, along with an additional 1,152 who would reside in proposed competitive residences – yielding an estimated 4,421 age- and income-qualified households in the PMA that will not reside in retirement communities by 2024.

Occupancy Projection. Assuming 125 proposed Independent Living Apartments for the Project plus 1,899 competitive units (per the Market Study’s competitive analysis which accounts for new/proposed units, unoccupied units, plus units available upon turnover at competitive communities), there are approximately 2,024 total units in the PMA to be occupied. The Market Study estimates that 70% of these units will be occupied by PMA residents, 90% will be occupied by seniors age 75 years or older and 95% will be occupied at stabilized occupancy, yielding a total of 1,511 units that need to be occupied by PMA and SMA households to achieve stabilized occupancy at the Project and other communities located in the PMA.

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Penetration/Capture Rate. The penetration rate (forecasted in 2024) based on 125 units and 5,676 age- and income-qualified households not residing in competitive communities is approximately 1.3%. The Market Study provides an analysis, based on an entry-level Entrance Fee of $300,000, and based on 4,289 age- and home value-qualified households (accounting for all existing and proposed competitive residences, numbering 4,708) that yields a potential market depth between 153 (2.5% market capture) and 337 (5.5% market capture) independent living units at the Project.

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Project Penetration Rate Summary

According to the Market Study, the above penetration rates and capture rate analyses demonstrate demand for additional Independent Living Apartments in the PMA. Estimates of market depth for assisted living and memory support also indicate demand for additional units.

The Market Study does not constitute a formal feasibility study of the Project and the ability of the Project to support the issuance and repayment of the Bonds. No such feasibility study has been conducted by any party. See “RISK FACTORS” in the Limited Offering Memorandum for a description of certain risk factors affecting the issuance of the Bonds.

THE PROJECT DEVELOPMENT TEAM

The Developer and Manager

The Development Consultant

The Parent expects to engage the Development Consultant for the Project pursuant to a Development Consulting Services Letter (the “Development Consulting Agreement”) dated as of August

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15, 2019. The Development Consultant will assist with certain development activities for the Project including assisting the Parent with implementation of the Business Plan, preparation of detailed budgets, and assistance in securing the issuance of the Bonds and Permanent Bonds, if any.

The Development Consultant is led by Brian Schiff, Managing Director, who has been active in senior services field for nearly 30 years. His experience includes leading acquisitions, operations and marketing as an officer at Health Care and Retirement Corporation; as a partner, leading BDO Seidman’s health care consulting practice for nearly 10 years with a focus on strategic planning, market analyses and financial feasibility studies for nonprofit providers; and as a senior vice president with Greystone Communities for 7 years leading planning, financing and development of new and repositioned non-profit senior living communities. The Development Consultant works with non-profits senior service providers to establish executable strategic initiatives and helping them execute those selected initiatives. Mr. Schiff has been involved in the financing of over 150 communities during his career representing over $5 billion. Mr. Schiff received a triple major in International Relations, History and German from Colgate University and an MBA from the University of Virginia. Currently, the Development Consultant is providing development and consulting services to senior living clients across the United States.

Other clients of the Development Consultant and projects that the Development Consultant consulted on include:

Aldersgate Charlotte, NC 2015 - Current

Expansion and repositioning of existing community, including 125-bed replacement skilled nursing, 18-bed expansion of memory care assisted living, and 62 new independent living units.

Salemtowne Winston-Salem, NC 2014-Current

Expansion and repositioning of existing community including 100 bed skilled nursing, 20 bed assisted living memory care and 56 new independent living units.

The Langford College Station, TX 2014-Current

Start up life plan community including 72 independent living units, 24 assisted living units and 18 memory care assisted living units.

Legacy Midtown Park Dallas, TX 2018-Current

Start up rental life plan community including 184 independent living units, 51 assisted living units, 36 assisted living memory care units and 54 skilled nursing beds.

The Construction Manager

Frank L. Blum Construction Corporation (the “Construction Manager”) will be engaged to provide pre-construction services for the Project under the Preconstruction Services Agreement between the Corporation and the Construction Manager (the “Preconstruction Services Agreement”). Headquartered in Winston-Salem, North Carolina, Construction Manager will have primary responsibility for pre-construction services, including estimating, scheduling analysis, and design constructability reviews. Incorporated in 1923, Construction Manager provides construction management “at risk,” general contracting, pre-construction and design-build services to clients in the athletic facilities, biotechnology and research facilities, financial institutions, healthcare facilities, K-12 and higher education, hospitality, manufacturing, mission critical data centers/power plants, multi-family, museum,

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galleries and performing arts, not-for-profits, corporate, religious facilities, and senior living community markets.

A representative list of the Construction Manager’s senior housing projects in North Carolina includes the following:

• Arbor Acres United Methodist Retirement Community, Winston-Salem, North Carolina • Carolina Village, Hendersonville, North Carolina • Croasdaile Village, Durham, North Carolina • Cross Road, Asheboro, North Carolina • Givens Estates, Asheville, North Carolina • Givens Highland Farms, Black Mountain, North Carolina • River Landing, Colfax, North Carolina • Pennybyrn, High Point, North Carolina • Penick Village, Southern Pines, North Carolina • Ridge Care, Mebane, North Carolina • WhiteStone, Greensboro, North Carolina • Glenaire, Cary, North Carolina • Salemtowne, Winston-Salem, North Carolina

The Architect

The Corporation will engage the Architect to serve as the architect for the Project. Founded in 1954, the Architect has significant experience in the planning and design of more than 125 retirement communities and 1,525 projects including clients in North Carolina and requiring involvement the Department of Health Services Regulation (“DHSR”). The Architect team assisted in preparation of the Business Plan and the rezoning of the Property and will lead and prepare all the necessary architectural and design documents for the Project.

A representative list of the Architect’s projects in North Carolina includes the following:

• Arbor Acres United Methodist Retirement Community, Winston-Salem, North Carolina • Baptist Retirement Communities of North Carolina - Brookridge, North Carolina; Winston- Salem, North Carolina • Baptist Retirement Communities of North Carolina - Western North Carolina/Rickman; Asheville, North Carolina • Carolina Village; Hendersonville, North Carolina • Givens Estate, Ashville, North Carolina • Givens Highland Farms, Black Mount, North Carolina • Penick Village, Couthern Pines, North Carolina • Salemtowne, Winston-Salem, North Carolina

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The Civil Engineer

The Corporation will engage the Civil Engineer for the Project. The Civil Engineer is a full- service landscape architecture and civil engineering ﬁrm offering a wide range of land planning and development services to both public and private sector clients throughout the Southeast. The Civil Engineer has extensive experience in Senior Living design, including master planning. The Civil Engineer is a certiﬁed Small Business Enterprise by the City of Charlotte and is currently working with the four largest Life Plan Communities in the Charlotte area, each with coordination through DHSR. The Civil Engineer will be engaged to assist in the preparation of the schematic design drawings, including utility demolition, proposed utilities and approximate grade relationships, rezoning plans, construction documents for the site-related elements of the Project to obtain site development plan approval and sewer and water permits.

The Marketing Consultant

The Corporation is engaging Love & Company, Inc. (the “Marketing Consultant”) for marketing and other services, including project validation research, brand development, marketing and sales services, development team support and integrated media services.

The Owner’s Representative

The Corporation has also engaged Construction Practices, LLC (“Construction Practices”) to provide as the owner’s representative services acting as a third-party member of the development team acting on the owner’s behalf and, in the owner’s best interest across all phases of development from planning and design through construction and completion.

Projects Recently Completed or Under Contract

• Aldersgate UMRC Skilled Nursing Facility, Charlotte, NC

• Aldersgate UMRC I.L. Hybrid Units, Charlotte, NC

• Salemtowne RC Skilled Nursing/Rehab Facility, Winston-Salem, NC

• Salemtowne RC Wellness Center Renovations, Winston-Salem, NC

• Salemtowne RC I.L. Hybrid Units, Winston-Salem, NC

• Arbor Acres UMCRC Master Planning Project, Winston-Salem, NC

• Arbor Acres UMCRC I.L. Hybrid Units, Winston-Salem, NC

• Arbor Acres UMCRC Community Center, Winston-Salem, NC

• Arbor Acres UMCRC Resident Bistro, Winston-Salem, NC

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CERTAIN PROJECT CONTRACTS

The Development Agreement and Management Agreement

Under the Development Agreement, the Parent will administer, manage and supervise the development and construction of the Project on behalf of the Corporation. The Parent will not be paid for its role as a developer or for construction management. Upon completion of the Project, under the Management Agreement, the Parent is responsible for operating, maintaining and servicing the Project. Management responsibilities of the Parent include, but are not limited to, staffing, accounting, billing, collections, setting of rates and charges and general administration.

The Development Consultant Agreement

The Development Consultant will serve as the Development Consultant pursuant to the Development Consultant Agreement. The Development Consultant will provide, among other things, the following services with respect to development of the Project (collectively, the “Development Consultant Services”).

Planning and Development. The Development Consultant will provide overall planning and development consulting services for the Project which would include the following:

• Assist the project team with an evolving project scope, including pricing and programmatic features of the Project;

• Update financial projections as needed;

• Assist the project team during the zoning process;

• Assist the project team during the certificate of need process with respect to the assisted living component of the Project;

• Meet monthly with the project team; and

• Assist with establishing schedules and timelines for pre-construction through stabilized occupancy.

Design and Construction Assistance. The Development Consultant will, among other things:

• Review and make recommendations related to space design, master site plan, interior design, including room layouts and common areas and landscaping, consistent with market demand and pricing;

• Coordinate with the project team on architectural drawings;

• Assist with estimates relating to regulatory and certificate of need, zoning and permitting processes;

• Coordinate timing of schematic, design and construction drawings to align with master schedule;

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• Review construction estimates for pre-construction services through obtaining a guaranteed maximum price contract

• Attend meeting and make recommendations with respect to change orders.

Marketing Coordination. The Development Consultant will work with the Project’s marketing team and Marketing Consultant to assist in the preparation and review of a marketing plan to include at least a budget, staffing, advertising and promotion, timelines for pre-sales and move-ins, urgency tools, and metrics for management of the marketing process. In addition, the Development Consultant will provide the following assistance.

• Review the Marketing Consultant’s recommendations for a sales center;

• Review and make recommendations for any changes to residency agreements required for consistency with other Aldersgate Family related projects and to reflect specific programs for the Project.

• Review and make recommendations for changes in the marketing budget;

• Ensure coordination between marketing and design/construction professionals;

• Update financial projections to reflect marketing recommendations; and

• Review the Project’s marketing monthly status report to include targets and metrics and advise of recommended changes based on review of this information.

Financing Coordination – Pre-Construction and Permanent Bonds, if any. The Development Consultant is providing services in connection with the issuance of the Bonds and any Permanent Bonds, if any including:

• Provide financial projections and compilations (in non-GAAP format) for use in management’s financial feasibility forecasts and coordinate management’s examination or compilation of the such forecast for the issuance of the Bonds and Permanent Bonds, if any, purposes; See “Appendix B – COMPILATION OF A FINANCIAL PROJECTION” attached to the Limited Offering Memorandum;

• Assist in establishing a financing calendar;

• Review potential financing structures and evaluate the strengths and weaknesses of each and provide recommendations to Management regarding the financing structure;

• Review financing documents for key covenants and advise management of suggested changes or other recommendations;

• Assist management in the preparing and presenting to potential bondholders; and

• Review monthly status reports for filing on EMMA and assist in any bondholder conference calls or site visits.

Compensation. The Corporation has agreed to pay the Development Consultant a development/consulting fee (the “Development Consultant Fee”) including two components: a monthly retainer and Milestone Payments.

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Monthly Retainer. The Development Consultant is to be paid a monthly retainer of $3,000 until the issuance of the Bonds. After issuance of the Bonds and until the issuance of the Permanent Bonds, the Development Consultant is to be paid a monthly retainer of $10,000. After the issuance of the Permanent Bonds and until the Independent Living Apartments are opened, the Development Consultant is to be paid a monthly retainer of $8,500.

Milestone Payments. The Development Consultant would receive payments based on specific milestones achieved by the Project including:

• $25,000 due upon execution of the Development Consultant Agreement;

• $100,000 upon the issuance of the Bonds;

• $50,000 upon the completion of schematic design documents;

• $75,000 upon the start of pre-sales (10% deposits) for the Independent Living Apartments;

• $100,000 upon the completion of any Permanent Bonds, if any of the Project;

• $25,000 upon construction achieving 50% as estimated by the construction manager;

• $25,000 upon construction achieving 75% as estimated by the construction manager; and

• $75,000 upon opening of the Independent Living Apartments.

The Development Consultant will also be entitled to be reimbursed for Reimbursable Expenses (as defined in the Development Agreement)). The Development Consultant’s services will end at the opening of the Independent Living Units.

The Preconstruction Services Agreement

The Corporation and the Construction Manager have entered into a Preconstruction Services Agreement (the “Preconstruction Services Agreement”) under which the Construction Manager will assist the Corporation in the design, budget, schedule, constructability, evaluation and value engineering aspects of the Project. The Corporation will pay a lump sum fee after pre-construction services are performed and the Construction Manager will also be reimbursed for expenses incurred. The Corporation is entitled to a credit of the lump sum payment if the Construction Manager continues to be retained by the Corporation for the Project after pre-construction services are completed.

The Architect Agreement

Under the Architect Agreement, the Architect will be reimbursed a fixed fee based on a percentage of the hard construction costs, excluding site costs or contingencies, which will be determined during the design process. The Architect is also reimbursed for out of pocket expenses associated with the Project.

The Civil Engineer Agreement

Under the Civil Engineer Agreement, the Civil Engineer’s lump sum fee is broken down into three sections: schematic design, the design development and construction documents phase and the construction observation phase. The Civil Engineer will bill on a monthly basis, a percentage of work

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completed for each phase. In addition, the Civil Engineer will be paid varying hourly rates, depending on the type of professional performing the tasks for work outside of the scope of the basic services set forth in the Civil Engineer Agreement.

The Marketing Agreement and Ongoing Marketing Efforts

The Corporation will engage the Marketing Consultant for the ongoing marketing efforts of the Project. Full marketing of the Priority Reservation program ($100 deposits) (“Priority Program”) is anticipated to begin in November 2019 and is expected to conclude in July 2020. The goal of the Priority Program is to generate more than 200 priority deposit applicants within eight months, pursuant to non- binding reservation agreements, along with $100 deposits.

The process will involve marketing to prospective residents through well planned events, advertising and public relations activity. As described herein, the Corporation anticipates submission of its Step 2 application for a Start-Up Certificate and approval from the NCDOI in order to proceed directly to collecting 10% Deposits in the Spring of 2020.

The marketing plan is based on an educational strategic approach, utilizing a managed dissemination of information to introduce the Project and the Corporation to local area seniors. Strategies are designed to:

• Create urgency among households to inquire and learn about the Project; • Educate the market about the three levels of Entrance Fee Plans offered; • Share the vision of the many positive values and benefits of the CCRC lifestyle, along with the health care and long-term care benefit; • Present and sell the Project to qualified seniors as their potential new home through a professionally developed and managed “staged” marketing program; and • Utilize the Charter Members) to motivate prospective residents to make a deposit in the early stages of marketing.

Depositors making a 10% Deposit, up to the first 70% of the Depositors, are eligible to receive “Charter Member” benefits. Charter Members are expected to be eligible for certain benefits, including first selection of their Independent Living Apartment. This and other promotional and community building options will continue and expand as the sales program is fully underway in 2020. The goal of the marketing and sales program is to obtain 70% pre-sales of the available 125 Independent Living Apartments. The marketing program will be under the direct supervision of the Parent and carried out by the onsite Marketing Director and the Marketing Consultant.

In its initial response to a request for proposals, the Marketing Consultant identified challenges with attracting and retaining non-Jewish residents to the Project. The Project may require a significant number of non-Jewish residents to be successful. The Corporation believes that the Project will be able to attract and retain non-Jewish residents to the Project in line with its Business Plan, however, if indeed, the Project needs to attract non-Jewish residents and is unable to do so, the Corporation may not be able to secure to Permanent Financing.

The Marketing Consultant will be reimbursed fixed fees based on specific tasks such as branding, the commencement of marketing plans and other planning activities. They will also be reimbursed a monthly fee from their engagement through the opening of the community and a sales commission based on 10% deposits. The Marketing Consultant will also be reimbursed for any expenses incurred related to the Project.

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The Owner’s Representative Agreement

The Owner’s Representative will be paid an hourly rate during the conceptual budgeting through construction document phase, a monthly rate between the Construction through Certificate of Occupancy phase and an hourly rate thereafter. The Owner’s Representative could also receive bonus compensation if the Project is completed in the timeline contemplated in the Owner’s Representative Agreement.

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APPENDIX B

COMPILATION OF A FINANCIAL PROJECTION

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COMPILATION OF A FINANCIAL PROJECTION

ALDERSGATE AT SHALOM PARK, INC.

FOR THE YEARS ENDING DECEMBER 31, 2019 THROUGH 2026

ALDERSGATE AT SHALOM PARK, INC. TABLE OF CONTENTS

Independent Accountants’ Compilation Report ...... B-1

Projected Statements of Operations and Changes in Net Deficits For the Years Ending December 31, 2019 through 2026 ...... B-3

Projected Statements of Cash Flows For the Years Ending December 31, 2019 through 2026 ...... B-4

Projected Statements of Financial Position December 31, 2019 through 2026 ...... B-5

Projected Schedule of Financial Ratios For the Years Ending December 31, 2019 through 2026 ...... B-6

Summary of Significant Projection Assumptions and Accounting Policies:

Background and Information ...... B-7

Plan of Finance ...... B-23

Summary of Significant Accounting Policies ...... B-28

Management’s Basis for Projection of Revenues and Entrance Fees ...... B-31

Management’s Basis for Projection of Expenses ...... B-38

Management’s Basis for Projection of Other Items ...... B-41

CliftonLarsonAllen LLP CLAconnect.com

INDEPENDENT ACCOUNTANTS’ COMPILATION REPORT

Board of Directors Aldersgate at Shalom Park, Inc. Charlotte, North Carolina

Management is responsible for the accompanying projected financial statements of Aldersgate at Shalom Park, Inc. (“Shalom Park” or the “Corporation”), which comprise the projected balance sheets as of December 31, 2019, 2020, 2021, 2022, 2023, 2024, 2025, and 2026 and the related projected statements of operations and changes in net deficits, and cash flows as of and for each of the years then ending, and the related summaries of significant projection assumptions and accounting policies in accordance with the guidelines for presentation of a financial projection established by the American Institute of Certified Public Accountants (“AICPA”). We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not examine or review the projected financial statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any form of assurance on these projected financial statements or the assumptions. Furthermore, even if Shalom Park is able to achieve the following (the “Hypothetical Assumptions” as discussed in page 7 and 8):

 Construct the Project (as defined subsequently herein) that consists of 125 independent living apartments, eight (8) memory support units, and eight (8) assisted living units;  Construction, development, marketing, and other related costs of the proposed Project approximate $103,511,000;  Pre-permanent financing of project-related costs of the Project are funded primarily through the proposed issuance of the Series 2019 Notes at terms and rates as reflected subsequently herein;  Permanent financing to fund the project-related costs of the Project and repay the Series 2019 Notes are primarily funded through the issuance of $135,495,000 of bonds (the “Series 2021 Bonds” or the “Permanent Financing”) at the terms and rates as reflected subsequently herein;  The Project’s “Independent Living Apartments”, along with the Project’s “Assisted Living Units” and “Memory Support Suites”, are successfully marketed and occupied during the Projection Period;  Underlying assumptions regarding unit turnover as well as entrance fee receipts and refunds occur as presented in the projection;  All regulatory approvals are received in accordance with the timeline detailed herein;  The Corporation receives approval from the North Carolina Department of Insurance to operate as a Life Plan Community;  The Corporation applies for and receives a license to operate the Memory Support Suites;  The Projection covers a period that is in excess of five years which increases the uncertainty of assumptions beyond an initial five-year period; and

B-1 Board of Directors Aldersgate at Shalom Park, Inc.

 The timing to achieve an appropriate level of presales of the Project’s Independent Living Apartments, obtain Permanent Financing, and the construction period occur as projected.

There will usually be differences between the projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material.

The accompanying projection and this report are intended solely for the information and use of the Borrower, the Corporation, BB&T Capital Markets, a division of BB&T Securities, LLC and Herbert J. Sims & Company, Inc., and certain “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 or an institutional “accredited investor” as defined in Rule 501(a)(1),(2),(3),(7) or (8) and are not intended to be and should not be used by anyone other than these specified parties.

We have no responsibility to update this report for events and circumstances occurring after the date of this report.

CliftonLarsonAllen LLP

Charlotte, North Carolina September 25, 2019

B-2 ALDERSGATE AT SHALOM PARK, INC. PROJECTED STATEMENTS OF OPERATIONS AND CHANGES IN NET DEFICITS ASSUMING THE HYPOTHETICAL ASSUMPTIONS ON PAGES 7 AND 8 FOR THE YEARS ENDING DECEMBER 31, (000s Omitted)

2019 2020 2021 2022 2023 2024 2025 2026 Revenue, gains, and other support Net resident service revenues Independent Living $ - -$ -$ -$ 486$ 5,418$ 9,456$ $ 10,572 Assisted Living and Memory Care - - - - 27 658 1,322 1,390 Amortization of deferred entrance fees - - - - 350 1,342 2,391 2,919 Investment and interest income, net - - - - 245 707 836 580 Other support - - - - 6 76 135 150 Contribution from Parent 671 ------Total revenue, gains, and other support 671 - - - 1,114 8,201 14,140 15,611

Expenses Assisted Living and Memory Support - - - - 193 819 872 899 Healthcare Placement Expense - - - - 1 14 36 62 Dietary - - - - 428 1,999 2,294 2,400 Housekeeping and Laundry - - - - 78 473 507 525 Plant Operations - - - - 170 530 546 563 Utilities - - - - 169 536 552 569 Administration 348 1,490 1,199 895 810 1,312 1,497 1,564 Charitable Care - - - - 43 375 665 752 Management Fee - - - - 161 308 546 606 Interest expense - - - - 2,538 6,844 5,974 5,574 Depreciation - - - - 998 2,996 3,010 3,023 Total expenses 348 1,490 1,199 895 5,589 16,206 16,499 16,537

Deficit of revenues, gains, and other support over expenses 323 (1,490) (1,199) (895) (4,475) (8,005) (2,359) (926)

Other Changes in net assets without donor restriction Loss on Extinguishment of Debt - - (331) - - - - - Total other changes in net assets without donor restriction - - (331) - - - - -

Change in net deficit 323 (1,490) (1,530) (895) (4,475) (8,005) (2,359) (926)

Net deficit, beginning of year - 323 (1,167) (2,697) (3,592) (8,067) (16,072) (18,431) Net deficit, end of year $ 323 $ (1,167) $ (2,697) $ (3,592) $ (8,067) $ (16,072) $ (18,431) $ (19,357)

See Summary of Significant Projection Assumptions and Accounting Policies and Independent Accountants’ Compilation Report B-3 ALDERSGATE AT SHALOM PARK, INC. PROJECTED STATEMENTS OF CASH FLOWS ASSUMING THE HYPOTHETICAL ASSUMPTIONS ON PAGES 7 AND 8 FOR THE YEARS ENDING DECEMBER 31, (000s Omitted)

2019 2020 2021 2022 2023 2024 2025 2026

Cash flows from operating activities: Change in net deficits $ 323 $ (1,490) $ (1,530) $ (895) $ (4,475) $ (8,005) $ (2,359) $ (926) Adjustments to reconcile change in net deficits to net cash provided by (used in) operating activities: Depreciation - - - - 998 2,996 3,010 3,023 Amortization Expense - - - - 126 381 381 348 Amortization of earned entrance fees - - - - (350) (1,342) (2,391) (2,919) Loss on Extinguishment of Debt - - 331 - - - - - Net change in current assets and liabilities - - - - 182 193 (82) (7) (Decrease) increase in accrued interest 140 896 2,122 475 45 (509) (362) (39) Entrance fees received from resident turnover - - - - 173 2,011 4,619 6,589 Entrance fees refunded - - - - (72) (794) (1,602) (2,382) Net cash provided by (used in) operating activities 463 (594) 923 (420) (3,373) (5,069) 1,214 3,687

Cash flows from investing activities: Purchase of property and equipment (1,615) (2,091) (31,063) (45,037) (26,332) (192) (198) (204) Interest cost capitalized during construction period (140) (896) (3,239) (6,243) (4,651) - - - (Increase) decrease in assets limited as to use (6,114) (133) (40,588) 28,276 (10,573) (7,706) 28,048 (98) (Increase) decrease in assets limited as to use, current - - - - (625) (2,543) 362 38 (Increase) decrease in investments - - - - (621) (314) (7,379) (2,086) Net cash provided by (used in) investing activities (7,869) (3,120) (74,890) (23,004) (42,802) (10,755) 20,833 (2,350)

Cash flows from financing activities: Initial entrance fees received - - - - 19,192 33,373 18,002 - Issuance of Series 2021 Bonds - - 83,418 23,424 27,340 1,313 - - Deferred financing costs (826) - (2,705) - - - - - Principal payments on Series 2021 Bonds - - - - - (15,000) (38,140) (1,285) Issuance of Series 2019 Notes 7,489 ------Principal payments on Series 2019 Notes - - (7,489) - - - - - (Decrease) increase in resident deposits 743 3,714 743 - (104) (3,330) (1,767) - Net cash provided by (used in) financing activities 7,406 3,714 73,967 23,424 46,428 16,356 (21,905) (1,285)

Net increase in cash and cash equivalents - - - - 253 532 142 52

Beginning balance of cash and cash equivalents - - - - - 253 785 927

Ending balance of cash and cash equivalents $ - -$ -$ -$ 253$ 785$ 927$ 979$

See Summary of Significant Projection Assumptions and Accounting Policies and Independent Accountants’ Compilation Report B-4 ALDERSGATE AT SHALOM PARK, INC. PROJECTED STATEMENTS OF FINANCIAL POSITION ASSUMING THE HYPOTHETICAL ASSUMPTIONS ON PAGES 7 AND 8 DECEMBER 31, (000s Omitted) 2019 2020 2021 2022 2023 2024 2025 2026 Assets

Current assets: Cash and cash equivalents $ - -$ -$ -$ 253$ 785$ 927$ 979$ Assets limited as to use - Series 2019 Notes and Series 2021 Bonds - - - - 625 3,168 2,806 2,768 Accounts receivable - - - - 21 253 448 498 Prepaid expenses and other assets - - - - 39 122 144 152 Inventory - - - - 6 17 21 22 Total current assets - - - - 944 4,345 4,346 4,419

Investments - - - - 621 935 8,314 10,400

Assets limited as to use: Project Fund 5,371 1,790 22,530 - - - - - Funded Interest Fund - - 12,202 6,455 1,321 - - - Debt service reserve fund - long-term debt - - 6,902 6,902 6,902 6,902 6,902 6,902 Entrance Fee Fund - - - - 6,692 25,065 - - Designated for Statutory Operating Reserve Fund - - - - 2,964 3,105 1,888 1,986 Working Capital Fund - - - - 6,157 - - - Resident deposits 743 4,457 5,201 5,202 5,096 1,766 - - Total assets limited as to use 6,114 6,247 46,835 18,559 29,132 36,838 8,790 8,888

Property and equipment 1,755 5,237 39,539 90,819 121,802 121,994 122,192 122,396 less accumulated depreciation - - - - (998) (3,994) (7,004) (10,027) Net property and equipment 1,755 5,237 39,539 90,819 120,804 118,000 115,188 112,369

Total assets $ 7,869 11,484$ $ 86,374 109,378$ 151,501$ 160,118$ 136,638$ $ 136,076

2019 2020 2021 2022 2023 2024 2025 2026 Liabilities and Net Deficits

Current liabilities: Accounts payable $ - -$ -$ -$ 169$ 523$ 618$ 653$ Accrued expenses - - - - 79 244 288 305 Accrued interest payable 140 1,036 3,158 3,633 3,678 3,169 2,807 2,768 Current maturities of Series 2021 Bonds - - - - 15,000 38,140 1,285 1,365 Current maturities of Series 2019 Notes - 7,158 ------Resident deposits 743 4,457 5,200 5,200 5,096 1,766 - - Total current liabilities 883 12,651 8,358 8,833 24,022 43,842 4,998 5,091

Long-term debt, net of current portion and bond issuance costs - - 80,713 104,137 116,603 80,157 79,253 78,236 Series 2019 Notes, less current maturities and issuance costs 6,663 ------Refundable Entrance Fees - - - - 13,056 36,247 49,979 52,064 Deferred revenue from advance fees, net of amortization - - - - 5,887 15,944 20,839 20,042 Total liabilities 7,546 12,651 89,071 112,970 159,568 176,190 155,069 155,433

Net deficits: Without Donor Restriction 323 (1,167) (2,697) (3,592) (8,067) (16,072) (18,431) (19,357) Net deficits 323 (1,167) (2,697) (3,592) (8,067) (16,072) (18,431) (19,357)

Total liabilities and net deficits $ 7,869 11,484$ $ 86,374 109,378$ 151,501$ 160,118$ 136,638$ $ 136,076

See Summary of Significant Projection Assumptions and Accounting Policies and Independent Accountants’ Compilation Report B-5 ALDERSGATE AT SHALOM PARK, INC. PROJECTED SCHEDULE OF FINANCIAL RATIOS ASSUMING THE HYPOTHETICAL ASSUMPTIONS ON PAGES 7 AND 8 FOR THE YEARS ENDING DECEMBER 31, (000s Omitted)

Long-Term Debt Service Coverage Ratio (1) 2026 Change in net deficit $ (926) Deduct: Entrance fee amortization (2,919)

Add: Depreciation 3,023 Interest expense 5,574 Entrance fees received from resident turnover 6,589 Entrance fees refunded (2,382) Income Available for Debt Service $ 8,959 (3) Maximum Annual Debt Service $ 6,902 Maximum Annual Debt Service Coverage Ratio 1.30x

Long-Term Debt Service Coverage Ratios Revenue Only 2026 Change in net deficit (926) Deduct: Entrance fee amortization (2,919) Add: Depreciation 3,023 Interest expense 5,574 Income Available for Debt Service 4,752 (2) Annual Debt Service 6,898 Debt Service Coverage Ratio 0.69x

Days Cash on Hand (1) 2026 Cash and cash equivalents $ 979 Investments 10,400 Designated for Statutory Operating Reserve Fund 1,986 Cash on hand $ 13,365

Total expenses $ 16,537 Less: Amortization of deferred issuance costs (348) Depreciation (3,023) Total expenses less depreciation $ 13,166 Daily operating expenses $ 36 Days cash on hand 371

Notes: (1) Calculations are presented based upon assumed terms of the Series 2021 Bonds. (2) Annual debt service has been provided by Management and the Underwriters. (3) Maximum annual debt services have been provided by Management and the Underwriters.

See Summary of Significant Projection Assumptions and Accounting Policies and Independent Accountants’ Compilation Report B-6 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION

Basis of Presentation

Aldersgate at Shalom Park, Inc. (the “Corporation” or “Shalom Park”) is a North Carolina nonprofit corporation, the sole member of which is Aldersgate Life Plan Services, Inc. (the “Parent”), a North Carolina nonprofit corporation. The Project (defined herein) is planned to be a start-up Life Plan Community (“Life Plan Community” or “LPC”) located in Charlotte, North Carolina. The accompanying financial projection presents, to the best knowledge and belief of Management (as subsequently defined). The expected results of operations and changes in net deficits, cash flows, and financial position of the Corporation as of and for the year ending December 31, 2019 and for each of the eight years ending December 31, 2020, 2021, 2022, 2023, 2024, 2025 and 2026 (the “Projection Period”) assuming that the hypothetical assumptions (the “Hypothetical Assumptions”) stated below occur.

For purposes of this financial projection, management (“Management”) is defined as management of the Parent.

A projection, although similar to a forecast, is a presentation of prospective financial information that is subject to one or more hypothetical assumptions. Management has included assumptions that are considered to be “Hypothetical Assumptions” as defined by the American Institute of Certified Public Accountants’ “Guide for Prospective Financial Information.” A Hypothetical Assumption is defined as follows: “An assumption used in a financial projection or in a partial presentation of projected information to present a condition or course of action that is not necessarily expected to occur, but is consistent with the purpose of the presentation.”

The accompanying financial projection contained herein is estimated by Management. Accordingly, the financial projection reflects Management’s judgment as of September 25, 2019 the date of this financial projection, of its expected conditions and its expected course of action during the Projection Period assuming the Hypothetical Assumptions (as subsequently defined below) occur as projected. The assumptions disclosed herein, while not all- inclusive, are those that Management believes are significant to its financial projection. However, even if the Hypothetical Assumptions stated below occur as projected, there will usually be differences between the projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material.

Management’s purpose in preparing this financial projection is associated with its plans to secure financing related to the proposed issuance of a note with a par amount of $13,000,000 inclusive of a discount of $5,511,000 ($7,489,000 net Bond Anticipation Notes proceeds) (Aldersgate at Shalom Park Pre-Development Project) Series 2019 (the “Series 2019 Notes”) and is solely for the use of the Corporation, BB&T Capital Markets, a division of BB&T Securities, LLC, and Herbert J. Sims & Company, Inc., and certain “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 or an institutional “accredited investor” as defined in Rule 501(a)(1),(2),(3),(7) or (8), and are not intended to be and should not be used by anyone other than these specified parties.

Hypothetical Assumptions

A hypothetical assumption is an assumption used in a financial projection to present a condition or course of action that is not necessarily expected to occur (since there are factors present that are likely to change) but is consistent with the purpose of the presentation. Management does not need to have a reasonably objective basis for the hypothetical assumption, although the hypothetical assumption should be consistent with the purpose of the projection. Management has prepared its financial projection assuming the following hypothetical assumptions (the Hypothetical Assumptions”):

 Construct the Project (as defined subsequently herein) to consist of 125 independent living apartments, eight (8) memory support units, and eight (8) assisted living units; See Independent Accountants’ Compilation Report B-7 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

 Construction, development, marketing, and other related costs of the proposed Project approximate $103,511,000;  Pre-permanent financing of project-related costs of the Project are funded primarily through the proposed issuance of the Series 2019 Notes at terms and rates as reflected subsequently herein;  Permanent financing to fund the project-related costs of the Project and repay the Series 2019 Notes are primarily funded through the issuance of $135,495,000 of bonds (the “Series 2021 Bonds” or the “Permanent Financing”) at the terms and rates as reflected subsequently herein;  The Project’s Independent Living Apartments (defined herein), along with the Project’s Assisted Living Units and Memory Support Suites (defined herein), are successfully marketed and occupied during the Projection Period;  Underlying assumptions regarding unit turnover as well as Entrance Fee (defined herein) receipts and refunds occur as presented in the projection;  All regulatory approvals are received in accordance with the timeline detailed herein;  The Corporation receives approval from the North Carolina Department of Insurance to operate as a Life Plan Community;  The Corporation applies for and receives a license to operate the Memory Support Suites;  The Projection covers a period that is in excess of five years which increases the uncertainty of assumptions beyond an initial five-year period; and  The timing to achieve an appropriate level of presales of the Project’s Independent Living Apartments, obtain Permanent Financing, and the construction period occur as projected.

Hypothetical assumptions are not derived from sources which are based upon supporting documentation such as contracts, agreements or other empirical data. Because of the nature of financial projections, a hypothetical assumption is not intended to provide a reasonable basis for the presentation.

The Corporation

Aldersgate at Shalom Park, Inc. (the “Corporation”), is a North Carolina nonprofit corporation, the sole member of which is Aldersgate Life Plan Services, Inc. (the “Parent”), a North Carolina nonprofit corporation. The Corporation was incorporated and organized on November 29, 2016. By letter dated December 14, 2017, the Internal Revenue Service (“IRS”) informed the Corporation that the IRS had determined that the Corporation is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). The Corporation was created to assist in the development of a senior living facility which, upon receipt of necessary regulatory approval, to be operated as “Life Plan Community” initially expected to consist of the Independent Living Apartments, the Assisted Living Units and the Memory Support Suites, and a clubhouse located near the Temple Israel synagogue (the “Temple”) and within “Shalom Park” (as described herein) in Charlotte, Mecklenburg County, North Carolina and would be located on approximately 11.5 acres of land at the corner of Jefferson Road and Providence Road in Charlotte, North Carolina (the “Property”).

Neighborhood Collaboration

See Independent Accountants’ Compilation Report B-8 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Preconstruction costs of the Project are being financed with bonds issued by the Public Finance Authority’s Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project), Series 2019 Notes. Although the Corporation will be collaborating with the Sellers throughout the design, construction and operation of the Project, neither the Sellers nor any other party other than the Corporation, are responsible for payment of principal or interest on the Series 2019 Notes and the Series 2021 Bonds, as subsequently hereinafter defined.

See Independent Accountants’ Compilation Report B-9 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

The Corporate Structure

The Aldersgate Family (as defined herein) is organized as follows:

The Main Affiliate: Aldersgate United Methodist Retirement Community, Inc. Aldersgate United Methodist Retirement Community, Inc. (the “Main Affiliate”) is a North Carolina nonprofit corporation incorporated in 1945, which operates a Life Plan Community located in Charlotte, North Carolina which is also known as “Aldersgate.” Aldersgate began operations in 1945 and currently includes 309 independent living apartments and cottages, 46 traditional assisted living units, 61 memory support suites, 125 skilled nursing beds, and a new community center.

Beginning in early 2016, the Main Affiliate implemented a series of restructuring transactions involving the creation of new, distinct legal entities dedicated to specific proposed operating activities designed to facilitate its ability to expand services in furtherance of its charitable mission through new business opportunities while managing liability and financial risks associated with such opportunities. These new entities, along with the Main Affiliate, were consolidated under a new parent corporation (namely, the Parent) that provides management and certain administrative services (such as accounting and human resources) to each entity and shares the costs of such services pursuant to arms’s length management services or cost-sharing agreements. The Parent, the Corporation, the Main Affiliate and their affiliated entities (namely Aldersgate at Sharon, Inc., Aldersgate at Home, Inc., Aldersgate

See Independent Accountants’ Compilation Report B-10 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Holdings, Inc. and Aldersgate Foundation Inc.) are collectively referred to herein as the “Aldersgate Family.”

For the purpose of the projection, the operations of the Corporation have been presented for the eight years ending December 31, 2019 through 2026. Neither the Parent nor any of its other affiliates (except for Aldersgate at Shalom Park, Inc.) is not obligated for the payment of debt service on the Series 2019 Notes and the Series 2021 Bonds.

See Independent Accountants’ Compilation Report B-11 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Development of the Project

The Corporation expects to engage Brian Schiff and Associates, LLC (“BSA”) to assist the Corporation and the Parent in preparing a development plan (the “Development Plan”) and to act as the “Development Consultant” for the Project. In addition to the Development Consultant, the project team also includes Frank L. Blum Construction Contractor as the general contractor, Landworks Design Group, PA as the civil engineer, RLPS Architects as the architect, and Construction Practices, LLC as the owner’s representative. Neither the BSA, Frank L. Blum Construction Contractor, Landworks Design Group, PA, RLPS Architects, or Construction Practices, LLC are obligated for the payment of debt service on the Series 2019 Notes.

The Project

The Project is planned to be located on approximately 11.5 acres of land located at the corner of Jefferson Road and Providence Road in Charlotte, North Carolina. The Project is expected to consist of 125 independent living apartments (the “Independent Living Apartments”) in five separate hybrid buildings with structured parking, eight (8) assisted living units (the “Assisted Living Units”) and eight (8) memory support suites (the “Memory Support Suites”) in a stand-alone health care building (collectively the “Assisted Living Center”). The Project is also expected to include a new “Clubhouse” to include dining spaces (formal and bistro/cafe), main kitchen, activity spaces, other various common areas, as well as administrative and support spaces.

See Independent Accountants’ Compilation Report B-12 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Independent Living Apartments

The following table summarizes the anticipated unit mix, square footage and fees of the Independent Living Apartments.

Table 1 Independent Living Apartments Unit Mix, Square Footage and Fees (2019)

Monthly Service Monthl y Service Entrance Fees Entrance Fees Fees Fees Square 90% and 50% 0 % Refundable 90% and 0% 50% Unit Name Total Units Footage Refundable Plan Plan Refundable Plan Refundable Plan One Bedroom Apartment 1 BR/1.5 Bath 18 1,000 $435,000 $310,000 $4,445 $3,778 1 BR/1.5 Bath/Den 3 1,225 535,000 380,000 5,150 4,378 Two Bedroom Apartment 2 BR/2.0 Bath 16 1,115 485,000 350,000 4,650 3,953 2 BR/2.5 Bath/Den 18 1,225 535,000 380,000 5,025 4,271 2 BR/2.5 Bath/Den/Deluxe 18 1,325 575,000 410,000 5,300 4,505 2 BR/2.5 Bath/Den/Deluxe 18 1,425 625,000 445,000 5,575 4,739 2 BR/2.5 Bath/Den/Deluxe 16 1,525 665,000 475,000 5,850 4,973 2 BR/2.5 Bath/Den/Deluxe 18 1,650 715,000 515,000 6,250 5,313 Total/Weighted Average 125 1,321 $575,480 $411,360 $5,297 $4,503 Second Person Fee $25,000 $25,000 $1,350 $1,350

Source: Management Note: (1) The Independent Living Apartments are projected to be available for occupancy in September 2023 (Fiscal Year 2023). (2) To encourage early commitments to residency at the Project, the Corporation expects to offer early depositors a package of benefits (“Charter Benefits”). Charter Benefits may include promotional discounts or services; however, the specific list of benefits would not be determined until formal marketing activities have been initiated. (3) The “Entrance Fees” shown are Charter Benefit pricing and are in 2019 dollars. Management assumes the Charter Benefit pricing to increase approximately 6.0% once construction of the Project begins and 8.0% once the Project is available for occupancy. The Entrance Fees are assumed to increase 2.75% annually beginning in Fiscal Year 2024. (4) The “Monthly Service Fees” shown are in 2019 dollars and are assumed to increase 3.0% annually beginning in Fiscal Year 2020. (5) Charter Benefit pricing for the second person Entrance Fees and Monthly Service Fees for are assumed to be $25,000 and $1,350 per month, respectively.

Each Independent Living Apartment is expected to be furnished with the following items: carpeting and wood floors, self-defrosting refrigerator and freezer with ice maker, range and oven, dishwasher, microwave oven, garbage disposal, washer, dryer, an emergency call system, fire sprinkler system a telephone/data communications port, individually controlled heating and air conditioning units. All Independent Living Apartments are expected to also have a patio or balcony and access to telephone, internet, and cable television services.

See Independent Accountants’ Compilation Report B-13 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Assisted Living Units and Memory Support Suites

The Project is expected to include eight (8) stand-alone Assisted Living Units and eight (8) Memory Support Suites in a secured setting located in a stand-alone health care building. The Assisted Living Units and Memory Support Suites have been designed to foster the continued independence of residents who require varying amounts of assistance with activities of daily living and to provide services designed for residents who need memory support services. Three meals are to be provided daily. The Assisted Living Units and Memory Support Suites are expected to be private suites with full bathrooms to be furnished with amenities, but are not expected to include a kitchenette or washer/dryer units. The Assisted Living and Memory Support Suites are expected to have secured access and separate common areas.

Admission to the Assisted Living Units and Memory Support Suites is expected to be provided for residents in accordance with the terms of the Assisted Living and Memory Support Agreement (defined herein) and are closed units limited to only Residents transferring from within the Project.

The following table summarizes the expected types, square footage and fees of the Assisted Living Units and Memory Support Suites:

Table 2 Assisted Living Units and Memory Support Suites Unit Mix, Square Footage and Fees (2019) Unit Type Total Units Square Footage Monthly Service Fees Assisted Living Units 8 550 $6,397 Memory Care Suites 8 300 $6,971 Total 16

Source: Management Note: (1) The Assisted Living Units and Memory Support Suites are projected to open in October 2023 (Fiscal Year 2023). (2) The Assisted Living Units and Memory Support Suites Monthly Service Fees are in 2019 dollars and are assumed to increase 3.0% annually beginning in Fiscal Year 2020. (3) The Assisted Living Units and Memory Support Suites are closed/sheltered beds for use of Residents (as subsequently defined) transferring from the Independent Living Apartments. (4) The Assisted Living Units are assumed to offer two tiers of care. The Monthly Service Fees shown are for Tier 1 care. Tier 2 care is assumed to be an additional $640 per month in 2019 dollars.

Common Areas

The Project is expected to include a number of common areas in each of the Independent Living Apartments buildings, and the Assisted Living Center. The Project is also anticipated to include a Clubhouse which is planned to include the main kitchen, formal, casual and private dining spaces, living areas, various activity rooms, a beauty/barber parlor, a mailroom. The Clubhouse is also anticipated to include administrative and support spaces.

Resident Admission Criteria

Generally, Management has indicated that to be accepted for residency in the Independent Living Apartments, a prospective resident must be at least 62 years old and must demonstrate the ability to live independently or with some assistance with activities of daily living as determined by the Corporation, and is able to meet the financial obligations as a resident of the selected unit within the Independent Living Apartments. The Project operates on a

See Independent Accountants’ Compilation Report B-14 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED) non-discriminatory basis, and provides facilities and services to residents without unlawful discrimination due to race, color, religion, sex, national origin, ancestry, disability or any other unlawful reason.

In order to reserve an independent living unit, a prospective resident must execute a residence and services agreement (the “Residency Agreement”) and provide payment of an initial entrance fee deposit equal to 10 percent of the applicable entrance fee pricing (the “Deposit”) for the selected independent living unit (the “Depositor”) within 10 days of signing the Residency Agreement. The Depositor must also provide a self-disclosure of his or her health and finances.

The Residency Agreement is a contract under which the Corporation is obligated, upon payment by the resident of an entrance fee and ongoing payments of the Monthly Service Fee to the Corporation, to provide certain services for life to the resident.

To be accepted for admission to the Independent Living Units, a prospective resident must be at least 62 years of age (or if a couple, one spouse is at least 62 years of age) at the time residency is established, have financial assets adequate to pay the entrance fee, and have sufficient income to meet the anticipated Monthly Service Fee and other personal expenses not provided under the Residency Agreement (the “Resident”). The remaining 90 percent of the Entrance Fee is due on or before the date of occupancy (the “Occupancy Date”).

The Residency Agreement may be terminated by the Resident for any reason prior to occupancy by giving written notice. In the event of such termination, the Resident shall receive a refund of the entrance fee according to the reason for termination. However, if the Resident dies before occupying his or her residence or becomes incapable of meeting the physical, mental or financial requirements of admission, the Residency Agreement shall be cancelled and the entire Entrance Fee amount shall be refunded.

Services and Amenities Under the Residency Agreement, payment of the Entrance Fee and Monthly Service Fee entitles all Residents to occupy the selected Independent Living Apartments and receive the following services and amenities at no additional cost:

 Utilities (except telephone, internet services, and basic television);  A declining balance meal plan for use in any of the dining areas;  Routine maintenance;  24-hour emergency response service;  24-hour security;  Planned social and recreational activities;  Scheduled local transportation;  Weekly housekeeping;  Priority admission to assisted living, memory support, and skilled nursing services;  Weekly laundry for flat linens;  Uncovered parking; and  Use of grounds and common facilities.

Additional services that are available to Residents for an extra charge include, but are not limited to, additional meals, Kosher style meals, telephone service and cable television, high-speed internet access, guest accommodations, additional housekeeping or maintenance services, medicine and medical supplies, tray service, and catering.

See Independent Accountants’ Compilation Report B-15 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Health Care Benefit Basic temporary and permanent assisted living and memory care services, as needed, would be provided to Residents as described in the Residency Agreements and subject to changes in law at a discounted fee of 10% of the then marketed rates (the “Health Care Benefit Rate”). If a Resident requires nursing care, the Resident would have priority access and discounted fee of 20% access to Asbury Health and Rehabilitation Center (“Asbury”) on a temporary or permanent basis. Asbury, located on the Main Affiliate’s campus, is a 125-bed licensed nursing care facility of which 100 beds are Medicare certified and 25 beds are dually certified for Medicare and Medicaid. The Main Affiliate, a related party, is an affiliate of the Parent. Use of these nursing services requires the certification of such need by the Resident's attending physician and shall be subject to availability of an appropriate accommodation at the Project.

In the event that an appropriate accommodation is not available upon determination that a permanent transfer is required, the Project will arrange and pay for Resident's care in his/her residence by a certified home health care agency of the Project's choice, if reasonably possible, until an appropriate accommodation becomes available at Asbury. If home health care is not medically possible, the Community will arrange and pay for the Resident's care in another facility of the Project's choice that can provide the same care that would otherwise have been provided by the Community until space becomes available. The Community will pay for care in another facility to the same extent as if it were provided by the Project. The Resident will pay monthly or daily service fees to the Corporation as if the Resident were living at the Project. As part of the proposed Residency Agreement , residents can receive a 20% discount for nursing care if they transfer to Asbury.

Residents are also responsible for any charges that are not covered by the Health Care Benefit Rate which may include drugs, supplies, ancillary services and level-of-care fees, if applicable.

Resident Fee Structure The Corporation plans to offer three (3) refund plans under the Residency Agreement (the “Residency Plans”), as described below. The table below describes refund provisions for the planned Residency Agreement. Entrance Fee Options Amortization Timing 90% Refundable Plan For Residents who have chosen the 90% Refundable Entrance Fee option, the refund due shall be the entrance fee paid less: (i) ten percent (10%); (ii) a fee of one thousand dollars ($1,000); and (iii) any amount due to the Corporation for monthly care or other unpaid services. 50% Refundable Plan For Residents who have chosen the 50% Refundable Entrance Fee option, the refund due shall be the entrance fee paid less: (i) ten percent (10%); (ii) 3.33% per month for months 1 through 12; (iii) a fee of one thousand dollars ($1,000); and (iv) any amount due to the Corporation for monthly care or other unpaid services. 0% Refundable Plan For Residents who have chosen the 0% Refundable Entrance Fee option, the refund due, if any, shall be the Entrance Fee paid, less: (i) ten percent (10%); (ii) 7.5% per month for months 1 through 12; (iii) a fee of one thousand dollars ($1,000); and (iv) any amount due to the Corporation for monthly care or other unpaid services. No part of the 0% Refundable Entrance Fee is refundable after a Resident has resided at the Project for twelve (12) months.

See Independent Accountants’ Compilation Report B-16 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Under all entrance fee options, upon termination of the Residency Agreement either by the Resident, by the Corporation or as the result of the death of the Resident, the balance of the refundable portion of the entrance fee to be refunded to the Resident or the Resident’s estate after the Corporation has received a new entrance fee for the vacated unit.

To reserve an Independent Living Apartment, a prospective resident must pay the reservation deposit (the “Reservation Deposit”), equal to 10 percent of the Entrance Fee, prior to or upon execution of the reservation agreement (the “Reservation Agreement”), and pay the remaining 90 percent of the Entrance Fee on or before the date of occupancy. An additional Entrance Fee is required for a second resident living in an Independent Living Apartment. The Monthly Service Fee is based on the type of Independent Living Apartment selected by the resident. In addition to the first resident’s Monthly Service Fee, an additional Monthly Service Fee is payable for a second resident living in an Independent Living Apartment.

The following table presents the Residency Plans, pricing adjustment factors, refund percentages, and contract amortization periods that the Corporation expects to offer to residents of the Independent Living Apartments.

Table 3 Independent Living Apartments Planned Residency Plans, Pricing Adjustment Factors, Refund Percentages, and Contract Amortization Periods Entrance Fee premium Monthly Service Fee discount Entrance Fee Residency Plan Amortization Period (based on 0% Refundable Plan) (based on 0% Refundable Plan) Refundability 90% Refundable Plan 40.00% 0.00% 90% 0 50% Refundable Plan 40.00% 15.00% 50% 12 0% Refundable Plan - - 0% 12

Source: Management

Utilization of Residency Plans Management has projected the following utilization of Residency Plans for the residents of the Independent Living Apartments and the turnover residents of the Independent Living Apartments.

Table 4 Utilization of Residency Plans during the Projection Period Independent Living Apartments and Turnover of Independent Living Apartments Residency Plan Utilization 90% Refundable Plan 60.00% 50% Refundable Plan 20.00% 0% Refundable Plan 20.00% Total 100.00%

Source: Management

See Independent Accountants’ Compilation Report B-17 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

The Real Estate and Purchase Agreement and Deed Restriction

The Corporation has entered into the Purchase Agreement with the Sellers for the purchase of the Property. Although the Purchase Agreement is currently effective, the sale and transfer of the Property will not take place until certain conditions are met prior to the sale and transfer of the Property, including that the Corporation must obtain necessary and appropriate government approvals with respect to the Project, and enter into various additional agreements relating to the Sellers’ rights that continue beyond the sale and transfer of the Property. The Property will not be sold and transferred at the time of the issuance of the Series 2019 Notes.

The Series 2019 Notes must be issued no later than March 31, 2020, or Seller may elect to terminate the Purchase Agreement. Although the Purchase Agreement retains flexibility as to when the transfer and sale of the Property may take place, such transfer and sale must take place no later than 1,320 days (approximately 3.6 years) after the issuance of the Series 2019 Notes.

Under the Purchase Agreement, the purchase price of the Property depends upon the length of time it takes the Corporation to pre-sell 70% of the units in the Project after the Series 2019 Notes are issued. (“Pre-Sale Goal”). If the Corporation meets the Pre-Sale Goal within 630 days of the issuance of the Series 2019 Notes, the purchase price of the Property is $6,500,000. If the Corporation meets the Pre-Sale goal between 631 days and 810 days of the issuance of the Series 2019 Notes, the purchase price of the Property is $6,200,000. Finally, if the Corporation meets the Pre-Sale Goal after 811 days of the issuance of the Series 2019 Notes, the purchase price of the Property is $5,900,000.

The Property is currently subject to the terms of a joint venture agreement and certain deed restrictions (“Title Restrictions”) that do not permit the Project to be developed as a Life Plan Community. The Corporation has been working with the Sellers and the title company to obtain a release of the Title Restrictions. To date, a release and termination of the Title Restrictions has been signed by 4 of the 5 entities (or their successors) that were beneficiaries to the Title Restrictions. The Sellers have indicated that the 5th entity is a non-profit corporation that has been inactive for approximately 25 years and has not filed any reports with the North Carolina Secretary of State’s Office since its original incorporation filing in 1970. The Corporation is currently pursuing solutions with the Sellers and the title company with regard to the 5th entity

The Management Agreement

The Parent is the manager of the Project, and also responsible for development of the Project. The Parent expects to engage BSA to assist with development advisory services as noted below. Under the Project Development and Construction Management Agreement between the Parent and the Corporation (“the Development Agreement”), the Parent will administer, manage, and supervise the development and construction of the Project on behalf of the Corporation. The Parent will not be paid for its role as a developer or construction management. Upon completion of the Project, under the Life Plan Community Management Agreement between the Corporation and the Parent (the “Management Agreement”), the Parent is responsible for operating, maintaining and servicing the Project. Management responsibilities of the Parent include, but are not limited to, staffing, accounting, billing, collections, setting of rates and charges and general administration. The Parent will charge the Corporation a management fee of 5% of net resident service revenues, as noted in the projected statements of operations and changes in net deficits.

Development Consulting Agreement

BSA has been engaged to serve as the “Development Consultant” of the Project pursuant to a development consulting services agreement (the “Development Consultant Agreement”) between BSA and the Corporation. BSA

See Independent Accountants’ Compilation Report B-18 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED) will provide the following services but are not limited to, with respect to development of the Project (collectively, the “Development Consultant Services”).

Planning and Development

BSA will provide overall planning and development consulting services for the Project which would include the following:

(a) BSA will work with the Project’s development team (“Project Development Team”) to update the Business Plan (as defined herein). The Business Plan will establish the concepts, strategies, schedules and budget estimates recommended for the Project. BSA will also assist in the implementation of the Business Plan. The update could include continued refinement of the Project scope, pricing and programs from the Business Plan as more information becomes available in order to establish an updated Business Plan for use through the temporary and permanent financing.

(b) Prepare and submit for approval by the Corporation, detailed budgets and schedules of costs and expenses for each phase of development activity, including but not necessarily limited to, the phases of development activity which are more particularly set forth in the Business Plan. BSA will also prepare financial projections based on any material changes of the assumptions related to the Project’s scope, operational changes, Project costs (i.e., direct and indirect construction, site work, design and engineering, furniture, fixtures, and equipment, marketing, legal and zoning, and project management), financing assumptions and timing of the Project until permanent financing.

(c) Assist the Corporation, the civil engineer and legal counsel in the achievement of zoning required for Project including coordination of the necessary professionals for zoning approval; create narrative documents regarding the Project, as required; review applications for consistency with the Business Plan; and provide financial projections if required.

(d) Assist the Corporation and the certificate of need consultant to apply for and achieve a new certificate of need (“CON”) for the assisted living elements of the Project including coordination of the necessary professionals for zoning approval; create narrative documents regarding the Project, as required; review applications for consistency with the Business Plan; meet with the State regulators to discuss the application and provide financial projections, if required.

(e) Identify and provide recommendations of the remaining Project Development Team members to be engaged; establish criteria for evaluation and create request for proposals (“RFP”) for these services; lead and provide an analysis and evaluation during the RFP process; and assist in review and negotiation of contracts of the Project Development Team members. BSA will also lead and coordinate meetings, to occur at least monthly, with the Project Development Team, Management, and other Shalom Park stakeholders.

(f) Establish, with the Corporation, a pre-opening schedule which includes tasks required to open the Project and identify relationships between those tasks through the use of a GANT chart; and establish and update a detailed schedule for Project’s development beginning with pre-construction through stabilized occupancy.

Management has assumed that the CON, as noted above in (d) is anticipated to be a sheltered bed CON upon filing.

See Independent Accountants’ Compilation Report B-19 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Design and Construction Assistance

BSA will assist the Corporation in coordinating the work of architects, engineers and other design professionals and determine that all such design and architectural work is consistent with the Business Plan, affordable within the Project’s budget. In addition, BSA will provide the following assistance:

(a) Review and make recommendations for changes in space design, master site plan, interior design and landscaping in conjunction with other members of the Project Development Team for consistency with the Business Plan and review design, especially room layouts and common areas, with Management and the marketing consultant for consistency with market demands and prices established within the Business Plan;

(b) Coordinate with the architect, general contractor, civil engineer, and legal counsel to achieve all architectural drawings and estimates necessary for the regulatory, certificate of need, zoning and permitting process in conjunction with established timeline;

(c) Coordinate timing of completion of various design stages (i.e. schematic, design and construction drawings) to maintain overall schedule;

(d) Review construction estimates from the pre-construction planning process through the guaranteed maximum price (“GMP”) from the general contractor and its sub-contractors. BSA will also work with the Corporation, the owner’s representative and architect to review and resolve those estimates for consistency with the market demands and the Project’s financial viability; and

(e) Attend owner, architect, construction (“OAC”) meetings and work with the owner’s representative to review and recommend approval/not approve any potential change orders.

Marketing Coordination

BSA will work with the Project’s marketing team and marketing consultant (collectively “the Marketing Team”) to assist in the preparation and review of a marketing plan to include at least a budget, staffing, advertising and promotion, timelines for pre-sales and move-ins, urgency tools, and metrics for management of the marketing process. In addition, BSA will provide the following assistance:

(a) In conjunction with the Marketing Team, review the marketing consultant’s recommendations for a sales center for consistency with the Business Plan;

(b) In conjunction with legal counsel and the Marketing Team, review and make recommendations for any residency agreements required for consistency with other Aldersgate Family related projects and to reflect specific programs for the Project.

(c) BSA will work with the Marketing Team review and make recommendations for changes in the marketing budget for the Project proposed by the marketing consultant and update financial projections to reflect marketing recommendations;

(d) Ensure coordination between marketing and design/construction professionals for consistency of scope of the Project and the Project’s amenities; and

(e) Review the Project’s marketing monthly status report to include targets and metrics and advise Management of recommended changes based on review of this information. See Independent Accountants’ Compilation Report B-20 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Financing Coordination – Pre-Construction and Permanent Financing

BSA will provide services in connection with obtaining temporary and permanent financing including:

(a) Preparation of financial projections and compilations (in non-GAAP format) for inclusion in financing documents both for temporary and permanent financing;

(b) In conjunction with the investment banker/underwriter, establish financing calendar;

(c) In conjunction with the investment Banker/underwriter, review potential financing structures and evaluate the strengths and weaknesses of each and provide recommendations to Management regarding the financing structure;

(d) Review financing documents for key covenants and advise Management of suggested changes or other recommendations;

(e) Assist Management in the preparing and presenting to potential bondholders; and

(f) Review monthly status reports for filing on Electronic Municipal Market Access (“EMMA”) and assist in any bondholder conference calls or site visits.

Compensation

The Corporation has agreed to pay BSA a development/consulting fee (the “BSA Fee”) including two components: a Monthly Retainer and Milestone Payments, as defined below.

(a) Monthly Retainer - BSA is to be paid a Monthly Retainer of $3,000 until the closing of the Series 2019 Notes. Upon funding of the Series 2019 Notes until construction begins on the Independent Living Apartments, BSA is to be paid a Monthly Retainer of $10,000. During the construction period of the Independent Living Apartments, BSA is to be paid a Monthly Retainer of $8,500.

(b) Milestone Payments - BSA would receive payments based on specific milestones achieved by the Project including:  $25,000 upon signing of the Development Consultant Agreement;  $100,000 upon the issuance of the Series 2019 Notes;  $50,000 upon the completion of schematic design documents;  $75,000 upon the start of pre-sales (10% deposits) for the Independent Living Apartments;  $25,000 upon completion of 50% of construction for the Independent Living Apartments;  $50,000 upon completion of 75% of construction for the Independent Living Apartments;  $100,000 upon the closing of Series 2021 Bonds; and  $75,000 upon opening of the Independent Living Apartments.

Total estimated costs of the Development Consultant’s contract in the Project budget amount to approximately $835,000.

BSA will also be entitled to be reimbursed for Reimbursable Expenses (as defined in the Development Consultant Agreement). The Development Consultant’s services will end at the opening of the Independent Living Units. See Independent Accountants’ Compilation Report B-21 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

BACKGROUND AND INFORMATION (CONTINUED)

Development Timeline

A proposed timeline for development of the Project, as provided by Management, is summarized in the following table:

Table 5 Development Timeline Item Date Issuance of Series 2019 Notes November-19 Issuance of Series 2021 Bonds June-21 Construction Begins June-21 Construction is completed August-23 Move-ins begin in the Independent Living Units September-23 Move-ins begin in the Assisted Living Units and Memory Support Suites October-23 Assisted Living Units and Memory Support Suites reach stabilized occupancy March-25 Independent Living Units reach stabilized occupancy September-25

Source: Management

See Independent Accountants’ Compilation Report B-22 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

PLAN OF FINANCE

Pre-Permanent Finance Capital

It is anticipated that the pre-permanent finance capital development costs for the Project, including the costs associated with obtaining regulatory approvals, design costs, and marketing activities, would be funded from the proceeds of the Series 2019 Notes. Management has assumed the following pre-permanent finance capital sources and uses of funds in preparing the financial projection based upon information provided by BB&T Capital Markets, a division of BB&T Securities, LLC, and Herbert J. Sims & Company, Inc. (collectively, the “Underwriters”).

Table 6 Pre-Permanent Finance Capital Projected Sources and Uses of Funds (Dollars in Thousands) Sources of Funds Series 2019 Notes, Net of Discount $ 7,489 (1) Equity Contribution 671 (2) Total Sources of Funds $ 8,160

Us es of Funds Marketing $ 2,583 (3) Design & Engineering 2,645 (4) Land 650 (5) Zoning, Legal and Consultants 615 (6) Project Contingency 180 (7) Project Management 542 (8) Indirect Construction & Technology 119 (9) Total Project Fund Depos it $ 7 ,3 3 4

Cost of Issuance and Other 403 (10) Underwriters Discount 423 (10) Total Financing & Other Costs $ 826

Total Uses of Funds $ 8,160

Source: Management and the Underwriters

Notes to Table:

1) The Corporation’s Underwriters have indicated that the Series 2019 Notes are planned to be issued at a par amount of $13,000,000, net of a discount of $5,511,000 ($7,489,000 net proceeds). The Series 2019 Notes will not bear interest on a current basis. The principal amount of the Series 2019 Notes will be due on December 31, 2024 (the “Maturity Date”). The Bonds will be subject to earlier optional or mandatory redemption prior to maturity at a redemption price equal to their Accreted Value. “Accreted Value” means, with respect to 2019 Notes or a portion thereof, (i) if calculated on a “Calculation Date”, the dollar amount per $1,000 due at maturity of the Series 2019 Notes set forth in the table below for such Calculation Date and (ii) if calculated on a date other than a Calculation Date, the dollar amount per $1,000 due at maturity of the Series 2019 Notes, such amount being determined conclusively by the Bond Trustee or a certified public accountant selected by the Bond Trustee, by interpolating such dollar amount, using the straight-line method, by reference to the dollar See Independent Accountants’ Compilation Report B-23 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

PLAN OF FINANCE (CONTINUED)

amounts for the Calculation Dates listed on the table set forth below which are immediately prior to and immediately subsequent to such date, and the number of calendar days elapsed since the date listed which is immediately prior to such date. Accreted Value per $1,000 Due at Calculation Date Maturity of the 2019 Notes November 6, 2019 $576.10 December 1, 2019 $580.40 June 1, 2020 $612.32 December 1, 2020 $646.00 June 1, 2021 $681.53 December 1, 2021 $719.01 June 1, 2022 $758.56 December 1, 2022 $800.28 June 1, 2023 $844.30 December 1, 2023 $890.73 June 1, 2024 $939.73 December 1, 2024 $991.22 December 31, 2024 $1,000.00

2) The Parent will provide equity of $671,000 to the Corporation to pay for Project related costs.

3) Management has assumed marketing costs of $2,583,000 include marketing consulting fees, direct marketing costs, salaries and other promotional materials.

4) Management has projected design and engineering costs would total approximately $2,645,000.

5) Management has projected that a portion of the land and other land related costs would total approximately $650,000. For additional details, see The Real Estate and Purchase Agreement and Deed Restrictions section for additional details.

6) Management has projected costs related to zoning, legal, and other consulting to be approximately $615,000.

7) Management has projected a project contingency of approximately $180,000 (or 3%) of the total Project Fund Deposit.

8) Management has projected the project management fees of approximately $542,000 would be paid based upon the Development Consulting Agreement as more fully described herein.

9) Management has projected indirect construction costs to approximate $119,000.

10) Management has projected that costs of issuance related to the issuance of the Series 2019 Notes would approximate $826,000 and includes the Underwriters’ fees, legal and accounting fees and other miscellaneous financing costs.

See Independent Accountants’ Compilation Report B-24 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

PLAN OF FINANCE (CONTINUED)

Permanent Finance Capital

The total financial requirements of the Project are projected to be approximately $135,495,000 including repayment of principal and accreted interest on the Series 2019 Notes. The Corporation expects to fund this requirement primarily through the issuance of the Series 2021 Bonds together with anticipated Entrance Fee receipts from the initial occupancy of the Independent Living Apartments. A summary of the projected sources and uses of funds for the Corporation’s Series 2021 Bonds is provided in the following table based upon data provided by Management and the Underwriters.

Table 7 Permanent Finance Capital Projected Sources and Uses of Funds (Dollars in Thousands) Sources of Funds 2025 Entrance Fee Bank Loan $ 38,140 (1) 2024 Entrance Fee Bank Loan 15,000 (1) Series 2021A Bonds - 2031 Term Bonds 8,975 (1) Series 2021A Bonds - 2041 Term Bonds 24,925 (1) Series 2021A Bonds - 2051 Term Bonds 48,455 (1) Initial Entrance Fees 12,500 (2) Interest Earnings 1,147 (3) Total Sources of Funds $ 149,142

Us es of Funds Direct Construction $ 87,416 (4) Land 5,850 (5) Project Contingency 2,844 (6) Indirect construction costs 2,619 (7) Design and Engineering 1,647 (8) Marketing Costs 1,671 (9) Project Management 915 (10) Other 513 (11) Zoning, Legal and Consultants 36 (12) Total Project Fund Deposit $ 103,511

Debt Service Reserve Funds 6,902 (13) Funded Interest Fund 14,662 (14) Cost of Issuance and Other Finance Costs 2,706 (15) Working Capital Fund 9,500 (16) Operating Reserve Fund 3,000 (17) Series 2019 Notes Repayment 7,334 (18) Series 2019 Interest 1,372 (19) Series 2019 Cost of Issuance 155 (20) Total Uses of Funds $ 149,142

Source: Management and the Underwriter

See Independent Accountants’ Compilation Report B-25 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

PLAN OF FINANCE (CONTINUED)

Notes to Table 7:

1) The Corporation’s Underwriters have indicated that proceeds from the Series 2021 Bonds in the amount of $135,495,000 are planned to be generated utilizing the following structure and terms. The responsibility for payment of the debt service on the Series 2021 Bonds is expected to be solely that of the Corporation.

 $38,410,000 of tax-exempt variable rate bonds with a maturity of July 1, 2025 bearing interest at an all-in interest rate of 3.75% (the “2025 Entrance Fee Bank Loan”). The 2025 Entrance Fee Bank Loan is assumed to have a stated maturity date of 5 years from the date of issuance. The 2025 Entrance Fee Bank Loan is assumed to be a draw-down loan. The draw down on the loan is anticipated to last 24 months with the last draw occurring on in July 2023. Interest is funded on the 2025 Entrance Fee Bank Loan until October 2023 or 3 months past construction completion. Management has projected initial entrance fees from the Project to be sufficient to repay the 2025 Entrance Fee Bank Loan during the Projection Period.  $15,000,000 of tax-exempt variable rate bonds with a maturity of July 1, 2024 bearing interest at an all-in interest rate of 3.75% (the “2024 Entrance Fee Bank Loan”). The 2024 Entrance Fee Bank Loan is assumed to have a stated maturity date of 4 years from the date of issuance. The 2024 Entrance Fee Bank Loan is assumed to be a draw-down loan. The draw down on the loan is anticipated to last 24 months with the last draw occurring on in July 2023. Interest is funded on the 2024 Entrance Fee Bank Loan until October 2023 or 3 months past construction completion. Management has projected initial entrance fees from the Project to be sufficient to repay the 2024 Entrance Fee Bank Loan during the Projection Period.  $8,975,000 of tax-exempt fixed rate term bonds (the “2031 Term Bonds) assumed to be issued with a fixed coupon of 6.00%, maturing July 1, 2031, subject to annual sinking fund redemptions from July 1, 2026 through July 1, 2031. Interest on the 2031 Term Bonds is payable January 1 and July of each year beginning on July 1, 2021.  $24,925,000 of tax-exempt fixed rate term bonds (the “2041 Term Bonds) assumed to be issued with a fixed coupon of 6.75%, maturing July 1, 2041, subject to annual sinking fund redemptions from July 1, 2032 through July 1, 2041. Interest on the 2041 Term Bonds is payable January 1 and July 1 of each year beginning on July 1, 2021.  $48,455,000 of tax-exempt fixed rate term bonds (the “2051 Term Bonds) assumed to be issued with a fixed coupon of 7.00%, maturing July 1, 2051, subject to annual sinking fund redemptions from July 1, 2042 through July 1, 2051. Interest on the 2051Term Bonds is payable January 1 and July1 of each year beginning on July 1, 2021.

2) Management has projected that approximately $12,500,000 of Entrance Fees from initial Residents of the Independent Living Apartments (the “Initial Entrance Fees”) to be used to fund start-up losses, and operating reserves. Approximately $9,500,000 is projected to be deposited into a working capital fund and $3,000,000 is projected to be deposited into a statutory required operating reserve fund as required by the North Carolina Department of Insurance.

3) Management has projected $1,147,000 in interest earnings on trustee-held funds.

4) Management has projected direct construction costs related to the construction of the Project to approximate $87,416,000 which includes a Construction contingency of $5,586,000 or approximately 7.5% of the direct construction costs.

See Independent Accountants’ Compilation Report B-26 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

PLAN OF FINANCE (CONTINUED)

5) Management has projected that the total costs of land and other land related costs to be funded with the Series 2021 Bonds would total approximately $5,850,000. For additional details, see The Real Estate and Purchase Agreement and Deed Restrictions section for additional details

6) Management has included a project contingency of $2,844,000 or 3.0% of the overall project-related costs of the Project.

7) Management has anticipated indirect construction costs for the Project would approximate $2,619,000 and consist of preconstruction services, furniture, fixtures and equipment and other such costs.

8) Management has projected additional design and engineering costs of the Project would approximate $1,647,000.

9) Addition marketing costs related to the initial occupancy of the Project units are planned to approximate $1,671,000 and are planned to include marketer fees direct marketing costs, salaries and commissions, promotional materials and other items as provided by Management.

10) Management has assumed costs related to project management including fees related to the Development Consultant, the project monitor and the owner representative to approximate $915,000.

11) Management has projected that other costs would total approximately $513,000 and would include expenses related to the development plan, pre-opening expenses, travel, legal and professional fees and other administrative costs.

12) Management has assumed cost related to zoning, legal and other consulting costs of approximately $36,000.

13) Represents the estimated amounts planned to be deposited into the debt service reserve fund related to the Series 2021 Bonds as provided by Management and the Underwriters.

14) Management and the Underwriters have projected funds in the amount of $14,662,000 would be utilized to pay project related debt service through approximately January 2024 which is approximately 31 months from the assumed issuance date of the Series 2021 Bonds.

15) Management and the Underwriter estimate costs related to the Underwriters’ discount, legal fees, accounting fees and other costs associated with the proposed issuance of the Series 2021 Bonds to approximate $2,706,000.

16) Management expects funds in the amount of $9,500,000 to be used to fund a working capital fund.

17) Management has projected that $3,000,000 would be utilized to establish the statutory required operating reserve fund, as required by the North Carolina Department of Insurance.

18) Management has projected that the amount required to redeem the Series 2019 Notes to approximate $7,334,000.

19) Management has projected that the amount required to redeem the accreted interest on the Series 2019 Notes would approximate $1,372,000.

20) Management has projected that the amount required to redeem the Series 2019 Notes including cost of issuance to approximate $155,000.

See Independent Accountants’ Compilation Report B-27 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The Corporation reports in accordance with the industry audit and accounting guide for Health Care Entities issued by the American Institute of Certified Public Accountants. These projected financial statements are prepared in conformity with accounting principles generally accepted in the United States of America to present balances and transactions according to the existence or absence of donor-imposed restrictions. This is accomplished by classification of net assets and transactions into two classes which are with donor restrictions and without donor restrictions.

Use of Estimates

The preparation of the projected financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the projected financial statements and accompanying notes. Estimates made by the Corporation relate primarily to the life expectancies used to amortize deferred revenue from entrance fees, the collectability of accounts receivable and the economic lives of depreciating assets. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Corporation considers all cash, money market funds, and highly liquid investments with a stated maturity of three months or less when purchased to be cash and cash equivalents unless classified as assets limited as to use.

Inventories

Inventories, included in other current assets in the projected balance sheets, consist primarily of medical supplies and are stated at the lower of cost or market which is determined on a first-in, first-out basis.

Investments

Investments are held as available for sale and are stated at fair value in the projected balance sheets. Investment income (including realized gains and losses on investments, interest and dividends) is included in the deficit of revenues, gains, and other support over expenses unless restricted by donors or law. Unrealized gains and losses on investments, if any, are excluded from investment income and included as changes in net assets without donor restrictions or net assets with donor restrictions, as appropriate. Management does not assume any changes in the underlying values of investments during the Projection Period.

Management plans to continually review its investments and evaluates whether declines in the fair value of securities should be considered other-than-temporary. Factored into this evaluation are the general market conditions, the issuer’s financial condition and near-term prospects, the recommendation of investment advisors and the length of time and extent to which the market value has been less than cost. Management has projected that no provision for other-than-temporary decline during the Projection Period is necessary.

Assets Limited as to Use

Assets limited as to use are stated at fair value in the projected balance sheets and include assets required by statute, held under bond agreements, held under donor restrictions or designated by the board of directors for financial assistance to residents. The board may, at its discretion, subsequently use assets it has designated for other purposes.

See Independent Accountants’ Compilation Report B-28 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

North Carolina General Statute section 58-64-33, as amended, establishes an operating reserve requirement that must be satisfied on an annual basis. Specifically, in years where the combined independent and assisted living occupancy of the licensed facility exceeds 90 percent, the operating reserve amount required equals 25 percent of projected operating expenses (adjusted for non-cash items). In years where the combined independent and assisted living occupancy is under 90 percent, a reserve equal to 50 percent of projected operating expenses (adjusted for non-cash items) must be established. To the extent that funds have been set aside for the payment of interest and principal on debt, interest expense and principal payments are excluded from the statutory operating reserve requirements.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Assets contributed to the Corporation are recorded at fair market value at the date of contribution.

Expenditures which materially increase values, change capacities, or extend useful lives are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 40 years.

Deferred Financing Costs

Debt issuance costs are projected to be incurred in connection with the issuance of the Corporation’s long-term debt. These costs are amortized over the term of the related indebtedness, which approximates the effective interest method.

In accordance with Generally Accepted Accounting Principles (“GAAP”), the Corporation presents debt issuance costs as a direct deduction from the face amount of the related borrowings, amortizes debt issuance costs using the effective interest method over the life of the debt, and records the amortization as a component of interest expense.

Entrance Fees

Entrance Fees represent initial payments made by residents in exchange for membership at the Project. Membership includes the use and privileges of amenities at the community and discounted fees when using health care accommodations. Entrance Fees are based upon the accommodation chosen by the member. The Corporation offers three types of lifecare residency agreements distinguished by the extent to which the entrance fee is refundable:

0% Refundable Plan – the refund due, if any, shall be the Entrance Fee paid, less: (i) ten percent (10%); (ii) 7.5% amortized per month for months 1 through 12; (iii) a fee of one thousand dollars ($1,000); and (iv) any amount due to the Corporation for month care or other unpaid services. No part of the 0% Refundable Plan is refundable to the resident after twelve (12) months.

90% Refundable Plan – the refund due shall be the entrance fee paid less: (i) ten percent (10%); (ii) a fee of one thousand dollars ($1,000); and (iii) any amount due to the Corporation for monthly care or other unpaid services.

50% Refundable Plan – the refund due shall be the entrance fee paid less: (i) ten percent (10%); (ii) 3.33% per month for months 1 through 12; (iii) a fee of one thousand dollars ($1,000); and (iv) any amount due to the Corporation for monthly care or other unpaid services.

See Independent Accountants’ Compilation Report B-29 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The refundable portion of Entrance Fees is recorded as Refundable Entrance Fees until such time as the agreement is terminated. The non-refundable portion of Entrance Fees is recorded as Deferred Entrance Fees and amortized into income using the straight-line method over the remaining life of the member, actuarially adjusted annually, beginning with the date of each member’s occupancy.

Resident and Patient Service Revenue

Patient and resident service revenue is projected to be reported at the estimated net realizable amounts from residents and third-party payors, including estimated retroactive adjustments under reimbursement agreements with third- party payors. Resident service revenue is planned to be recorded as revenue when earned. Retroactive adjustments are planned to be accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as final settlements are determined. Management has not assumed any third-party settlements or adjustments during the Projection Period.

Income and Real Property Taxes

The Corporation is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code (IRC). Accordingly, the Corporation has made no provision for income taxes in the projected financial statements.

The Corporation is not aware of any activities that would jeopardize their tax-exempt status. The Corporation follows accounting guidance regarding recognition and measurement of uncertain tax positions.

The Corporation is subject to local real property taxes but may exclude up to 100% of the taxes due by providing a prescribed amount of community benefit, unreimbursed housing, and charitable health care services. Management has not projected the Corporation owing any federal income tax. Under the terms of the Purchase Agreement, Management is assumed to pay property taxes on the Property until the Project is available for occupancy and are included in administration expense on the Projected Statements of Operations and Changes in Net Deficit.

Estimated Obligation to Provide Future Services

The Corporation annually calculates the present value of the net cost of future services and the use of facilities to be provided to current residents and compares that amount with the balance of deferred entrance fee revenue. If the present value of the estimated cost of future services and use of facilities to be provided to current residents exceeds the deferred revenue from Entrance Fees and the present value of periodic fees, a liability is recorded (obligation to provide future services) with the corresponding change to income. Management does not project a liability during the Projection Period.

See Independent Accountants’ Compilation Report B-30 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF REVENUES AND ENTRANCE FEES

Projected revenues for the Independent Living Apartments are primarily based on the Monthly Service Fees planned to be charged to the Independent Living Apartment Residents and the planned utilization of the Independent Living Apartments. Projected health care revenues are planned to primarily consist of funds generated from services provided to Residents either transferring from the Independent Living Apartments to the Assisted Living Units and/or the Memory Support Suites.

Management secured the services of Glynn Devins to conduct a market assessment and has based its assumptions relating to demand, pricing and occupancies in part on the results of that market study.

Projected Utilization, Monthly Service Fees/Daily Rates and Entrance Fees

Independent Living Apartments

Projected revenue from the Independent Living Apartments consists of revenue from operating the Independent Living Apartments during the Projection Period. Management has projected resident services revenue based upon its projected move-in schedule, as noted in Table 9, and its plans for operating the Independent Living Apartments during the Projection Period.

Management has projected the following occupancy for the Independent Living Apartments.

Table 8 Independent Living Apartments Projected Average Occupancy For the Years Ending December 31, ` 2021 2022 2023 2024 2025 2026 Total Available Units (1) - - 41.7 125.0 125.0 125.0 Occupancy Percentage 0.0% 0.0% 4.7% 51.5% 87.1% 95.0% Average Occupied Units - - 5.9 64.4 108.9 118.8

Source: Management (1) Management has projected that the Independent Living Apartments would be available for occupancy in September of 2023 (Fiscal Year 2023).

See Independent Accountants’ Compilation Report B-31 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF REVENUES AND ENTRANCE FEES (CONTINUED)

Projected occupancy for the Project is based upon Management’s assumed move-in schedule for the Independent Living Apartments as depicted in the following table.

Table 9 The Project Move-In Schedule Independent Living Apartments Cumulative Cumulative Month/Year Net Move Ins Number of Units Percentage 2023 September 9.00 9.00 7.2% October 9.00 18.00 14.4% November 9.00 27.00 21.6% December 6.00 33.00 26.4% 2024 January 6.00 39.00 31.2% February 6.00 45.00 36.0% March 6.00 51.00 40.8% April 6.00 57.00 45.6% May 6.00 63.00 50.4% June 3.72 66.72 53.4% July 3.72 70.44 56.4% August 3.72 74.16 59.3% September 3.72 77.88 62.3% October 3.72 81.60 65.3% November 3.72 85.32 68.3% December 3.72 89.04 71.2% 2025 January 3.72 92.76 74.2% February 3.72 96.48 77.2% March 3.72 100.20 80.2% April 3.72 103.92 83.1% May 3.72 107.64 86.1% June 3.72 111.36 89.1% July 3.72 115.08 92.1% August 3.67 118.75 95.0%

Source: Management

See Independent Accountants’ Compilation Report B-32 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF REVENUES AND ENTRANCE FEES (CONTINUED)

The following table summarizes the projected Independent Living Unit Monthly Service Fees during the Projection Period.

Table 10 Independent Living Apartments Projected Monthly Service Fees For the Years Ending December 31, Independent Living Units - 90% Entrance Fee Plan and 0% Entrance Fee Plan 2021 2022 2023 2024 2025 2026 One Bedroom Apartment 1 BR/1.5 Bath $4,445 $4,578 $4,715 $4,856 $5,002 $5,152 1 BR/1.5 Bath/Den 5,150 5,305 5,464 5,628 5,797 5,971 Two Bedroom Apartment 2 BR/2.0 Bath 4,650 4,790 4,934 5,082 5,234 5,391 2 BR/2.5 Bath/Den 5,025 5,176 5,331 5,491 5,656 5,826 2 BR/2.5 Bath/Den/Deluxe 5,300 5,459 5,623 5,792 5,966 6,145 2 BR/2.5 Bath/Den/Deluxe 5,575 5,742 5,914 6,091 6,274 6,462 2 BR/2.5 Bath/Den/Deluxe 5,850 6,026 6,207 6,393 6,585 6,783 2 BR/2.5 Bath/Den/Deluxe 6,250 6,438 6,631 6,830 7,035 7,246 Total/Weighted Average $5,297 $5,456 $5,620 $5,789 $5,963 $6,142

Independent Living Units - 50% Entrance Fee Plan 2021 2022 2023 2024 2025 2026 One Bedroom Apartment 1 BR/1.5 Bath $3,778 $3,891 $4,008 $4,128 $4,252 $4,380 1 BR/1.5 Bath/Den 4,378 4,509 4,644 4,783 4,926 5,074 Two Bedroom Apartment 2 BR/2.0 Bath 3,953 4,072 4,194 4,320 4,450 4,584 2 BR/2.5 Bath/Den 4,271 4,399 4,531 4,667 4,807 4,951 2 BR/2.5 Bath/Den/Deluxe 4,505 4,640 4,779 4,922 5,070 5,222 2 BR/2.5 Bath/Den/Deluxe 4,739 4,881 5,027 5,178 5,333 5,493 2 BR/2.5 Bath/Den/Deluxe 4,973 5,122 5,276 5,434 5,597 5,765 2 BR/2.5 Bath/Den/Deluxe 5,313 5,472 5,636 5,805 5,979 6,158 Total/Weighted Average $4,503 $4,638 $4,777 $4,920 $5,068 $5,220

Source: Management

Management has projected that second person utilization for the Independent Living Apartments is assumed to range from approximately 60 percent declining to 54 percent during the Projection Period based in part on Management’s experience at Aldersgate Family communities and from its actuary, A.V. Powell and Associates (the “Actuary”). Management projects the second person Monthly Service Fee to be approximately $1,750 (non-Charter Benefit) in Fiscal 2019. Management has projected that Monthly Service Fees would be inflated by an average of 3.0 percent per annum beginning the fiscal year ending December 2024.

See Independent Accountants’ Compilation Report B-33 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF REVENUES AND ENTRANCE FEES (CONTINUED)

Assisted Living and Memory Support

Projected revenue consists of revenue from operating the Assisted Living Units and the Memory Support Suites during the Projection Period. Management has projected this revenue based upon its plans for operating the Assisted Living Units and the Memory Support Suites during the Projection Period.

Management has projected that the Assisted Living Units and Memory Support Suites to be available for occupancy in October 2023 (Fiscal Year 2023). Projected occupancy for the Assisted Living Units and Memory Support Suites is based upon Management’s assumed move-in schedule for these units. Management has forecasted all of the occupied units to be internal transfers during the Projection Period.

Table 11 Assisted Living Units and Memory Support Suites Projected Average Occupancy For the Years Ending December 31, 2021 2022 2023 2024 2025 2026 Total Available Units (1) - - 4.0 16.0 16.0 16.0 Occupancy Percentage 0.0% 0.0% 1.9% 44.0% 85.8% 87.5%

Average Occupied Units - - 0.3 7.0 13.7 14.0

Source: Management 1) Management has projected that the Assisted Living Units and Memory Support Suites would be available for Occupancy in October 2023 (Fiscal Year 2023) and are anticipated to fill over an 18-month period at an average of approximately 0.74 units per month.

Management has projected the following Monthly Service Fees for the Assisted Living Units and Memory Support Suites, shown with the 10% discount rate, during the Projection Period.

Table 12 Assisted Living Units and Memory Support Suites Projected Weighted Average Monthly Service Fees (Assuming 10% Discounted Rates) For the Years Ending December 31, 2021 2022 2023 2024 2025 2026 Assisted Living Units $6,397 $6,589 $6,787 $6,991 $7,201 $7,417 Memory Support Suites 6,971 7,180 7,395 7,617 7,846 8,081

Source: Management

Management has projected the Monthly Service Fees for the Assisted Living Units and the Memory Support Suites to be inflated by 3.0 percent per annum beginning on January 1, 2020 and during the remainder of the Projection Period.

In addition, Management has projected that approximately 12.5% (or one Resident) of the Residents of the Assisted Living Units would utilize additional care services (“Tier 2 Services) for an additional 10% of the Monthly Service Fee or average rate of $640 per month in Fiscal Year 2019 dollars. Management has projected these level of care fees to inflate by 3.0 percent per annum beginning the year ending December 31, 2020 through the remainder of the Projection Period. The Memory Support Suites Monthly Service Fees are assumed to be all inclusive.

See Independent Accountants’ Compilation Report B-34 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF REVENUES AND ENTRANCE FEES (CONTINUED)

Under the Health Care Benefit Rate, if a Resident requires nursing care, the Resident would have priority access and discounted fee of 20% access to Asbury on a temporary or permanent basis. Management and the Actuary have projected the following permanent and temporary nursing care during the Projection Period. Management has projected the 20% discount as a healthcare placement expense on the projected statement of operations and changes in net deficits. Table 13 Skilled Nursing Projected Temporary and Permanent Nursing Care Days For the Years Ending December 31, 2021 2022 2023 2024 2025 2026 Temporary Nursing Care Days - - 11 219 789 1,659 Permanent Nursing Care Days - - 32 382 672 774 Total Skilled Nursing Care Days - - 43 601 1,461 2,433

Source: Management and the Actuary

Entrance Fee Receipts

Management has projected the Entrance Fees prices for the Independent Living Apartments as follows:

Table 14 Independent Living Apartments Projected Average Entrance Fees For the Years Ending December 31, 2019 2020 2021 2022 2023 2024 2025 2026 CHARTER PLANS 90% Refundable Plan (1) 575,480$ 575,480$ $ 575,480 $610,009 $658,810 $ - -$ $ - 50% Refundable Plan (1) 575,480$ 575,480$ $ 575,480 $610,009 $658,810 $ - -$ $ - 0% Refundable Plan$ 411,360 411,360$ $ 411,360 $436,042 $470,925 $ - -$ $ - Weighted Average 542,656$ 542,656$ 542,656$ 575,215$ 621,233$ $ - -$ $ - PRICING ONCE CHARTER PLAN PRICING EXPIRES (2) 90% Refundable Plan (1) $0 $0 $0 $0 $0 $676,927 $695,542 $714,669 50% Refundable Plan (1) - - - - - $676,927 $695,542 $714,669 0% Refundable Plan - - - - - $483,875 $497,182 $510,855 Weighted Average $0 $0 $0 $0 $0 $638,317 $655,871 $673,907

Source: Management Notes: (1) Residents under the 90% Refundable Plan and the 50% Refundable Plan are projected to pay Entrance Fees which are approximately 1.40 times higher than Entrance Fees under the 0% Refundable Plan. Management plans to increase these Entrance Fees 6.0% at permanent financing and an additional 8.0% at opening and 2.75% annually thereafter. (2) Turnover entrance fee plans are the available Entrance Fee plans once the Charter Benefits have expired.

Management has projected that approximately 60 percent of Residents would select the 90% Refundable Plan, 20 percent of Residents would select the 50% Refundable Plan, and 20 percent of Residents would select the 0% Refundable Plan. See Independent Accountants’ Compilation Report B-35 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF REVENUES AND ENTRANCE FEES (CONTINUED)

Management has assumed that Entrance Fees for post-first-generation Residents would be inflated by an average of 2.75 percent per annum beginning the fiscal year ending December 31, 2024.

The assumed turnover for the Independent Living Apartments due to death, withdrawal or transfer to the higher levels of care, and double occupancy of the Independent Living Apartments has been based in part on Management’s experience at Aldersgate Family communities and the Actuary.

Refunds of Entrance Fees are generated upon death or termination of the Residency Agreement and withdrawal from the Project or Asbury (if permanently transferred), subject to the re-occupancy of the vacated Independent Living Apartments. Entrance Fees may be generated from Independent Living Apartments turning over without a corresponding refund because the Resident has not withdrawn from the Project, but has permanently transferred to the higher levels of care. The assumed number of refunds for the Independent Living Apartments is provided by the Management and the Actuary. If a Resident is transferred to Asbury for nursing care, under the proposed Residency Agreement, such transfer would not be considered a termination of the Residency Agreement. Management has not projected terminations of the Residency Agreement as a result of residents needing nursing care and choosing to terminate the Residency Agreement and utilizing nursing in nursing facilities other than Asbury.

To encourage early commitments to residency at the Project, the Corporation expects to offer Charter Benefits to early depositors which could include promotional discounts or services; however, the specific list of benefits would not be determined until formal marketing activities have been initiated. Management has projected that approximately 50% percent of residents would benefit from the Charter Resident Benefit pricing.

The following table presents the projected initial and turnover Entrance Fees received and the total projected Entrance Fee refunds.

Table 15 Projected Entrance Receipts and Refunds For the Years Ending December 31, (Dollars in Thousands)

2021 2022 2023 2024 2025 2026 Units Number of Independent Living Units Entrance Fees Received - - 33.0 56.0 29.7 - Number of Turnover Entrance Fees Received - - - 3.0 7.0 10.0 Number of Entrance Fee Refunds - - - 2.0 3.0 5.0 Total Number of Entrance Fees Received, Net of Refunds - - 33.0 61.0 39.7 15.0 Entrance Fees Initial Independent Living Units Entrance Fees Received $0 $0 $19,192 $33,373 $18,002 $0 Turnover Entrance Fees Received - - 173 2,011 4,619 6,589 Refunds - - (72) (794) (1,602) (2,382) Total Entrance Fees Received, Net of Refunds $0 $0 $19,293 $34,590 $21,019 $4,207 Source: Management and the Actuary

See Independent Accountants’ Compilation Report B-36 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF REVENUES AND ENTRANCE FEES (CONTINUED)

Interest Income

Management has projected interest income to consist of interest earned on available cash and cash equivalents, investments and assets limited as to use. During construction of the Project, interest expense on the Series 2021 Bonds has been netted with interest earned on the various trustee-held funds relating to the Series 2021 Bonds.

The following table reflects Management’s assumed realized investment earning rates during the Projection Period.

Table 16 Projected Investment Earning Rates For the Years Ending December 31,

2021 2022 2023 2024 2025 2026 Cash and Cash Equivalent n/a n/a 3.00% 3.00% 3.00% 3.00% Investment n/a n/a 3.00% 3.00% 3.00% 3.00% Debt Service Reserve Fund - Series 2021 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Bonds Funded Interest Fund 2.00% 2.00% 2.00% 2.00% n/a n/a Bond Fund 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Working Capital Fund n/a n/a 3.00% 3.00% n/a n/a Operating Reserve Fund n/a n/a 3.00% 3.00% 3.00% 3.00% Entrance Fee Fund n/a n/a 3.00% 3.00% 3.00% n/a

Source: Management and Underwriters

Management does not project any unrealized or realized gains or losses from the valuation or sale of investments during the Projection Period.

Other Revenue

Management has projected other revenue to include service revenue, additional meals, guest meals, guest rooms, and beauty and barber services. Other Revenue is assumed to equal approximately 1.0% of annual resident revenue.

See Independent Accountants’ Compilation Report B-37 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF EXPENSES

Operating Expenses

Operating expenses have been projected to be recognized during the month incurred. Management has projected operating expenses based upon Management’s operating plans for the Project. In general, operating expenses including salaries and hourly wages are projected to increase during the fill-up period of the Project and by 3.0 percent annually throughout the Projection Period for inflation.

Salaries and Wages

A full time equivalent (“FTE”) is assumed to represent 2,080 hours of time paid annually. The table that follows presents a summary of projected incremental FTEs related to the Project by department upon stabilization.

Table 17 Incremental FTEs related to the Project

2023 2024 2025 2026 Avg. Hourly Avg. Hourly Avg. Hourly Avg. Hourly FTEs Wage FTEs Wage FTEs Wage FTEs Wage Assisted Living and Memory Support 13.60 $ 21.94 13.60 $ 22.60 13.60 23.27$ 13.60 $ 23.97 Dietary 24.00 $ 19.61 34.60 $ 18.98 34.60 19.55$ 34.60 $ 20.13 Housekeeping and Laundry 5.10 $ 15.72 10.20 $ 16.20 10.20 16.69$ 10.20 $ 17.18 Plant Operations 6.60 $ 19.42 6.60 $ 20.01 6.60 $ 20.61 6.60 $ 21.22 Administration 13.35 $ 20.41 16.60 $ 24.83 16.60 26.33$ 16.60 $ 27.12 Total 62.65 $ 18.76 81.60 $ 20.51 81.60 21.28$ 81.60 $ 21.91

Source: Management

Payroll Taxes and Employee Benefits

Payroll taxes and employee benefits costs include FICA, unemployment taxes, workers’ compensation, medical insurance, life insurance, retirement contributions and other miscellaneous benefits. Management has projected that these benefit costs would approximate 23 percent of salaries and wages during the Projection Period.

Healthcare Services

Assisted Living and Memory Support Services

Non-salary costs are projected to include Management’s estimate of the costs of operating the Assisted Living Units and the Memory Support Suites. These non-salary costs include costs for supplies and other miscellaneous costs incurred in the provision of assisted living and memory support services. These costs are anticipated to increase during the move-in period and for inflation at 3.0 percent annually throughout the Projection Period.

Skilled Nursing Discount

Management has projected that residents needing nursing care would transfer to Asbury. Asbury projects its daily rate to be $206 per day, inflated at 3% per year. The discount under the Residency Agreement offers the resident a

See Independent Accountants’ Compilation Report B-38 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF EXPENSES (CONTINUED)

20 percent discount from these daily rates. Asbury is not offering the discount to the resident, and rather, the discount is being paid by the Corporation.

Dietary

Non-salary related costs of the dietary department are projected to include Management’s estimate of the costs for raw food, dietary supplies, equipment, linens, and other such costs. Management assumes that these costs would vary with changes in occupancy levels from the opening of the Project. Additionally, these costs are anticipated to increase at 3.0 percent annually throughout the Projection Period.

Housekeeping and Laundry

Non-salary related costs of housekeeping services include Management’s estimate of the costs for contract services, supplies, chemicals and other miscellaneous costs associated with providing housekeeping and laundry services to residents. Additionally, these costs are anticipated to increase for inflation at 3.0 percent annually throughout the Projection Period.

Plant Operations and Utilities

Non-salary related costs in this department are projected to include Management’s estimate of the cost for service contracts, repairs, general maintenance, cable television, telephone service, electricity, water, sewer, gas, sanitation, and other operating supplies which Management assumes are primarily fixed in nature. Certain costs in this department are projected to be adjusted based upon the estimated increase in square footage of the facilities upon completion of the Project. In addition, these costs are anticipated to increase at 3.0 percent annually throughout the Projection Period for inflation.

Administration

Non-salary related costs of administration are forecasted to include Management’s estimate of costs for professional fees, insurance, fundraising, supplies and other miscellaneous costs. In addition, non-salary related costs of marketing and sales are forecasted to include Management’s estimates of costs for advertising, print and online materials and website, contract services, professional fees, and other miscellaneous costs. Additionally, these costs are anticipated to increase for inflation at 3.0 percent annually throughout the Projection Period.

Marketing is projected to include Management’s estimate of the costs for marketing the Project until stabilization, as well as the costs of marketing the Project. Costs would include supplies, special events, marketing collateral, advertising and other miscellaneous costs. The costs are also anticipated to increase at 3.0 percent annually throughout the Projection Period for inflation.

Charitable Care

Under North Carolina General Statute 105-278.6A, a Life Plan Community is subject to local real property taxes but may exclude up to 100% of the taxes due by providing a prescribed amount of community benefit, unreimbursed housing, and charitable health care services. Management assumes annual expense related charitable care to equal 5% of revenue, less investment income, as defined by North Carolina Department of Revenue.

See Independent Accountants’ Compilation Report B-39 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF EXPENSES (CONTINUED)

Management Fee

Under the Management Agreement, the Parent is responsible for developing, constructing, managing, operating, maintaining and servicing the Project. Management responsibilities of ALPS include, but are not limited to, staffing, accounting, billing, collections, setting of rates and charges and general administration. ALPS is assumed to collect a fee equal to 5% of Resident revenue generated from the Independent Living Apartments, the Assisted Living Units and the Memory Support Suites (the “Management Fee”).

Interest Expense

Interest expense is projected related to the anticipated debt service requirements and the amortization of the deferred financing costs associated with the Series 2019 Notes and the Series 2021 Bonds, as provided by the Underwriter. Management has capitalized interest expense during the development and construction period of the Project, net of interest income on the related trustee held-funds.

Depreciation

Property and equipment are projected to be depreciated over their estimated useful lives by the straight-line method.

See Independent Accountants’ Compilation Report B-40 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF OTHER ITEMS

Current Assets and Current Liabilities Cash and Cash Equivalents The Corporation considers all cash, money market funds, and highly liquid investments with a stated maturity of three months or less when purchased to be cash and cash equivalents unless classified as assets limited as to use. Cash and cash equivalent balances for the Projection Period are assumed to reflect net cash flows during the Projection Period.

Accounts Receivable Accounts receivable, net of an allowance for non-collectible accounts, are projected based on Management’s estimate. Management has projected accounts receivable at approximately 15 days for resident accounts receivable throughout the Projected Period.

Prepaid Expenses and Other Assets Prepaid expenses and other assets are projected based upon Management’s estimate of 7 days of operating expenses excluding depreciation, amortization, interest, salaries, employee benefits and payroll taxes throughout the Projection Period.

Inventory Inventory is projected based upon Management’s estimate of 1 day of operating expenses excluding depreciation, amortization, interest, salaries, employee benefits and payroll taxes throughout the Projection Period.

Accounts Payable Accounts payable is projected based upon Management’s estimate of 30 days of expenses excluding depreciation, amortization, interest, salaries, employee benefits and payroll taxes throughout the Projection Period.

Accrued Expenses Accrued expenses are projected based upon Management’s estimate of 14 days of expenses excluding depreciation, amortization, interest, salaries, employee benefits and payroll taxes throughout the Projection Period.

Accrued Interest Payable Accrued interest is projected based upon the terms of the Series 2019 Notes and the Series 2021 Bonds during the Projection Period. Note that Accreted Interest on the Series 2019 Notes is projected to be added to the balance of the Series 2019 Notes until repaid.

Assets Limited as to Use

Trustee Held Funds The following funds are projected to be held by the Series 2021 Bonds’ trustee in the name of the Corporation:

Bond Fund – The bond fund is planned to represent monthly advance payments of bond principal and interest to be made by the Corporation to the bond trustee relating to the Series 2021 Bonds. The funds held in the bond funds are planned to be used by the bond trustee to make the principal payments and the interest payments to the owners of the Series 2021 Bonds when due.

See Independent Accountants’ Compilation Report B-41 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF OTHER ITEMS (CONTINUED)

Project Fund – Series 2019 Notes – Upon the assumed issuance of the Series 2019 Notes, the Project Fund is planned to be funded to include the projected amount of funds needed to pay for Project-related costs.

Funded Interest Fund – Upon the assumed issuance of the Series 2021 Bonds, the funded interest fund is planned to be funded to pay for interest payments on the Series 2021 Bonds for the first 28 months after the issuance of the Series 2021 Bonds.

Debt Service Reserve Funds – The Corporation is projected to maintain a debt service reserve fund related to each series of the Series 2021 Bonds, which are assumed to be funded from proceeds of the Series 2021 Bonds. The debt service reserve fund is to be released and available to pay debt service in the year that the respective series of the Series 2021 Bonds is repaid in full.

Entrance Fee Fund – Initial Entrance Fees relating to the Independent Living Apartments are planned to be deposited into the Entrance Fee Fund.

Designated for Statutory Operating Reserve – The Project is required to maintain a statutory operating reserve. The combined occupancy in the Independent Living Apartments, the Memory Support Suites, and the Assisted Living Units is assumed to fall below 90% in Fiscal Years 2023 and 2024 and greater than 90 percent beginning in 2025 and throughout the Projection Period.

See Independent Accountants’ Compilation Report B-42 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF OTHER ITEMS (CONTINUED)

Table 18 Designated Statutory Operating Reserve For the Years Ending December 31, (Dollars in Thousands) 2019 2020 2021 2022 2023 2024 2025 2026 Statutory Operating Reserve Calculation: Available Units Independent Living - - - - 42 125 125 125 Assisted Living - - - - 2 8 8 8 Memory Support - - - - 2 8 8 8 Total Available Units - - - - 46 141 141 141

Occupied Units on the last day of the year Independent Living - - - - 33 89 119 119 Assisted Living - - - - 1 6 7 7 Memory Support - - - - 1 6 7 7 Total Occupied Units - - - - 35 101 133 133

Occupancy at year End 0% 0% 0% 0% 76% 72% 94% 94%

2019 2020 2021 2022 2023 2024 2025 2026 Projected Operating Expenses 348$ 1,985$ $ 1,199 895$ $ 5,584 16,193$ 16,486$ 16,524$

Include: P rincipal Payments - - - - - 15,000 38,140 1,285 Exclude: Amortization of Bond Issue Costs - (495) - - (126) (381) (381) (348) Depreciation and Amortization - - - - (993) (2,983) (2,997) (3,010) Debt Service Reserve Funds Limited to Actual Debt Service Associated with the Debt Service Reserve Funds - (6,288) (6,902) (6,902) (6,902) (6,898) (6,901) Principle paid from Entrance Fees (15,000) (38,140) Total Adjusted Expenses 348$ 1,490$ (5,089)$ (6,007)$ (2,437)$ 5,927$ 6,210$ $ 7,550

Required Reserve 0% 0% 0% 0% 50% 50% 25% 25%

Required Operating Reserve at December 31 $ - -$ -$ $ - 2,964$ 3,105$ 1,888$ $ 1,986

Source: Management and the Actuary

Working Capital Fund – This fund is assumed to be used to fund the pre-opening costs and ongoing working capital needs of the Project. The Working Capital Fund is projected to be funded and released to cash in Fiscal 2024.

Property and Equipment

Property and equipment balances, net of accumulated depreciation, are projected based on assumed costs of constructing the Project, and other routine property and equipment additions during the Projection Period, reduced

See Independent Accountants’ Compilation Report B-43 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF OTHER ITEMS (CONTINUED) by estimated annual depreciation. The following table reflects the project related costs, capitalized interest, net of interest earnings, and other routine capital additions during the Projection Period:

Table 19 Projected Property and Equipment Additions For the Years Ending December 31, (Dollars in Thousands) 2019 2020 2021 2022 2023 2024 2025 2026 Beginning Balance $ - $ 1,755 $ 5,237 $ 39,539 $ 90,819 $121,802 $121,994 $122,192 Project Costs 1,615 2,091 31,063 45,037 26,271 - - - Capitalized Interest (1) 140 1,391 3,239 6,243 4,651 - - - Routine Additions - - - - 61 192 198 204 Ending Balance $ 1,755 $ 5,237 $ 39,539 $ 90,819 $121,802 $121,994 $122,192 $122,396

Source: Management Notes: (1) Capitalized interest is shown net of interest income.

Other Assets

Other Assets are comprised of resident security deposits, notes receivable and other assets.

Long-Term Debt and Interest Expense

During the Projection Period, the Corporation’s long-term debt is planned to be comprised of the Series 2019 Notes, and the Series 2021 Bonds. The terms of the Series 2019 Notes and Series 2021 Bonds are more fully described in the notes to Table 6 and Table 7. The Series 2019 Notes are assumed to be redeemed with the proceeds of the Series 2021 Bonds.

See Independent Accountants’ Compilation Report B-44 SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS AND ACCOUNTING POLICIES

MANAGEMENT’S BASIS FOR PROJECTION OF OTHER ITEMS (CONTINUED)

The following table presents a summary of the assumed annual principal payments for all long-term debt which is presented on a December 31, fiscal year basis:

Table 20 Schedule of Series 2019 Notes and Series 2021 Bonds Annual Principal Payments (Dollars in Thousands) Year Ending December 31, Series 2019 Notes Series 2021 Bonds Total 2019 $ - $ - $ - 2020 - - - 2021 7,489 (1) - 7,489 2022 - - - 2023 - - - 2024 - 15,000 (2) 15,000 2025 - 38,140 (2) 38,140 2026 - 1,285 1,285 Thereafter - 81,070 81,070 Total $ 7,489 $ 135,495 $ 142,984

Source: Management and the Underwriters Notes: (1) Principal on the Series 2019 Notes is assumed to be repaid from proceeds of the Series 2021 Bonds. The amount shown on the table excludes projected accreted interest on the Series 2019 Notes of approximately $1,372,000 which is also projected to be paid from proceeds of the Series 2021 Bonds. (2) Principal payments on the Series 2021 Bonds through 2025 are assumed based upon the projected availability of the Initial Entrance Fees of the Independent Living Apartments.

See Independent Accountants’ Compilation Report B-45 [THIS PAGE INTENTIONALLY LEFT BLANK]

Market Analysis and Feasibility Update For a New Senior Housing Development at Shalom Park Charlotte, North Carolina

Prepared For:

APPENDIX C

August 2019

Table of Contents

Project Overview ...... 4 11 Introduction ...... 4 Aldersgate Shalom Park ...... 5 Scope ...... 7

Executive Summary ...... 8 Market Depth ...... 8 Demographics ...... 12 Competitive Environment ...... 13

Market Area Definition ...... 15 Market Area Map ...... 16 Market Area Map (with drive-time boundaries) ...... 17

Demographics ...... 18 Population ...... 18 Households and Income Distributions ...... 20 Adult Child Influencers ...... 24 Real Estate Analysis ...... 25

Table of Contents (Continued)

Competitive Environment ...... 30 11 Introduction ...... 30 Communities with Independent Living ...... 31 Map of Primary Competitors ...... 32 Communities with Assisted Living ...... 41 Communities with Memory Care ...... 42 Proposed Projects or Projects in Development ...... 43 Individual Community Evaluations ...... 48 Map of All Competitors ...... 53

Analysis of Need/Demand ...... 54 Independent Living ...... 52 Assisted Living ...... 63 Memory Care ...... 66

PROJECT OVERVIEW

Introduction Shalom Park consists of approximately 50 acres of land on the south side of Charlotte – an upscale location within a rapidly 11 growing MSA. The site was assembled to become a home for Jewish culture in the city, and indeed, in the region. Currently, The Jewish Community Center, Temple Beth El (Reform), Temple Israel (Conservative), a pre-school, a summer camp, The Jewish Federation, Jewish Family Services, FCJC Asset Managers, a local Jewish newspaper, and a number of other Jewish organizations and social service agencies are located at Shalom Park.

Shortly after Shalom Park was founded, Temple Israel began assembling properties adjacent to its site, between Shalom Park and Jefferson Drive. The approximately 7-acre property provides a natural site for a senior living community that would offer a connection to the campus amenities and a Jewish culture for residents.

Aldersgate, one of the leading providers of housing for seniors and long-term care services in the area, partnered with the Jewish agencies associated with Shalom Park to create a vision for the campus that would include housing with services for seniors on this Shalom Park campus. The culmination of this vision would be “Aldersgate Shalom Park.”

In late 2016, a comprehensive market analysis and strategic planning study was commissioned from GlynnDevins Research (GD Research – formerly “Brooks Adams Research”), the purpose of which was to provide research and recommendations in support of Aldersgate Shalom Park’s strategic, and master planning process. The ultimate goal was to create a document that would outline the senior living community’s plan to be responsive to both local and national trends so that it can offer the most desired, and hence marketable, options possible at Shalom Park – thereby making the campus relevant and desired by the market for years to come.

At this point in time, and as Aldersgate Shalom Park is progressing towards financing, it has commissioned an update to the original study to be reflective of current market conditions, specifically focusing on shifting demographics and changes in the competitive environment in the Charlotte, NC market. This document contains this updated market study from GD Research.

Aldersgate Shalom Park As currently planned, Aldersgate Shalom Park’s footprint would sit on approximately 11.5 acres and include 125 Independent Living (IL) residences, along with 16 Assisted Living (AL) residences, split evenly between traditional AL residences and Memory Care (MC) residences for those suffering from Alzheimer’s Disease or dementia-related disorders. 11 IL residences would be contained within five “hybrid” buildings with nearly 210,000 square feet of living space along with nearly 66,000 square feet of garage space located beneath the hybrid buildings. The AL and MC residences would be contained within a single, Assisted Living and Memory Support Center, with a total of 18,000 square feet. This building would also contain commons spaces including a therapy gym, clinic space, and storage/maintenance space.

Currently-proposed residence mix, size, and pricing are detailed in the following table (in 2019 dollars)

Entrance Fee* Monthly Fee Square Residence Type Number 90% & 50% 90% and 0% Feet 0% Plan 50% Plan Plans Plans 1 Bedroom, 1½ Bath 18 1,000 $435,000 $304,500 $4,445 $3,778 1 Bedroom + Den, 1½ Bath 3 1,225 $520,000 $364,000 $5,150 $4,378 2 Bedroom, 2 Bath 16 1,115 $470,000 $329,000 $4,650 $3,953 2 Bedroom + Den, 2½ Bath 18 1,225 $505,000 $353,500 $5,025 $4,271 2 Bedroom + Den Deluxe, 2½ Bath 18 1,325 $540,000 $378,000 $5,300 $4,505 2 Bedroom + Den, 2½ Bath 18 1,425 $565,000 $395,500 $5,575 $4,739 2 Bedroom + Den, 2½ Bath 16 1,525 $615,000 $430,500 $5,850 $4,973 2 Bedroom + Den, 2½ Bath 18 1,650 $680,000 $476,000 $6,250 $5,313 Total/Weighted Average 125 1,321 $543,760 $380,632 $5,297 $4,503 Second Person Fee $20,000 $20,000 $1,150 $1,150

* The EF shown are for Charter Members (the first 70% of the Depositors) – assumed to increase 6% upon construction start and 8% after opening.

Aldersgate Shalom Park is also proposed to include approximately 27,600 square feet of Clubhouse space that would include: Dining spaces (formal and bistro) Activity spaces (classroom, small fitness room – similar11 to hotel) Administrative spaces Back of house spaces (Main Kitchen, Kosher Kitchen, etc.)

Not included within the construction scope of the project are the nearby amenities of the existing center of Jewish life itself, including (among other services listed above) the two on-site temples and the Levine Jewish Community Center (JCC). The availability of these adjacent amenities would allow residents of Aldersgate Shalom Park access to a wealth of amenities, programs, and services, and particularly those associated with the JCC, including (but not limited to): Fitness center Water aerobics Personal training Aquatic therapy Pilates Adult enrichment classes (boxing, meditation, Tai Tennis Chi, etc.) Group exercise classes Lecture series Pickle ball Dancing Massage services Ceramics Nutritional counseling Music lessons Swimming pools Language lessons

Scope This updated study relies on many of the same assumptions from the prior, but strategically alters assumptions to reflect GD Research’s current understanding of the project (Aldersgate Shalom Park). It also utilizes current demographic estimates and five-year projections along with updating methodologies11 where appropriate. The primary components of this study included: Reviewing and confirming the market area(s) based on current drive-time estimates, geographic criteria, socioeconomic characteristics of the potential consumer population(s) and GD Research’s professional experience. Performing demographic analyses of the older adult population to include baseline data from the 2010 U.S. Census, and estimates and projections for the years 2019 and 2024. The analyses include an examination of population by age group, projections of the number of elderly households by age and income, housing values, and other information relevant to characterizing and quantifying the market for housing and services. Updating the analysis of potentially competitive facilities within the defined market area(s) to include current offerings, pricing, occupancy, and with particular attention paid to any new facilities that have entered the market since the production of the prior report. Integrating the findings from the above tasks to develop updated estimates of market depth for all levels of service under consideration. These levels of service included Independent Living (IL), Assisted Living (AL), and Memory Care (MC) within an Assisted Living setting. Analyses of market depth are expanded from the original report to include measures of project- and market-penetration that can be compared to national benchmarks. The analyses are based on established industry assumptions along with GD Research’s professional experience.

EXECUTIVE SUMMARY

Market Depth The markets for all levels of care analyzed herein show sufficient depth to warrant the development of a new senior living 11 community at Shalom Park as it is currently proposed with 125 Independent Living residences and 16 Assisted Living Residences split evenly between traditional Assisted Living and Memory Care. In addition, the entrance fee pricing currently proposed for Aldersgate Shalom Park is very competitive with existing, comparable communities within its Primary Market Area (PMA); however, proposed monthly service fees are noticeably higher than competitors, creating a potential for some market resistance on this front.

The project site has significant advantages due to its connection to the Levine Jewish Community Center and its location on the Shalom Park campus. This, along with prolific forecast growth rates within the target market in the PMA should allow Aldersgate Shalom Park community to achieve success, even in the face of a very aggressive market in terms of new product entering the marketplace.

Specific market depth is dependent on price point, but all methodologies employed to estimate market depth point to a growing market that should be able to accommodate new IL at Aldersgate Shalom Park. For new IL housing with an entrance fee, there will be projected (by 2024) demand for between 153 and 337 residences (midpoint 245) with a starting entrance fee of $300,000 and associated monthly fees of at least $3,750. As projected entrance fees increase, estimated demand declines due to issues concerning affordability (related to home values). For entrance fee housing starting at: o $400,000, there will be estimated demand for between 109 and 239 residences (midpoint 174) o $500,000, demand will be for between 76 and 168 residences (midpoint 122) o $750,000, demand will be for between 40 and 87 residences (midpoint 64) Each statistical estimate indicates market depth beyond that which is currently being offered in the PMA if all residences were 100% occupied. Estimates also take into account any proposed or planned communities, or additions to existing communities that were deemed by GD Research as likely to proceed. A summary of estimates by potential entrance fee price point, via capture rate analysis is indicated in the chart on the top of the following page: 8

Forecast Cumulative Demand by Potential Entrance Fee (2024)

337 2.5% Capture (Conservative) 245 11 239 174 4.0% Capture (Standard) 153 168 122 109 87 76 64 5.5% Capture (Moderately aggressive) 40

$300,000 + $400,000 + $500,000 + $750,000 +

A similar chart is provided below summarizing market depth by monthly service fee price point. Though the proposed monthly fees for Aldersgate Shalom park are approximately 15% to 30% higher than those at comparable communities, there remains sufficient market depth at a range of price points to accommodate the new Aldersgate Shalom Park residences as proposed.

Forecast Cumulative Demand by Monthly Price Point (2024)

337 2.5% Capture (Conservative) 245 224 4.0% Capture (Standard) 153 163 157 102 114 71 5.5% Capture (Moderately aggressive)

$3,750+ $5,000+ $6,250+

As an additional check on market conditions for IL, a series of penetration analyses were run for the PMA as a whole and also specifically for Aldersgate Shalom Park. These analyses are then compared via time-series (for the market as a whole) and to national benchmarks (for the project).

9 o The current Gross Market Penetration Rate (GMPR) in the PMA is 39.3%, slightly exceeding the 75th percentile of all U.S. markets (33.3%), indicating a market that is crowded, but not likely at its saturation point; however, due to significant forecast growth among target market households, the GMPR is forecast to fall to 35.5% – approximately the 77th percentile of all U.S. market – even though there is a forecasted significant increase in new product. 11 Gross Market Penetration Rate Summary

o The calculated Project Penetration Rate (PPR) for Aldersgate Shalom Park by 2024 is 1.3%, indicating a very favorable market, from which the new community would only need to capture just over 1% of qualified households to fill its proposed 125 IL residences.

Project Penetration Rate Summary

MIN 25th 50th 75th MAX 0.1% 2.5% 4.9% 9.9% 20.3%

1.3% (2024)

o The calculated Net Market Penetration Rate (NMPR) for Aldersgate Shalom Park by 2024 is 26.6%, a rate exceeding the national 75th percentile (approximately 86th). This reflects the notable number of competitors in the PMA; however, it is likely that if growth in the target market continues at its current pace (indicated by forecast growth in the age 65 to 74 cohort) that NMPR will decline. 11 Project Penetration Rate Summary MIN 25th 50th 75th MAX 1.1% 7.7% 12.8% 17.7% 37.7%

26.6% (2024)

Even though Aldersgate Shalom Park will not have the ability to take direct admission to its proposed care center (at least at the time of opening), there is also forecast need for long-term care residences from within the Care Market Area (CMA – a subset of the PMA) with an estimated need for up to 202 Assisted Living residences and for up to 198 Memory Care residences (in an Assisted Living setting). These estimates represent conservative estimates of need and demand in the market. o In addition, currently proposed fees for AL and MC residences at Aldersgate Shalom Park are competitively priced compared to primary competitors within the CMA.

Demographics Demographics projections from key cohorts within the PMA are forecast to show notable growth over the next five years and beyond. The patterns of growth evidenced and forecast for the market area are very typical for a “southeastern” state as much of this region is seeing growth projections that are typically well above U.S. averages. 11 The older population (age 65+) is predicted to experience a significantly greater rate of growth than the total population from 2019 to 2024 at over 20% – a rate double that for the national average in this cohort. The bulk of the primary age market (age 75+) is also predicted to experience a greater rate of growth (27%) than the population as a whole, and at a rate over double the national average. Second only to growth in the age 75-84 cohort, growth within the age 65 to 74 cohort is forecast to be substantial, at just over 26%. This cohort represents the first wave of baby boomers and is an indication of strong, future market potenial. There are currently 6,013 target market households (age 75+, income $75,000+) in the PMA, and this cohort is expected to grow by over 50% through 2024 to reach a total of 9,054 – a projected gain of over 3,000 households. o Importantly, the most significant concentration of target market households are located within the project’s CMA – roughly contained within a 12-minute drive of Shalom Park. The population of potential “Adult Child Influencers” or those age 45-64 (those who are of the appropriate age to have a parent within the target age group of the project), are forecast to increase by 10% from 2019 to 2024 – over 10 times the national rate of growth in this cohort. By 2024, there will be nearly 150,000 such households who could potentially relocate an aging parent to be closer to them. Data from Claritas indicates that the median value of owner-occupied housing units in the market area is expected to near $270,000 by 2024 (an 9% increase from 2019), indicating that older home-owners in the PMA may have significant assets available to them that could potentially increase their ability to afford monthly fees. o As with target market households, many of the areas with the greatest concentration of high-value households are within the project’s CMA.

Competitive Environment The competitive environment is robust and very active. The retirement housing market in Charlotte has been very active for some time, and in large part due to the ongoing and forecast growth in the area, is becoming more so – especially as Charlotte has been gaining a national reputation as a retirement destination. 11 This activity is evident via examination of both Gross Market Penetration and Net Market Penetration, with the PMA exhibiting rates above the 75th percentile of all U.S. markets. Taken on their own, these high rates might indicate a market near saturation, but combined with an examination of occupancy rates and building activity, indicate a mature market – one that has a high level of product acceptance and usage. There are a total of 19 existing communities that offer (or that shortly will offer) IL within the PMA, and these have a total of 3,556 residences. There is a very broad range of quality among communities, and it was determined that of all 19, only six are considered to be primary competitors to Aldersgate Shalom Park. The six primary competitiors include: The Cypress of Charlotte, Plantation Estates, Providence Meadows, Sharon Towers, Southminster, Windsor Run. o Windsor Run is new, and still in its initial fill-up, so occupancy statistics are not included in averages. o Providence Meadows is only included due to the relative newness of the community. As this community ages, it will likely become less competitive to a new offering at Shalom Park. o These six communities have a total of 1,614 IL residences, of which all residences are currently occupied (except Windsor Run), and most have lengthy wait lists. o All primary competitiors are located within Aldersgate Shalom Park’s CMA except for Windsor Run, which is located just beyond the CMA boundary. o All primary competitors except for Providence Meadows offer (or will offer in the case of Windsor Run) additional levels of care on their campuses. There are 17 communities offering (or that shortly will offer) AL within the CMA, with a total of 869 existing residences. Only four of six primary competitors offer Assisted Living (all but Providence Meadow and Windsor Run); however, Windsor Run is planing to add AL in the next phase of development. There are 14 communities offering (or that shortly will offer) MC within the CMA, with a total of 278 existing residences. As with AL (above), the same four of six primary competitors offer Memory Care.

As alluded to above, there is very significant building activity occurring within the PMA, including additions/expansions to four of the primary competitors along with the addition of a completely new Life Plan Community (The Barclay at SouthPark) which will become a primary competitor once open. o In total, if all proposed/planned expansions11 and new building are completed according to plan, they would add a total of 1,152 new IL to the PMA, increasing the number of IL residences by nearly 33%. o The Barclay at SouthPark is a proposed Life Plan Community from Liberty Senior Living, located at 6010 Fairview Road. When completed, it will include 165 IL, 68 AL, 24 MC, and 28 nursing beds. Construction is underway and the building’s core structure was finished in June 2019. Anticipated completion of the community is projected to be late summer 2020. o Plantation Estates is currently expanding their community in Matthews. When completed, 88 IL, 16 MC, 120 nursing beds will be added to the campus. o Sharon Towers is currently expanding their community in a 46-residence IL addition called “The Deerwood.” Construction is underway as of July 2019 and the addition is slated to be open to residents in early 2021. o Southminster is undergoing a $120 million expansion that will add 66 IL, 25 AL, and 60 nursing beds. Construction is underway and the full expansion is scheduled to be open in late Summer 2020. o Windsor Run is planning final build-out to include 900 IL residences along with a care center that would include 24 AL, 18 MC, and 18 nursing beds. The first part of the expansion (building four) is slated to begin construction in 2021. o There are additional communities and expansions that will either be notably less competitive to Aldersgate Shalom Park or whose prospects for construction are unknown or in doubt at this time. These are listed in the body of this report.

MARKET AREA DEFINITION

The Primary Market Area (PMA) and its sub-markets were determined based on geographic and demographic considerations, direct input from consumer research specific to the project (market survey), GD Research’s professional 11 experience, direct input from the Aldersgate Shalom Park team, and the use of “industry rules of thumb.” In particular, drive-time analysis was utilized to understand how Aldersgate Shalom Park may be able to draw residents for the various levels of care under consideration for the Charlotte site.

The map on the following page shows the relative position of the PMA and its defined sub-market, and the map on the second following page shows these boundaries, along with approximations of both 12-minute and 22-minute drive time boundaries, considered appropriate distances of travel from which to draw varying levels of care that could be provided in a new community at Shalom Park. A 12-minute drive time within an urbanized area is considered an appropriate draw area for higher levels of care, including Assisted Living (AL) and Memory Care (MC). When assessing potential market depth for higher levels of care, only this “Care Market Area” (CMA) is considered as a potential market area; however, reasonable “outside fill” assumptions are also given consideration to account for the percentage of potential residents that could originate from beyond the CMA, especially to be closer to adult-children who currently reside within this area. It is also expected that the CMA represents the area from which a new community would be able to draw a significant portion of Independent Living (IL) residents as well. A 22-minute drive time within an urbanized area is considered an appropriate draw area for IL, and areas contained within this boundary are included in “IL Only” market area, of which the CMA is a subset. This total area is considered to be the PMA (Primary Market Area). In addition, it is further expected that the proposed new community would draw residents from beyond the boundaries of the market area, as is typical with a proposed community of this type. Reasonable “outside fill” assumptions are applied to estimate total market depth. Additionally, it is assumed that Aldersgate Shalom Park would draw Jews at a greater rate than competitors due to its affiliation with the Shalom Park campus, and also the fact that there are no current, Jewish-affiliated options for senior housing and services between Richmond, VA and Atlanta, GA; however, additional “outside fill” due to Jewish affiliation is not assumed in this research to provide a conservative estimate of market depth. Any market from the Jewish community residing beyond the PMA boundary would be in addition to assesed market depth in this report.

Market Area Map

Market Area Map (with drive-time boundaries)

DEMOGRAPHICS

Population The PMA’s total population is predicted to grow by 7.6% from 2019 through 2024 – over double the national average for 11 total population growth. The older population (age 65+) is predicted to experience a significantly greater rate of growth than the total population from 2019 to 2024 at nearly 27% (60% greater than the national average). The primary target market for senior housing (age 75+) is predicted to experience rate of growth (27%) more than double the U.S average in this cohort (12%). This, combined with strong forecast growth in the following age 65 to 74 cohort (26%) indicate potential for a stable and strong future market beyond 2024. o Growth in the age 75-84 cohort is forecast to eclipse all other “older” age cohorts from 2019 to 2024 (36%).

Population Demographics: Aldersgate Shalom Park PMA

Market Area Percent Change

2019 2024 Market Area U.S. Average

Total Population 946,698 1,018,567 7.6% 3.6%

Age 45 to 64 130,321 138,654 6.4% -2.4%

Age 55 to 64 107,973 123,111 14.0% 1.9%

Age 65 to 74 69,138 87,170 26.1% 19.8%

Age 75 to 84 29,984 40,760 35.9% 15.1%

Age 85+ 12,749 13,657 7.1% 5.8%

Total Ages 55+ 219,844 264,698 20.4% 10.2%

Total Ages 65+ 111,871 141,587 26.6% 16.8%

Total Ages 75+ 42,733 54,417 27.3% 12.3% 18

Older Population As mentioned previously, the most noticeable growth in the elderly population is predicted to occur in the primary target cohort (age 75+) and particularly within the age 75 to 84 cohort. National trends show this as a categorical change from previous trends, which saw the majority of growth in the older population (by percentage) among the oldest, age 85+ cohort; however, the PMA had already been experiencing11 exceptionally strong growth in the younger-old cohort (age 65 to 74) from 2010, as seen in the chart below indicating 69% growth in the age 65 to 74 cohort from 2010 to 2019. Much of the growth in the younger, age 65 to 74 cohort, from 2010 to 2019 is attributable to the baby boom generation, and the same is true for forecast growth (from 2019 to 2024) of a significant portion of the older, age 75 to 84 cohort as well. o The age 75 to 84 cohort is forecast to experience greater growth (by percentage) between 2019 and 2024 (36%) than it did in the nine years prior (33% growth from 2010 through 2019).

POPULATION GROWTH BY AGE COHORT

65-74 75-84 85+

69%

36% 33% 30% 26%

2010 TO 2019 2019 TO 2024

Households and Income Distribution The current median household income (all ages) in the PMA is $67,135 and it is predicted increase to $75,952 by 2024 (approximately 13% predicted growth). The median income in the Care Market Area (CMA),11 the immediate area around the Aldersgate Shalom Park site, is currently $80,547, approximately 20% higher than the median income for the entire PMA. It is important to note that there is a significant decline in median household income as age increases. Though this decline is in accordance with national averages, it is important to note that prospects will likely have less income available to them in retirement than would be indicated by area median incomes (all ages). By 2024, the median income for age 65+ households is predicted to be $55,949 – approximately 74% of the predicted median for all households.

Age 75+ Households There are currently an estimated 27,327 households headed by someone age 75 or older in the PMA. Of these households, approximately 22% (6,013 households) have annual incomes of $75,000 or more. This percentage is projected to increase to approximately 27% (9,054 households) by 2024, an overall projected gain of over 3,000 target market households. The market with incomes of $75,000 or more is considered to be the total target market for IL in the PMA. The income distribution of age 75+ households in the PMA indicates slightly greater overall affluence than national averages. Over one-quarter (26%) of age 75+ households will earn at least $75K by 2024 – a cohort considered to be the primary target market for new IL housing. Almost one-fifth (18%) of age 75+ households will earn at least $100K.

Predicted Income Distribution Age 75+ Households (2024)

<$50K $50K-$75K $75K-$100K $100K-$150K $150K+ 56.9% 16.6% 8.8% 9.4% 8.3%

Age 75+ Household Demographics: Aldersgate Shalom Park PMA

Market Area Percent Change

2019 11 2024 Market Area U.S. Average Total Age 75+ Households 27,327 34,185 25.1% 10.9%

<$50,000 17,001 19,453 14.4% 4.5%

$50,000 to $75,000 4,314 5,676 31.6% 13.3%

$75,000 to $100,000 2,216 3,024 36.5% 18.7%

$100,000 to $125,000 1,269 1,820 43.4% 24.9%

$125,000 to $150,000 902 1,377 52.7% 34.6%

$150,000+ 1,626 2,833 74.2% 49.6%

Total $75,000+ 6,013 9,054 50.6% 30.1%

Total $100,000+ 3,797 6,030 58.8% 38.0%

Total $125,000+ 2,528 4,210 66.5% 44.9%

Geographic Distribution of Target Market An examination of projected (2024) household data by zip code and block group shows the highest concentration of target market households (age 75+, income $75K+) in the CMA and the southern half of the PMA. Nearly all zip code and block group areas with the largest number of qualified households are in the CMA – within an approximate 12-minute drive of Shalom Park.

Visual (graphical) representations of these data can be seen in the two maps immediately following, including a map by zip code and also one by block group to show more specific density of target market households.

Age 75+, Income $75,000+ Households by Zip Code (Forecast for 2024)

111

22 Age 75+, Income $75,000+ Households by Block Group (Forecast for 2024)

1111

Adult Child Influencers As adult children typically encourage their aging parents to move closer if/when additional care (AL, MC) may be needed, coupled with the fact that a more affluent adult child may be able to financially support the cost of care for an aging parent (in part or in whole), GD Research analyzed population and income demographics for those ages 45 to 64 (potential adult children) within the PMA. 11 The potential “adult child” population is predicted to grow by 10% through 2024, a dramatically greater rate than the national average. There are predicted to be over 157,000 potential adult-child influencers in the PMA that could potentially relocate an aging parent to be closer to them. In addition, income growth among affluent households is predicted to be significant when compared to the national average (nearly double).

PMA Percent Change

Population 2019 2024 Market Area U.S. Average

Total Age 45 to 64 Population 143,629 157,484 10% -0.2%

Ages 45 to 54 35,656 34,373 -4% -2.4%

Ages 55 to 64 107,973 123,111 14% 1.9%

Households

Total Age 45 to 64 Households 136,869 148,588 9% -1.0%

<$75,000 61,105 57,772 -5% -11.1%

$75,000 to $100,000 16,412 17,311 5% -3.8%

$100,000 to $125,000 14,687 16,144 10% 0.9%

$125,000 to $150,000 11,407 13,198 16% 8.3%

$150,000+ 33,258 44,164 33% 20.8%

Total $100,000+ 59,352 73,506 24% 12.8%

Real Estate Analysis Fifty-nine percent (59%) of households (all ages) in the PMA were estimated to live in a residence they own in 2019 and this percentage is expected to remain constant through 2024. Home ownership among age 75+ households is notably higher at 71% and is also expected to remain constant through 2024. 11 It is very common for older households to show greater ownership statistics than the general population. Though loan-to-value (LTV) ratios for older households have increased since 2008 (recession), older households still typically have greater equity in their homes than the general population given their potential tenure in their homes due to their age.

Data from Claritas indicates that the median value of owner-occupied housing units in the market area was $245,672 in 2019, and this figure is expected to grow to $267,385 by 2024 (a 9% increase). Home value distribution is somewhat bi-polar, with the most notable concentrations of home values at either end of the spectrum – approximately one-third each of homes are valued at less than $200,000 and at $400,000 or more.

Home Value Distribution

2019 2024 23% 21% 22% 20% 21% 19% 16% 15% 13% 13% 9% 9%

<$150,000 $150,000 - $199,999 $200,000 - $299,999 $300,000 - $399,999 $400,000 - $499,999 $500,000+

An additional source for home value and housing market data (Altos Research) indicates the following current data on the housing market in Charlotte, as this area is likely very representative of the overall market for housing within the PMA. Median list price ($389,000) Median list price per square foot ($164) 11 Days on market (83) Number of homes for sale in current inventory (1,902) Most expensive listed home ($7,000,000) Least expensive listed home ($47,500) Current market action index (47): The Market Action Index measures the current rate of sale versus available inventory. An index above 30 implies Seller's Market conditions – below 30, conditions favor the buyer. This score of “47” implies a strong seller’s advantage.

Median List Price

26 Average Days on Market

Price per Square Foot

27 The maps on this and the following page indicate geographic distribution by zip code and by block group of high-value homes ($300,000+). This distribution, when paired with understanding distribution of primary target market households by income, give a strong indication as to the locations from which residents are most likely to be drawn. The distribution bears similarity to that for primary target market households. 11

28 Home Values Estimated at $300,000+ by Block Group (Forecast for 2024)

111

Competitive Environment

Introduction GD Research identified and analyzed existing and proposed market-rate communities within the PMA, including those that 11 offer Independent Living, Assisted Living, and Memory Care. All potentially competitive communities within the PMA were inventoried for the purpose of analyzing demand; however, The analysis of the competitive environment contained within this section of the report focuses solely on those communities considered most likely to be directly competitive to a new community at Shalom Park – primary competitors.

This analysis provides a comprehensive and detailed analysis of the competitive landscape for primary competitors. It is important to note that a new community is expected to draw IL residents from the PMA; however, higher levels of care, including AL and MC, are expected to draw primarily from the CMA only. As such, communities are only included in the analysis if the levels of care offered correspond with the market area subset identified: Communities within the Care Market Area (CMA) are included if they IL, AL, or MC. Communities located within the PMA but not located within the CMA are only included in the analysis if they offer Independent Living; therefore, communities with AL and/or MC are not included in the analysis if they are located outside of the CMA (even if they are still within the PMA).

Many sources were used to compile the competitive data, including information provided by representatives of Aldersgate Shalom Park, NICMap, websites, telephone conversations, prior research, and in-person visits/tours. In-person visits were only conducted for primary competitors, as cooperatively identified by representatives of GD Research and Aldersgate Shalom Park. These communities tended to be either within, or closer to the Aldersgate Shalom Park PMA and would likely have a greater direct-impact on any new construction at Shalom Park.

Data on operating capacity, occupied residences, and fees are often based on information provided by the community, which cannot always be verified, and then cross-referenced with other sources when possible. It is important to note that occupancy data represent a snapshot in time and can change quickly. 30

Primary Competitors Included in Competitive Analysis Offer Independent Living Offer Assisted Living Offer Memory Care The Cypress of Charlotte The Cypress of Charlotte The Cypress of Charlotte 11 Plantation Estates Plantation Estates Providence Meadows Sharon Towers Sharon Towers Southminster Southminster Windsor Run

Communities with Independent Living The following table summarizes key metrics among communities that offer Independent Living residences considered potentially competitive to Aldersgate Shalom Park.

Primary Competitors with Independent Living in the PMA

Community Status Residences Occupancy Levels of Care 2nd Person EF 2nd Person MSF

The Cypress of Charlotte Not for Profit 287 100% IL, MC, NC n/a $1,406

Plantation Estates Not for Profit 500 100% IL, AL, MC, NC $30,000 $1,743-$1,917

Providence Meadows For Profit 133 100% IL n/a $495

Sharon Towers Not for Profit 240 100% IL, AL, NC $16,500 $1,519-$1,789

Southminster Not for Profit 269 100% IL, AL, NC $25,000 $1,930

Windsor Run For Profit 318 NEW IL n/a $836

Total/Average 1,614 100% $28,833 $1,591 “n/a” indicates that information does not exist, while dashes “—” indicate that information exists but is not known 31

Map of Primary Competitors

Label Name 1 Barclay at Southpark, The 1111 2 Cypress of Charlotte, The 3 Plantation Estates At Matthews 4 Sharon Towers 5 Southminster 6 Windsor Run

The following table includes a summary of the entrance fee contracts offered by primary competitors, including the provision of Lifecare (or lack thereof), and the amount of contract refundability offered. A “0%” refundable contract refers to those that are amortized (typically 2% to 3% per month) until there is no longer

any refund available after four to five years of residency.11 Also, these contracts are typically 100% refundable during the first 90 to 120 days of residency prior to amortization beginning. The contracts that are “50%” refundable work the same way as above, except that they freeze when 50% of the initial contract amount is remaining.

Primary Competitors by Contract Type and Refund

Type A Contract Type C Contract

0% 50% 90% 0% 50% 90%

Cypress of Charlotte, The (a)

Plantation Estates (b)

Providence Meadows

Sharon Towers

Southminster

Windsor Run

(a) Equity model with 10% Membership Fee

(b) Also offers 70%-refundable modified Life Care contract (for those with long-term care insurance)

The following table (continued on the next page) summarizes size and pricing for competitors that offer a traditional (non- refundable) entrance fee option among IL communities in the PMA. Plantation Estates is the only entrance fee community that offers a studio apartment option (600 sq. ft.). The Non-

Refundable Entrance Fee options for the studio range11 from $126,900 to $174,900 and monthly service fees range from $2,100 to $2,333.

Traditional (Non-Refundable) Entrance Fee Contract: Monthly Fee and Size Comparison 1 Bdrm 1 Bdrm + Den 2 Bdrm 2 Bdrm + Den or Cottage Community Apartment Apartment Apartment 3 Bdrm Apartment (1+Den to 2 Bdrm) Size (sq. ft.): 715 - 820 971 1,030-1,178 1,380 – 1,693 1,850-2,100 Entrance Fee: $184,900 - $255,900 $226,900 - $306,900 $235,900 - $330,900 $276,900 - $431,900 $383,900 - $515,900 Plantation EF/Sq. Ft.: $259 - $312 $234 - $316 $229 - $281 $201 - $255 $208 - $246 Estates* Monthly Fee: $2,224 - $2,471 $2,392 - $2,658 $2,601 - $3,216 $2,894 - $3,715 $3,675 - $4,295 MF/Sq. Ft.: $3.01 - $3.11 $2.46 - $2.74 $2.53 - $2.73 $2.10 - $2.19 $1.99 - $2.05 Size (sq. ft.): 300 – 1,000 1,280 720 – 1,655 1,800 – 1,940 1,100 - 2,299 Entrance Fee: $78,200 - $204,000 $288,000 $128,00 - $406,000 $431,000 - $475,000 $228,000 - $574,000 Sharon Towers EF/Sq. Ft.: $204 - $261 $225 $178 - $245 $239 - $245 $207 - $250 Monthly Fee: $3,095 - $4,078 $3,503 - $3,998 $3,398 - $4,386 $4,126 - $4,737 $3,495 - $5,432 MF/Sq. Ft.: $4.08 - $10.32 $2.74 - $3.12 $2.65 - $4.72 $2.29 - $2.44 $2.36 - $3.18 Size (sq. ft.): 635 955 - 1,250 1,000 - 1,855 1,295 - 2,200 1,430 - 1,730 Entrance Fee: $115,000 $190,000 - $298,000 $199,000 - $484,000 $282,000 - $565,000 $305,000 - $352,000 Southminster EF/Sq. Ft.: $181 $199 - $238 $199 - $261 $218 - $257 $203 - $213 Monthly Fee: $3,367 $3,645 - $3,930 $3,645 - $4,504 $4,079 - $5,001 $3,637 - $3,764 MF/Sq. Ft.: $5.30 $3.14 - $3.82 $2.43 - $3.65 $2.27 - $3.15 $2.18 - $2.54

Traditional (Non-Refundable) Entrance Fee Contract: Monthly Fee and Size Comparison (Continued) 1 Bdrm 1 Bdrm + Den 2 Bdrm 2 Bdrm + Den or Cottage Community Apartment Apartment Apartment 3 Bdrm Apartment (1+Den to 2 Bdrm) Size (sq. ft.): 813-1,093 1,09711 - 1,109 1,106 - 1,795 Entrance Fee: $134,400 - $193,200 $182,400 - $201,000 $187,200 - $341,400 Windsor Run EF/Sq. Ft.: $165 - $177 $166 - $181 $169 - $190 n/a n/a Monthly Fee: $2,131 - $2,555 $2,523 - $2,565 $2,595 - $3,622 MF/Sq. Ft.: $2.34 - $2.62 $2.30 - $2.31 $2.02 - $2.35 Size (sq. ft.): 751 1,114 1,292 1,718 1,752 Entrance Fee: $160,075 $247,650 $289,000 $410,300 $393,133 Average EF/Sq. Ft.: $213 $222 $224 $239 $224 Monthly Fee: $2,911 $3,152 $3,496 $4,092 $4,050 MF/Sq. Ft.: $3.87 $2.83 $2.71 $2.38 $2.31

“n/a” indicates that the residence/information does not exist, while dashes (“—“) indicate that information exists but was unattainable. * Offers a “Modified Life Care Plan” which applies LTC-insurance to costs of care for up to three years. EF pricing is discounted 30%, and MSF pricing is discounted 10%.

The table on the following page summarizes size and pricing for competitors that offer a 50% refundable entrance fee option among IL communities in the PMA. Plantation Estates is the only entrance fee community that offers a studio apartment option (600 sq. ft.). The 50% Refundable Entrance Fee options for the studio range from $126,900 to $139,900 and monthly service fees are $2,566.

50% Refundable Entrance Fee Contract: Monthly Fee and Size Comparison 1 Bdrm 1 Bdrm + Den 2 Bdrm 2 Bdrm + Den or 1 Bdrm + Den or Community Apartment Apartment Apartment 3 Bdrm Apartment 2 Bdrm Cottage Size (sq. ft.): 715 - 820 97111 1,030 – 1,178 1,380 – 1,693 1,850 – 2,100 Entrance Fee: $334,900 - $395,900 $410,900 - $487,900 $426,900 - $525,900 $442,900 - $689,900 $694,900 - $820,900 Plantation EF/Sq. Ft.: $468 - $483 $423 - $502 $414 - $446 $321 - $408 $376 - $391 Estates* Monthly Fee: $2,924 $2,924 $3,179 - $3,538 $3,538 - $4,087 $4,469 - $4,725 MF/Sq. Ft.: $3.57 - $4.09 $3.01 $3.00 - $3.09 $2.41 - $2.56 $2.25 - $2.42 Size (sq. ft.): 300 – 1,000 1,280 720 – 1,655 1,800 – 1,940 1,100 - 2,299 Entrance Fee: $109,089 - $284,580 $401,760 $178,560 - $556,370 $601,245 - $662,625 $318,060 - $800,730 Sharon Towers EF/Sq. Ft.: $285 - $364 $314 $248 - $336 $334 - $342 $289 - $348 Monthly Fee: $3,095 - $4,078 $3,503 - $3,998 $3,398 - $4,386 $4,126 - $4,737 $3,495 - $5,432 MF/Sq. Ft.: $4.08 - $10.32 $2.74 - $3.12 $2.65 - $4.72 $2.29 - $2.44 $2.36 - $3.18 Size (sq. ft.): 635 955 - 1,250 1,000 - 1,855 1,295 - 2,200 1,430 - 1,730 Entrance Fee: $161,000 $266,000 - $417,200 $278,600 - $677,600 $394,800 - $791,000 $427,000 - $492,800 Southminster EF/Sq. Ft.: $254 $279 - $334 $279 - $365 $305 - $360 $285 - $299 Monthly Fee: $3,367 $3,645 - $3,930 $3,645 - $4,504 $4,079 - $5,001 $3,637 - $3,764 MF/Sq. Ft.: $5.30 $3.14 - $3.82 $2.43 - $3.65 $2.27 - $3.15 $2.18 - $2.54 Size (sq. ft.): 684 1,118 1,240 1,718 1,752 Entrance Fee: $241,078 $397,587 $440,655 $597,078 $592,532 Average EF/Sq. Ft.: $352 $356 $355 $348 $338 Monthly Fee: $3,293 $3,487 $3,775 $4,261 $4,254 MF/Sq. Ft.: $4.81 $3.12 $3.05 $2.48 $2.43

“n/a” indicates that the residence/information does not exist, while dashes (“—“) indicate that information exists but was unattainable. 36

The following table (continued on the next page) summarizes size and pricing for competitors that offer a 90% refundable entrance fee option. The Cypress of Charlotte offers an equity model where the gross sales price of the unit includes a 10% membership

fee, making it most comparable to a 90% Entrance11 Fee. For the purposes of comparison the estimated gross starting price for each unit type is referred to as an Entrance Fee in the table.

90% Refundable Entrance Fee Contract: Monthly Fee, and Size Comparison 1 Bdrm 1 Bdrm + Den 2 Bdrm 2 Bdrm + Den or 1 Bdrm + Den or Community Apartment Apartment Apartment 3 Bdrm Apartment 2 Bdrm Cottage Size (sq. ft.): 810 – 1,118 929 1,160 1,315 – 2,541 1,600 – 2,900 Entrance Fee: $365,000 - $475,000 $400,000 $520,000 $550,000 - $1.2m $900,000 - $1.1m The Cypress EF/Sq. Ft.: $425 - $451 $431 $448 $418 - $472 $379 - $563 of Charlotte Monthly Fee: $2,593 - $2,762 $2,647 $2,923 $3,194 - $4,170 $4,170 - $4,225 MF/Sq. Ft.: $2.47 - $3.20 $2.85 $2.52 $1.64 - $2.43 $1.46 - $2.61 Size (sq. ft.): 300 – 1,000 1,280 720 – 1,655 1,800 – 1,940 1,100 - 2,299 Entrance Fee: $159,450 - $415,956 $587,232 $260,992 - $827,834 $878,809 - $968,525 $464,892 - $1.17m Sharon Towers EF/Sq. Ft.: $416 - 532 $459 $362 - $500 $448 - $499 $423 - $509 Monthly Fee: $3,095 - $4,078 $3,503 - $3,998 $3,398 - $4,386 $4,126 - $4,737 $3,495 - $5,432 MF/Sq. Ft.: $4.08 - $10.32 $2.74 - $3.12 $2.65 - $4.72 $2.29 - $2.44 $2.36 - $3.18 Size (sq. ft.): 635 955-1,250 1,000 - 1,855 1,295 - 2,200 1,430 - 1,730 Entrance Fee: $230,000 $380,000 - $596,000 $398,000 - $969,000 $564,000 - $1.13m $610,000 - $704,000 Southminster EF/Sq. Ft.: $362 $398 - $477 $398 - $522 $436 - $514 $407 - $427 Monthly Fee: $3,367 $3,645 - $3,930 $3,645 - $4,504 $4,079 - $5,001 $3,637 - $3,764 MF/Sq. Ft.: $5.30 $3.14 - $3.82 $2.43 - $3.65 $2.27 - $3.15 $2.18 - $2.54

90% Refundable Entrance Fee Contract: Monthly Fee, and Size Comparison (Continued) 1 Bdrm 1 Bdrm + Den 2 Bdrm 2 Bdrm + Den or 1 Bdrm + Den or Community Apartment Apartment Apartment 3 Bdrm Apartment 2 Bdrm Cottage Size (sq. ft.): 813 - 1,093 1,09711 - 1,109 1,106 - 1,795 Entrance Fee: $224,000 - $322,000 $304,000 - $335,000 $312,000 - $569,000 Windsor Run EF/Sq. Ft.: $276 - $295 $277 - $302 $282 - $317 n/a n/a Monthly Fee: $2,131 - $2,555 $2,523 - $2,565 $2,595 - $3,622 MF/Sq. Ft.: $2.34 - $2.62 $2.30 - $2.31 $2.02 - $2.35 Size (sq. ft.): Entrance Fee: Average EF/Sq. Ft.: Monthly Fee: MF/Sq. Ft.: “n/a” indicates that the residence/information does not exist, while dashes (“—“) indicate that information exists but was unattainable.

Additional Notes on Communities with Independent Living The Cypress of Charlotte is the only community that offers three-bedroom cottage options (2,411 to 3,900 sq. ft.). o The Estimated Gross Starting Price for the three-bedroom cottages range from $1,200,000 to $1,300,000 and monthly service fees range from $4,323 to $4,659. Providence Meadows is included as a primary competitor pricipally due to the age of the community (less than two years old). As this community ages, it will likely become less competitive to Aldersgate Shalom Park. The Barclay at SouthPark will become a significant competitor once construction is completed and it becomes available for occupancy. Detailed information on proposed offerings is available later in this analysis. o Final pricing was not available so it was not included in this analysis for comparison.

The following table summarizes the long-term care (AL, MC, NC) and meal plan offerings included in primary competitors’ contracts. Providence Meadows does not offer additional levels of care (beyond IL) Windsor Run does not currently offer long-term care,11 but will after construction of its care center is completed (scheduled for completion in 2020).

Long-Term Care and Meal Plan Inclusion

Long-Term Care Meals

Cypress of Charlotte, The 90 days at no extra cost, then discounted thereafter 30 meals/month

Plantation Estates (a) Life Care 1/day per month (no carry-over)

Providence Meadows none 3/day

IL rate, plus LTC rate (appx. $150/day), Flexible spending (used for meals, snacks, etc.) Sharon Towers plus cost of extra meals equivalent to 1 meal/day per quarter (no carry-over)

14 days included per year, and can carry-over Southminster 1 dinner/day equivalent per month (no carry-over) not to exceed a total of 44 days

Not yet built, anticipated to be Type C, fee-for-service; Windsor Run 1 standard equivalent meal/day per month (no carry-over) Additional $35,000 EF deposit for external admit

(a) Also offers 70%-refundable modified Life Care contract (for those with long-term care insurance)

The following table summarizes the amenities included among communities offering IL in the PMA. Please note that some communities may have amenities that were not listed on website/brochure and/or were not seen during visit.

Community11 Amenities The Cypress of Plantation Providence Amenities Sharon Towers Southminster Windsor Run Charlotte Estates Meadows Art Studio/Room • • • • • • Beauty/Barber shop • • • • • • Bistro • • • Computer Room • • Fellowship/Worship Center • • • • • Fitness center • • • • • • Fitness Programs • • • • • Game room • • • • Garden • • Gatehouse • • • Guest Suite • • Library • • • • • Pet Friendly • Pool • • • • • Private Dining Room • • • Pub • • • • • Putting Green • Restaurant-style dining • • • • • • Theater • • • Transportation • • • Walking paths • • • Wi-Fi (included) • • Woodworking Shop • • • 40

Communities with Assisted Living The following table summarizes residences, occupancies, and community fees for communities within the CMA (Care Market Area) offering Assisted Living (AL). There are four primary competitors in the CMA that11 offer AL. These have a current total of 127 residences, of which 99% are estimated to be currently occupied.

Primary Competitors with Assisted Living in the CMA

Community Name ALU AL Occupancy Second Person MSF Entrance Fee

The Cypress of Charlotte 4 100% n/a $10,000

Plantation Estates 60 100% n/a n/a

Sharon Towers 38 95% n/a $26,200 - $39,300

Southminster 25 100% n/a $1,500

Total/Average 127 99% n/a

“n/a” indicates that the residence/information does not exist, while dashes (“—“) indicate that information exists but was unattainable.

The table on the following page summarizes monthly fees and level-of-care fees by residence type (studio, one-bedroom, two-bedroom) among CMA competitors that offer AL. All communities offer “all-inclusive” pricing for Assisted Living; therefore any variability in monthly fees are based on residence type and size and not on the amount of care provided. Plantation Estates is not included in the cost comparison as it offers a Life Care (Type A) contract and does not accept external admission (those who do not have a Life Care Contract) to AL; therefore AL, pricing is not comparable to other primary competitors.

Assisted Living Monthly Fee and Level-of-Care Comparison

Semi-Private/Companion Studio 1 Bedroom Base Monthly Fee: $5,070 $5,730 11 The Cypress of Charlotte Level of Care: All-Inclusive All-Inclusive n/a Total Monthly Fee: $5,070 $5,730 Base Monthly Fee: $4,942 - $5,049 $7,391 Sharon Towers Level of Care: n/a All-Inclusive All-Inclusive Total Monthly Fee: $4,942 - $5,049 $7,391 Base Monthly Fee: $7,026 - $7,787 Southminster Level of Care: n/a All-Inclusive n/a Total Monthly Fee: $7,026 - $7,787 Average Total Monthly Fee: $5,070 $6,107 $7,391

“n/a” indicates that the residence/information does not exist, while dashes (“—“) indicate that information exists but was unattainable.

Communities with Memory Care The Cypress of Charlotte is the only primary competitor located within the CMA to offer Memory Care. It has a total of 10 beds, of which nine are currently occupied (90% occupancy). The Cypress charges a $10,000 entrance fee for Memory Care. All MC residences are private and monthly fees are $6,780 (all inclusive).

Proposed Projects or Projects in Development There are a number of proposed additions within the PMA, each of which may have some impact on market depth in the future. The majority of the projects identified are in the planning or pre-planning process. These projects are detailed here.

The Barclay at SouthPark 11 The Barclay at SouthPark is a proposed Continuing Care Retirement Community from Liberty Senior Living, located at 6010 Fairview Road in Charlotte. When completed, it will house 165 Independent Living residences, 68 Assisted Living residences, 24 Memory Care residences, and 28 skilled nursing residences. Construction is underway and the building’s core structure was finished in June 2019. Anticipated completion of the community is projected to be late summer 2020. The nine-story complex will include approximately 595,000 square feet. The community is advertising an upscale, urban feel with a walkable location that will aid their residents in thriving in retirement. The immediate neighborhood has an abundance of amenities including multiple restaurants, a United Healthcare clinic, Walgreens, swim and raquet club, YMCA and major shopping, all within a 10-minute walk. The Barclay at SouthPark will operate under a rental contract. The community advertises 40 different independent living floor plans. The one-bedroom apartments will range from 745 sq.ft. to 1,258 sq.ft. and the two-bedroom apartments will range from 1,257 sq.ft. to 1,825 sq.ft. The residences are marketed as luxurious with “high-end finishes throughout, artisan-crafted hardwood floors, granite countertops, and high end appliances”. Brier Creek Health Care will consist of Assisted Living, Memory Care, and Skilled Nursing. The AL studios will range from 432 sq.ft. to 785 sq.ft. and one-bedrooms will be 846 sq.ft. The MC residences will be 426 sq.ft. and the skilled nursing units will be 427 sq. ft. The 11-acre site will be available for further expansion of The Barclay at SouthPark and a 150-room Hilton Canopy hotel. Proposed amenities include a library, poker and club room, media and multi-purpose room, art studio, chapel, casual dining, bar/pub, fine dining, pool, hot tub, gym, classroom for land classes, underground parking, and numerous courtyards. On-site will also be a coffee shop and day spa & salon open to the public. Advertised services include a concierge, weekly housekeeping, transportation, notary services, document shredding, dry cleaning pick-up and drop-off, valet parking, and guest rooms.

Plantation Estates Plantation Estates is currently expanding their Continuing Care Retirement Community in Matthews. When completed 88 Independent Living residences, 16 Assisted Living/Memory Care residences, and 120 Nursing Care units will be added to the campus. 11 WillowBrooke Court Skilled Care is a newly constructed building that will have 120 beds in private rooms. Oakbridge Terrace Assisted Living will expand into the rest of the original skilled nursing units and separate the MC residences on the first floor and the AL units on the second and third floors. After renovations are completed there will be 76 AL/MC units. This phase of the Plantation Estates expansion should be opening in early 2020. The Independent Living expansion is currently in the planning process and residents are slated to move into the residences in 2022. The sales representative claims they will begin pre-sales in Fall/Winter of 2019. o The expansion will add four hybrid homes, each with 18 apartments, along with eight two-bedroom villas (each with two residences per villa). The hybrid homes have underground parking garages under each. Each residence in the hybrid homes comes with a storage unit in the parking garage and a climate controlled storage unit in the common area. o The proposed hybrid aparments will be two-bedroom residences ranging in size from 1,412 to 1,600 sq. ft. Currently proposed entrance fees range from $389,900 to $428,900 and monthly fees from $3,484 to $3,715. o The proposed villas are two-bedroom residences with dens that range from 1,850 to 2,100 sq. ft.

Proffitt Dixon Residential Project The Proffitt Dixon Residential Project is a proposed active adult community, without a formal name, located at 6408 Providence Road in Charlotte. The community is still in the planning process and does not have an established timeline for construction. The community would be composed of 200 apartments and 79 townhome or carriage units (stacked flats). Proposed amenties include a clubhouse with wellness and fitness facility, a pool, and outdoor activities. This community would likley not be competitive to Aldersgate Shalom Park.

Royal Park Continuing Care Community Royal Park Continuing Care Community is a proposed continuing care retirement community from the partnership of Liberty Healthcare and Capstone Lifestyle Communities located at 2035 Moore Road in Matthews – the current location of the Royal Park of Matthews Rehabilitation and Health Center. This community is located approximately five minutes southeast of the Matthews Festival Shopping Center. 11 The community is planning to have 204 IL residences, consisting of 184 apartments and 20 cottages, and eventually 39 AL apartments around the existing Royal Park Nursing and Health Center. The first phase of the community addition, the IL apartments and cottages, is slated to be completed in Summer of 2020. Independent Living apartment pricing will start at $1,695 and cottages start at $2,200. The community is proposed to be rental with a $1,000 community fee. Proposed amenities include an 11,000 sq.ft. clubhouse, game room, craft area, bistro, demonstration kitchen, fitness center, fitness classes, a yoga studio, a spa, walking trails, community gardens, pet spa, pool, dog park, and “sports” court.

Sharon Towers Sharon Towers is currently expanding their community in Charlotte. This expansion, called the Deerwood, will add 46 Independent Living apartments once complete. Construction is underway as of July 2019 and the addition is slated to be open to residents in early 2021. The addition will be a tiered structure with three to five floors that flank the Sharon Towers entrance. The Deerwood is being marketed as “elegant, care-free, and full of modern conveniences.” There are five floor plans offered: o The one bedroom units will be 1,000 sq. ft. o The two-bedroom units will range from 1,300 sq. ft. to 1,962 sq. ft. o The three-bedroom units will be 2,060 sq. ft. Proposed amenities include a garden terrace with outdoor seating, community room with kitchentte, storage units,

Southminster Southminster is expanding their community in Charlotte. The $120 million expansion will add 66 Independent Living residences, 25 Assisted Living residences, and 60 Skilled Nursing residences. Construction is underway as of July 2019 and the full expansion is scheduled to be open in late Summer 2020. 11 The IL expansion is known as the Southminster Terraces. Land was purchased from Quail Hollow Presbyterian Church to accommodate the expansion. Phase one of this project consists of two boutique apartment buildings, one with 18 residences and the other with 12. Both buildings will be three stories. Phase two will consist of two more Southminster Terrace buildings, each with 18 residences. Both phases of the project were sold out 18 months ahead of the project’s completetion schedule. The two bedroom apartments range from 1,383 sq.ft to 2,156 sq. ft. Traditional entrance fee pricing ranges from $369,000 to $439,700 and monthly service fee ranges from $4,289 to $4,434.

St. Margaret at Trevi Village St. Margaret at Trevi Village is a proposed Continuing Care Retirement Community located at 12220 US Hwy 29 Charlotte. The proposed community would be one part of a very significant development to be located between Charlotte Motor Speedway and the University of North Carolina at Charlotte that would include multiple retail and restaurant options. The campus would be on 12.46-acres, and the proposed development would include 543,000 square feet. The senior living community will be surrounded by a hotel, office and retail spaces The proposed retirement community would have 325 Independent and Assisted Living “flexible units” and 100 skilled nursing beds. Construction was set to start in Spring of 2019; however, it has been currently put on hold until further notice. As current plans have been put on hold, and the likelihood of this development uncertain, St. Margaret at Trevi Village is not included in the estimates of demand detailed later in this report.

Twin Lakes Senior Living Facility Twin Lakes Senior Living Facility is a proposed senior living community from Twin Lakes Farm LLC., located at 1700 Beulah Church Road in Matthews – near the southern edge of the PMA, an approximate 25-minute drive from Shalom Park. The three-story senior apartment complex totaling 70,000 square feet will have 182 units over an 8.4-acre campus. 11 This community is working through re-zoning requirements and pushback from representatives of the Indian Trail, Weddington, and Wesley Chapel town councils, from which their approval of rezoning from R-40 to R-4 CZ was denied by a planning board vote of 4 to 3. There are no construction timelines until zoning is approved. This community would likley not be competitive to Aldersgate Shalom Park.

Vibrant Eastway Park Vibrant Eastway Park is a proposed senior living apartment complex from Fitch Irick Partners located at 301 Eastway Drive in Charlotte. The four-story senior apartment complex will have 132 units on the 4.6-acre campus. Developers applied for a tax-exempt bond and are currently in the planning process. The tentative completion date is some time in 2021. This community would likley not be competitive to Aldersgate Shalom Park.

Windsor Run Retirement Windsor Run is in the process of expanding their community in Matthews. This expansion will add approximately 583 Independent Living residences, along with a care center that would include 24 AL, 18 MC, and 18 Skilled Nursing beds. The community is an Erickson Living community located on 85 acres. The IL expansion will include six additional buildings. When completed there will be a total of 900 IL units and a total of nine buildings interconnected via walkways. The first part of the expansion (building four) is slated to begin construction in 2021. The AL will require a $35,000 entrance fee for external admissions. Monthly service fees will range from $4,737 to $6,000 with level of care fees adding up to $2,947. The Memory Care monthly service fees will be $6,211 with level of care fees ranging up to $1,991. The Care Center should be completed in 2020.

Individual Community Evaluations Six primary competitors were toured by GD Research staff. These included: The Cypress of Charlotte, Plantation Estates, Providence Meadows, Sharon Towers, Southminster, and Windsor Run. Descriptions and evaluation of these communities are as follows. 11

The Cypress of Charlotte The Cypress is a non-profit CCRC operated by Life Care Services LLC and located in Charlotte, NC, about 5 miles from Shalom Park. The community consists of 310 IL residences (257 apartments and 53 cottages) and 10 MC units. NC is also offered. There are no designated AL apartments, and instead, care is brought into the IL units for an additional fee. IL homes are currently 100% occupied with a one- to three-year waitlist, depending on the desired residence. The payment model of the Cypress is unique as it is the only equity model in the area. Residents not only buy and own their homes, but also sell them when they are ready to move out. It is possible to either make a profit or a loss on the home depending on the real estate market. This is an appealing model for those who want to feel they are making an investment rather than paying an entrance fee, though 10% of the gross sale price includes the membership fee. Residents also pay a monthly fee for maintenance and services.

Physical Plant The Cypress is a gated community on 65 acres that consists of one main clubhouse and five IL apartment buildings surrounding a large lake. Surrounding these are the cottages and the healthcare building. Transportation can be provided at all times of day to and from various areas of the community. All amenities are located in the clubhouse, which is so newly renovated it still smells of fresh paint. While no amenities are unique to the Cypress, they are all large, new, and aesthetically impressive. There are two dining venues – both causal and formal. One meal a day is provided, excluding complimentary breakfast. The clubhouse appears to be well-utilized, with many residents observed walking about, reading in the library, and socializing in the lobby. Individual residences are very large, with some apartments larger than 2,500 square feet and cottages over 4,000 square feet.

Plantation Estates Plantation Estates is a non-profit CCRC that is operated by ACTS-Retirement Life Communities and offers all levels of care. The community is located in Matthews and of the primary competitors, is the greatest distance from Shalom Park. The community consists of 500 IL residences (354 standard apartments, 126 hybrid residences, and 20 duplex residences) and 60 AL apartments. Memory care is only available within 11Skilled Nursing and included in the count of 80 NC beds. By 2020, the 80 MC/NC units will be converted to AL when the new healthcare building, which is currently under construction, opens. The new building will feature 120 private rooms. Four additional hybrid buildings (18 apartments each) and eight more villas (duplexes) are being planned. The main clubhouse is also currently under renovation. Existing homes are currently 100% full, with a 4-5-year waitlist. Plantation Estates offers a Life Care entrance fee payment model. Entrance fee prices are typically a bit higher than the other competitors, however, a resident continues to pay the same IL monthly fee when they move to a higher level of care Entrance fees are offered in a 0% refundable amortized option, a 50% refundable option (in which EF prices vary based on age), and a “modified life care” option designed to better serve those with long-term care insurance. All plans are 100% refundable for the first 120 days. Refundable EF options were discouraged by marketing staff.

Physical Plant Plantation Estates is a 100-acre, gated community divided into two. The first half consists of the larger of the two clubhouses (under renovation), all standard IL apartments, and both healthcare buildings (one of which is under construction). The second half consists of the smaller of the two clubhouses, the hybrid homes, and the duplexes. Each half is separated by Fullwood Lane. The first half is clearly the older of the two and is outdated. It has a traditional décor, with long, aesthetically unappealing hallways. Even the “newly renovated section” still appears to have older, more traditional décor. The second half of the community is only 18 months old, and the hybrid buildings have a more modern feel. In addition to the apparent age of the aesthetic look of each half of the community, residents are older in the first half by an average of 10 years. Residents average age 81 in the first half and 71 in the second. Each clubhouse contains different amenities, but both contain a pool, fitness center, and 2-3 of the 5 restaurants (where one meal per day is provided). Between the two clubhouses, Plantation Estates features the most amenities of any competitor. 49

Providence Meadows Providence Meadows is a for-profit community located 10-minutes south of Shalom Park. It only offers IL but was included in this analysis because of its relatively recent opening (July 2017). There are 133 apartments, of which 100% are currently occupied. The community is owned by Hawthorn Retirement Group and offers a month-to-month rental contract. Once established, those shopping Aldersgate Shalom Park will11 likely not perceive Providence Meadows to be a true competitor. The community consists of one building that is very similar to for-profit chains seen all over the country. Despite the fact that the community is so new, the building still somehow manages to look old and outdated. Residents appeared quite frail for an IL community, and somewhat surprising given the age of the community (less than two years old). The front entrance leads to the dining room, with the marketing offices hidden around the corner. Individual residences consist of studio, one- and two-bedroom apartments, and all have only kitchenettes.

Sharon Towers Sharon Towers is a non-profit CCRC located approximately a 10-minute drive to the west of Shalom Park. It is self-operated and contains 240 IL residences (apartments, hybrids, and cottages), 43 AL apartments, and 96 NC units. Currently, all residences are full. There is also ongoing construction for 46 new IL apartments. Entrance fees include 0%, 50%, and 90% refundable options.

Physical Plant Though located in a suburban neighborhood amongst single-family homes, Sharon Towers is located in Southpark, one block from Fairview Road which has a very significant number of retail, restaurant, and medical amenities. The main building contains the standard apartments and amenity spaces. Cottages, and hybrid homes (called the Magnolia Villas, which are three-stories and 18-units each) are in separate structures. Construction is visible where “The Deerwood” (a new apartment building containing 46 new IL apartments) is being built. Several cottages had to be razed in order to make space for this new construction. Based on the artist rendering, the new building will appear to have a much more modern look than the rest of the community.

The exterior of the main building looks outdated, as though it has not been updated since the 1960s; however, the landscaping is lush and beautiful. The interior matches the exterior, having an outdated feel and very little décor. Most individual apartments contain large balconies, and the hybrid homes include underground parking. There are many amenities, but none are unique to11 Sharon Towers. The building also contains three restaurants (fine, causal, and bistro dining). Cottages appeared to be quite nice, but some appeared notably older.

Southminster Southminster is a non-profit CCRC that is self-operated and contains IL, AL, and NC. It is located an approximate 17-minute drive southwest of Shalom Park, near Quail Hollow Club. The community currently consists of 269 IL residences (29 cottages and 240 apartments), 25 AL, and 60 NC. Additionally, one new IL building containing 30 apartments has just been completed (but is not yet open) and another containing 36 apartments is currently under construction. Though memory care can be provided in AL, there is not a specific, secured unit for MC. All homes, including those not yet built or open, are currently 100% full, with a waitlist of typically one year for 1- bedroom apartments, 2-3 years for cottages, and 5-6 years for 2-bedroom apartments. Entrance fee options include 0% (amortizes for 20 months), 50%, and 90% refundable options. The community, being non-profit, has a benevolent fund to provide support if a resident ever run out of money; thus, no one is ever asked to leave.

Physical Plant The community consists of one main three-story building, two attached IL buildings (one new and one under construction) and is surrounded by cottages. Healthcare is located on the third floor of the main building. The ongoing construction makes it difficult to navigate the campus. Aesthetically, the building appears modern while still having a more traditional feel and seems as though updates and renovations occur regularly. There are three dining venues – a pub, casual, and more formal dining. Individual residences are quite nice, all with large windows and lots of natural light. Floor plans are large, with some up to 2,000 square feet.

Windsor Run Windsor Run is a new, for-profit community operated by Erikson Living and located in Matthews, an approximate 20- to 25- minute drive southeast of Shalom Park. Along with Plantation Estates, Windsor Run is one of two primary competitors located the greatest distance from Shalom Park. 11 There are currently 318 IL apartments at the community; however, a healthcare building is currently being planned and is set to open in 2020. Additionally, four new IL buildings are planned and will eventually total 900 IL apartments. Construction schedules will change depending on how fast units sell and new buildings can be built, but the plan is to keep building over the next seven years. Though the community just opened in June, it is already 65% full. Windsor Run offers 0% and 90% refundable entrance fee options.

Physical Plant Windsor Run is a gated community with one main building with centralized amenities. It is surrounded by an abundance of land, and it seems that walking trails and other outdoor amenities will still be plentiful after the additional buildings are constructed. Nothing is currently under construction, but plans are well underway for a healthcare building. Décor is modern, common spaces are large, and all is in pristine condition. The “shiny and new” and modern feel is likely to attract many adult children shopping for their parents. The community has many typical amenities, but also included many unique amenities such as a dog park, a putting green, and interactive cooking demonstrations. There are three dining venues (a pub, a bistro, and a more formal restaurant), and the marketing representative pointed out that these were architecturally designed to prevent echoes and minimize ambient noise. Individual apartments match the feel of the common spaces, and almost all have balconies.

Map of All Competitors

Label Name 1Aldersgate 111 2 Barclay at Southpark, The 3 Brightmore of South Charlotte 4 Brighton Gardens of Charlotte 5 Brookdale Carriage Club Providence 6 Brookdale Charlotte East 7 Brookdale Cotswold 8 Brookdale South Charlotte 9 Brookdale South Park 10 Carmel Hills Retirement Community 11 Carmel Place 12 Charlotte Square 13 Cypress of Charlotte, The 14 Dorchester Charlotte 2 15 Elmcroft of Little Avenue 16 MerryWood on Park Site 17 Plantation Estates At Matthews 30 18 Providence Meadows 19 Shads Landing 11 20 Sharon Towers 21 Southminster 22 Summit Place of Southpark 23 Sunrise of Providence 24 The Charlotte 25 Waltonwood Cotswold 26 Waltonwood Providence 27 White Oak of Charlotte 28 Willow Grove 29 Windsor Run 30 Royal Park (Proposed)

ANALYSIS OF NEED/DEMAND

Independent Living GD Research has evaluated the market for IL in the Aldersgate Shalom Park PMA for the current year (2019) and projected 11 for the year 2024, examining market depth through the use of a number of different methodologies to provide a multifaceted analysis of the market’s potential to absorb new development. The employed methodologies included: Market Capture Analysis (MCA): This methodology yields a range of estimates of market capacity in the form of the number of residences the market could absorb prior to reaching saturation. The “range” results from the application of accepted industry-standard capture rates to provide conservative, standard, and moderately aggressive evaluations of market depth. Gross Market Penetration Rate (GMPR): This is the percentage of age- and income-qualified houesholds in the PMA that the total market would need to capture in order to achieve stabilized occupancy. It measures the level of saturation in the market over a period of time. Project Penetration Rate (PPR): This is percentage of age- and income-qualified households in the PMA that the project would need to capture in order to achieve stabilized occupancy (forecast for five years from the time of reporting). Net Market Penetration Rage (NMPR): This is the percentage of age- and income-qualified households in the PMA that all available residences (including the project, any other projects known to be entering the market, and refilling residences at existing communities) would need to capture in order to achieve stabilized occupancy (forecast for five years from the time of reporting).

Whereas Market Capture Analysis yields estimates of market depth specific to the PMA, the various “Penetration Rate” methodologies help measure the degree to which a market is either underserved or saturated via comparison to national benchmarks.

It is important to note that the occupancy of existing communities can be a key indicator in determining the acceptance of a product and the depth of a market. The presence of existing communities that are fully occupied may be an indication that the market is underserved. Alternately, low occupancy at existing communities might indicate that market supply exceeds demand. Other factors may exist, including the possibility that available product and service offerings do not meet the expectations of consumers in the market. 54

Competition All providers that offer IL in the PMA are included in the analysis, and all residences are assumed to be full. In addition, all proposed/planned residences that are considered likely to proceed (at the time of reporting) are also included in the analysis and assumed full. This methodology produces a conservative estimate of market demand. All communities within the PMA that are offering or are planning to offer IL are listed11 in the following table:

Community Area Levels of Care Primary Payment Age Aldersgate Retirement Community PMA IL, AL, MC, NC EF 74 Barclay at Southpark, The CMA IL, AL, MC, NC Rent -1 Brightmore of South Charlotte PMA IL, AL, MC, NC Rent 4 Brookdale Carriage Club Providence CMA IL, AL, MC, NC Rent 32 Brookdale Charlotte East PMA IL, AL Rent 33 Carmel Hills Retirement Community CMA IL, AL EF 40 Carmel Place CMA IL Rent 25 Cypress of Charlotte, The CMA IL, AL, MC, NC EF 21 Dorchester Charlotte PMA IL Rent 22 MerryWood on Park CMA IL, AL Rent 31 Plantation Estates CMA IL, AL, NC EF 32 Providence Meadows CMA IL Rent 2 Shads Landing PMA IL Rent 11 Sharon Towers CMA IL, AL, NC EF 51 Southminster CMA IL, AL, NC EF 33 Waltonwood Providence PMA IL, AL, MC Rent 5 White Oak of Charlotte CMA IL, NC Rent 56 Willow Grove PMA IL Rent 11 Windsor Run PMA IL EF 1

Market Capture Analysis Capture rate methodology indicates sufficient market depth to accommodate up to a maximum of 337 IL residences at Aldersgate Shalom Park by 2024, with more conservative estimates indicating an ability to capture 245 residences. These estimates reflect strong growth in the target market from 2019, for which current estimates indicate demand for up to 204 residences (149 conservative). Estimates assume a minimum11 monthly fee for proposed residences of $3,750, roughly translating to affordability with a minimum annual household income of $75,000. The capture rate analysis indicates a projected market (by 2024) for 153 to 337 entrance fee IL residences with a starting monthly fee of $3,750 (utilizing conservative to more aggressive capture rates) and minimum entrance fees of $300,000. A “standard” capture rate (4% capture) analysis points to market potential for up to 245 residences beyond those which are currently available in the PMA or that are proposed/planned to be developed. At a higher price point of $5,000, depth in the rental market ranges from 102 (conservative) to 163 (standard) to 224 (moderately aggressive) additional residences. It is important to note that maximizing market potential is dependent upon market acceptance of the product. The primary reason for employing a range of capture rate assumptions is that in a competitive market (of which Charlotte is), a product that does not meet market expectations would be expected to achieve a lower capture rate, whereas a product that meets or exceeds market expectation would be expected to achieve a higher capture rate. Estimates of depth based on market capture are in addition to existing and proposed product that is likely to be open prior to the year of reporting (2024). The estimates further assume that all operating residences are full. o It is important to note that there are currently estimated to be 1,152 IL residences either in planning or under construction within the PMA. Estimates provided here assume all projects will be developed as planned. If alterations are made to proposed projects, or if any projects are abandoned, demand estimates would grow. Estimates also take into account potential for a new product to achieve an “outside fill rate” of 30% – an assumption that assumes 70% of Aldersgate Shalom Park’s residents will originate from within the boundaries of the PMA, and the remining 30% (“outside fill”) will originate from beyond these boundaries.

Market Capture Analaysis: Aldersgate Shalom Park PMA

Year 2024 Total Market Area

11 Total age 75+ households 34,185

- Existing, competitive IL 3,556

- Proposed, potentially competitive IL 1,152

= Total market pool 29,477

Segmentation by income $75K to $100K $100K to $125K $125K+

x Percent with target income 8.8% 5.3% 12.3%

x Percent who own home* 83.1% 83.1% 83.1%

x Percent of homes valued at $300K+ 54.9% 54.9% 54.9%

= Qualified market pool 1,432 862 1,994

÷ Percent draw from market area 70% 70% 70%

= Total Market Pool 2,046 1,232 2,849

Capture rate analysis $75K to $100K $100K to $125K $125K+ Total

x Capture rate range 2.5% 51 31 71 153

4.0% 82 49 114 245

5.5% 113 68 157 337

Independent Living Market Segmentation by Price Point (Entrance Fee) An examination of market depth by entrance fee price point begins with total demand for entry fee product. Following this, the market pool is categorized according to the projected (2024) distribution of home values in the PMA as it is assumed that home values are an excellent (though somewhat conservative) proxy for affordability for entrance fees. 11 The potential market includes only those with household incomes of $75,000 or more (could afford at least $3,750/month), roughly matching the current minimum proposed monthly fee for Aldersgate Shalom Park. The following charts indicate forecast (to 2024) demand by entrance fee price point, both by category, and also cumulatively.

Forecast Demand by Potential Entrance Fee (2024)

98 2.5% Capture (Conservative) 80 87 71 71 64 52 58 4.0% Capture (Standard) 45 40 32 36 5.5% Capture (Moderately aggressive)

$300K - $399K $400K - $499K $500K - $749K $750K+

Forecast Cumulative Demand by Potential Entrance Fee (2024)

337 2.5% Capture (Conservative) 245 239 174 4.0% Capture (Standard) 153 168 122 109 87 76 64 5.5% Capture (Moderately aggressive) 40

$300,000 + $400,000 + $500,000 + $750,000 + 58

Market Capture Analysis: Market Segmentation by Monthly Fee An examination of market depth by monthly fee begins with the market capture methodology outlined above that estimates overall depth in the PMA. The estimated market pool indicated from the above analysis is then categorized according to the projected distribution of household incomes by 2024 (data on income provided by Nielsen Claritas). 11 The potential market includes only those with estimated home values of $300,000 or more, roughly matching the current minimum proposed entrance fee for Aldersgate Shalom Park. The following charts indicate forecast (to 2024) demand by monthly fee price point, both by category, and also cumulatively.

Forecast Demand by Monthly Price Point (2024)

157 2.5% Capture (Conservative) 113 114 82 4.0% Capture (Standard) 68 71 51 49 31 5.5% Capture (Moderately aggressive)

$3,750 TO $4,999 $5,000 TO $6,249 $6,250+

Forecast Cumulative Demand by Monthly Price Point (2024)

337 2.5% Capture (Conservative) 245 224 4.0% Capture (Standard) 153 163 157 102 114 71 5.5% Capture (Moderately aggressive)

$3,750+ $5,000+ $6,250+ 59

Gross Market Penetration The current GMPR in the PMA is 39.3%, exceeding the 75th percentile of all U.S. markets (33.3%), indicating a market that is crowded, but not likely at its saturation point; however, due to significant forecast growth among target market households, the GMPR is forecast to fall to 35.5% – approximately the 77th percentile of all U.S. market – even though there is a forecasted significant increase in new product. The rapidity11 of growth in number of target market households within the PMA, along with the relatively small size of Aldersgate Shalom Park should make the prospects of success likely. The gross market penetration rate is the percentage of age- and income-qualified households within the PMA that the total market would need to capture in order to achieve stabilized occupancy (95%). The GMPR is calculated in the current year (2019) and also for five years from now (2024) in order to show the rate of change between years. This is important because a notable decline in GMPR over time indicates the rate of growth of age- and income-qualified households in the PMA is outstripping the forecast influx of new competitive product.

Gross Market Penetration Rate (GMPR) Analaysis: Aldersgate Shalom Park PMA

Market inventory of retirement communities 2019 2024 The Project (Shalom Park IL) -- 125 Existing units in the PMA 3,556 3,556 Other planned units in the PMA -- 1,152 Total units available in the PMA 3,556 4,833 Percent of units to be occupied from the PMA 70% 70% Total units to be occupied from the PMA 2,489 3,383 Total number of units to be occupied within the PMA at 95% occupancy 2,365 3,214 Number of age 75+, income $75,000+ households 6,013 9,054 Gross Market Penetration Rate ($75,000+) 39.3% 35.5%

Project Penetration Rate (PPR) The calculated PPR for Aldersgate Shalom Park by 2024 is 1.3%, indicating a very favorable market, from which the new community would only need to capture just over 1% of qualified households to fill its proposed 125 IL residences. The project penetration rate (PPR) indicates the percentage11 of the age/income-qualified market pool in the PMA that would need to move into the subject property (Aldersgate Shalom Park) to achieve stabilized (95%) occupancy. National benchmarks have been established for PPR that are intended only as general guides. These generally indicate the greatest potential for success of a project with a PPR between 2.5% (25th percentile) and 9.9% (75th percentile) for the qualifying market ages 75 or older and with annual household incomes of at least $75,000. Due to the relatively small size of Aldersgate Shalom Park, a PPR that it falls below “optimal benchmarks” (25th percentile) is somewhat expected and is not a concern due to the high level of product education in the Charlotte market. Specific market conditions and product offerings can affect the interpretation of the data (e.g., households may have less than the minimum annual income requirements and yet have resources available such as investments or support from family members, to pay the monthly service fees). These rates must also be evaluated in the context of other market factors such as occupancy at existing communities, proposed facilities and/or new residences, the design of the communities, and existing and proposed marketing efforts.

Net Market Penetration Rate (NMPR) The calculated NMPR for Aldersgate Shalom Park by 2024 is 26.6%, a rate exceeding the national 75th percentile (approximately 86th). This reflects the notable number of competitors in the PMA; however, it is likely that if growth in the target market continues at its current pace (indicated by forecast growth in the age 65 to 74 cohort) that NMPR will decline. The net market penetration (NMPR) rate is calculated by dividing the number of available independent living residences in the PMA by the number of age- and income-qualified households in the PMA. Available residences include planned residences at Aldersgate Shalom Park, along with potentially proposed residences at other communities and residences becoming available due to attrition. National benchmarks have been established for NMPR that are intended only as general guides. These generally indicate the greatest potential for success of a project with a NMPR between 7.7% (25th percentile) and 17.7% (75th percentile) for the qualifying market ages 75 or older and with annual household incomes of at least $50,000. As indicated above for PPR, specific market conditions and product offerings can affect the interpretation of the data.

Project (PPR) and Net Market (NMPR) Penetration Analaysis: Aldersgate Shalom Park PMA Net Market and Project Penetration Rate Calculations (Year 2024) Planned residences at the project (Shalom Park IL) 125 11 x Percentage of residences to be occuped from the PMA 70% x Percentage of resiedences to be occupied by those age 75+ 90% Total project residences to be occupied by age 75+ households at 95% occupancy (a) 75 Other planned IL residences in the PMA 1,152 x Percentage of residences to be occuped from the PMA 70% x Percentage of resiedences to be occupied by those age 75+ 90% Total of other planned residences to be occupied by age 75+ households at 95% occupancy (b) 689 Residences Available Due to Attrition Entrance Fee Rental Existing residences at 95% occupancy 1,941 1,615 x Attrition Rate (1) 12.2% 31.6% Number of residences from attrition 237 510 Total residences to be occupied, including planned and attrition (c) 1,511 Forecast age- and income-qualified households (2) 9,054 Less existing inventory of available comparable residences (3) 3,378 Net number of age- and income-qualified households (d) 5,676 PROJECT PENETRATION RATE (a/d) 1.3% NET MARKET PENETRATION RATE (c/d) 26.6%

(1) Source: The State of Seniors Housing (2013) (2) Age 75+, Income $75,000+ (includes all households who could potentially afford IL in the PMA) (3) Reflects the 3,526 existing comparable residences in the PMA, assuming a 95% occupancy rate

Assisted Living GD Research ran the demand estimation model for AL residences from the age-, income-, and need-qualified households in the CMA. Qualifications for need include national statistics on those requiring assistance with Activities of Daily Living (ADL) and Instrumental Activities of Daily Living (IADL) and who also are likely to seek out a formal care setting.1 The market area considered in the estimation of demand is limited to the “Care11 Market Area” (CMA) as this area is somewhat reduced in size from the PMA and considered a more appropriate draw area for higher levels of care, including Assisted Living and also Memory Care.

The estimate indicates forecast (2024) private-pay need for up to 202 additional AL residences in the CMA from the total target market (age 75+, income $100,000+). An income of $100,000 translates to an ability to afford monthly fees of $6,700. o At a higher price point of $8,300/month (translating to a minimum income of $125,000), estimated forecast need is for up to 144 residences. o At $10,000/month (translating to a minimum income of $150,000), estimated forecast need is for up to 104 residences. This estimate includes 869 market-rate residences in 17 communities within the CMA, plus an additional 93 expansion/new residences. It should also be noted that there is a possibility of new communities (as of yet unidentified) entering the PMA by 2024. Any new additions would reduce estimated need.

Communities Offering Assisted Living in the Aldersgate Shalom Park CMA Barclay at SouthPark, The (New) Charlotte, Brighton Gardens of Sharon Towers Brookdale Carriage Club Providence Cypress of Charlotte, The Southminster (plus expansion) Brookdale Cotswold Elmcroft of Little Avenue Summit Place of Southpark Brookdale South Charlotte MerryWood on Park The Charlotte Carmel Hills Retirement Community Plantation Estates Waltonwood at Cotswold Charlotte Square Providence, Sunrise of

1 Source: U.S. Census Bureau, Survey of Income and Program Participation, May–August 2010. The percentage of the market likely to seek out a formal care setting is calculated specifically for the CMA.

Demand Calculation for Assisted Living: Aldersgate Shalom Park CMA

Market Area CMA

Target market by age 11 75-84 85+

Forecast population by age 14,292 6,103

x % with disability & needs assistance 21.9% 30.2%

= Population in-need of AL by age 3,130 1,843

Total assisted living need, age 75+ 4,973

x Percentage estimated to receive formal care 33%

= Total need for institutional care 1,641

% Draw from Primary Market Area 90%

= Demand adjusted for draw from PMA 1,823

- AL residences (current and proposed/planned and likely to proceed) 962

= Remaining unsupplied demand 861

x Target-market income ($100K to $125K) 7.2% 62

x Target-market income ($125K to $150K) 5.0% 43

x Target-market income ($150K+) 13.0% 112

Total Private-pay market for Assisted Living (2024) 216

Assisted Living Market Segmentation by Price Point An examination of market depth by monthly fee price point begins with the market capture methodology outlined above that estimates overall depth in the PMA. The estimated market pool indicated from the above analysis is then categorized according to the projected distribution of household incomes by 2024 (data on income provided by Claritas). This is particularly useful for Assisted Living as market depth varies11 rather dramatically by price point. There is demand for up to 202 additional residences priced at $6,700 or more per month, but this is reduced to 144 residences with a higher minimum monthly price of $8,300, and 104 residences priced at $10,000 or more. As visually evidenced in the chart below, ranges of projected market depth are as follows for varying rental price points:

Market Depth for Assisted Living by Price Point (2024)

202

144

104

$6,700+ $8,300+ $10,000+

Memory Care The Memory Care within an AL setting need/demand estimation includes assumptions of an increasing prevalence of Alzheimer’s disease and related dementias (ADRD) with age, combined with an estimation of this population that is likely to seek out a formal care setting as opposed to an informal caregiver such as a family member.2 It also accounts for the portion of the market that could afford care in such a setting,11 including only those age 65 or older with minimum annual household incomes of $100,000 in the potential market pool. As with Assisted Living, the market area considered in the estimation of demand is limited to the “Care Market Area” (CMA).

The estimate indicates forecast (2024) need for up to 198 additional MC residences in the CMA from the market with incomes of at least $100,000. An income of $100,000 translates to a monthly price-point affordability of approximately $6,700. o At a higher price point of $8,300/month, estimated forecast need is for 142 residences. o At $10,000/month, estimated forecast need is for 99 residences. This estimate includes 278 market-rate residences in 13 communities within the CMA, plus an additional 40 expansion/new residences. It should also be noted that there is a possibility of new communities (as of yet unidentified) entering the PMA by 2024. Any new additions would reduce estimated need.

Communities Offering Memory Care in the Aldersgate Shalom Park CMA Barclay at SouthPark, The (New) Charlotte Square Providence, Sunrise of Brookdale Carriage Club Providence Charlotte, Brighton Gardens of Summit Place of Southpark Brookdale Cotswold Cypress of Charlotte, The The Charlotte Brookdale South Charlotte Elmcroft of Little Avenue Waltonwood at Cotswold Brookdale South Park Plantation Estates (plus expansion)

2 The percentage of the market likely to seek out a formal care setting is calculated specifically for the CMA.

Demand Calculation for Memory Care: Aldersgate Shalom Park CMA

Market Area CMA

Target Market by Age 11 65-74 75-84 85+

Population by age 28,823 14,292 6,103

Less percent nursing-eligible by age .94% 3.6% 13.8%

= Non-nursing-eligible population 28,552 13,777 5,263

x Percent with probable dementia 1.1% 6.5% 24.2%

= Probable dementia population (non-nursing) 314 896 1,274

Total Memory Care need, age 65+ 2,483

x Percentage estimated to receive formal care 33%

= Total need for institutional care 819

% Draw from Care Market Area 90%

= Demand adjusted for draw from PMA 910

- MC residences (current and proposed/planned and likely to proceed) 318

= Remaining unsupplied demand 592

Segmented for Private-Pay Market $100K to $125K $125K to $150K $150K+ TOTAL

x Target-market income 9.5% 7.2% 20.2% 37.0%

2024: Projected private-pay market for Memory Care 56 43 99 198

Memory Care Market Segmentation by Price Point An examination of market depth by monthly fee price point follows an identical methodology to that utilized for Assisted Living (above). Total demand is for 198 new MC residences targeting11 the market with minimum household incomes of $100,000 – equating to monthly affordability of $6,700. At a higher price point, of $8,300, demand is for up to 142 new residences (equating to a minimum household income of $125,000), and at a price point of $10,000 (miniumum income of $150,000), indicated demand is for 99 residences. As visually evidenced in the chart below, ranges of projected market depth are as follows for varying rental price points:

Market Depth for Memory Care by Price Point (2024)

198

142

$6,700+ $8,300+ $10,000+

APPENDIX D

FORMS OF PRINCIPALBOND DOCUMENTS

[THIS PAGE INTENTIONALLY LEFT BLANK] TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS AND OTHER PROVISIONS CONCERNING INTERPRETATION ...... 1 Section 1.01 Definitions ...... 1 Section 1.02 Interpretation ...... 6

ARTICLE II OBLIGATIONS, AUTHORIZATION, ISSUANCE AND TERMS OF OBLIGATIONS ...... 7 Section 2.01 Amount of Obligations ...... 7 Section 2.02 Form, Designation, Numbering and Registration of Obligations ...... 7 Section 2.03 Execution and Authentication of Obligations ...... 7 Section 2.04 Supplement Creating Obligations ...... 8 Section 2.05 Conditions to Issuance of Obligation No. 1 Hereunder ...... 8 Section 2.06 Conditions to Issuance of Other Obligations Hereunder ...... 9

MASTER TRUST INDENTURE ARTICLE III PARTICULAR COVENANTS OF THE OBLIGATED GROUP ...... 10 Section 3.01 Nature of Obligations; Payment of Principal and between Interest; Security; Further Assurances; Deposit of Gross Receipts ...... 10 Section 3.02 Covenants as to Corporate Existence, Maintenance of ALDERSGATE AT SHALOM PARK, INC. Properties, Etc...... 11 Section 3.03 Parties Becoming Members of the Obligated Group ...... 12 D-1 and Section 3.04 Withdrawal from the Obligated Group ...... 12 ARTICLE IV EVENTS OF DEFAULT AND REMEDIES ...... 13 Section 4.01 Events of Default ...... 13 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Section 4.02 Acceleration; Annulment of Acceleration ...... 14 Section 4.03 Additional Remedies and Enforcement of Remedies ...... 15 as Master Trustee Section 4.04 Application of Gross Receipts and Other Moneys after Default ...... 15 Section 4.05 Remedies Not Exclusive ...... 17 Dated as of November 1, 2019 Section 4.06 Remedies Vested in the Master Trustee ...... 17 Section 4.07 Holders’ Control of Proceedings ...... 17 Section 4.08 Termination of Proceeding ...... 17 Section 4.09 Waiver of Event of Default ...... 17 Section 4.10 Appointment of Receiver ...... 18 Section 4.11 Remedies Subject to Provisions of Law ...... 18

Section 4.12 Notice of Default ...... 18

ARTICLE V THE MASTER TRUSTEE ...... 19 Section 5.01 Certain Duties and Responsibilities ...... 19 Section 5.02 Certain Rights of Master Trustee ...... 20 Section 5.03 Right to Deal in Obligations and Related Bonds ...... 21 Section 5.04 Removal and Resignation of the Master Trustee ...... 21 Section 5.05 Compensation and Reimbursement ...... 22 Section 5.06 Recitals and Representations ...... 23 Section 5.07 Separate or Co-Master Trustee ...... 23 Section 5.08 Indemnification of Master Trustee ...... 24 Section 5.09 Master Trustee Receipt of Instructions or Directions via Electronic Means ...... 25 i PPAB 4993612v5 PPAB 4993612v5 Page

ARTICLE VI SUPPLEMENTS AND AMENDMENTS ...... 25 Section 6.01 Supplements Not Requiring Consent of Holders ...... 25 THIS MASTER TRUST INDENTURE, dated as of November 1, 2019 (the “Master Indenture”), Section 6.02 Supplements Requiring Consent of Holders ...... 26 between ALDERSGATE AT SHALOM PARK, INC., a North Carolina nonprofit corporation (the Section 6.03 Execution and Effect of Supplements ...... 27 “Corporation”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized and validly existing under the laws of the United States of America, having a ARTICLE VII SATISFACTION AND DISCHARGE OF INDENTURE ...... 28 corporate trust office in Jacksonville, Florida, and being duly qualified to accept and administer the trusts Section 7.01 Satisfaction and Discharge of Indenture ...... 28 created hereby (the “Master Trustee”), Section 7.02 Payment of Obligations after Discharge of Lien ...... 28 W I T N E S S E T H: ARTICLE VIII CONCERNING THE HOLDERS ...... 28 Section 8.01 Evidence of Acts of Holders ...... 28 WHEREAS, the Corporation is authorized and deems it necessary and desirable to enter into this Section 8.02 Obligations or Related Bonds Owned by Members of Master Indenture for the purpose of providing for the issuance from time to time by Members of the Obligated Group ...... 29 Obligated Group (as defined herein) of Obligations (as defined herein) to finance or refinance the Section 8.03 Instruments Executed by Holders Bind Future Holders ...... 30 acquisition, construction or betterment of retirement facilities, health care facilities or other facilities, or for other lawful and proper purposes; and ARTICLE IX MISCELLANEOUS PROVISIONS ...... 30 Section 9.01 Limitation of Rights ...... 30 WHEREAS, all acts and things necessary to constitute this Master Indenture a valid indenture Section 9.02 Severability ...... 30 and agreement according to its terms have been done and performed, the Corporation has duly authorized Section 9.03 Holidays ...... 30 the execution and delivery of this Master Indenture, and the Corporation, in the exercise of the legal rights Section 9.04 Governing Law ...... 31 and powers vested in it, executes this Master Indenture and proposes to make, execute, issue and deliver Section 9.05 Counterparts ...... 31 Obligations hereunder; and Section 9.06 Immunity of Individuals ...... 31 Section 9.07 Binding Effect ...... 31 WHEREAS, the Master Trustee agrees to accept and administer the trusts created hereby, subject Section 9.08 Notices ...... 31 to the terms hereof,

D-2 Section 9.09 Consents and Approvals ...... 32 Section 9.10 Electronic Transactions ...... 32 NOW, THEREFORE, in consideration of the premises, of the acceptance by the Master Trustee of the trusts hereby created, and of the giving of consideration for and acceptance of Obligations issued hereunder by the registered owners thereof, and for the purpose of fixing and declaring the terms and conditions upon which Obligations are to be issued, authenticated, delivered and accepted by all persons who shall from time to time be or become registered owners thereof, the Members of the Obligated Group covenant and agree with the Master Trustee, for the equal and proportionate benefit of the respective registered owners from time to time of Obligations issued hereunder, as follows:

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS CONCERNING INTERPRETATION

Section 1.01 Definitions. For the purposes hereof unless the context otherwise indicates, the following words and phrases shall have the following meanings:

“Accounts” means any right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, or (iii) for a secondary obligation incurred or to be incurred. The term “Accounts” shall include healthcare insurance receivables. The term “Accounts” shall not include (i) rights to payment evidenced by chattel paper or an instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) letter-of-credit rights or letters of credit, or (vi) rights to payment for money or funds advanced or sold. Any term used in this definition (other than the term “Accounts”) shall have the meanings given such terms, if any, in the UCC.

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“Authority” means the Public Finance Authority, a unit of government and a body corporate and “Defeased Obligations” means Obligations issued under a Supplement that has been discharged, politic of the State of Wisconsin in accordance with Sections 66.0301, 66.0303 and 66.0304 of the or provision for the discharge of which has been made, pursuant to its terms. Wisconsin Statutes, as amended, and its successors and assigns. “Derivative Agreement” means, without limitation, (i) any contract known as or referred to or “Authority Loan Agreement” means the Loan Agreement, dated as of November 1, 2019, by and which performs the function of an interest rate swap agreement, currency swap agreement, forward between the Authority and the Corporation, including any amendments or supplements thereto as therein payment conversion agreement or futures contract; (ii) any contract providing for payments based on permitted, pertaining to the Series 2019 Bonds. levels of, or changes or differences in, interest rates, currency exchange rates, or stock or other indices; (iii) any contract to exchange cash flows or payments or series of payments; (iv) any type of contract “Business Day” means any day on which banks in the city in which the Corporate Trust Office of called, or designed to perform the function of, interest rate floors or caps, options, puts or calls, to hedge the Master Trustee is located and New York, New York are not authorized to be closed for commercial or minimize any type of financial risk, including, without limitation, payment, currency, rate or other banking purposes. financial risk; and (v) any other type of contract or arrangement that the Member of the Obligated Group entering into such contract or arrangement determines is to be used, or is intended to be used, to manage “Code” means the Internal Revenue Code of 1986, as amended, and all regulations promulgated or reduce the cost of Indebtedness, to convert any element of Indebtedness from one form to another, to thereunder. maximize or increase investment return, to minimize investment return risk or to protect against any type of financial risk or uncertainty. “Collateral Assignments” means any assignment of construction documents, management agreements, development agreements, marketing agreements or any other assignment or agreement “Derivative Indebtedness” means Indebtedness (or that portion of Indebtedness) for which a executed by any Member of the Obligated Group as security for all Obligations issued under this Master Member of the Obligated Group shall have entered into a Derivative Agreement. Indenture, each as amended from time to time in accordance with its terms, including the Assignment of Contracts (defined in the Related Bond Indenture for the Series 2019 Bonds). “Derivative Obligations” means the payment obligations of a Member of the Obligated Group under a Derivative Agreement that hedges Indebtedness, including but not limited to regularly scheduled “Corporate Trust Office” means the principal or a designated office of the Master Trustee at payments and termination payments. which its corporate trust business is conducted, which at the date hereof is located in Jacksonville, Florida. “Electronic Means” means facsimile transmission, email transmission, secure electronic

D-3 transmission containing applicable authorization codes, passwords and/or authentication keys issued by “Corporation” means Aldersgate at Shalom Park, Inc., a nonprofit corporation duly organized the Master Trustee, or other similar electronic means of communication providing evidence of and validly existing under and by virtue of the laws of the State of North Carolina, and any successor or transmission and specified by the Master Trustee as available for use in connection with its services successors thereof. hereunder, including a telephone communication confirmed by any other method set forth in this definition. “Defeasance Obligations” means (i) with respect to any Obligation that secures a series of Related Bonds, the obligations permitted to be used to defease such series of Related Bonds under the “Event of Default” means, with respect to this Master Indenture, any one or more of those events Related Bond Indenture, and (ii) with respect to any Obligation for which there are no Related Bonds, set forth in Section 4.01. (A) noncallable Government Obligations, (B) evidences of ownership of a proportionate interest in specified noncallable Government Obligations, which Government Obligations are held by a bank or trust “Facility” has the meaning given to the term “Facility” in the Authority Loan Agreement. company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian, (C) Defeased Municipal Obligations and (D) evidences of ownership of a “Governing Body” means, when used with respect to any Member of the Obligated Group, its proportionate interest in specified Defeased Municipal Obligations, which Defeased Municipal managing member, board of directors, board of trustees or other board or group of individuals in which Obligations are held by a bank or trust company organized and existing under the laws of the United the powers of such Member of the Obligated Group are vested. States of America or any state thereof in the capacity of custodian. “Government Obligations” means direct obligations of, or obligations the timely payment of the “Defeased Municipal Obligations” means obligations of state or local government municipal principal of and interest on which are fully and unconditionally guaranteed by, the United States of bond issuers which are rated in the highest rating category by S&P and Moody’s, respectively, provision America. for the payment of the principal of and interest on which shall have been made by deposit with a trustee or escrow agent of (i) noncallable Government Obligations, (ii) evidences of ownership of a proportionate “Gross Receipts” means all revenues, income, receipts and money (other than proceeds of interest in specified noncallable Government Obligations, (iii) cash or (iv) any combination of such borrowing and moneys received from residents that are held in escrow) received in any period by or on noncallable Government Obligations, evidences of ownership and cash, which Government Obligations behalf of any Member of the Obligated Group, including, but without limiting the generality of the or evidences of ownership, together with any cash, are held by a bank or trust company organized and foregoing, (a) revenues derived from its operations, (b) gifts, grants, bequests, donations and contributions existing under the laws of the United States of America or any state thereof in the capacity of custodian, and the income therefrom, exclusive of any gifts, grants, bequests, donations and contributions to the the maturing principal of and interest on such Government Obligations or evidences of ownership, when extent specifically restricted by the donor to a particular purpose inconsistent with their use for the due and payable, being sufficient, together with any cash, to provide money to pay the principal of, payment of Obligations, (c) proceeds derived from (i) insurance, except to the extent otherwise required premium, if any, and interest on such obligations of such state or local government municipal bond by this Master Indenture to be used for a particular purpose inconsistent with their use for the payment of issuers. Obligations, (ii) Accounts, (iii) securities and other investments, (iv) inventory and other tangible and 2 3 PPAB 4993612v5 PPAB 4993612v5

intangible Property, (v) medical or health care insurance, indemnity or reimbursement programs or “Obligation Register” has the meaning given such term in Section 2.02. agreements and (vi) contract rights and other rights and assets now or hereafter owned, held or possessed by each Member of the Obligated Group, (d) rentals received from the leasing of real or tangible personal “Officer’s Certificate” means a certificate signed by (i) the chairman or president of the property and (e) any licensing fees or royalties from any intellectual property owned by any Member of Governing Body, or the president or chief executive officer, or the chief financial officer, or the chairman the Obligated Group. of the finance committee of the Governing Body of each Member of the Obligated Group or (ii) the Obligated Group Representative. Each Officer’s Certificate presented under this Master Indenture shall “Guaranty” means any obligation of any Member of the Obligated Group guaranteeing in any state that it is being delivered pursuant to (and shall identify the section or subsection of) this Master manner, directly or indirectly, any obligation of any Person that is not a Member of the Obligated Group Indenture and shall incorporate by reference and use in all appropriate instances all terms defined in which obligation of such other Person would, if such obligation were the obligation of a Member of the Section 1.01. Each Officer’s Certificate shall state (i) that the terms thereof are in compliance with the Obligated Group, constitute Indebtedness hereunder. requirements of the section or subsection pursuant to which such Officer’s Certificate is delivered, or shall state in reasonable detail the nature of any non-compliance and the steps being taken to remedy such “Holder” means the owner of any Obligation issued hereunder. non-compliance, and (ii) that it is being delivered together with any opinions, schedules, statements or other documents required in connection therewith. “Indebtedness” means (i) all indebtedness of Members of the Obligated Group for borrowed money, (ii) all installment sales, conditional sales and capital lease obligations, incurred or assumed by “Opinion of Bond Counsel” means an opinion in writing signed by an attorney or firm of any Member of the Obligated Group, and (iii) all Guaranties. Indebtedness shall not include obligations attorneys selected by the Corporation and experienced in the field of municipal bonds whose opinions are of any Member of the Obligated Group to another Member of the Obligated Group. generally accepted by purchasers of municipal bonds.

“Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person “Opinion of Counsel” means an opinion in writing signed by an attorney or firm of attorneys other than the owner of such Property, whether such interest arises by contract, statute or common law, selected by the Corporation, who may be counsel for any Member of the Obligated Group. including but not limited to any mortgage, deed of trust or pledge of, security interest in or encumbrance on any Property which secures any Indebtedness or any other obligation of any Member of the Obligated “Outstanding,” when used with reference to Indebtedness or Obligations, means, as of any date of Group or which secures any obligation of any Person. The term “Lien” shall include any easements, determination, all Indebtedness or Obligations theretofore issued or incurred and not paid and discharged covenants, restrictions, conditions, encroachments, reservations, rights-of-way, leases and other title other than (i) Obligations theretofore cancelled by the Master Trustee or delivered to the Master Trustee

D-4 exceptions and encumbrances affecting real property. for cancellation, (ii) Indebtedness deemed paid and no longer Outstanding under the documents pursuant to which such Indebtedness was incurred, and (iii) Obligations in lieu of which other Obligations have “Master Indenture” means this Master Trust Indenture, dated as of November 1, 2019, between been authenticated and delivered or have been paid pursuant to the provisions of the Supplement the Corporation and the Master Trustee, and any amendments or supplements hereto. regarding mutilated, destroyed, lost or stolen Obligations unless proof satisfactory to the Master Trustee has been received that any such Obligation is held by a bona fide purchaser. For purposes hereof, the “Master Trustee” means The Bank of New York Mellon Trust Company, N.A., and its successors principal amount of any Obligation that evidences and secures Derivative Obligations shall be deemed to in the trusts created hereunder. be zero and such Obligation shall be disregarded for purposes of any request, direction or consent of the Holders requested or permitted hereunder unless the related Derivative Agreement has terminated, in “Member of the Obligated Group” means, initially, the Corporation and, thereafter, any Person which case the principal amount of such Obligation shall be deemed to be the amount of any termination which shall become a Member of the Obligated Group in accordance with Section 3.03 and not including payment owed to the Holder of such Obligation. any Person which shall have withdrawn from the Obligated Group in accordance with Section 3.04. “Permitted Liens” means (i) Liens on Pledged Assets or other Property created by this Master “Obligated Group” means, collectively, the Members of the Obligated Group. Indenture, or the Collateral Assignments, and (ii) any Lien on the Property of the Corporation which existed on the date of authentication and delivery of Obligation No. 1 and was disclosed to the Master “Obligated Group Representative” means the Person at the time designated to act on behalf of the Trustee in an Officer’s Certificate. Obligated Group in a written certificate furnished to the Master Trustee, which certificate shall contain a specimen signature of such Person and shall be signed on behalf of the Obligated Group by the president “Person” means an individual, association, unincorporated organization, corporation, limited or chief executive officer of the Corporation or the Governing Body, the chairman of the Governing Body liability company, partnership, joint venture, business trust or a government or an agency or a political of the Corporation or by such Person’s designee. subdivision thereof, or any other entity.

“Obligation” means the evidence of particular Indebtedness issued hereunder. “Pledged Assets” means all Gross Receipts, Accounts, general intangibles, inventory, documents, instruments and chattel paper of each Member of the Obligated Group, now owned or hereafter acquired, “Obligation No. 1” means Obligation No. 1 issued, authenticated and delivered under this Master and all proceeds thereof; provided, however, that Pledged Assets shall not include contract rights Indenture and Supplement No. 1 to the Authority as evidence of the Corporation’s obligation to repay the consisting of charitable pledges. loan made by the Authority to the Corporation pursuant to the Authority Loan Agreement, and assigned to the Related Bond Trustee for the Series 2019 Bonds issued by the Authority to obtain funds for such “ Property” means any and all rights, titles and interests in and to any and all property, whether loan. real or personal, tangible (including cash) or intangible, wherever situated and whether now owned or hereafter acquired. 4 5 PPAB 4993612v5 PPAB 4993612v5

“Related Bond Indenture” means any indenture, bond resolution or other comparable instrument (d) Headings of articles and sections herein and in the table of contents hereof are solely for pursuant to which a series of Related Bonds is issued. convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof. Reference herein to particular articles or sections are references to articles or sections of “Related Bond Issuer” means the issuer of any issue of Related Bonds. this Master Indenture unless some other reference is otherwise indicated.

“Related Bond Trustee” means the trustee and its successors in the trusts created under any (e) Provisions relating to the redemption of Obligations or the calling of Obligations for Related Bond Indenture. redemption do not mean or include the payment of Obligations at their stated maturity or maturities.

“Related Bonds” means (a) revenue bonds or similar obligations issued by any state, territory or ARTICLE II possession of the United States or any municipal corporation or political subdivision formed under the laws thereof or any constituted authority or agency or instrumentality of any of the foregoing empowered OBLIGATIONS, AUTHORIZATION, ISSUANCE to issue obligations on behalf thereof, including the Series 2019 Bonds, and (b) any bonds issued by any AND TERMS OF OBLIGATIONS other Person, in either case the proceeds of which are loaned or otherwise made available to a Member of the Obligated Group in consideration, whether in whole or part, of the execution, authentication and Section 2.01 Amount of Obligations. Each Member of the Obligated Group may issue delivery of an Obligation to such governmental issuer or Person or in consideration of the execution and Obligations hereunder to evidence and secure Indebtedness or Derivative Obligations incurred or to be delivery of a Guaranty issued by a Member of the Obligated Group which Guaranty is represented by an incurred by such Member of the Obligated Group. The number and principal amount of Obligations that Obligation. may be created hereunder are not limited, except as limited by the provisions hereof or of any Supplement. Except for Obligation No. 1, any Member of the Obligated Group proposing to incur “Series 2019 Bonds” means the Authority’s Retirement Facility Revenue Anticipation Bonds Indebtedness or Derivative Obligations to be evidenced and secured by an Obligation issued hereunder (Shalom Park Pre-Development Project) Series 2019. shall, at least seven (7) days prior to the date of the incurrence of such Indebtedness or Derivative Obligations, give written notice of its intention to incur such Indebtedness or Derivative Obligations and “Supplement” means an indenture supplemental to, and authorized and executed pursuant to the issue such Obligation, including in such notice the amount of Indebtedness or Derivative Obligations to terms of, this Master Indenture. be incurred, to the other Members of the Obligated Group and to the Master Trustee. The Master Trustee shall be under no obligation to verify that any such notice has been given to such other Members of the

D-5 “Supplement No. 1” means Supplemental Indenture for Obligation No. 1, dated as of November Obligated Group. Pursuant to Section 3.01, each Member of the Obligated Group is jointly and severally 1, 2019, by and between the Corporation and the Master Trustee. liable for each and every Obligation. “Tax-Exempt Organization” means a Person organized under the laws of the United States of Section 2.02 Form, Designation, Numbering and Registration of Obligations. Obligations America or any state thereof which is exempt from federal income taxes under Section 501(a) of the Code shall be issued in such forms as may from time to time be created by Supplements permitted hereunder. by virtue of being an organization described in Section 501(c)(3) of the Code, or corresponding Each Obligation or series of Obligations shall be created by a different Supplement and shall be provisions of federal income tax laws from time to time in effect. designated in such a manner as will differentiate such Obligation from any other Obligation. Obligations “UCC” means the North Carolina version of the Uniform Commercial Code, Chapter 25 of the shall be issuable as fully registered Obligations and shall be numbered as provided in the Supplement General Statutes of North Carolina, as amended, or any successor statutes. creating such Obligation. The Master Trustee shall keep at its Corporate Trust Office a register (the “Obligation Register”), in which the Master Trustee shall provide for the registration of transfer and Section 1.02 Interpretation. exchange of each Obligation as provided in the Supplement creating such Obligation, subject to any additional reasonable regulations as it may prescribe. (a) Any reference herein to any officer or member of the Governing Body of a Member of the Obligated Group shall include those Persons succeeding to their functions, duties or responsibilities Section 2.03 Execution and Authentication of Obligations. Each Obligation shall be pursuant to or by operation of law or who are lawfully performing their functions. executed for and on behalf of the issuer thereof, by the Chairman, Vice Chairman, President or Vice President of its Governing Body or its President or Vice President (or any other officer authorized to do (b) Unless the context otherwise indicates, words importing the singular shall include the so) and may be attested by a Secretary or any Assistant Secretary of the Governing Body or the issuer plural and vice versa, and the use of the neuter, masculine, or feminine gender is for convenience only thereof. The signatures of any such officers may be mechanically or photographically reproduced on the and shall be deemed to mean and include the neuter, masculine or feminine gender. Obligation. If any officer whose signature appears on any Obligation ceases to be such officer before delivery thereof, such signature shall remain valid and sufficient for all purposes as if such officer had (c) Where the character or amount of any asset, liability or item of income or expense is remained in office until such delivery. Each Obligation shall be manually authenticated by an authorized required to be determined or any consolidation, combination or other accounting computation is required officer of the Master Trustee, without which authentication no Obligation shall be entitled to the benefits to be made for the purposes hereof or of any agreement, document or certificate executed and delivered in hereof. connection with or pursuant to this Master Indenture, the same shall be done in accordance with accounting principles generally accepted in the United States of America consistently applied.

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The Master Trustee’s authentication certificate shall be substantially in the following form: and orders of governmental or regulatory authorities (collectively, “Consents”) that are required to be obtained by the Corporation as a condition precedent to the execution, delivery and performance of the MASTER TRUSTEE’S AUTHENTICATION CERTIFICATE Corporation Documents, except that the offer and sale of the Series 2019 Bonds in certain jurisdictions may be subject to the provisions of the securities or Blue Sky laws of such jurisdictions with respect to The undersigned Master Trustee hereby certifies that this Obligation No. ____ is one of the which such counsel expresses no opinion; (iv) the execution and delivery of the Corporation Documents Obligations contemplated by the within-mentioned Indenture. by the Corporation, and compliance with the terms thereof, (A) do not conflict with the articles of organization or operating agreement of the Corporation, (B) do not in any material respect conflict with, or constitute on the part of the Corporation, a breach or default under, any indenture, mortgage, deed of trust, agreement or other instrument to which the Corporation is a party known to such counsel after , reasonable inquiry, (C) do not violate any applicable provisions of statutory laws or regulations, and as Master Trustee (D) to the knowledge of such counsel, do not conflict with, violate or result in a breach of any judgment, court order or consent decree that names the Corporation and is specifically directed to it or its properties; (v) the Corporation has been determined to be an organization that is exempt from federal income taxes under Section 501(a) of the Code, by virtue of being an organization described in Section 501(c)(3) of the By: Code and is not classified as a “private foundation” as defined in Section 509(a) of the Code; to the best Authorized Signatory of such counsel’s knowledge after due investigation, the Corporation has conducted its operations and has made all necessary filings so as to maintain its status as an organization described in Section 501(c)(3) of Section 2.04 Supplement Creating Obligations. Any Member of the Obligated Group and the the Code and has done nothing to impair its status as an exempt organization; (vi) the Master Indenture is Master Trustee may from time to time enter into a Supplement in order to create an Obligation hereunder. effective to create in favor of the Master Trustee a security interest (the “Article 9 Security Interest”) in Such Supplement shall set forth the date of such Obligation, the date or dates on which the principal of, the collateral described therein in which the Corporation has rights, to which North Carolina’s version of redemption premium, if any, and interest or other payments on such Obligation shall be payable, the form Article 9 of the Uniform Commercial Code (“Article 9”) is applicable, and in which a security interest of such Obligation and such other terms and provisions as shall conform with the provisions hereof. may be created under Article 9 (the “Article 9 Collateral”); (vii) the Article 9 Security Interest in that portion of the Article 9 Collateral in which a security interest may be perfected by the filing of a financing Section 2.05 Conditions to Issuance of Obligation No. 1 Hereunder. Simultaneously with or statement under Article 9 has been, and is as of the date of such opinion, perfected by the filing of

D-6 prior to the execution, authentication and delivery of the Obligation No. 1 pursuant to this Master financing statements in the offices of the Secretary of State of the State of North Carolina and the Register Indenture, the Corporation shall have delivered the following to the Master Trustee: of Deeds of Mecklenburg County, North Carolina; and (ix) registration of Obligation No. 1 under the Securities Act of 1933, as amended, and qualification of this Master Indenture, Supplement No. 1 under (a) All UCC financing statements with respect to the security interests in Pledged Assets of the Trust Indenture Act of 1939, as amended, is not required, or, if such registration or qualification is the Corporation granted to the Master Trustee pursuant to this Master Indenture, with evidence of filing in required, that all applicable registration and qualification provisions of said acts have been complied with the office of the Secretary of State of North Carolina; and satisfied; and

(b) An Officer’s Certificate stating that (i) all requirements and conditions to the issuance of (d) An Officer’s Certificate confirming that searches as of a recent date of the official records the Obligation No. 1, if any, set forth in this Master Indenture and Supplement No. 1 shall have been in the office of the Secretary of State of the State of North Carolina and the offices of the Register of complied with and satisfied, and (ii) to the best of the knowledge of the signer thereof, the Person who is Deeds and Clerk of Superior Court of Mecklenburg County, North Carolina attached thereto do not to be the Holder of such Obligation upon the original issuance thereof is not acquiring the interest disclose as of the date and time of such search any UCC security interest, federal or state tax lien or represented by such Obligation directly or indirectly with the assets of, or in connection with any judgment lien recorded or filed in such offices naming the Corporation as “debtor” which purports to take arrangement or understanding by it in any way involving, any employee benefit plan with respect to priority over the security interests in the Pledged Assets of the Corporation granted to the Master Trustee which (A) any employee of any Member of the Obligated Group or the Master Trustee, in its individual pursuant to the Master Indenture, except Permitted Liens. capacity, is a participant or (B) any Member of the Obligated Group or the Master Trustee, in its individual capacity, or any of their affiliates is otherwise a party in interest, all within the meaning of the Section 2.06 Conditions to Issuance of Other Obligations Hereunder. With respect to Employee Retirement Income Security Act of 1974, as amended; Obligations created hereunder, except the Obligation No. 1, simultaneously with or prior to the execution, authentication and delivery of an Obligation pursuant to this Master Indenture: (c) An Opinion of Counsel to the Corporation to the effect that (i) the Corporation is a nonprofit corporation in existence under the laws of the State of North Carolina, with corporate power to (a) All requirements and conditions to the issuance of such Obligation, if any, set forth in execute, deliver and perform its obligations under each of this Master Indenture, Supplement No. 1 and this Master Indenture and in the Supplement creating such Obligation shall have been complied with and Obligation No. 1 (collectively, the “Corporation Documents”); (ii) each of the Corporation Documents satisfied, as provided in an Officer’s Certificate, a copy of which Certificate shall be delivered to the has been duly authorized, executed and delivered by the Corporation and constitutes a legal, valid and Master Trustee and upon which the Master Trustee may conclusively rely; binding agreement of the Corporation, enforceable in accordance with its terms, except that the enforceability of the same may be limited by (A) the provisions of applicable bankruptcy, insolvency, (b) The issuer of such Obligation shall have delivered to the Master Trustee an Opinion of reorganization, fraudulent conveyance, moratorium and similar laws affecting the enforcement of Counsel to the effect that (i) registration of such Obligation under the Securities Act of 1933, as amended, creditors’ rights generally; (B) general principles of equity, and (C) other exceptions to enforceability and qualification of this Master Indenture or the Supplement creating such Obligation under the Trust approved by the Master Trustee; (iii) the Corporation has obtained all consents, approvals, authorizations Indenture Act of 1939, as amended, are not required, or, if such registration or qualification is required, 8 9 PPAB 4993612v5 PPAB 4993612v5

that all applicable registration and qualification provisions of said acts have been complied with, and (ii) or cause each Member of the Obligated Group to prepare and file such continuation statements in a timely the Master Indenture, the Supplement creating such Obligation and such Obligation are valid, binding and manner to assure that the security interests in Pledged Assets shall remain perfected. enforceable obligations of the Members of the Obligated Group in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance and other laws affecting (d) If an Event of Default shall have occurred and be continuing, the Master Trustee may creditors’ rights generally and usual equity principles; require that each Member of the Obligated Group deliver all Gross Receipts to it. Each Member of the Obligated Group covenants that, if an Event of Default shall have occurred and be continuing, it will, (c) Each Member of the Obligated Group shall have delivered to the Master Trustee an immediately upon receipt of a written request from the Master Trustee, deliver or direct to be delivered to Officer’s Certificate stating that, to the best of the knowledge of the signer thereof, the Person who is to the Master Trustee all Gross Receipts thereafter received until such Event of Default has been cured, such be the Holder of such Obligation upon the original issuance thereof is not acquiring the interest Gross Receipts to be applied in accordance with Section 4.04 of this Master Indenture. represented by such Obligation directly or indirectly with the assets of, or in connection with any arrangement or understanding by it in any way involving, any employee benefit plan with respect to Section 3.02 Covenants as to Corporate Existence, Maintenance of Properties, Etc. which (i) any employee of any Member of the Obligated Group or the Master Trustee, in its individual capacity, is a participant or (ii) any Member of the Obligated Group or the Master Trustee, in its Each Member of the Obligated Group hereby covenants as follows: individual capacity, or any of their affiliates is otherwise a party in interest, all within the meaning of the Employee Retirement Income Security Act of 1974, as amended; and (a) Except as otherwise expressly provided herein, to preserve its corporate or other legal existence, to procure and maintain all rights, licenses and permits necessary or desirable in the operation ARTICLE III of its business and affairs and to be qualified to do business in each jurisdiction where the ownership of its Property or the conduct of its business requires such qualification; provided, however, that nothing PARTICULAR COVENANTS OF THE OBLIGATED GROUP herein contained shall be construed to obligate it to maintain any of its rights, licenses or permits no longer necessary or desirable, in its judgment, in the operation of its business and affairs, if the failure to Section 3.01 Nature of Obligations; Payment of Principal and Interest; Security; Further maintain such right, license or permit will not be disadvantageous in any material respect to the Holders Assurances; Deposit of Gross Receipts. of Obligations.

(a) Each Obligation issued pursuant to this Master Indenture shall be a general, joint and (b) To do all things reasonably necessary to conduct its affairs and carry on its business and D-7 several obligation of each Member of the Obligated Group and shall be equally and ratably secured by operations in such manner as to comply with any and all applicable laws of the United States and the this Master Indenture. Each Member of the Obligated Group covenants promptly to pay or cause to be several states thereof and duly observe and conform to all valid orders, regulations or requirements of any paid the principal of, redemption premium, if any, and interest on each Obligation issued hereunder, and governmental authority relative to the conduct of its business and the ownership of its Property; provided, any other payments, required to be made under the Supplement creating such Obligation and under said nevertheless, that nothing herein contained shall require it to comply with, observe and conform to any Obligation, at the place, on the dates and in the manner provided herein, in the Supplement creating such such law, order, regulation or requirement of any governmental authority so long as the validity thereof or Obligation and in such Obligation according to the terms thereof whether at maturity, upon proceedings the applicability thereof to it shall be contested in good faith and the failure to comply will not have a for redemption, by acceleration or otherwise. material adverse effect on the financial condition of the Obligated Group.

(b) To secure (i) the prompt payment of the principal of, redemption premium, if any, and the (c) To pay promptly all lawful taxes, governmental charges and assessments at any time interest on the Obligations and any other payments, required to be made under the Supplements creating levied or assessed upon or against it or its Property; provided, however, that it shall have the right to the Obligations and under the Obligations, and (ii) the performance by each Member of the Obligated contest in good faith any such taxes, charges or assessments or the collection of any such sums and Group of its other obligations hereunder and under the Collateral Assignments, each Member of the pending the resolution of such contest may delay or defer payment thereof if such delay or deferral will Obligated Group hereby grants to the Master Trustee a security interest in its Pledged Assets. not have a material adverse effect on the financial condition of the Obligated Group.

(c) Each Member of the Obligated Group shall also execute and deliver to the Master Trustee (d) To pay promptly or otherwise satisfy and discharge all of its Indebtedness and all from time to time such Supplements as may be necessary or appropriate to include its Pledged Assets as demands and claims against it as and when the same become due and payable or within any period of security hereunder. In addition, each Member of the Obligated Group covenants that it will prepare and grace with respect thereto, other than any Indebtedness, demands or claims (exclusive of the Obligations file such UCC financing statements or amendments to or terminations of existing financing statements created and Outstanding hereunder or any Related Bonds) whose validity, amount or collectability is which shall, in the Opinion of Counsel, be necessary to comply with applicable law or as required due to being contested in good faith. changes in the Obligated Group, including, without limitation, (i) any Person becoming a Member of the Obligated Group pursuant to Section 3.03, or (ii) any Member of the Obligated Group ceasing to be a (e) To comply with all terms, covenants and provisions of any Liens upon any of its Member of the Obligated Group pursuant to Section 3.04. In particular, each Member of the Obligated Property. Group covenants that it will, at least thirty (30) days prior to the expiration of any financing statement, prepare and file such continuation statements of existing financing statements as shall, in the Opinion of (f) So long as this Master Indenture shall remain in force and effect, each Member of the Counsel, be necessary to comply with applicable law and shall provide to the Master Trustee written Obligated Group which is a Tax-Exempt Organization at the time it becomes a Member of the Obligated notice of such filing. If the Master Trustee shall not have received such notice at least twenty-five (25) Group agrees, so long as all amounts due or to become due on any Related Bond have not been fully paid days prior to the expiration date of any such financing statement, the Master Trustee shall prepare and file to the holder thereof, that it will not take any action or fail to take any action which action or failure to act (including any action or failure to act which would result in the alteration or loss of its status as a Tax- 10 11 PPAB 4993612v5 PPAB 4993612v5

Exempt Organization), or which would, in the Opinion of Bond Counsel, result in the interest on any from the Obligated Group would not adversely affect the exclusion from gross income for Related Bond which is not includable in the gross income of the holder thereof for federal income tax purposes of federal income taxation of the interest on any such Related Bond; and purposes becoming included in the gross income of the holder thereof for federal income tax purposes. (ii) An Officer’s Certificate which shall state that (A) all conditions precedent Section 3.03 Parties Becoming Members of the Obligated Group. Persons which are not provided in this Master Indenture relating to such withdrawal have been complied with and (B) Members of the Obligated Group may, with the prior written consent of the current Members of the immediately after giving effect to such withdrawal, no Event of Default hereunder shall have Obligated Group, become Members of the Obligated Group, if: occurred and be continuing.

(a) The Person which is becoming a Member of the Obligated Group shall execute and (b) Upon the withdrawal of any Member from the Obligated Group pursuant to subsection deliver to the Master Trustee an appropriate instrument containing the agreement of such Person (i) to (a) of this Section, all liability of such Member of the Obligated Group with respect to all Obligations become a Member of the Obligated Group under this Master Indenture and thereby become subject to Outstanding under this Master Indenture shall cease, any guaranty by such Member of the Obligated compliance with all provisions of this Master Indenture pertaining to a Member of the Obligated Group, Group pursuant to Section 3.03 shall be released and discharged in full, the Master Trustee shall execute including the security interest provided for in Section 3.01 and the performance and observance of all and deliver to such Member of the Obligated Group a release of any Collateral Assignments given by covenants and obligations of a Member of the Obligated Group hereunder, and (ii) unconditionally and such Member of the Obligated Group, and the Master Trustee shall execute and deliver to such Member irrevocably guaranteeing to the Master Trustee and each other Member of the Obligated Group that all of the Obligated Group all UCC-3 termination statements necessary to terminate the security interest in Obligations issued and then Outstanding or to be issued and Outstanding hereunder will be paid in the Pledged Assets of such Member of the Obligated Group pursuant to Section 3.01. accordance with the terms thereof and of this Master Indenture when due. (c) Notwithstanding the provisions of this Section, the Corporation shall not withdraw from (b) The Obligated Group Representative shall have delivered to the Master Trustee an the Obligated Group so long as Obligation No. 1 is Outstanding. Officer’s Certificate which shall state that (i) such admission and such instrument comply with this Article and that all conditions precedent provided in this Master Indenture relating to such admission have ARTICLE IV been complied with and (ii) immediately after giving effect to such admission, no Event of Default hereunder shall have occurred and be continuing. EVENTS OF DEFAULT AND REMEDIES

D-8 (c) Each instrument executed and delivered to the Master Trustee in accordance with Section 4.01 Events of Default. Event of Default, as used herein, shall mean any of the subsection (a) of this Section, shall be accompanied by an Opinion of Counsel, addressed to the Master following events: Trustee, to the effect that such instrument has been duly authorized, executed and delivered by such Person and constitutes a valid and binding obligation of such Person enforceable in accordance with its (a) The Members of the Obligated Group shall fail to make any payment of the principal of, terms, except as enforceability may be limited by bankruptcy laws, insolvency laws, other laws affecting the redemption premium, if any, or interest on any Obligation issued and Outstanding hereunder, and any creditors’ rights generally, equity principles and laws dealing with fraudulent conveyances. other payments, required to be made under the Supplements creating such Obligations and under such Obligations, when and as the same shall become due and payable, whether at maturity, by proceedings for (d) If all amounts due or to become due on any Related Bond, the interest on which is not redemption, by acceleration or otherwise, in accordance with the terms thereof, of this Master Indenture includable in the gross income of the holder thereof for purposes of federal income taxation, have not or of any Supplement; been fully paid to the holder thereof, there shall be filed with the Master Trustee, an Opinion of Bond Counsel, addressed to the Master Trustee, to the effect that the admission of such Person to the Obligated (b) Any Member of the Obligated Group shall fail duly to perform, observe or comply with Group would not adversely affect the exclusion from gross income for purposes of federal income any covenant or agreement on its part under this Master Indenture, other than as described in taxation of the interest on any such Related Bond. Section 4.01(a), for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Members of the Obligated Group by the Section 3.04 Withdrawal from the Obligated Group. Master Trustee, or to the Members of the Obligated Group and the Master Trustee by the Holders of at least twenty-five percent (25%) in aggregate principal amount of Obligations then Outstanding; provided, (a) No Member of the Obligated Group may withdraw from the Obligated Group unless, however, that if said failure be such that it cannot be corrected within thirty (30) days after the receipt of prior to the taking of such action, there is delivered to the Master Trustee: such notice, it shall not constitute an Event of Default if corrective action is instituted within such thirty (30) day period and diligently pursued until the Event of Default is corrected; (i) (A) An Officer’s Certificate stating that (I) all Obligations issued by such Member are no longer Outstanding or (II) an amount of cash or Defeasance Obligations, which (c) An event of default shall occur under a Related Bond Indenture or upon a Related Bond; together with the interest earned thereon, will be sufficient to accomplish the requirement of clause (A) (I) above has been transferred by such Member to the Master Trustee or all (d) Any Member of the Obligated Group shall fail to pay promptly or otherwise satisfy and Outstanding Obligations issued by such Member have been assumed by another Member of the discharge any Outstanding Indebtedness (other than Obligations issued and Outstanding hereunder and Obligated Group, and (B), in either case, if all amounts due or to become due on any Related Related Bonds), whether such Indebtedness now exists or shall hereafter be created, as and when the same Bond, the interest on which is not includable in the gross income of the holder thereof for becomes due and payable and any period of grace with respect thereto shall have expired, or another purposes of federal income taxation, have not been fully paid to the holder thereof, an Opinion of event of default as defined in any instrument, indenture or mortgage evidencing or securing such Bond Counsel, addressed to the Master Trustee, to the effect that such Member’s withdrawal Indebtedness shall occur, which event of default shall not have been waived by the holder of such 12 13 PPAB 4993612v5 PPAB 4993612v5

instrument, indenture or mortgage, and as a result of such failure to pay or other event of default such Trustee may, and upon the written request of Holders of not less than a majority in aggregate principal Indebtedness shall have been accelerated; provided, however, that such default shall not constitute an amount of the Obligations Outstanding shall, annul such declaration and its consequences with respect to Event of Default if the validity, amount or collectability of such Indebtedness is being contested in good any Obligations or portions thereof not then due by their terms. No such annulment shall extend to or faith and such Member of the Obligated Group establishes and maintains reserves satisfactory to the affect any subsequent Event of Default or impair any right consequent thereon. Master Trustee for the payment of such Indebtedness pending the outcome of such contest; Section 4.03 Additional Remedies and Enforcement of Remedies. (e) The entry of a decree or order by a court having jurisdiction in the premises for an order for relief against any Member of the Obligated Group, or approving as properly filed a petition seeking (a) Upon the occurrence and continuance of any Event of Default, the Master Trustee may, reorganization, arrangement, adjustment or composition of or in respect of such Member under the United and upon the written request of the Holders of not less than twenty-five percent (25%) in aggregate States Bankruptcy Code or any other applicable federal or state law, or appointing a receiver, liquidator, principal amount of the Obligations Outstanding, together with indemnification of the Master Trustee to custodian, assignee, or sequestrator (or other similar official) of such Member or of any substantial part of its satisfaction therefor, shall, proceed forthwith to protect and enforce its rights and the rights of the its Property, or ordering the winding up or liquidation of its affairs, and the continuance of any such Holders hereunder by such suits, actions or proceedings as the Master Trustee, being advised by counsel, decree or order unstayed and in effect for a period of ninety (90) consecutive days; and shall deem expedient, including but not limited to:

(f) The institution by any Member of the Obligated Group of proceedings for an order for (i) enforcement of the right of the Holders to collect and enforce the payment of relief, or the consent by it to an order for relief against it, or the filing by it of a petition or answer or amounts due or becoming due under the Obligations; consent seeking reorganization, arrangement, adjustment, composition or relief under the United States Bankruptcy Code or any other similar applicable federal or state law, or the consent by it to the filing of (ii) suit upon all or any part of the Obligations; any such petition or to the appointment of a receiver, liquidator, custodian, assignee, trustee or sequestrator (or other similar official) of such Member of the Obligated Group or of any substantial part (iii) civil action to require any Person holding moneys, documents or other property of its Property, or the making by it of an assignment for the benefit of creditors, or the admission by it in pledged to secure payment of amounts due or to become due on the Obligations to account as if it writing of its inability to pay its debts generally as they become due, or the taking of corporate action by were the trustee of an express trust for the Holders; any Member of the Obligated Group in furtherance of any such action. (iv) civil action to enjoin any acts or things, which may be unlawful or in violation of

D-9 Section 4.02 Acceleration; Annulment of Acceleration. the rights of the Holders;

(a) Upon the occurrence and during the continuation of an Event of Default hereunder, the (v) enforcement of its rights as a secured party under the UCC; and Master Trustee may and, upon the written request of (i) the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Obligations Outstanding or (ii) any Person properly exercising the (vi) enforcement of any other right of the Holders conferred by law or hereby. right given to such Person under any Supplement to require acceleration of the Obligations issued pursuant to such Supplement, shall, by notice to the Members of the Obligated Group, declare all (b) Regardless of the happening of an Event of Default, the Master Trustee, if requested in Obligations Outstanding immediately due and payable, whereupon such Obligations shall become and be writing by the Holders of not less than twenty-five percent (25%) in aggregate principal amount of the immediately due and payable, anything in the Obligations or in any other section of this Master Indenture Obligations then Outstanding, shall, upon being indemnified to its satisfaction therefor, institute and to the contrary notwithstanding; provided, however, that if the terms of any Supplement give a Person the maintain such suits and proceedings as it may be advised shall be necessary or expedient (i) to prevent right to consent to acceleration of the Obligations issued pursuant to said Supplement, the Obligations any impairment of the security hereunder by any acts which may be unlawful or in violation hereof, or issued pursuant to such Supplement may not be accelerated by the Master Trustee unless such consent is (ii) to preserve or protect the interests of the Holders, provided that such request and the action to be taken properly obtained pursuant to the terms of such Supplement. In the event the Obligations are accelerated by the Master Trustee are not in conflict with any applicable law or the provisions hereof and, in the sole there shall be due and payable on such Obligations an amount equal to the total principal amount of all judgment of the Master Trustee, is not unduly prejudicial to the interest of the Holders not making such such Obligations, plus all interest accrued on such principal amount to the date of payment of such request. principal. Section 4.04 Application of Gross Receipts and Other Moneys after Default. During the (b) At any time after the Obligations shall have been declared to be immediately due and continuance of an Event of Default all Gross Receipts and other moneys received by the Master Trustee payable and before the entry of final judgment or decree in any suit, action or proceeding instituted on pursuant to any right given or action taken under the provisions of this Article, after payment of the costs account of such Event of Default, if (i) the Obligated Group has paid or caused to be paid or deposited and expenses of the proceedings resulting in the collection of such moneys and of the expenses and with the Master Trustee moneys sufficient to pay all matured installments of interest or other payments advances incurred or made by the Master Trustee with respect thereto and all other fees, costs and and all principal or redemption prices then due (other than the principal then due only because of such expenses of the Master Trustee under this Master Indenture shall be applied as follows: declaration) of all Obligations Outstanding; (ii) the Obligated Group has paid or caused to be paid or deposited with the Master Trustee money sufficient to pay the charges, compensation, expenses, (a) Unless the principal of all Outstanding Obligations shall have become or have been disbursements, advances, fees and liabilities of the Master Trustee; (iii) all other amounts then payable by declared due and payable: the Obligated Group hereunder shall have been paid or a sum sufficient to pay the same shall have been deposited with the Master Trustee; and (iv) every Event of Default (other than a default in the payment of FIRST: To the payment to the Persons entitled thereto of all installments of interest then such Obligations then due only because of such declaration) shall have been remedied, then the Master due on Obligations in the order of the maturity of such installments, and, if the amount available 14 15 PPAB 4993612v5 PPAB 4993612v5

shall not be sufficient to pay in full any installment or installments maturing on the same date, shall be paid to the Person entitled to receive the same; if no other Person shall be entitled thereto, then then to the payment thereof ratably, according to the amounts due thereon to the persons entitled the balance shall be paid to the Members of the Obligated Group, their respective successors, or as a court thereto, without any discrimination or preference; and of competent jurisdiction may direct.

SECOND: To the payment to the Persons entitled thereto of the unpaid principal Notwithstanding any provision of this Section to the contrary, for purposes of this Section, installments of any Obligations which shall have become due, whether at maturity or by call for “interest” on Obligations that evidence and secure Derivative Obligations shall mean regularly scheduled redemption, in the order of their due dates, and if the amounts available shall not be sufficient to payments under the applicable Derivative Agreement and “principal” of such Obligations shall mean pay in full all Obligations due on any date, then to the payment thereof ratably, according to the termination payments and any other payment except regularly scheduled payments under the applicable amounts of principal installments due on such date, to the Persons entitled thereto, without any Derivative Agreement. Unless otherwise provided in the Supplement creating an Obligation that discrimination or preference, except Derivative Obligations evidenced and secured by an evidences and secures Derivative Obligations, payment of the portion of such Obligation that evidences Obligation that are subordinate to other Obligations; and and secures termination payments and any other payments except regularly scheduled payments under a Derivative Agreement shall be subordinate to payment of other Obligations. THIRD: To the payment to the Persons entitled thereto of any unpaid Derivative Obligations evidenced and secured by an Obligation that are subordinate to other Obligations Section 4.05 Remedies Not Exclusive. No remedy by the terms hereof conferred upon or which shall have become due, in the order of their due dates, and if the amounts available shall reserved to the Master Trustee or the Holders is intended to be exclusive of any other remedy, but each not be sufficient to pay in full all such unpaid Derivative Obligations due on any date, then to the and every such remedy shall be cumulative and shall be in addition to every other remedy given payment thereof ratably, according to the amounts of unpaid Derivative Obligations due on such hereunder or existing at law or in equity or by statute on or after the date hereof. date, to the Persons entitled thereto, without any discrimination or preference. Section 4.06 Remedies Vested in the Master Trustee. All rights of action (including the right (b) If the principal of all Outstanding Obligations shall have become or have been declared to file proof of claims) hereunder or under any of the Obligations may be enforced by the Master Trustee due and payable: without the possession of any of the Obligations or the production thereof in any trial or other proceedings relating thereto. Any such suit or proceeding instituted by the Master Trustee may be FIRST: To the payment of the principal and interest then due and unpaid upon brought in its name as the Master Trustee without the necessity of joining as plaintiffs or defendants any Obligations without preference or priority of principal over interest or of interest over principal, Holders. Subject to the provisions of Section 4.04, any recovery or judgment shall be for the equal D-10 or of any installment of interest over any other installment of interest, or of any Obligation over benefit of the Holders. any other Obligation, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference, except Derivative Section 4.07 Holders’ Control of Proceedings. If an Event of Default shall have occurred and Obligations evidenced and secured by an Obligation that are subordinate to other Obligations; be continuing, notwithstanding anything herein to the contrary, the Holders of not less than a majority in and aggregate principal amount of Obligations then Outstanding shall have the right, at any time, by an instrument in writing executed and delivered to the Master Trustee and accompanied by indemnity SECOND: To the payment of Derivative Obligations evidenced and secured by an satisfactory to the Master Trustee, to direct the method and place of conducting any proceeding to be Obligation that are subordinate to other Obligations. taken in connection with the enforcement of the terms and conditions hereof or for the appointment of a receiver or any other proceedings hereunder, provided that such direction is not in conflict with any (c) If the principal of all Outstanding Obligations shall have been declared due and payable, applicable law or the provisions hereof, and provided further, that the Master Trustee shall have the right and if such declaration shall thereafter have been rescinded and annulled under the provisions of this to decline to follow any such direction if the Master Trustee in good faith shall determine that the Article, then, subject to the provisions of paragraph (b) of this Section in the event that the principal of all proceeding so directed would involve it in personal liability, and, in the sole judgment of the Master Outstanding Obligations shall later become due or be declared due and payable, the moneys shall be Trustee, is not unduly prejudicial to the interest of any Holders not joining in such direction and provided applied in accordance with the provisions of paragraph (a) of this Section. further that nothing in this Section shall impair the right of the Master Trustee in its discretion to take any other action hereunder which it may deem proper and which is not inconsistent with such direction by Whenever moneys are to be applied by the Master Trustee pursuant to the provisions of this Holders. Section, such moneys shall be applied by it at such times, and from time to time, as the Master Trustee shall determine, having due regard for the amount of such moneys available for application and the Section 4.08 Termination of Proceeding. In case any proceeding taken by the Master Trustee likelihood of additional moneys becoming available for such application in the future. Whenever the on account of an Event of Default shall have been discontinued or abandoned for any reason or shall have Master Trustee shall apply such moneys, it shall fix the date upon which such application is to be made been determined adversely to the Master Trustee or to the Holders, then the Members of the Obligated and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. Group, the Master Trustee and the Holders shall be restored to their former positions and rights The Master Trustee shall give such notice as it may deem appropriate of the deposit with it of any such hereunder, and all rights, remedies and powers of the Master Trustee, the Members of the Obligated moneys and of the fixing of any such date, and shall not be required to make payment to the Holder of Group and the Holders shall continue as if no such proceeding had been taken. any unpaid Obligation until such Obligation shall be presented to the Master Trustee for appropriate endorsement of any partial payment or for cancellation if fully paid. Section 4.09 Waiver of Event of Default.

Whenever all Obligations and interest thereon have been paid under the provisions of this Section (a) No delay or omission of the Master Trustee or of any Holder to exercise any right or and all expenses and charges of the Master Trustee have been paid or provided for, any balance remaining power accruing upon any Event of Default shall impair any such right or power or shall be construed to 16 17 PPAB 4993612v5 PPAB 4993612v5

be a waiver of any such Event of Default or an acquiescence therein. Every power and remedy given by Event of Default shall have been cured before the giving of such notice; provided that, except in the case this Article to the Master Trustee and the Holders, respectively, may be exercised from time to time and of default in the payment of the principal of, redemption premium, if any, or interest or other payment on as often as may be deemed expedient by them. any of the Obligations and the Events of Default specified in subsections (e) and (f) of Section 4.01, the Master Trustee shall be protected in withholding such notice if and so long as the board of directors, the (b) The Master Trustee may waive any Event of Default which in its opinion shall have been executive committee, or a trust committee of directors or any responsible officer of the Master Trustee in remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it good faith determines that the withholding of such notice is in the interests of the Holders. under the provisions hereof, or before the completion of the enforcement of any other remedy hereunder. For purposes of this Master Indenture, the Master Trustee shall not be deemed to have knowledge (c) Notwithstanding anything contained herein to the contrary, the Master Trustee, upon the of an Event of Default hereunder unless written notice of any event which is an Event of Default is written request of the Holders of not less than a majority of the aggregate principal amount of Obligations received by the Master Trustee and such notice references this Master Indenture. then Outstanding, shall waive any Event of Default hereunder and its consequences; provided, however, that, except under the circumstances set forth in subsection (b) of Section 4.02, a default in the payment ARTICLE V of the principal of, premium, if any, or interest on or other payment on any Obligation, when the same shall become due and payable by the terms thereof or upon call for redemption, may not be waived THE MASTER TRUSTEE without the written consent of the Holders of all the Obligations (with respect to which such payment default exists) at the time Outstanding. Section 5.01 Certain Duties and Responsibilities.

(d) In case of any waiver by the Master Trustee of an Event of Default hereunder, the (a) Except during the continuance of an Event of Default the Master Trustee undertakes to Members of the Obligated Group, the Master Trustee and the Holders shall be restored to their former perform such duties and only such duties as are specifically set forth in this Master Indenture, and no positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other implied covenants or obligations shall be read into this Master Indenture against the Master Trustee. Event of Default or impair any right consequent thereon. (b) In the absence of bad faith on its part, the Master Trustee may conclusively rely, as to the Section 4.10 Appointment of Receiver. Upon the occurrence of any Event of Default, unless truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions the same shall have been waived as herein provided, the Master Trustee shall be entitled as a matter of furnished to the Master Trustee and conforming to the requirements of this Master Indenture; but in the D-11 right if it shall so elect, (i) forthwith and without declaring the Obligations to be due and payable, (ii) after case of any such certificates or opinions which by any provision hereof are specifically required to be declaring the same to be due and payable, or (iii) upon the commencement of an action to enforce the furnished to the Master Trustee, the Master Trustee shall be under a duty to confirm such certificates or specific performance hereof or in aid thereof or upon the commencement of any other judicial proceeding opinions received are in the format prescribed by this Master Indenture, provided, though, that the Master to enforce any right of the Master Trustee or the Holders, to the appointment of a receiver or receivers of Trustee has no duty to examine or investigate the substantive content of any such certificate or opinion. any or all of the Property of the Obligated Group with such powers as the court making such appointment shall confer. Upon the occurrence of an Event of Default, each Member of the Obligated Group, (c) In case an Event of Default has occurred and is continuing, the Master Trustee shall respectively, hereby consents and agrees, and will if requested by the Master Trustee consent and agree at exercise such of the rights and powers vested in it by this Master Indenture, and use the same degree of the time of application by the Master Trustee for appointment of a receiver of its Property, to the care and skill in their exercise, as a prudent person would exercise or use under the circumstances. appointment of such receiver of its Property and that such receiver may be given the right, power and authority, to the extent the same may lawfully be given, to take possession of and operate and deal with (d) No provision of this Master Indenture shall be construed to relieve the Master Trustee such Property and the revenues, profits and proceeds therefrom, with like effect as such Member of the from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, Obligated Group could do so, and to borrow money and issue evidences of indebtedness as such receiver. except that:

Section 4.11 Remedies Subject to Provisions of Law. All rights, remedies and powers (i) this Subsection shall not be construed to limit the effect of subsection (a) of this provided by this Article may be exercised only to the extent that the exercise thereof does not violate any Section; applicable provision of law, and all the provisions of this Article are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent (ii) the Master Trustee shall not be liable for any error of judgment made in good necessary so that they will not render this instrument or the provisions hereof invalid or unenforceable faith by a chairman or vice-chairman of the board of directors, the chairman or vice-chairman of under the provisions of any applicable law. the executive committee of the board of directors, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any Section 4.12 Notice of Default. Promptly after obtaining knowledge of any Event of Default, trust officer or assistant trust officer, the controller and any assistant controller or any other each Member of the Obligated Group shall deliver to the Master Trustee, a written notice specifying the officer or employee of the Master Trustee customarily performing functions similar to those nature and period of existence of such Event of Default and the action the Obligated Group is taking and performed by any of the above designated officers or with respect to a particular matter, any other proposes to take with respect thereto. officer or employee to whom such matter is referred because of his knowledge of and familiarity with the particular subject, unless it shall be proved that the Master Trustee was negligent in The Master Trustee shall, within thirty (30) days after it has received notice of the occurrence of ascertaining the pertinent facts; an Event of Default, mail to all Holders as the names and addresses of such Holders appear upon the books of the Master Trustee, notice of such Event of Default known to the Master Trustee, unless such 18 19 PPAB 4993612v5 PPAB 4993612v5

(iii) the Master Trustee shall not be liable with respect to any action taken or omitted such further inquiry or investigation into such facts or matters as it may see fit, and, if the Master Trustee to be taken by it in good faith in accordance with the direction of the Holders of a majority in shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, principal amount of the Outstanding Obligations (or such other percentage specified herein) records and premises of any Member of the Obligated Group, personally or by agent or attorney. relating to the time, method and place of conducting any proceeding for any remedy available to the Master Trustee, or exercising any trust or power conferred upon the Master Trustee, under (g) The Master Trustee may execute any of the trusts or powers hereunder or perform any this Master Indenture, except under the circumstances set forth in subsection (c) of Section 4.09 duties hereunder either directly or by or through agents or attorneys. requiring the consent of the Holders of all the Obligations at the time Outstanding; and (h) The Master Trustee shall be under no obligation to effect or maintain insurance or to (iv) no provision of this Master Indenture shall require the Master Trustee to expend renew any policies of insurance or to inquire as to the sufficiency of any policies of insurance carried by or risk its own funds or otherwise incur any financial or other liability, directly or indirectly, in the Corporation or Members of the Obligated Group, or to report, or make or file claims or proof of loss the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if for, any loss or damage insured against or that may occur, or to keep itself informed or advised as to the it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity payment of any taxes or assessments, or to require any such payment to be made. against such risk or liability is not reasonably assured to it. (i) Except as otherwise expressly required herein, the Master Trustee shall not be (e) Whether or not therein expressly so provided, every provision of this Master Indenture responsible for the recording or filing of this Master Indenture, assignments or any UCC financing relating to the conduct or affecting the liability of or affording protection to the Master Trustee shall be statements or have any responsibility for the validity, perfection, continuation or value of any lien or any subject to the provisions of this Section. collateral securing the Obligations.

Section 5.02 Certain Rights of Master Trustee. Except as otherwise provided in Section 5.01: (j) No permissive right of the Master Trustee hereunder, including the authority to enter into Supplements or take other actions, shall be construed as a duty, and the Master Trustee shall be under no (a) The Master Trustee may rely and shall be protected in acting or refraining from acting obligations to take any such action or exercise any such right. upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper or document believed by it to be genuine and to have been signed or (k) The Master Trustee is not required to give any bond or surety with respect to the presented by the proper party or parties. performance of its duties or the exercise of its powers under this Indenture. D-12 (b) Any request, direction or statement of any Member of the Obligated Group mentioned (l) The Master Trustee shall have no responsibility for any information in any offering herein shall be sufficiently evidenced by an Officer’s Certificate and any action of the Governing Body memorandum or other disclosure material distributed with respect to the Obligations, and the Master may be sufficiently evidenced by a copy of a resolution certified by the secretary or any assistant Trustee shall have no responsibility for compliance with any state or federal securities laws in connection secretary of the Member of the Obligated Group to have been duly adopted by the Governing Body and to with the Obligations. be in full force and effect on the date of such certification and delivered to the Master Trustee. (m) The Master Trustee shall not be responsible or liable for any failure or delay in the (c) Whenever in the administration of this Master Indenture the Master Trustee shall deem it performance of its obligations under this Master Indenture or any documents related to this Master desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, the Master Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad including, without limitation, acts of God; earthquakes; fire; flood; hurricanes or other storms; wars; faith on its part, rely upon an Officer’s Certificate. terrorism; similar military disturbances; sabotage; epidemic; pandemic; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications services; accidents; labor (d) The Master Trustee may consult with counsel or independent auditor and the written disputes; acts of civil or military authority or governmental action; it being understood that the Master advice of such counsel or independent auditor or any Opinion of Counsel shall be full and complete Trustee shall use commercially reasonable efforts which are consistent with accepted practices in the authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good banking industry to resume performance as soon as reasonably practicable under the circumstances. faith and in reliance thereon. (n) The Master Trustee shall not be required to foreclose on any mortgage, deed of trust or (e) The Master Trustee shall be under no obligation to exercise any of the rights or powers similar instrument securing any Obligations unless first being indemnified to its satisfaction and will not vested in it by this Master Indenture whether on its own motion or at the request or direction of any of the be required to so foreclose if doing so could subject the Master Trustee to any environmental liability or Holders pursuant to this Master Indenture which shall be in the opinion of the Master Trustee likely to would require the approval on any governmental body or regulator that cannot be obtained. involve expense or liability not otherwise provided for herein, unless one or more Holders or such Holders making such request shall have offered and furnished to the Master Trustee reasonable security Section 5.03 Right to Deal in Obligations and Related Bonds. The Master Trustee may in or indemnity satisfactory to the Master Trustee against the costs, expenses and liabilities which might be good faith buy, sell or hold and deal in any Obligations and Related Bonds with like effect as if it were incurred by it in compliance with such request or direction or otherwise in connection herewith. not such Master Trustee and may commence or join in any action which a Holder or holder of a Related Bond is entitled to take with like effect as if the Master Trustee were not the Master Trustee. (f) The Master Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, Section 5.04 Removal and Resignation of the Master Trustee. The Master Trustee may consent, order, bond, note or other paper or document, but the Master Trustee, in its discretion, may make resign on its motion or may be removed at any time by an instrument or instruments in writing signed by 20 21 PPAB 4993612v5 PPAB 4993612v5

the Holders of not less than a majority of the principal amount of Obligations then Outstanding or, if no expenses and disbursements of its counsel and its agents), except any such expense, disbursement or Event of Default shall have occurred and be continuing, or no event has occurred or is continuing that, advance as may be attributable to its negligence or bad faith. after notice or passage of time or both, would become an Event of Default, by an instrument in writing signed by the Obligated Group Representative. No such resignation or removal shall become effective (c) To indemnify the Master Trustee for, and to hold it harmless against, any loss, liability or unless and until a successor Master Trustee (or temporary successor trustee as provided below) has been expense incurred without negligence or bad faith on its part, arising out of or in connection with the appointed and has assumed the trusts created hereby. Written notice of such resignation or removal shall acceptance or administration of this trust or its duties hereunder, including the costs and expenses of be given to the Members of the Obligated Group, each Holder at the address then reflected on the books defending itself against any claim or liability in connection with the exercise or performance of any of its of the Master Trustee. A successor Master Trustee may be appointed by the Obligated Group powers or duties hereunder. Representative or the Holders at the direction of the Holders of not less than a majority in aggregate principal amount of Obligations Outstanding. In the event a successor Master Trustee has not been Section 5.06 Recitals and Representations. The recitals, statements and representations appointed and qualified within sixty (60) days of the date notice of resignation is given, the Master contained herein, or in any Obligation (excluding the Master Trustee’s authentication on the obligations) Trustee, any Member of the Obligated Group or any Holder may apply to any court of competent shall be taken and construed as made by and on the part of the Members of the Obligated Group, jurisdiction for the appointment of a temporary successor Master Trustee to act until such time as a respectively, and not by the Master Trustee, and the Master Trustee neither assumes nor shall be under successor is appointed as above provided. any responsibility for the correctness of the same.

There shall at all times be a Master Trustee hereunder, which shall be a bank or trust company The Master Trustee makes no representation as to, and is not responsible for, the validity or organized and doing business under the laws of the United States of America or of any state thereof, sufficiency hereof, of the Obligations, or the validity or sufficiency of insurance to be provided. The authorized under such laws to exercise corporate trust powers, subject to supervision or examination by Master Trustee shall be deemed not to have made representations as to the security afforded hereby or federal or state authority, and having a combined capital and surplus of at least $100,000,000, either hereunder or as to the validity or sufficiency of such document. The Master Trustee shall not be directly or by a guarantee of a corporation related to the Master Trustee. If such corporation publishes concerned with or accountable to anyone for the use or application of any moneys which shall be released reports of condition at least annually, pursuant to law or to the requirements of such supervising or or withdrawn in accordance with the provisions hereof. The Master Trustee shall have no duty of inquiry examining authority, then the combined capital and surplus of such corporation will be deemed to be its with respect to any default or Events of Default described herein without receipt by the Master Trustee of combined capital and surplus as set forth in its most recent report of condition so published. If at any written notice of a default or an Event of Default from a Member of the Obligated Group or any Holder. time the Master Trustee ceases to be eligible as above provided, it shall resign immediately in accordance D-13 with the terms of this Section 5.04. Section 5.07 Separate or Co-Master Trustee. At any time or times, for the purpose of meeting any legal requirements of any jurisdiction, the Master Trustee shall have power to appoint, and, Every successor Master Trustee howsoever appointed hereunder shall execute, acknowledge and upon the request of the Holders of at least twenty-five percent (25%) in aggregate principal amount of deliver to its predecessor and also to each Member of the Obligated Group an instrument in writing, Obligations Outstanding, shall appoint, one or more Persons approved by the Master Trustee either to act accepting such appointment hereunder, and thereupon such successor Master Trustee, without further as co-trustee or co-trustees, jointly with the Master Trustee, or to act as separate trustee or separate action, shall become fully vested with all the rights, immunities, powers, trusts, duties and obligations of trustees, and to vest in such person or persons, in such capacity, such rights, powers, duties, trusts or its predecessor, and such predecessor shall execute and deliver an instrument transferring to such obligations as the Master Trustee may consider necessary or desirable, subject to the remaining provisions successor Master Trustee all the rights, powers and trusts of such predecessor. The predecessor Master of this Section. If no Event of Default shall have occurred and be continuing, or no event has occurred or Trustee shall execute any and all documents necessary or appropriate to convey all interest it may have to is continuing that, after notice or passage of time or both, would become an Event of Default, any co- the successor Master Trustee. The predecessor Master Trustee shall promptly deliver all material records trustee or separate trustee appointed pursuant to this Section shall be subject to the written approval of the relating to the trust or copies thereof and, on request, communicate all material information it may have Obligated Group, evidenced by an instrument in writing signed by the Obligated Group Representative. obtained concerning the trust to the successor Master Trustee. Every co-trustee or separate trustee shall, to the extent permitted by law but to such extent only, Each successor Master Trustee, not later than ten (10) days after its assumption of the duties be appointed subject to the following terms, namely: hereunder, shall mail a notice of such assumption to each registered Holder. (a) The Obligations shall be authenticated and delivered solely by the Master Trustee. Section 5.05 Compensation and Reimbursement. Each Member of the Obligated Group, respectively, agrees: (b) All rights, powers, trusts, duties and obligations conferred or imposed upon the trustees shall be conferred or imposed upon and exercised or performed by the Master Trustee, or by the Master (a) To pay the Master Trustee from time to time reasonable compensation for all services Trustee and such co-trustee or co-trustees or separate trustee or separate trustees jointly, as shall be (including, should it become necessary, additional compensation for extraordinary services) rendered by it provided in the instrument appointing such co-trustee or co-trustees or separate trustee or separate hereunder (which compensation shall not be limited by any provision of law in regard to the trustees, except to the extent that, under the law of any jurisdiction in which any particular act or acts are compensation of a trustee of an express trust). to be performed, the Master Trustee shall be incompetent or unqualified to perform such act or acts, in which event such act or acts shall be performed by such co-trustee or co-trustees or separate trustee or (b) Except as otherwise expressly provided herein, to reimburse the Master Trustee upon its separate trustees. request for all reasonable expenses, disbursements and advances incurred or made by the Master Trustee, including fees on collection and enforcement and extraordinary and out-of-pocket costs and expenses, in accordance with any provision of this Master Indenture (including the reasonable compensation and the 22 23 PPAB 4993612v5 PPAB 4993612v5

(c) Any request in writing by the Master Trustee to any co-trustee or separate trustee to take (b) any and all liability or loss, cost or expense including, without limitation, reasonable or to refrain from taking any action hereunder shall be sufficient warrant for the taking, or the refraining attorneys’ fees, resulting from or arising out of any loss or damage to property or any injury to or death of from taking, of such action by such co-trustee or separate trustee. any person arising out of, pertaining to, or having any connection with, any construction project or the financing thereof (whether or not arising out of acts omissions, or negligence of the State or any of its (d) Any co-trustee or separate trustee may, to the extent permitted by law, delegate to the agents, contractors, servants, employees, licensees, lessees or assignees). Master Trustee the exercise of any right, power, trust, duty or obligation, discretionary or otherwise. This indemnification covenant and the obligations of the Members of the Obligated Group under (e) The Master Trustee at any time, by any instrument in writing, may accept the resignation this Section 5.08 shall survive the resignation or removal of the Master Trustee and the termination of the of or remove any co-trustee or separate trustee appointed under this Section. Upon the request of the Master Indenture and any Supplemental Indenture. Master Trustee, the Members of the Obligated Group shall join with the Master Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such Section 5.09 Master Trustee Receipt of Instructions or Directions via Electronic Means. resignation or removal. The Master Trustee, the Members of the Obligated Group agree that the Master Trustee will accept and act upon instructions, including funds transfer instructions (“Instructions”), given pursuant to this Master (f) No trustee or any paying agent hereunder shall be personally liable by reason of any act Indenture and delivered using Electronic Means; provided, however, that the Members of the Obligated or omission of any other trustee or paying agent hereunder, nor will the act or omission of any trustee or Group shall provide to the Master Trustee an incumbency certificate listing officers with the authority to paying agent hereunder be imputed to any other trustee or paying agent. provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Members of the Obligated Group, as (g) Any demand, request, direction, appointment, removal, notice, consent, waiver or other applicable, whenever a person is to be added or deleted from the listing. If a Member of the Obligated action in writing delivered to the Master Trustee shall be deemed to have been delivered to each such co- Group elects to give the Master Trustee Instructions using Electronic Means, the Master Trustee’s trustee or separate trustee. understanding of such Instructions shall be deemed controlling. Each of the Members of the Obligated Group understands and agrees that the Master Trustee cannot determine the identity of the actual sender (h) Any moneys, papers, securities or other items of personal property received by any such of such Instructions and that the Master Trustee shall conclusively presume that directions that purport to co-trustee or separate trustee hereunder shall forthwith, so far as may be permitted by law, be turned over have been sent by an Authorized Officer listed on the incumbency certificate provided to the Master to the Master Trustee. Trustee have been sent by such Authorized Officer. Each of the Members of the Obligated Group shall D-14 be responsible for ensuring that only Authorized Officers transmit such Instructions to the Master Trustee Upon the acceptance in writing of such appointment by any such co-trustee or separate trustee, it and that the Members of the Obligated Group and all Authorized Officers are solely responsible to shall be vested with such rights, powers, duties or obligations, as shall be specified in the instrument of safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or appointment jointly with the Master Trustee (except insofar as local law makes it necessary for any such authentication keys upon receipt by the Members of the Obligated Group. The Master Trustee shall not co-trustee or separate trustee to act alone) subject to all the terms hereof. Every such acceptance shall be be liable for any losses, costs or expenses arising directly or indirectly from the Master Trustee’s reliance filed with the Master Trustee. To the extent permitted by law, any co-trustee or separate trustee may, at upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent any time by an instrument in writing, constitute the Master Trustee its or his attorney-in-fact and agent, with a subsequent written instruction. Each of the Members of the Obligated Group agrees: (i) to assume with full power and authority to perform all acts and things and to exercise all discretion on its or his all risks arising out of the use of Electronic Means to submit Instructions to the Master Trustee, including behalf and in its or his name. without limitation the risk of the Master Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated In case any co-trustee or separate trustee shall die, become incapable of acting, resign or be with the various methods of transmitting Instructions to the Master Trustee and that there may be more removed, all rights, powers, trusts, duties and obligations of said co-trustee or separate trustee shall, so far secure methods of transmitting Instructions than the method(s) selected by the Corporation; (iii) that the as permitted by law, vest in and be exercised by the Master Trustee unless and until a successor co-trustee security procedures (if any) to be followed in connection with its transmission of Instructions provide to it or separate trustee shall be appointed in the manner herein provided. a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Master Trustee immediately upon learning of any compromise or unauthorized use of the Section 5.08 Indemnification of Master Trustee. The Members of the Obligated Group shall security procedures. jointly and severally, to the extent permitted by law, indemnify and hold harmless the Master Trustee and its officers, directors, members, employees, attorneys and agents (each an “Indemnified Party” and ARTICLE VI collectively, the “Indemnified Parties”) from: (a) any liability, cost or expense including, without limitation, reasonable attorneys’ fees, SUPPLEMENTS AND AMENDMENTS resulting from or arising out of the administration of the Obligations, the Master Indenture, any Section 6.01 Supplements Not Requiring Consent of Holders. Each Member of the Supplemental Indenture and any other instrument or agreement related thereto and hereto and the Obligated Group, when authorized by resolution or other action of equal formality by its Governing obligations and duties imposed on an Indemnified Party thereby and hereby, other than any such liability, Body, and the Master Trustee may, without the consent of or notice to any of the Holders, enter into one cost or expense which is adjudicated to have resulted from the negligence or willful misconduct of the or more Supplements for one or more of the following purposes: Master Trustee; and (a) To cure any ambiguity or formal defect or omission herein which shall not materially and adversely affect the interests of the Holders. 24 25 PPAB 4993612v5 PPAB 4993612v5

(b) To correct or supplement any provision herein which may be inconsistent with any other following such notice, the Master Trustee shall receive an instrument or instruments purporting to be provision herein, or to make any other provisions with respect to matters or questions arising hereunder executed by the Holders of not less than the aggregate principal amount or number of Obligations and which shall not materially and adversely affect the interests of the Holders. specified in subsection (a) for the Supplement in question which instrument or instruments shall refer to the proposed Supplement and shall specifically consent to and approve the execution thereof in (c) To grant or confer ratably upon all of the Holders any additional rights, remedies, powers substantially the form of the copy thereof as on file with the Master Trustee, thereupon, but not otherwise, or authority that may lawfully be granted or conferred upon them subject to the provisions of the Master Trustee may execute such Supplement in substantially such form, without liability or Section 6.02(a). responsibility to any Holder, whether or not such Holder shall have consented thereto.

(d) To qualify this Master Indenture under the Trust Indenture Act of 1939, as amended, or (c) Any such consent shall be binding upon the Holder giving such consent and upon any corresponding provisions of federal laws from time to time in effect. subsequent Holder of such Obligation and of any Obligation issued in exchange therefor (whether or not such subsequent Holder thereof has notice thereof), unless such consent is revoked in writing by the (e) To create and provide for the issuance of Obligations as permitted hereunder. Holder of such Obligation giving such consent or by a subsequent Holder thereof by filing with the Master Trustee, prior to the execution by the Master Trustee of such Supplement, such revocation and, if (f) To obligate a successor to any Member of the Obligated Group if permitted and provided such Obligation is transferable by delivery, proof that such Obligation is held by the signer of such for by any Supplement. revocation in the manner permitted by Section 8.01 of this Master Indenture. At any time after the Holders of the required principal amount or number of Obligations shall have filed their consents to the (g) To comply with the provisions of any federal or state securities law. Supplement, the Master Trustee shall make and file with each Member of the Obligated Group a written statement to that effect. Such written statement shall be conclusive that such consents have been so filed. Section 6.02 Supplements Requiring Consent of Holders. (d) If the Holders of the required principal amount of the Obligations Outstanding shall have (a) Other than Supplements referred to in Section 6.01 and subject to the terms and consented to and approved the execution of such Supplement as herein provided, no Holder shall have provisions and limitations contained in this Article, the Holders of not less than a majority in aggregate any right to object to the execution thereof, or to object to any of the terms and provisions contained principal amount of Obligations then Outstanding shall have the right, from time to time, anything therein or the operation thereof, or in any manner to question the propriety of the execution thereof, or to contained herein to the contrary notwithstanding, to consent to and approve the execution by each enjoin or restrain the Master Trustee or any Member of the Obligated Group from executing the same or D-15 Member of the Obligated Group, when authorized by resolution or other action of equal formality by its from taking any action pursuant to the provisions thereof. Governing Body, and the Master Trustee of such Supplements as shall be deemed necessary and desirable for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the Section 6.03 Execution and Effect of Supplements. terms or provisions contained herein; provided, however, nothing in this Section shall permit or be construed as permitting a Supplement which would: (a) In executing any Supplement permitted by this Article, the Master Trustee shall be entitled to receive and to rely upon an Opinion of Counsel stating that the execution of such Supplement (i) Effect a change in the times, amounts or currency of payment of the principal of, is authorized or permitted hereby and that all conditions precedent thereto have been satisfied. The redemption premium, if any, and interest or other payment on any Obligation or a reduction in the Master Trustee may but shall not be obligated to enter into any such Supplement which affects the Master principal amount or redemption price of any Obligation or the rate of interest thereon, without the Trustee’s own rights, duties or immunities. consent of the Holder of such Obligation; (b) Upon the execution and delivery of any Supplement in accordance with this Article, the (ii) Permit the preference or priority of any Obligation over any other Obligation, provisions hereof shall be modified in accordance therewith and such Supplement shall form a part hereof without the consent of the Holders of all Obligations then Outstanding; or for all purposes and every Holder of an Obligation theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. (iii) Reduce the aggregate principal amount of Obligations then Outstanding the consent of the Holders of which is required to authorize such Supplement without the consent of (c) Any Obligation authenticated and delivered after the execution and delivery of any the Holders of all Obligations then Outstanding. Supplement in accordance with this Article may, and if required by the issuer of such Obligation or the Master Trustee shall, bear a notation in form approved by the Master Trustee as to any matter provided (b) If at any time each Member of the Obligated Group shall request the Master Trustee to for in such Supplement. If the issuer of any Obligations then Outstanding or the Master Trustee shall so enter into a Supplement pursuant to this Section, which request is accompanied by a copy of the determine, new Obligations so modified as to conform in the opinion of the Master Trustee and the resolution or other action of its Governing Body certified by its secretary or any assistant secretary or if it Governing Body of such issuer to any such Supplement may be prepared and executed by the issuer and has no secretary or assistant secretary, its comparable officer, and the proposed Supplement, the Master authenticated and delivered by the Master Trustee in exchange for and upon surrender of Obligations then Trustee shall, at the expense of the Obligated Group, cause notice of the proposed execution of such Outstanding. Supplement to be mailed, postage prepaid, to all Holders. Such notice shall briefly set forth the nature of the proposed Supplement and shall state that copies thereof are on file at the Corporate Trust Office for inspection by all Holders. The Master Trustee shall not, however, be subject to any liability to any Holder by reason of its failure to mail the notice required by this Section, and any such failure shall not affect the validity of such Supplement when approved and consented to as provided in this Section. If,

26 27 PPAB 4993612v5 PPAB 4993612v5

ARTICLE VII such owner of Related Bonds bears to the aggregate principal amount of all Related Bonds then outstanding; provided, however, if the Related Bond Indenture so provides, if at any time a letter of credit SATISFACTION AND DISCHARGE OF INDENTURE or bond insurance policy secures payment of the principal of and interest on such Related Bonds, then the provider of such letter of credit or bond insurance policy shall be deemed to be the holders of such Section 7.01 Satisfaction and Discharge of Indenture. If (a) the Obligated Group Related Bonds except during any period when such provider has failed to honor its obligations under such Representative shall deliver to the Master Trustee for cancellation all Obligations theretofore letter of credit or bond insurance policy, and (iii) the principal amount of any Obligation that evidences authenticated (other than any Obligations which shall have been mutilated, destroyed, lost or stolen and and secures Derivative Obligations shall be deemed to be zero and such Obligation shall be disregarded which shall have been replaced or paid as provided in the Supplement) and not theretofore cancelled, or for purposes of any request, direction or consent of the Holders requested or permitted hereunder unless (b) all Obligations not theretofore cancelled or delivered to the Master Trustee for cancellation shall have the related Derivative Agreement has terminated, in which case the principal amount of such Obligation become due and payable and money sufficient to pay the same shall have been deposited with the Master shall be deemed to be the amount of any termination payment owed to the Holder of such Obligation: Trustee, or (c) all Obligations that have not become due and payable and have not been cancelled or provided, however, that no Supplement that would alter the priority of such Obligation with respect to the delivered to the Master Trustee for cancellation shall be Defeased Obligations, and if in all cases the Pledged Assets or application of moneys under Section 4.04 of this Master Indenture shall be permitted Members of the Obligated Group shall also pay or cause to be paid all other sums payable hereunder by without the consent of the Holder of such Obligation. the Members of the Obligated Group or any thereof, then this Master Indenture shall cease to be of further effect, and the Master Trustee, on demand of the Members of the Obligated Group and, if requested by (b) As to any request, direction, consent or other instrument provided hereby to be signed the Master Trustee, on being furnished an Opinion of Counsel to the effect that all conditions precedent to and executed by the Holders, such action may be in any number of concurrent writings, shall be of similar the satisfaction and discharge of this Master Indenture have been satisfied, and at the cost and expense of tenor, and may be signed or executed by such Holders in person or by agent appointed in writing. In the Members of the Obligated Group, shall execute proper instruments acknowledging satisfaction of and connection with the initial offering and sale of Related Bonds, the underwriters (or their representative) of discharging this Master Indenture. Each Member of the Obligated Group, respectively, hereby agrees to such Related Bonds shall be deemed to be the initial Holders thereof or, if such Related Bonds so provide, reimburse the Master Trustee for any costs or expenses theretofore and thereafter properly incurred by the may be appointed as attorney-in-fact by the initial purchasers of such Related Bonds for the purpose of Master Trustee in connection with this Master Indenture or such Obligations. consenting to any request, direction, consent or other instrument to be signed and executed by the Holders. Section 7.02 Payment of Obligations after Discharge of Lien. Notwithstanding the discharge of the lien hereof as in this Article provided, the Master Trustee shall nevertheless retain such rights, (c) Proof of the execution of any such request, direction, consent or other instrument or of D-16 powers and duties hereunder as may be necessary and convenient for the payment of amounts due or to the writing appointing any such agent and of the ownership of Obligations, if made in the following become due on the Obligations and the registration, transfer, exchange and replacement of Obligations as manner, shall be sufficient for any of the purposes hereof and shall be conclusive in favor of the Master provided herein. Trustee and the Members of the Obligated Group, with regard to any action taken by them, or either of them, under such request, direction or consent or other instrument, namely: Nevertheless, any moneys held by the Master Trustee or any paying agent for the payment of the principal of, redemption premium, if any, or interest or other payment on any Obligation remaining (i) The fact and date of the execution by any person of any such writing may be unclaimed for five (5) years after the principal of all Obligations has become due and payable, whether at proved by the certificate of any officer in any jurisdiction who by law has power to take maturity or upon proceedings for redemption or by declaration as provided herein, shall then be treated as acknowledgments in such jurisdiction, that the person signing such writing acknowledged before abandoned property pursuant to the provisions of Section 116B-53 of the General Statutes of North him the execution thereof, or by the affidavit of a witness of such execution; and Carolina, as amended, or any successor provision, and the Master Trustee shall report and remit this property to the Escheat Fund according to the requirements of Chapter 116B of the North Carolina (ii) The ownership of Related Bonds may be proved by the registration books for General Statutes (or any successor provision), and thereafter the Holders of any Obligations shall look such Related Bonds maintained pursuant to the Related Bond Indenture. only to the Escheat Fund for payment and then only to the extent of the amounts so received, without any interest thereon, and the Master Trustee and the Members of the Obligated Group shall have no (d) Nothing in this Section shall be construed as limiting the Master Trustee to the proof responsibility with respect to such money. herein specified, it being intended that the Master Trustee may accept any other evidence of the matters herein stated which it may deem sufficient. ARTICLE VIII (e) Any action taken or suffered by the Master Trustee pursuant to any provision hereof upon

the request or with the assent of any person who at the time is the Holder of any Obligation, shall be CONCERNING THE HOLDERS conclusive and binding upon all future Holders of the same Obligation.

Section 8.01 Evidence of Acts of Holders. Section 8.02 Obligations or Related Bonds Owned by Members of Obligated Group. In determining whether the Holders of the requisite aggregate principal amount of Obligations have (a) In the event that any request, direction or consent is requested or permitted hereunder of concurred in any demand, direction, request, notice, consent, waiver or other action under this Master the Holders, (i) each Holder Representative (as defined in the Related Bond Indenture for the Series 2019 Indenture, Obligations or Related Bonds that are owned by any Member of the Obligated Group or by any Bonds) shall be deemed to be the Holder of Obligation No.1 for purposes of any request, direction or person directly or indirectly controlling or controlled by or under direct or indirect common control with consent of the Holders requested or permitted hereunder, (ii) the registered owners of Related Bonds then such Member shall be disregarded and deemed not to be Outstanding or outstanding under the Related outstanding shall be deemed to be such Holders for the purpose of any such request, direction or consent Bond Indenture, as the case may be, for the purpose of any such determination, provided that for the in the proportion that the aggregate principal amount of Related Bonds then outstanding held by each 28 29 PPAB 4993612v5 PPAB 4993612v5

purposes of determining whether the Master Trustee shall be protected in relying on any such direction, (b) When the date on which principal of or interest or premium or other payment on any consent or waiver, only such Obligations or Related Bonds which the Trustee has actual notice or Obligation is due and payable is not a Business Day, payment may be made on the next Business Day knowledge are so owned shall be so disregarded. Obligations or Related Bonds so owned that have been with the same effect as though payment were made on the due date, and, if such payment is made, no pledged in good faith may be regarded as Outstanding or outstanding under the Related Bond Indenture, interest shall accrue from and after such due date. as the case may be, for purposes of this Section, if the pledgee shall establish to the satisfaction of the Master Trustee the pledgee’s right to vote such Obligations or Related Bonds and that the pledgee is not a Section 9.04 Governing Law. This Master Indenture shall be governed by and construed in person directly or indirectly controlling or controlled by or under direct or indirect common control with accordance with the laws of the State of North Carolina. any Member of the Obligated Group. In case of a dispute as to such right, any decision by the Master Trustee taken upon the advice of counsel shall be full protection to the Master Trustee. Section 9.05 Counterparts. This Master Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute one instrument. Section 8.03 Instruments Executed by Holders Bind Future Holders. At any time prior to (but not after) the Master Trustee takes action in reliance upon evidence, as provided in Section 8.01, of Section 9.06 Immunity of Individuals. No recourse shall be had for the payment of the the taking of any action by the Holders of the percentage in aggregate principal amount of Obligations principal of, premium, if any, interest on or other payment on any Obligations issued hereunder or for any specified herein in connection with such action, any Holder of such an Obligation or Related Bond that is claim based thereon or upon any obligation, covenant or agreement herein against any past, present or shown by such evidence to be included in Obligations the Holders of which have consented to such action future officer, director, trustee, member, employee or agent of any Member of the Obligated Group, and may, by filing written notice with the Master Trustee and upon proof of holding as provided in all such liability of any such individual as such is hereby expressly waived and released as a condition of Section 8.01, revoke such action so far as concerns such Obligation or Related Bond. Except upon such and in consideration for the execution hereof and the issuance of Obligations issued hereunder. revocation any such action taken by the Holder of an Obligation or Related Bond in any direction, demand, request, waiver, consent, vote or other action of the Holder of such Obligation or Related Bond Section 9.07 Binding Effect. This instrument shall inure to the benefit of and shall be binding which by any provision hereof is required or permitted to be given shall be conclusive and binding upon upon each Member of the Obligated Group, the Master Trustee and their respective successors and such Holder and upon all future Holders and owners of such Obligation or Related Bond, and of any assigns subject to the limitations contained herein. Obligation or Related Bond issued in lieu thereof, whether or not any notation in regard thereto is made upon such Obligation or Related Bond. Any action taken by the Holders of the percentage in aggregate Section 9.08 Notices. principal amount of Obligations specified herein in connection with such action shall be conclusively D-17 binding upon each Member of the Obligated Group, the Master Trustee and the Holders of all of such (a) Unless otherwise expressly specified or permitted by the terms hereof, all notices, Obligations or Related Bonds. consents or other communications required or permitted hereunder shall be deemed sufficiently given or served if given in writing, mailed by United States registered or certified mail, return receipt requested, ARTICLE IX postage prepaid, addressed as follows:

(i) If to any Member of the Obligated Group, addressed to Aldersgate at Shalom MISCELLANEOUS PROVISIONS Park, Inc., at 3800 Shamrock Drive, Charlotte, North Carolina 28215; Attention: Suzanne H. Pugh; Section 9.01 Limitation of Rights. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Master Indenture or the Obligations issued (ii) If to the Master Trustee, addressed to it at The Bank of New York Mellon Trust hereunder is intended or shall be construed to give to any Person other than each Member of the Company, N.A., 10161 Centurion Parkway North, Jacksonville, Florida 32256; Attention: Obligated Group, the Master Trustee, and the Holders hereunder any legal or equitable right, remedy or Corporate Trust Services; or claim under or in respect to this Master Indenture or any covenants, conditions and provisions herein contained; this Master Indenture and all of the covenants, conditions and provisions hereof being intended (iii) If to any Holder, addressed to such Holder at the address shown on the books of to be and being for the sole and exclusive benefit of the parties mentioned in this Section. the Master Trustee kept pursuant hereto.

Section 9.02 Severability. If any one or more sections, clauses, sentences or parts hereof shall (b) Any Member of the Obligated Group, or the Master Trustee may from time to time by for any reason be questioned in any court of competent jurisdiction and shall be adjudged invalid or notice in writing to the other and to the Holders designate a different address or addresses for notice unenforceable, such judgment shall not affect, impair or invalidate the remaining provisions hereof, or the hereunder. Obligations issued pursuant hereto, but shall be confined to the specific sections, clauses, sentences and parts so adjudged. (c) The Master Trustee shall have the right to accept and act upon directions given pursuant to this Master Indenture, any Supplement, or any other document reasonably relating to this Master Section 9.03 Holidays. Except to the extent a Supplement or an Obligation provides Indenture and delivered using Electronic Means (as defined below); provided, however, that the otherwise: Corporation shall provide to the Master Trustee an incumbency certificate listing Authorized Officers with the authority to provide such directions (each, an "Authorized Officer") and containing specimen (a) Subject to subsection (b) of this Section, when any action is provided herein to be done signatures of such Authorized Officers, which incumbency certificate shall be amended whenever a on a day or within a time period named, and the day or the last day of the period is not a Business Day, person is to be added or deleted from the listing. If the Corporation elects to give the Master Trustee the action may be done on the next Business Day with effect as though done on the day or within the time directions using Electronic Means and the Master Trustee in its discretion elects to act upon such period named. 30 31 PPAB 4993612v5 PPAB 4993612v5

directions, the Master Trustee's understanding of such directions shall be deemed controlling. The Corporation understands and agrees that the Master Trustee cannot determine the identity of the actual IN WITNESS WHEREOF, the Corporation has caused these presents be signed in its name and sender of such directions and that the Master Trustee shall conclusively presume that directions that on its behalf by its President and, to evidence its acceptance of the trusts hereby created, the Master purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee has caused these presents to be signed in its name and on its behalf by a duly authorized officer, Master Trustee have been sent by such Authorized Officer. The Corporation shall each be responsible for all of as of the day and year first above written. ensuring that only Authorized Officers transmit such directions to the Master Trustee and that all Authorized Officers treat applicable user and authorization codes, passwords, and/or authentication keys ALDERSGATE AT SHALOM PARK, INC., as confidential and with extreme care. The Master Trustee shall not be liable for any losses, costs, or expenses arising directly or indirectly from the Master Trustee's reliance upon and compliance with such directions notwithstanding such directions conflict or are inconsistent with a subsequent written direction. The Corporation agrees: (i) to assume all risks arising out of the use of Electronic Means to submit By: directions to the Master Trustee, including without limitation the risk of the Master Trustee acting on Suzanne H. Pugh unauthorized directions, and the risk of interception and misuse by third parties; (ii) that it is fully President informed of the protections and risks associated with the various methods of transmitting directions to the Master Trustee and that there may be more secure methods of transmitting directions; (iii) that the security procedures (if any) to be followed in connection with its transmission of directions provide to it a THE BANK OF NEW YORK MELLON TRUST COMPANY, commercially reasonable degree of protection in light of its particular needs and circumstances and (iv) to N.A., as Master Trustee notify the Master Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. "Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys, or another method or system specified by the Master Trustee as By: available for use in connection with its services hereunder. Vice President

Section 9.09 Consents and Approvals. Whenever the written consent or approval of the D-18 Obligated Group, or the Master Trustee shall be required under the provisions of this Master Indenture, [MASTER TRUST INDENTURE] such consent or approval shall not be unreasonably withheld or delayed. Unless otherwise specified herein, consents of the Obligated Group shall be executed and delivered on behalf of the Obligated Group by the Obligated Group Representative.

Section 9.10 Electronic Transactions. The parties agree that the transactions described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law.

32 33 PPAB 4993612v5 PPAB 4993612v5

SUPPLEMENTAL INDENTURE FOR OBLIGATION NO. 1

between

ALDERSGATE AT SHALOM PARK, INC.

and

D-19 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., [THIS PAGE INTENTIONALLY LEFT BLANK]

as Master Trustee

Dated as of November 1, 2019

Supplementing the

Master Trust Indenture

Dated as of November 1, 2019

PPAB 4992844v7

“Related Bond Trustee” means The Bank of New York Mellon Trust Company, N.A., a national THIS SUPPLEMENTAL INDENTURE FOR OBLIGATION NO. 1, dated as of November 1, banking association duly existing under the laws of the United States of America, and any successor to its 2019 (“Supplement No. 1”), between ALDERSGATE AT SHALOM PARK, INC. (the “Corporation”), a duties under the Related Bond Indenture. North Carolina nonprofit corporation, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized and validly existing under the laws of the United States of “Supplement No. 1” means this Supplemental Indenture for Obligation No. 1. America, as master trustee (the “Master Trustee”) under the Master Trust Indenture, dated as of November 1, 2019 (as amended or supplemented from time to time in accordance with its terms, the Section 2. Issuance of Obligation No. 1. There is hereby created and authorized to be “Master Indenture”), between the Corporation and the Master Trustee, issued Obligation No. 1 in the aggregate principal amount of ______Dollars ($______) designated “Aldersgate at Shalom Park, Inc. Obligation No. 1.” Obligation No. 1 shall be W I T N E S S E T H: dated as of November __, 2019, and shall be payable in such amounts, at such times and in such manner and shall have such other terms and provisions as are set forth in the form of Obligation No. 1 attached WHEREAS, the Corporation has entered into the Master Indenture which provides for the hereto as Appendix A. issuance by any Member of the Obligated Group (as defined in the Master Indenture) of its obligations thereunder, upon such Member of the Obligated Group and the Master Trustee entering into an indenture The aggregate principal amount of Obligation No. 1 is limited to the amount stated in this Section supplemental to the Master Indenture to issue such obligations; and except for any Obligation authenticated and delivered in lieu of another Obligation as provided in Section 6 hereof with respect to any Obligation destroyed, lost or stolen, or, subject to the provisions of WHEREAS, the Corporation desires to issue Obligation No. 1 hereunder to evidence its Section 5 hereof, upon transfer of registration of Obligation No. 1. obligation arising from the lending to the Corporation by the Public Finance Authority (the “Authority”) of the proceeds of the Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Section 3. Payments on Obligation No. 1; Credits. Park Pre-Development Project), Series 2019 (the “Related Bonds”) pursuant to a Loan Agreement, dated as of November 1, 2019 (as amended or supplemented from time to time in accordance with its terms, the (a) The principal of and interest and any applicable redemption premium due with respect to “Loan Agreement”), between the Authority and the Corporation; and Obligation No. 1 are payable in any lawful money of the United States of America. Except as provided in subsection (b) of this Section with respect to credits, Section 4 hereof regarding prepayment and Section 8 WHEREAS, all acts and things necessary to constitute this Supplement No. 1 a valid indenture hereof regarding redemption, all payments due on Obligation No. 1 shall be made at the times and in the D-20 and agreement according to its terms have been done and performed, and the Corporation has duly amounts specified in Obligation No. 1 in clearing house funds by the Corporation depositing the same authorized the execution and delivery of this Supplement No. 1 and Obligation No. 1; with or to the account of the Related Bond Trustee at or prior to the opening of business on the day such payments shall become due or payable (or the next succeeding Business Day if such date is not a Business NOW, THEREFORE, in consideration of the premises, of the acceptance by the Master Trustee Day), and giving notice to the Master Trustee of each such payment on Obligation No. 1, specifying the of the trusts hereby created, and of the giving of consideration for and acceptance of Obligation No. 1 by amount paid and identifying such payment as a payment on Obligation No. 1. the holder thereof, the Corporation covenants and agrees with the Master Trustee, for the benefit of the holders from time to time of Obligation No. 1, as follows: (b) The Corporation shall receive credit for payment on Obligation No. 1, in addition to any credits resulting from payment or prepayment from other sources, as follows: Section 1. Definitions. For the purposes hereof unless the context otherwise indicates the following words and phrases shall have the following meanings: (i) On payments of interest on Obligation No. 1 in an amount equal to moneys deposited in the Bond Fund created under the Related Bond Indenture which amounts are (a) All capitalized terms used herein shall have the meanings given such terms in the Master available to pay interest on the Related Bonds and to the extent such amounts have not previously Indenture unless the context clearly indicates otherwise. been credited against payments on Obligation No. 1.

(b) “Authority” means the Public Finance Authority, its successors and assigns. (ii) On payments of principal on Obligation No. 1 in an amount equal to moneys deposited in the Bond Fund created under the Related Bond Indenture which amounts are “Corporation” means Aldersgate at Shalom Park, Inc., a nonprofit corporation duly organized available to pay principal of the Related Bonds and to the extent such amounts have not and validly existing under and by virtue of the laws of the State of North Carolina, and any successor or previously been credited against payments on Obligation No. 1. successors thereto. (iii) On payments of the Redemption Price of and interest on, respectively, Obligation “Holder Representative” means HJS Advisors, Inc. and BB&T Capital Markets. No. 1 in an amount equal to the Redemption Price of and interest on Related Bonds which have been called by the Related Bond Trustee for redemption prior to maturity and for the redemption “Obligation No. 1” means the Obligation issued pursuant to this Supplement No. 1. of which sufficient amounts in cash are on deposit in the Redemption Fund or the Bond Fund created under the Related Bond Indenture. A credit shall also be made against the payment on “Redemption Price” shall have the meaning given such term in the Related Bond Indenture. Obligation No. 1 which would be due, but for such call for redemption, to pay the Redemption Price of and interest on such Related Bonds when due. “Related Bond Indenture” means the Trust Agreement securing the Related Bonds, dated as of November 1, 2019, between the Authority and the Related Bond Trustee, as amended or supplemented from time to time. 2 PPAB 4992844v7 PPAB 4992844v7

(iv) On payments of principal of and interest on, respectively, Obligation No. 1 in an (d) Prior to due presentment by the owner for registration of transfer, the Corporation and the amount equal to the principal amount of and interest on Related Bonds acquired by any Member Master Trustee may deem and treat the person in whose name Obligation No. 1 is registered as the of the Obligated Group and delivered to the Related Bond Trustee and cancelled or purchased by absolute owner for all purposes; and neither the Corporation nor the Master Trustee shall be affected by the Related Bond Trustee and cancelled. A credit shall also be made against the payment on any notice to the contrary. All payments made to the registered owner shall be valid, and, to the extent of Obligation No. 1 which would be due, but for such cancellation, to pay the principal of and the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable on Obligation interest on such Related Bonds when due. No. 1.

Section 4. Prepayment of Obligation No. 1. Section 6. Mutilation, Destruction, Loss and Theft of Obligation No. 1. If (a) Obligation No. 1 is surrendered to the Master Trustee in a mutilated condition, or the Corporation and the Master (a) So long as all amounts which have become due under Obligation No. 1 have been paid, Trustee receive evidence to their satisfaction of the destruction, loss or theft of Obligation No. 1 and the Corporation may at any time and from time to time pay in advance and in any order of due dates all or (b) there is delivered to the Corporation and the Master Trustee such security or indemnity as may be part of the amounts to become due under Obligation No. 1. Prepayment may be made by payments of required by them to hold them harmless, then, in the absence of proof satisfactory to the Corporation and cash and/or surrender of Related Bonds as contemplated by Section 3 hereof. All such prepayments (and the Master Trustee that Obligation No. 1 has been acquired by a bona fide purchaser and upon the Holder the additional payment of any amount necessary to pay the applicable premium, if any, payable upon the paying the reasonable expenses of the Corporation and the Master Trustee, the Corporation shall cause to redemption of Related Bonds) shall be deposited upon receipt in the Redemption Fund created under the be executed and the Master Trustee shall authenticate and deliver, in exchange for such mutilated Related Bond Indenture and, at the request of and as determined by the Corporation, used for the Obligation No. 1, a new Obligation No. 1 of like principal amount, date and tenor. Every mutilated redemption or purchase of Outstanding (within the meaning of that term as used in the Related Bond Obligation No. l so surrendered to the Master Trustee shall be cancelled by it and delivered to, or upon Indenture) Related Bonds in the manner and subject to the terms and conditions set forth in the Related the order of, the Corporation. If any such mutilated, destroyed, lost or stolen Obligation No. 1 has Bond Indenture. Notwithstanding any such prepayment or surrender of Related Bonds, as long as any become or is about to become due and payable, Obligation No. 1 may be paid when due instead of Related Bonds remain Outstanding (within the meaning of that term as used in the Related Bond delivering a new Obligation No. 1. Indenture) or any additional payments required to be made hereunder remain unpaid, the Corporation shall not be relieved of its obligations hereunder. Section 7. Execution and Authentication of Obligation No. 1. Obligation No. 1 shall be manually executed for and on behalf of the Corporation by the Chairman, Vice Chairman, President or (b) Prepayments made under subsection (a) of this Section shall be credited against amounts any Vice President of its managing member, and may be attested by the Secretary or any Assistant D-21 to become due on Obligation No. 1 as provided in Section 3 hereof. Secretary of such managing member. If any officer whose signature appears on Obligation No. 1 ceases to be such officer before delivery thereof, such signature shall remain valid and sufficient for all purposes (c) The Corporation may also prepay all of its Indebtedness under Obligation No. 1 by as if such officer had remained in office until such delivery. Obligation No. 1 shall be manually providing for the payment of Related Bonds in accordance with Article XII of the Related Bond authenticated by an authorized officer of the Master Trustee, without which authentication Obligation Indenture. No. 1 shall not be entitled to the benefits hereof.

Section 5. Registration, Numbers, Negotiability and Transfer of Obligation No. 1. Section 8. Right to Redeem. Obligation No. 1 shall be subject to redemption, in whole or in part, prior to the maturity, in an amount equal to the principal amount of any Related Bond (i) called for (a) Obligation No. 1 shall be registered on the register to be maintained by the Master redemption pursuant to the Related Bond Indenture, or (ii) purchased for cancellation by the Related Trustee for that purpose at the Corporate Trust Office of the Master Trustee. Except as provided in Bond Trustee. Obligation No. 1 shall be subject to redemption on the date any Bond shall be so redeemed subsection (b) of this Section, so long as any Related Bond remains Outstanding (within the meaning of or purchased, and in the manner provided herein. that term as used in the Related Bond Indenture), Obligation No. 1 shall consist of a single Obligation registered as to principal and interest in the name of the Related Bond Trustee, and no transfer of Section 9. Partial Redemption of Obligation No. 1. Upon the call for redemption, and the Obligation No. 1 shall be registered under this Supplement No. 1 except for transfers to a successor surrender of, Obligation No. 1 for redemption in part only, the Corporation shall cause to be executed and Related Bond Trustee. the Master Trustee shall authenticate and deliver to or upon the written order of the Holder thereof, at the expense of the Corporation, a new Obligation No. 1 in principal amount equal to the unredeemed portion (b) Upon the principal of all Obligations Outstanding being declared immediately due and of Obligation No. 1, which old Obligation No. 1 so surrendered to the Master Trustee pursuant to this payable upon and during the continuance of an Event of Default, Obligation No. 1 may be transferred and Section 9 shall be cancelled by it and delivered to, or upon the order of, the Corporation. such transfer registered, if and to the extent the Related Bond Trustee requests that the restrictions of subsection (a) of this Section on transfers be terminated. The Corporation may agree with the Holder of Obligation No. 1 that such Holder may, in lieu of surrendering Obligation No. 1 for a new fully registered Obligation No. 1, endorse on Obligation No. 1 a (c) Obligation No. 1 shall be transferable only upon presentation of Obligation No. 1 at the notice of such partial redemption, which notice shall set forth, over the signature of such Holder, the Corporate Trust Office of the Master Trustee by the registered owner or by its duly authorized attorney. payment date, the principal amount redeemed and the principal amount remaining unpaid. Such partial Such transfer shall be without charge to the owner thereof, but any taxes or other governmental charges redemption shall be valid upon payment of the amount thereof to the registered owner of Obligation No. 1 required to be paid with respect to the same shall be paid by the owner requesting such transfer as a and the Obligated Group and the Master Trustee shall be fully released and discharged from all liability to condition precedent to the exercise of such privilege. Upon any such transfer, the Corporation shall the extent of such payment irrespective of whether such endorsement shall or shall not have been made execute and the Master Trustee shall authenticate and deliver in exchange for Obligation No. 1 a new upon the reverse of Obligation No. 1 by the owner thereof and irrespective of any error or omission in registered Obligation, registered in the name of the transferee. such endorsement. 3 4 PPAB 4992844v7 PPAB 4992844v7

Section 10. Effect of Call for Redemption. On the date designated for redemption of the Section 16. Counterparts. This Supplement No. 1 may be executed in several counterparts, Related Bonds, Obligation No. 1 shall become and be due and payable in an amount equal to the each of which shall be an original and all of which shall constitute one instrument. redemption price to be paid by the Corporation on the Related Bonds on such date. If on the date fixed for redemption of Obligation No. 1 moneys for payment of the redemption and accrued interest on the Section 17. Governing Law. This Supplement No. 1 shall be governed by and construed in Related Bonds are held by the Related Bond Trustee, interest on Obligation No. 1 shall cease to accrue accordance with the laws of the State of North Carolina. and said Obligation No. 1 shall cease to be entitled to any benefit or security under the Master Indenture to the extent of said redemption and the amount of Obligation No. 1 so called for redemption shall be [SIGNATURES ARE ON THE FOLLOWING PAGE] deemed paid and no longer Outstanding.

Section 11. Discharge of Supplement. Upon payment by the Corporation of a sum, in cash or Defeasance Obligations (as defined in the Related Bond Indenture), or both, sufficient, together with any other cash and Defeasance Obligations held by the Related Bond Trustee and available for such purpose, to cause all Outstanding Related Bonds to be deemed to have been paid within the meaning of Section 12.01 of the Related Bond Indenture and to pay all other amounts referred to in Section 12.01 of the Related Bond Indenture, accrued and to be accrued to the date of discharge of the Related Bond Indenture, Obligation No. 1 shall be deemed to have been paid and to be no longer Outstanding under the Master Indenture and this Supplement No. 1 shall be discharged.

Section 12. Tax-Exempt Status. The Corporation hereby covenants that, so long as all amounts due or to become due on any Related Bond have not been fully paid to the holder thereof, it will not take any action or fail to take any action which action or failure to act (including any action or failure to act which would result in the alteration or loss of its status as a Tax-Exempt Organization) would result in the interest payable on any Related Bond becoming includable in gross income of the holder thereof for purposes of federal income taxation under the Code. D-22 Section 13. Compliance with Special Covenants. The Corporation covenants and agrees that it will, and will cause any other Members of the Obligated Group to, comply with the provisions of Appendix B to this Supplement No. 1, entitled “SPECIAL COVENANTS,” for so long as Obligation No. 1 is Outstanding and the Related Bonds are Outstanding (as defined in the Related Bond Indenture). The provisions of Appendix B may be amended by the Holder Representative and the Corporation, and any such provisions may be waived by the Holder Representative, without the consent of any other Person. If the Holder Representative notifies the Master Trustee that an Event of Default has occurred under the provisions of Appendix B, an Event of Default shall occur under the Master Indenture. The Master Trustee shall have no duty to monitor compliance with any of the provisions of Appendix B to this Supplement No. 1.

Section 14. Ratification of Master Indenture. As supplemented hereby, the Master Indenture is in all respects ratified and confirmed and the Master Indenture as so supplemented hereby shall be read, taken and construed as one and the same instrument.

Section 15. Severability. If any provision of this Supplement No. 1 shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case and any jurisdiction or jurisdictions or in all jurisdictions, or in all cases, because it conflicts with any other provision or provisions hereof or any constitution, statute, rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to any extent whatever.

The invalidity of any one or more phrases, sentences, clauses, sections or subsections contained in this Supplement No. 1 shall not affect the remaining portions of this Supplement No. 1 or any part thereto.

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APPENDIX A IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its President and to evidence its acceptance of the trusts hereby created the Master [FORM OF OBLIGATION NO. 1] Trustee has caused these presents to be signed in its name and on its behalf by its duly authorized officer, all as of the day and year first above written. ALDERSGATE AT SHALOM PARK, INC. OBLIGATION NO. 1 ALDERSGATE AT SHALOM PARK, INC. FOR VALUE RECEIVED, ALDERSGATE AT SHALOM PARK, INC., a nonprofit corporation duly organized and validly existing under and by virtue of the laws of the State of North Carolina (the “Corporation”), promises to pay to the Public Finance Authority (the “Authority”), or assigns, the By: principal sum of ______DOLLARS ($______), together Suzanne H. Pugh with (a) interest thereon at such rate or rates as in the aggregate will produce an amount equal to the total President of all interest becoming due and payable on the Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project), Series 2019 (the “Related Bonds”), dated THE BANK OF NEW YORK MELLON TRUST COMPANY, the date of delivery thereof in the aggregate principal amount of $______and issued pursuant to a N.A., as Master Trustee Trust Agreement, dated as of November 1, 2019 (as amended or supplemented from time to time in accordance with its terms, the “Related Bond Indenture”), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Related Bond Trustee”), which is incorporated herein by reference and made a part hereof, and (b) such redemption premiums and other amounts, including By: with respect to the Authority Unassigned Rights (as defined in the hereinafter defined Loan Agreement) Vice President as are required to be paid by the Corporation to the Authority as part of the Loan Repayments and other Required Payments as provided in the Loan Agreement, dated as of November 1, 2019 (as amended or supplemented from time to time in accordance with its terms, the “Loan Agreement”), between the [SUPPLEMENT NO. 1]

D-23 Corporation and the Authority, which is incorporated herein by reference and made a part hereof. Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Related Bond Indenture and the Loan Agreement.

The foregoing amounts shall be paid by means of the Loan Repayments which shall be due and payable as follows:

(i) to the credit of the Interest Account, three (3) Business Days prior to each Interest Payment Date, that amount which shall be equal to the interest payable on the Related Bonds, if any, on the next ensuing Interest Payment Date;

(ii) to the credit of the Principal Account, three (3) Business Days prior to the Maturity Date, an amount equal to the principal of all Related Bonds due on the Maturity Date; and

(iii) to the credit of the Interest Account or the Redemption Fund, as applicable, any amount that may from time to time be required to enable the Bond Trustee to pay the interest on and the Redemption Price of Related Bonds as and when Related Bonds are called for redemption.

Notwithstanding the foregoing, no Event of Default shall occur under the Master Indenture if any interest or principal payment payable pursuant to (i) or (ii) above is paid within two days after such payment is due.

This Obligation No. 1 is a single Obligation of the Corporation limited to $______in principal amount, designated as “Aldersgate at Shalom Park, Inc. Obligation No. 1” (“Obligation No. 1” and together with all other Obligations issued under the Master Indenture hereinafter identified, the “Obligations”) issued under and pursuant to Supplemental Indenture for Obligation No. 1, dated as of November 1, 2019 (“Supplement No. 1”), supplementing the Master Trust Indenture, dated as of 7 A-1 PPAB 4992844v7 PPAB 4992844v7

November 1, 2019, between the Corporation and The Bank of New York Mellon Trust Company, N.A., Copies of the Master Indenture are on file at the Corporate Trust Office of the Master Trustee and as trustee (the “Master Trustee”). The Master Trust Indenture, as so supplemented and amended, is reference is hereby made to the Master Indenture for the provisions, among others, with respect to the hereinafter called the “Master Indenture”. This Obligation No. 1, together with all other Obligations nature and extent of the rights of the owners of Obligations issued under the Master Indenture, the terms outstanding under the Master Indenture, is equally and ratably secured by the provisions of the Master and conditions on which, and the purpose for which, Obligations are to be issued and the rights, duties Indenture, the provisions of which are incorporated herein by reference. As provided by Section 3.01 of and obligations of the Corporation and the Master Trustee under the Master Indenture, to all of which the the Master Indenture, each Member of the Obligated Group is jointly and severally liable for this registered owner hereof, by acceptance of this Obligation No. 1, assents. Obligation No. 1. The Master Indenture permits the issuance of additional Obligations under the Master Indenture Principal hereof, interest hereon and any applicable redemption premium are payable in any coin to be secured by the covenants made therein, all of which, regardless of the times of issue or maturity, are or currency of the United States of America which on the payment date is legal tender for the payment of to be of equal rank without preference, priority or distinction of any Obligation issued under the Master public and private debts. All payments hereon shall be payable in clearing house funds by the Indenture over any other such Obligation except as expressly provided or permitted in the Master Corporation depositing the same with or to the account of the Related Bond Trustee at or prior to the Indenture. opening of business on the day such payments shall become due and payable (or the next succeeding Business Day if such date is not a Business Day), and giving notice of payment to the Master Trustee as To the extent permitted by and as provided in the Master Indenture, modifications or changes of provided in the Supplement No. 1. the Master Indenture, of any indenture supplemental thereto, and of the rights and obligations of the Corporation and of the owners of Obligations in any particular may be made by the execution and This Obligation No. 1 is issued for the purpose of evidencing and securing the indebtedness and delivery of an indenture or indentures supplemental to the Master Indenture or any supplemental obligations of the Corporation under the Loan Agreement (including, but not limited to those payment indenture. Certain modifications or changes which would affect the rights of the owners of this obligations in respect of the Authority Unassigned Rights), and resulting from the making available to the Obligation No. 1 may be made only with the consent of the owners of not less than a majority in Corporation of the proceeds of the issuance and sale of the Related Bonds for the purpose of providing aggregate principal amount of the Obligations then Outstanding under the Master Indenture. No such funds, together with other available funds, to (i) pay a portion of the Cost of the Project (each as defined modification or change shall be made which will (i) effect a change in the times, amounts or currency of in the Related Bond Indenture) and (ii) pay certain expenses incurred in connection with the issuance of payment of the principal of, and premium, if any, or interest on any Obligation without the consent of the the Related Bonds. registered owner of such Obligation; (ii) permit the preference or priority of any Obligation over any other Obligation without the consent of the registered owners of all Obligations then Outstanding; or D-24 The Corporation shall receive credit for payment on Obligation No. 1, in addition to any credits (iii) reduce the aggregate principal amount of Obligations then Outstanding the consent of the registered resulting from payment or prepayment from other sources, as follows: (i) on payments of interest on owners of which is required to authorize such supplement without the consent of the registered owners of Obligation No. 1 in an amount equal to moneys deposited in the Bond Fund created under the Related all Obligations then Outstanding. Any such consent by the registered owners of this Obligation No. 1 Bond Indenture which amounts are available to pay interest on the Related Bonds and to the extent such shall be conclusive and binding upon such registered owner and all future owners hereof irrespective of amounts have not previously been credited against payments on Obligation No. 1; (ii) on payments of whether or not any notation of such consent is made upon this Obligation No. 1. principal on Obligation No. 1 in an amount equal to moneys deposited in the Bond Fund created under the Related Bond Indenture which amounts are available to pay principal of the Related Bonds and to the In the manner and with the effect provided in Supplement No. 1, Obligation No. 1 will be subject extent such amounts have not previously been credited against payments on Obligation No. 1; (iii) on to redemption in whole or in part prior to maturity, in an amount equal to the principal amount of any payments of the Redemption Price of and interest on, respectively, Obligation No. 1 in an amount equal to Related Bond (i) called for redemption pursuant to the Related Bond Indenture, or (ii) purchased for the Redemption Price of and interest on Related Bonds which have been called by the Related Bond cancellation. Obligation No. 1 shall be subject to redemption on the date any Related Bond shall be so Trustee for redemption prior to maturity and for the redemption of which sufficient amounts in cash are redeemed or purchased, and in the manner provided herein. on deposit in the Redemption Fund or the Bond Fund created under the Related Bond Indenture, and a credit shall also be made against the payment on Obligation No. 1 which would be due, but for such call Any redemption, either in whole or in part, shall be made upon notice thereof in the manner and for redemption, to pay the Redemption Price of and interest on such Related Bonds when due; and (iv) on upon the terms and conditions provided in the Related Bond Indenture. If this Obligation No. 1 shall payments of principal of and interest on, respectively, Obligation No. 1 in an amount equal to the have been duly called for redemption and payment of the redemption price, together with interest accrued principal amount of and interest on Related Bonds acquired by any Member of the Obligated Group and thereon to the date fixed for redemption, shall have been made or provided for, as more fully set forth in delivered to the Related Bond Trustee and cancelled or purchased by the Related Bond Trustee and Supplement No. 1 and the Related Bond Indenture, interest on this Obligation No. 1 shall cease to accrue cancelled. A credit shall also be made against the payment on Obligation No. 1 which would be due, but from the date fixed for redemption, and from and after such date this Obligation No. 1 shall be deemed for such cancellation, to pay the principal of and interest on such Related Bonds when due. not to be Outstanding, as defined in the Master Indenture, and shall no longer be entitled to the benefits of the Master Indenture, and the registered owner hereof shall have no rights in respect of this Obligation Upon payment by the Corporation of a sum, in cash or Defeasance Obligations (as defined in the No. 1 other than payment of the redemption price, together with accrued interest to the date fixed for Related Bond Indenture), or both, sufficient, together with any other cash and Defeasance Obligations redemption. held by the Related Bond Trustee and available for such purpose, to cause all Outstanding Related Bonds to be deemed to have been paid within the meaning of Section 12.01 of the Related Bond Indenture and to Upon the occurrence of certain Events of Default (as defined in the Master Indenture), the pay all other amounts referred to in Section 12.01 of the Related Bond Indenture, accrued and to be principal of all Obligations then Outstanding may be declared, and the same shall become, due and accrued to the date of discharge of the Related Bond Indenture, Obligation No. 1 shall be deemed to have payable as provided in the Master Indenture. been paid and to be no longer Outstanding under the Master Indenture.

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The registered owner of this Obligation No. 1 shall have no right to enforce the provisions of the Master Indenture, or to institute any action to enforce the covenants therein, or to take any action with IN WITNESS WHEREOF, the Corporation has caused this Obligation No. 1 to be executed in respect to any default under the Master Indenture, or to institute, appear in or defend any suit or other its name and on its behalf by its President all as of the ____ day of November, 2019. proceeding with respect thereto, except as provided in the Master Indenture. ALDERSGATE AT SHALOM PARK, INC. Obligation No. 1 is issuable only as a fully registered Obligation. This Obligation No. 1 shall be registered on the registration books to be maintained by the Master Trustee for that purpose at the Corporate Trust Office of the Master Trustee and the transfer of this Obligation No. 1 shall be registrable only upon presentation of this Obligation No. 1 at said office by the registered owner or by his duly By: authorized attorney and subject to the limitations, if any, set forth in Supplement No. 1. Such registration Suzanne H. Pugh of transfer shall be without charge to the registered owner hereof, but any taxes or other governmental President charges required to be paid with respect to the same shall be paid by the registered owner requesting such registration of transfer as a condition precedent to the exercise of such privilege. Upon any such registration of transfer, the Corporation shall execute and the Master Trustee shall authenticate and deliver in exchange for this Obligation No. 1 a new Obligation, registered in the name of the transferee.

Prior to due presentment hereof for registration of transfer, the Corporation and the Master Trustee may deem and treat the person in whose name this Obligation No. 1 is registered as the absolute owner hereof for all purposes; and neither the Corporation nor the Master Trustee shall be affected by any notice to the contrary. All payments made to the registered owner hereof shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable on this Obligation No. 1.

No covenant or agreement contained in this Obligation No. 1 or the Master Indenture shall be D-25 deemed to be a covenant or agreement of any director, officer, agent or employee of the Corporation or of the Master Trustee in his individual capacity, and no incorporator, member, officer or member of the Board of Directors of the Corporation shall be liable personally on this Obligation No. 1 or be subject to any personal liability or accountability by reason of the issuance of this Obligation No. 1.

This Obligation No. 1 shall not be entitled to any benefit under the Master Indenture, or be valid or become obligatory for any purpose, until this Obligation No. 1 shall have been authenticated by execution by the Master Trustee, or its successor as Master Trustee, of the Certificate of Authentication inscribed hereon.

[SIGNATURE IS ON THE FOLLOWING PAGE]

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MASTER TRUSTEE’S AUTHENTICATION CERTIFICATE

The undersigned Master Trustee hereby certifies that this Obligation No. 1 is one of the Obligations contemplated by the within-mentioned Master Indenture. SPECIAL COVENANTS

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Master Trustee

By: Authorized Signatory APPENDIX B TO

SUPPLEMENTAL INDENTURE FOR OBLIGATION NO. 1

between

ALDERSGATE AT SHALOM PARK, INC.

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., D-26 as Master Trustee

Dated as of November 1, 2019

______

Supplementing the

Master Trust Indenture

Dated as of November 1, 2019

______

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“Pre-Development Milestones” shall have the meaning assigned to such term in Section 4 APPENDIX B hereof.

SPECIAL COVENANTS “Pre-Sale” means, with respect to the Facility, (i) obtaining a deposit of not less than 10% of the applicable entrance fee for an independent living unit, (ii) obtaining a signed The Corporation hereby covenants and agrees that the provisions in this Appendix B shall be in residency agreement for such independent living unit and (iii) approval of financial qualifications effect so long as Obligation No. 1 is Outstanding under the Master Indenture, provided that any or all of for residency in such independent living unit. such provisions may be waived or modified by the Holder Representative without the consent of the holders of the Related Bonds or the holders of the Obligations. “Project Documents” shall have the meaning assigned to such term in the Loan Agreement. Section 1. Definitions. For the purposes hereof unless the context otherwise indicates the following words and phrases shall have the following meanings: “Project Fund” shall have the meaning assigned to such term in the Related Bond Indenture. (a) All capitalized terms used herein shall have the meanings given such terms in Supplement No. 1 to which this Appendix B is attached unless the context clearly indicates otherwise. “Sales Milestones” shall have the meaning assigned to such term in Section 4 hereof.

(b) “Bonds” means “Related Bonds” as defined in Supplement No. 1. Section 2. Reports and Notices. The Corporation will provide to the Holder Representative the following information, which shall be furnished to the beneficial owners of the Bonds upon request: “Consultant” means any a person or entity which provides expert advice professionally in connection with the Facility. (a) Within 15 days of the end of each month, monthly sales and marketing reports, including, at a minimum: reservations received, contracts signed, visits, waiting list, and marketing office activity; “Development Consultant” means Brian Schiff & Associates. (b) Within 30 days of the end of each month, monthly and year-to-date statements of income “Development Services Agreement” means that certain Development Consulting Services and development expenses comparing such expenses to the Pre-Construction Budget; D-27 Agreement, as amended and supplemented from time to time, by and between the Development Consultant and the Corporation. (c) Within 150 days of the end of each Fiscal Year, unaudited annual financial statements the Corporation (which shall include schedules showing, in a separate column, the balance sheet and “Facility” shall have the meaning assigned to such term in the Loan Agreement. statement of operations for the Corporation);

“Grace Period” shall have the meaning assigned to such term in Section 4 hereof. (d) Within 30 days of the end of each fiscal quarter, quarterly narrative and statistical assessment of progress of the pre-development of the Facility in achieving Milestones; and “Liquidity Account” shall have the meaning assigned to such term in the Trust Agreement. (e) Notification of failure to achieve any Milestones within 15 days of the date such Milestone should have been met pursuant to Section 4. “Maturity Date” shall have the meaning assigned to such term in the Related Bond Indenture. (f) Six months after the Effective Date (hereinafter defined), updated internally prepared financial model that is based off schematic design pricing; “Marketing Agreement” that certain marketing agreement between the Corporation and the Marketing Consultant. (g) Twelve months after the Effective Date, updated internally prepared financial model that incorporates final design drawings; “Marketing Consultant” shall mean Love & Company. (h) Prompt notice of receipt of construction permit letter; “Milestone” shall have the meaning assigned to such term in Section 4 hereof. (i) Prompt notice of receipt of the closed Certificate of Need; “Parent” means Aldersgate Life Plan Services, Inc., as developer of the Facility. (j) Prompt notice of any amendment to the Project Documents or any proposed material “Permanent Bonds” means any bonds issued or other form of indebtedness incurred to change to the Corporation’s development plan for the Facility; provide permanent financing for the construction of the Facility. (k) Prompt notice if the Corporation plans to delay or abandon development of the Facility or “Pre-Construction Budget” means the Pre-Construction Budget attached as Exhibit 1 is seriously considering such actions; hereto, as amended from time to time with the consent of the Holder Representative, which is also the “Project Budget” as defined in the Related Bond Indenture.

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(l) Prompt notice of any event or circumstance of which the Corporation has actual PRE-DEVELOPMENT AND SALES MILESTONE DUE DATE

knowledge, including any change in law of which the Corporation has actual knowledge, that would ** negatively impact on the development of the Facility; and 1. Submit Step 1 to NC Department of Insurance 3 months after Effective Date 2. Start taking priority deposits* 3 months after Effective Date (m) Prompt notice of any proposed change in ownership of the Corporation, the Facility or 3. Complete Schematic Design 4 months after Effective Date the any portion of the real estate acquired or to be acquired with respect to the Facility. 4. Begin Development Design 6 months after Effective Date 5. Submit Step 2 to NC Department of Insurance 7 months after Effective Date 6. Complete Development Design 10 months after Effective Date Section 3. Approval and Consent Rights; Major Actions. Prior to the Corporation taking * any action that requires, pursuant to the terms and provisions of the Loan Agreement, the Related Bond 7. Begin taking 10% Deposits 12 months after Effective Date Indenture or the Master Indenture, that the Corporation first provide notice of such action to the Holder 8. Begin Construction Drawings 12 months after Effective Date 9. Achieve 40% Pre-Sales* 16 months after Effective Date Representative, the Corporation agrees that the Holder Representative shall have the right to veto such * action provided such veto is reasonable and is in the best interests of the Holders or require reasonable 10. Achieve 60% Pre-Sales 19 months after Effective Date 11. Complete Real Estate Due Diligence relating to PSA 20 months after Effective Date conditions prior to approving or consenting to the Corporation taking such proposed action. The * Corporation agrees that the Holder Representative may provide consent on behalf of a majority of the 12. Achieve 70% Pre-Sales 20 months after Effective Date beneficial owners of the Bonds. In addition, the Holder Representative shall have the right to approve the 13. GMP Execution 20 months after Effective Date ______following major decisions of the Corporation, which approval must be in writing and may be granted or * withheld in the Holder Representative’s reasonable discretion: Indicates Sales Milestones; all other are Pre-Development Milestones. ** Completed (a) Approval of all budgets and any modifications to same, and the establishment of any budgeted reserves; If the Corporation fails to achieve a Pre-Development Milestone or Sales Milestone within 60- days (the “Grace Period”) from the Due Date, then the Holder Representative may, at its election and (b) Transfers, including, among other things, a sale of the Site (except if Bonds are being upon notice to the Corporation no later than 5 days after the end of the Grace Period, require: fully repaid in connection therewith), or transfer of a majority of ownership or control in the Corporation, or a material modification, termination or surrender of all or any part of the Corporation’s ownership or in (a) that the Corporation provide a plan to remedy its failure to achieve the Milestone D-28 any licenses, permits or approvals relating to the Facility; and otherwise overcome obstacles to achieving the issuance of the Permanent Bonds in an amount sufficient to allow for the repayment of the Bonds in full on or before the maturity date of (c) Material change of use, proposed use or request by the Corporation for a change in the Bonds, or to overcome obstacles to achieving the issuance of the Permanent Bonds; or zoning of any portion of the real estate acquired or to be acquired with respect to the Facility; (b) that (i) the Corporation shall cause the Parent to terminate the Development (d) Retention or replacement, as applicable, of the Development Consultant, marketing Services Agreement and the Corporation shall cause the Parent to replace the Development consultant, the architect, or any contractor, engineer or other professional services provider for the Consultant with a consultant reasonably recommended by the Holder Representative and Facility, or any material modification or termination of any agreements with any of the foregoing; approved by the Parent, also acting reasonably, or (ii) as it relates to the Sales Milestone, terminate the Marketing Agreement and replace the Marketing Consultant with a consultant (e) Changes in material programs or services offered or to be offered to residents of the reasonably recommended by the Holder Representative and approved by the Corporation, also Facility; acting reasonably or (iii) the Corporation terminate any agreement with any applicable consultant and replace Consultant with a reasonable recommendation by the Holder Representative and (f) Approval of all forms of leases and sales contracts (other than residency agreements/sales approved by the Corporation, also acting reasonably. contracts for the independent living units that are executed on an approved form in accordance with the pricing schedule approved by the Holder Representative; If the Corporation fails to comply with the requirements of the Holder Representative under clauses (a) and/or (b) above, as applicable, the Holder Representative shall have the discretion to approve (g) Approval of any contracts (or modification thereto) entered into between the Corporation disbursements from the Project Fund and, if the Holder Representative shall so elect, notify the or the Development Consultant, or any successor, or any entity affiliated with either relating to the Corporation and the Bond Trustee that it will not approve any portion of or all of one or more future operation of the Facility. requisitions from the Project Fund.

Section 4. Pre-Development Milestones and Sales Milestones. The Corporation shall Notwithstanding the foregoing paragraph, if within 5 days after the notice from the Holder comply with the established pre-development objectives (“Pre-Development Milestones”) and sales Representative that the Corporation or Parent shall terminate and replace the Development Consultant, objectives (“Sales Milestones” and together with the Pre-Development Milestones, collectively, the Marketing Consultant or any other applicable consultant, the Corporation provides a notice to the Holder “Milestones”) set forth below within the time indicated. For purposes hereof, “Effective Date” shall mean Representative intends to provide a written report prepared by a qualified, independent consultant November 1, 2019. reasonably acceptable to the Holder Representative stating that the failure of the Corporation to comply with the required Pre-Development Milestone or Sales Milestone was (1) primarily due to factors outside the control of the Corporation, or (2) that replacing the Development Consultant, Marketing Consultant or other consultant, respectively, is not likely to improve the ability of the Corporation to comply with such

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required Pre-Development Milestone or Sales Milestone, the Holder Representative shall have 5 days to Section 6. Events of Default. The occurrence of any of the following events shall be an approve or disapprove of the independent consultant chosen by the Corporation. If the Holder “Event of Default” under the Master Indenture if the Holder Representative notifies the Master Trustee of Representative disapproves of the independent consultant, the Corporation may nevertheless use such such pursuant to Section 13 of Supplement No. 1: independent consultant if 66.6 percent of the actual owners of the Bonds approve of such consultant. Such approval must be received within 5 days after the initial disapproval by the Holder Representative. (a) The Corporation defaults in the performance or observance of any agreement or covenant If approval is given by either the Holder Representative or 66.6 percent of the actual owners of the Bonds, contained in Section 5 of this Appendix B; such written report must contain sufficient detail to support the conclusions made therein and be delivered within the next 60 days. If such report is not delivered within the next 60 days, the Development (b) The Corporation shall fail duly to perform, observe or comply with any covenant, Consultant, Marketing Consultant or other consultant shall be terminated promptly thereafter. If the condition or agreement on its part under this Appendix B (other than referred to in (a) of this Section), Holder Representative and at least 33.5 percent of the actual owners of the Bonds disapprove of the and such failure continues for a period of thirty (30) days after the date on which written notice of such proposed independent consultant, the Development Consultant, Marketing Consultant or other consultant failure, requiring the same to be remedied, shall have been given to the Corporation by the Holder shall be terminated promptly after notice of such disapproval. Representative, 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 If the Corporation (i) in response to a demand from the Holder Representative pursuant to done, taken or remedied, as the case may be, within such 30-day period, no Event of Default shall be subsection (a) above provides the plan as required, or (ii) in response to a demand pursuant to subsection deemed to have occurred or to exist if, and so long as, the Corporation shall commence such performance, (b) above, (1) provides a report from an approved independent consultant that the replacement of the observation or compliance within such period and shall diligently and continuously prosecute the same to consultant(s) required to be removed would not be likely to improve the ability of the Corporation to completion, provided such default is cured within ninety (90) days after receipt by the Corporation of comply with such required Pre-Development Milestone or Sales Milestone, or (2) with respect to any such notice; or consultant(s) required to be removed for which no report is given, replace such consultant(s) with consultant(s) recommended by the Holder Representative and approved by the Corporation, the (c) Commencing on the third anniversary of the Closing, the Corporation is not in Corporation will be permitted to obtain further disbursements from the Project Fund as though the failure compliance with or has failed to achieve a Milestone set forth in Section 4 of this Appendix B and such to meet the Milestone(s) had not occurred. failure or non-compliance continues for a period of 180 days.

Notwithstanding anything in this Section 4 to the contrary, if an event of default occurs under D-29 Section 6(c) of this Appendix B or in the Related Trust Agreement, in addition to exercising its right to cause an Event of Default under the Master Indenture, the Holder Representative shall have the right to continue to (a) obligate the Corporation to comply with this Section 4, including but not limited to the authority to approve any and all future requisitions from the Project Fund and (b) direct the Master Trustee to assign it all documents under the Assignment of Contracts and then develop the Project in place of the Corporation and its subsidiaries to the extent permitted under the contracts so assigned.

Section 5. Negative Covenants. Each Member of the Obligated Group covenants that:

(a) Limitations on Incurrence of Indebtedness. It will not incur any Indebtedness subsequent to the delivery of Obligation No. 1.

(b) Transfers of Cash and Investments. It will not transfer any Property, including cash and investments to any Person except to (i) another Member of the Obligated Group and (ii) pay costs of the Facility or costs of issuing the Series 2019 Bonds.

(c) Consolidation, Merger, Sale or Conveyance. It will not merge or consolidate with, or sell or convey all or substantially all of its assets to any Person that is not a Member of the Obligated Group.

(d) Parties Becoming Members of the Obligated Group. It will not consent to any Person becoming a Member of the Obligated Group without the prior written consent of the Holder Representative.

(e) Withdrawal from the Obligated Group. The Corporation shall not withdraw from the Obligated Group and no other Person shall withdraw from the Obligated Group without the prior written consent of the Holder Representative.

B-5 B-6 PPAB 4992844v7 PPAB 4992844v7

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS ...... 4 Section 1.01 Meaning of Words and Terms ...... 4 Section 1.02 Rules of Construction ...... 11

ARTICLE II DETAILS OF BONDS; ISSUANCE OF BONDS ...... 11 Section 2.01 Limitation on Issuance of Bonds ...... 11 Section 2.02 Form and Numbering of Bonds; Limited Obligation ...... 11 Section 2.03 Details of Bonds ...... 12 Section 2.04 Authentication of Bonds ...... 13 TRUST AGREEMENT Section 2.05 Exchange of Bonds ...... 13 Section 2.06 Negotiability, Registration and Transfer of Bonds ...... 13 between Section 2.07 Ownership of Bonds ...... 14 Section 2.08 Authorization and Details of Bonds ...... 14 PUBLIC FINANCE AUTHORITY Section 2.09 Temporary Bonds ...... 17 Section 2.10 Mutilated, Destroyed, Stolen or Lost Bonds ...... 17 and Section 2.11 Book Entry System ...... 17

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., ARTICLE III REDEMPTION OF BONDS ...... 19 Section 3.01 Redemption Dates and Prices ...... 19 D-30 Bond Trustee Section 3.02 Selection of Bonds to Be Redeemed ...... 19 Section 3.03 Redemption Notice ...... 20 Dated as of November 1, 2019 Section 3.04 Effect of Calling for Redemption ...... 21 Section 3.05 Redemption of Portion of Bonds ...... 21 Section 3.06 Cancellation ...... 21 Securing Section 3.07 Use of Defeasance Obligations to Redeem Bonds ...... 21 Section 3.08 Purchase in Lieu of Redemption ...... 22 $______ARTICLE IV PROJECT FUND ...... 22 Public Finance Authority Section 4.01 Project Fund ...... 22 Retirement Facility Revenue Anticipation Bonds Section 4.02 Payments from Project Fund ...... 22 (Shalom Park Pre-Development Project) Section 4.03 Cost of Project ...... 23 Series 2019 Section 4.04 Requisitions from the Project Account and Issuance Account ...... 24 Section 4.05 Reliance Upon Requisitions from the Project Account and Issuance Account ...... 25 Section 4.06 Completion of the Project and Disposition of Project Account and Issuance Balances ...... 25 Section 4.07 The Liquidity Account ...... 25

ARTICLE V REVENUES AND FUNDS ...... 26 Section 5.01 Establishment of Funds ...... 26 Section 5.02 Funds Received ...... 26 Section 5.03 Application of Money in Interest Account ...... 27 Section 5.04 Application of Money in Principal Account ...... 27 Section 5.05 [Reserved] ...... 27 Section 5.06 Application of Money in Redemption Fund ...... 27 Section 5.07 [Reserved] ...... 28 Section 5.08 Money Held in Trust ...... 28

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Section 5.09 Cancellation of Bonds ...... 28 ARTICLE X EXECUTION OF INSTRUMENTS BY HOLDERS, PROOF OF OWNERSHIP OF BONDS Section 5.10 Disposition of Fund Balances ...... 28 AND DETERMINATION OF CONCURRENCE OF HOLDERS ...... 43 Section 10.01 Execution of Instruments by Holders ...... 43 ARTICLE VI SECURITY FOR DEPOSITS, INVESTMENT OF FUNDS AND COVENANT AS TO Section 10.02 Preservation of Information; Communications to Holders ...... 44 ARBITRAGE ...... 29 Section 10.03 Holders of Bonds Deemed Holders of Obligation No ...... 44 Section 6.01 Security for Deposits ...... 29 Section 10.04 Holder Representative Deemed Holder of Bonds ...... 44 Section 6.02 Investment of Money ...... 29 Section 6.03 Valuation ...... 30 ARTICLE XI SUPPLEMENTAL TRUST AGREEMENTS ...... 44 Section 11.01 Supplemental Trust Agreements without Consent of Holders ...... 44 ARTICLE VII GENERAL COVENANTS AND REPRESENTATIONS ...... 31 Section 11.02 Modification of Trust Agreement with Consent of Holders ...... 45 Section 7.01 Payment of Principal, Interest and Premium ...... 31 Section 11.03 Exclusion of Bonds ...... 46 Section 7.02 Covenant to Perform and Authority of Authority ...... 31 Section 11.04 Responsibilities of Bond Trustee and Authority under this Section 7.03 Covenant as to Obligation No. 1, Master Indenture and Article ...... 46 Agreement ...... 31 Section 11.05 Consent of Corporation ...... 47 Section 7.04 Enforcement of Security Documents ...... 31 Section 7.05 Further Instruments and Actions ...... 31 ARTICLE XII DEFEASANCE ...... 47 Section 7.06 Unrelated Bond Issues ...... 32 Section 12.01 Release of Trust Agreement ...... 47

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES ...... 32 ARTICLE XIII MISCELLANEOUS PROVISIONS ...... 48 Section 8.01 Events of Default ...... 32 Section 13.01 Legal Holidays; Time ...... 48 Section 8.02 Acceleration ...... 32 Section 13.02 Manner of Giving Notice ...... 48 Section 8.03 Enforcement of Remedies ...... 33 Section 13.03 Substitute Mailing ...... 49 Section 8.04 Pro-Rata Application of Funds ...... 33 Section 13.04 Parties and Holders Alone Have Rights under Trust Agreement ...... 49 Section 8.05 Effect of Discontinuance of Proceedings ...... 34 Section 13.05 Effect of Partial Invalidity ...... 49 D-31 Section 8.06 Control of Proceedings by Holders ...... 34 Section 13.06 Effect of Covenants ...... 49 Section 8.07 Restrictions upon Actions by Individual Holders ...... 35 Section 13.07 No Recourse Against Authority Members, Officers or Section 8.08 Enforcement of Rights of Action ...... 35 Employees of Authority...... 49 Section 8.09 Waivers ...... 35 Section 13.08 Expenses Payable Under Trust Agreement ...... 50 Section 8.10 Notice of Default ...... 36 Section 13.09 Dealing in Bonds ...... 50 Section 8.11 Right to Enforce Payment of Bonds Unimpaired ...... 36 Section 13.10 Multiple Counterparts ...... 50 Section 13.11 Headings ...... 50 ARTICLE IX CONCERNING THE BOND TRUSTEE ...... 36 Section 13.12 Governing Law; Jurisdiction ...... 50 Section 9.01 Acceptance of Duties ...... 36 Section 13.13 Consents and Approvals ...... 50 Section 9.02 Indemnification of Bond Trustee ...... 37 Section 13.14 Authority’s Performance ...... 51 Section 9.03 Limitations on Obligations and Responsibilities of Bond Trustee Section 13.15 Holder Representative; Limitation on Liability ...... 51 and Certain Rights of Bond Trustee ...... 37 Section 13.16 Electronic Transactions ...... 51 Section 9.04 Bond Trustee Not Liable for Failure of Authority to Act ...... 38 Section 9.05 Compensation and Indemnification of Bond Trustee ...... 39 EXHIBIT A – FORM OF BONDS ...... A-1 Section 9.06 Monthly Statements and Other Information from Bond Trustee ...... 39 EXHIBIT B – FORM OF REQUISITION (PROJECT ACCOUNT AND ISSUANCE ACCOUNT) ...... B-1 Section 9.07 Bond Trustee May Rely on Certificates and Advice ...... 40 EXHIBIT C – FORM OF REQUISITION (LIQUIDITY ACCOUNT) ...... C-1 Section 9.08 Notice of Default ...... 40 EXHIBIT D – FORM OF INVESTOR LETTER ...... D-1 Section 9.09 Bond Trustee Protected in Relying on Certain Documents ...... 40 EXHIBIT E – ACCRETED VALUE TABLE ...... E-1 Section 9.10 Bond Trustee May Pay Taxes and Assessments ...... 40 Section 9.11 Resignation and Removal of Bond Trustee Subject to Acceptance by Successor of Appointment ...... 41 Section 9.12 Resignation of Bond Trustee ...... 41 Section 9.13 Removal of Bond Trustee ...... 41 Section 9.14 Appointment of Successor Bond Trustee ...... 41 Section 9.15 Vesting of Duties in Successor Bond Trustee ...... 42 Section 9.16 Required Payments ...... 42 Section 9.17 Bond Trustee Receipt of Instructions or Directions via Electronic Means ...... 42

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TRUST AGREEMENT time to time in accordance with its terms, the “Master Indenture”), between the Company and [TRUSTEE], as trustee (the “Master Trustee”) and Supplemental Indenture for Obligation No. 1, dated as THIS TRUST AGREEMENT, dated as of November 1, 2019, between the PUBLIC FINANCE of November 1, 2019 (“Supplement No.1”) between the Company and the Master Trustee; and AUTHORITY, a joint powers commission and a unit of government and a body corporate and politic under the laws of the State of Wisconsin (together with its successors and assigns, the “Authority”), and THE WHEREAS, as security for all Obligations issued under the Master Indenture, the Corporation BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized will execute and deliver an Assignment of Contracts dated as of November 1, 2019 (as the same may be and validly existing under the laws of the United States of America and having a designated corporate amended from time to time as therein permitted, the “Assignment of Contracts”) from the Corporation to trust office in Jacksonville, Florida, which is authorized under such laws to exercise trust powers the Master Trustee, pursuant to which the Corporation will assign to the Master Trustee all of its (together with any successor trustee under this Trust Agreement, the “Bond Trustee”), respective rights, title and interests in certain contracts relating to the Project; and

W I T N E S S E T H: WHEREAS, the Authority is entering into this Trust Agreement for the purpose of authorizing the Bonds and securing the payment thereof by assigning its rights as registered owner of Obligation WHEREAS, the Authority was organized as a commission under and pursuant to the Act and No. 1 and certain of its rights under the Agreement; and exists by virtue of that certain Joint Exercise Agreement; and WHEREAS, under the Act, the Authority is authorized to enter into this Trust Agreement, to WHEREAS, the Authority is authorized and empowered under the Act and by the Joint Exercise issue the Bonds as hereinafter provided, to lend the proceeds of the Bonds to the Corporation for the Agreement to, among other things, issue bonds, notes or other evidences of indebtedness in connection purposes hereinbefore stated, and to do or cause to be done all the acts and things herein provided or with, and to make loans to assist in the financing and refinancing of, a “project” (as defined in the Act) required to be done as hereinafter covenanted; and located inside and outside of the State of Wisconsin; and WHEREAS, all things necessary (i) to make the Bonds, when authenticated by the Bond Trustee WHEREAS, Aldersgate at Shalom Park, Inc. (the “Corporation”) is a North Carolina nonprofit and issued as in this Trust Agreement provided, the valid, binding and legal obligations of the Authority corporation and has applied for the financial assistance of the Authority in financing the pre-construction and (ii) to constitute this Trust Agreement a valid, binding and legal instrument for the security of the and development costs (as more fully described in the hereinafter defined Agreement, the “Project”) of Bonds in accordance with its terms, have been done and performed; and acquiring, constructing and equipping a new life plan community to be located in Charlotte, North D-32 Carolina (as more fully described in the hereinafter defined Agreement, the “Facility”); and WHEREAS, the Bond Trustee has accepted the trusts created by this Trust Agreement and in evidence thereof has joined in the execution hereof; WHEREAS, the Facility is to be located within the territorial limits of the City of Charlotte, County of Mecklenburg, State of North Carolina (the “Facility Jurisdiction”) and the Authority, based on NOW, THEREFORE, THIS TRUST AGREEMENT WITNESSETH: that in consideration of representations of the Corporation, but without independent investigation, has found and determined that the premises, of the acceptance by the Bond Trustee of the trusts hereby created, and of the purchase and the financing of the Project will promote significant economic, cultural and community development acceptance of Bonds by the Holders (as defined herein) thereof, and also for and in consideration of the opportunities, including the creation or retention of employment, the stimulation of economic activity and sum of One Dollar in hand paid by the Corporation on behalf of the Bond Trustee at or before the the promotion of improvements in the health, safety and welfare of persons in the Facility Jurisdiction; execution and delivery of this Trust Agreement, and for other good and valuable consideration, the receipt and whereof is hereby acknowledged, and for the purpose of fixing and declaring the terms and conditions upon which Bonds are to be issued, authenticated, delivered, secured and accepted by all persons who WHEREAS, the Authority has determined to issue its Retirement Facility Revenue Anticipation shall from time to time be or become Holders thereof, and to secure the payment of all Bonds at any time Bonds (Shalom Park Pre-Development Project) Series 2019 (the “Bonds”) and to lend the proceeds issued and outstanding under this Trust Agreement and the interest and the redemption premium, if any, thereof to the Corporation for the purpose of providing funds, together with other available funds, to (i) thereon according to their tenor, purport and effect, and to secure the performance and observance of all pay a portion of the Cost (as hereinafter defined) of the Project, and (ii) pay certain expenses incurred in the covenants, agreements and conditions, express or implied, therein and herein contained, the Authority connection with the issuance of the Bonds; and has executed and delivered this Trust Agreement, and by this Trust Agreement has given, granted, bargained, aliened, remised, released, conveyed, transferred, assigned, confirmed, set over, and pledged, WHEREAS, the Corporation has represented to the Authority that it expects that the Bonds will and does hereby give, grant, bargain, alien, remise, release, convey, transfer, assign, confirm, set over, be repaid through the issuance of long-term bonds or other financing on or prior to the maturity date of and pledge unto the Bond Trustee, and its successor or successors in trust, except in all cases with respect the Bonds; provided, however, that the Authority has not undertaken to issue any such long-term bonds or to the Authority Unassigned Rights: to provide or participate in any such long-term financing; and 1. All right, title and interest of the Authority in and to Obligation No. 1 and all its rights WHEREAS, simultaneously with the issuance of the Bonds, the Company and the Authority will under the Master Indenture and the Assignment of Contracts as owner of Obligation No. 1; enter into a Loan Agreement, dated as of November 1, 2019 (the “Agreement”), specifying the terms and conditions of a loan by the Authority to the Company of the proceeds of the Bonds to provide for 2. All right, title and interest of the Authority in and to the Agreement, it being the intent financing of the Project and of the payment by the Company to the Authority of amounts sufficient for the and purpose hereof that the assignment and transfer to the Bond Trustee of the payments and other sums payment of the principal of, premium, if any, or interest on the Bonds and the costs incidental thereto, and due and to become due under the Agreement shall be effective and operative immediately and the Bond as evidence of the loan the Company will execute and deliver Obligation No. 1 (as defined herein) to the Trustee shall have the right to collect and receive said payments and other sums for application in Authority pursuant to a Master Trust Indenture, dated as of November 1, 2019 (as supplemented from accordance with the provisions hereof at all times during the period from and after the date of this Trust

Agreement until the indebtedness hereby secured shall have been fully paid and discharged. The THIS TRUST AGREEMENT FURTHER WITNESSETH and it is expressly declared that all Authority is to remain liable to observe and perform all the conditions and covenants in the Agreement Bonds issued and secured hereunder are to be issued, authenticated, delivered and dealt with, and all said provided to be observed and performed by it; and property hereby given, granted, bargained, aliened, remised, released, conveyed, transferred, assigned, confirmed, set over and pledged is to be dealt with and disposed of, under, upon and subject to the terms, 3. All money and securities held by the Bond Trustee in the Bond Fund and the Redemption conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Fund (each as hereinafter defined) and, until applied in payment of the cost of the Project in accordance Authority has agreed and covenanted, and does hereby agree and covenant, with the Bond Trustee and with Article IV hereof, all money and securities in the Project Fund (as hereinafter defined) and in any with the respective Holders, from time to time, of the Bonds, or any part thereof, as follows: other funds or accounts established under this Trust Agreement; excluding the Liquidity Account which shall not be deemed part of the trust estate. ARTICLE I

TO HAVE AND TO HOLD all the same with all privileges and appurtenances hereby conveyed DEFINITIONS and assigned, or agreed or intended so to be, to the Bond Trustee and its successor or successors in trust and to them and their assigns forever, subject to the exceptions, reservations and matters herein recited; Section 1.01 Meaning of Words and Terms. Unless otherwise required by the context, all capitalized terms used herein shall have the meanings assigned to such terms in Section 1.01 of the SUBJECT ONLY TO THE RIGHTS OF THE AUTHORITY TO APPLY AMOUNTS UNDER Agreement (as defined below), or in Section 1.01 of the Master Indenture (as defined below) as of the THE PROVISIONS OF THIS TRUST AGREEMENT, THE PLEDGE AND ASSIGNMENT OF THE date of this Trust Agreement unless the Authority consents in writing to the incorporation herein of a REVENUES AND FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THIS TRUST revised definition in the Master Indenture, or as set forth below: AGREEMENT HEREBY MADE SHALL IMMEDIATELY ATTACH THERETO AND SHALL BE EFFECTIVE, BINDING AND ENFORCEABLE FROM AND AFTER THE TIME OF THE “Accreted Value” means, with respect to Bonds or a portion thereof, (i) if calculated on a DELIVERY BY THE BOND TRUSTEE OF THE FIRST BONDS AUTHENTICATED AND Calculation Date, the dollar amount per $1,000 due at maturity of the Bonds set forth in Exhibit E DELIVERED UNDER THIS TRUST AGREEMENT. THE SECURITY SO PLEDGED AND ANY attached hereto for such Calculation Date and (ii) if calculated on a date other than a Calculation Date, the ASSIGNMENT THEN OR THEREAFTER RECEIVED BY THE BOND TRUSTEE FROM THE dollar amount per $1,000 due at maturity of the Bonds, such amount being determined conclusively by AUTHORITY AS SECURITY FOR THE BONDS SHALL IMMEDIATELY BE SUBJECT TO THE the Bond Trustee or a certified public accountant selected by the Bond Trustee, by interpolating such LIEN OF SUCH PLEDGE AND ASSIGNMENT AND THE LIEN OF SUCH PLEDGE AND dollar amount, using the straight-line method, by reference to the dollar amounts for the Calculation Dates D-33 ASSIGNMENT SHALL BE VALID AND BINDING AGAINST THE AUTHORITY, PURCHASERS listed on the table in Exhibit E attached hereto which are immediately prior to and immediately THEREOF, CREDITORS AND ALL OTHER PARTIES HAVING CLAIMS AGAINST THE subsequent to such date, and the number of calendar days elapsed since the date listed which is AUTHORITY IRRESPECTIVE OF WHETHER SUCH PARTIES HAVE NOTICE THEREOF AND immediately prior to such date. WITHOUT THE NEED FOR ANY PHYSICAL DELIVERY, RECORDATION, FILING, OR FURTHER ACT. “Agreement” means the Loan Agreement, dated as of November 1, 2019, between the Authority and the Corporation, including all amendments or supplements thereto. IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth, for the benefit, security and protection of the present and future Holders of the Bonds issued or to be issued under and “Assignment of Contracts” has the meaning set forth in the Preambles to this Trust Agreement. secured by this Trust Agreement, without preference, priority or distinction as to lien or otherwise, except The Assignment of Contracts is a Collateral Assignment as defined in the Master Indenture. as may otherwise be provided herein, of any one Bond over any other Bond by reason of priority in their issue, sale or otherwise, all as herein provided; “Authority Authorized Signatory” means any officer, director or other Person designated by resolution of the Authority (whether such resolution is adopted in connection with the issuance of the IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth, for the benefit, Bonds or otherwise) or by the Authority’s Bylaws as an “Authorized Signatory” empowered to, among security and protection of the present and future Holders of the Bonds issued or to be issued under and other things, execute and deliver on behalf of the Authority this Trust Agreement, the Authority secured by this Trust Agreement, without preference, priority or distinction as to lien or otherwise, except Documents and the Bonds. as may otherwise be provided herein, of any one Bond over any other Bond by reason of priority in their issue, sale or otherwise, all as herein provided; “Authority Documents” means the Agreement, this Trust Agreement and any other agreement, certificate, contract, or instrument to be executed by the Authority in connection with the issuance of the Provided, however, that if the Authority, its successors or assigns, shall well and truly pay, or Bonds or the financing of a portion of the expenses associated with the related Project. cause to be paid, or provide for the payment, pursuant to the provisions of this Trust Agreement, of the principal of Bonds and the interest and any redemption premium due or to become due thereon, at the “Authority Indemnified Party” or “Authority Indemnified Parties” means collectively, (i) the times and in the manner mentioned in the Bonds and this Trust Agreement, according to the true intent Sponsors, (ii) the Authority Members and (iii) each and all of the Authority’s, the Authority Members’ and meaning thereof and hereof, and shall cause the payments to be made into the Bond Fund as required and the Sponsors’ respective past, present, and future directors, board members, governing members, under this Trust Agreement, and shall pay or cause to be paid to the Bond Trustee all sums of money due trustees, commissioners, elected or appointed officials, officers, Authority Authorized Signatories, or to become due to it in accordance with the terms and provisions hereof, then upon such performance attorneys, advisors, agents (including, without limitation, counsel and financial advisers) and employees, and payments this Trust Agreement and the rights hereby granted shall cease, determine and be void, as and each of their respective heirs, successors and assigns. provided in Article XII; otherwise this Trust Agreement shall be and remain in full force and effect; and

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“Authority Member” means a party to the Joint Exercise Agreement and any political subdivision “Calculation Date” or “Interest Payment Date” means each April 1 and October 1, commencing that has been designated in the past, or from time to time in the future is designated, as a member of the April 1, 2020, to and including the Maturity Date. Authority pursuant to the Joint Exercise Agreement. “Code” means the Internal Revenue Code of 1986, as amended, and all regulations promulgated “Authority Unassigned Rights” means the rights of the Authority under Sections 3.04(a), 5.02, thereunder. 8.01, 8.02, 10.01, 10.05 and 10.12 of the Agreement and, to the extent not expressly provided in said sections (or in any other sections hereof or thereof) the Authority’s rights thereunder or under this Trust “Company Documents” has the meaning given such term in Section 2.08(f). Agreement to (a) inspect books and records; (b) give or receive notices, approvals, consents, requests and other communications; (c) receive payment or reimbursement for expenses, including without limitation “Conditional Redemption” has the meaning given such term in Section 3.03(b) hereof. “Required Payments” as defined in the Agreement and the Authority’s Annual Fee; (d) immunity from and limitation of liability; (e) indemnification by the Corporation or any other Person; and (f) to enforce, “Cost” means, as applied to the Project, without intending thereby to limit or restrict any proper in its own name and on its own behalf, those provisions hereof and of the Agreement and any other definition of such word under the Act, all items of cost set forth in Section 4.03. document, instrument or agreement entered into with respect to the Bonds that provides generally for the foregoing enumerated rights or any similar rights of the Authority or any Authority Indemnified Party. “Defaulted Interest” means Defaulted Interest as defined in Section 2.03. For avoidance of doubt, the “Authority Unassigned Rights” referenced in clauses (d), (e), and (f), above, shall include (but not be limited to) the rights of the Authority Indemnified Parties to immunity from and “Defeasance Obligations” means (i) noncallable Government Obligations, (ii) evidences of limitation of liability and indemnification by the Corporation as provided in the Agreement and the right ownership of a proportionate interest in specified noncallable Government Obligations, which of any such Authority Indemnified Party to enforce such rights in his, her or its own name. Government Obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian, (iii) Defeased Municipal “Beneficial Owner” means the Person in whose name a Bond is recorded as beneficial owner of Obligations and (iv) evidences of ownership of a proportionate interest in specified Defeased Municipal such Bond by the Securities Depository or a Participant or an Indirect Participant on the records of such Obligations, which Defeased Municipal Obligations are held by a bank or trust company organized and Securities Depository, Participant or Indirect Participant, as the case may be, or such Person’s subrogee. existing under the laws of the United States of America or any state thereof in the capacity of custodian.

“Bond Counsel” means a firm of attorneys knowledgeable and experienced in the law relating to “Defeased Municipal Obligations” means obligations of state or local government municipal D-34 municipal securities and the law relating to federal and State taxation of interest thereon and approved by bond issuers which are rated in the highest rating category by S&P and Moody’s, respectively, provision the Authority. for the payment of the principal of and interest on which shall have been made by deposit with a trustee or escrow agent of (i) noncallable Government Obligations, (ii) evidences of ownership of a proportionate “Bond Fund” means the Public Finance Authority Retirement Facility Revenue Anticipation interest in specified noncallable Government Obligations, (iii) cash or (iv) any combination of such Bonds (Shalom Park Pre-Development Project) Series 2019 Bond Fund created and so designated by noncallable Government Obligations, evidences of ownership and cash, which Government Obligations Section 5.01 and consisting of the Interest Account and the Principal Account. or evidences of ownership, together with any cash, are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian, “Bond Resolution” means the resolution of the Authority providing for the issuance of the Bonds the maturing principal of and interest on such Government Obligations or evidences of ownership, when and approving the Agreement, this Trust Agreement, the other Authority Documents and related matters. due and payable, being sufficient, together with any cash, to provide money to pay the principal of, premium, if any, and interest on such obligations of such state or local government municipal bond “Bond Trustee” means the bank or trust company serving as Bond Trustee under this Trust issuers. Agreement, whether the original or a successor trustee. “Determination of Taxability” means and shall be deemed to have occurred on the date when (i) “Bond Year” means the period commencing on December 1 of any year and ending on November the Authority is advised in writing by the Internal Revenue Service that the Internal Revenue Service has 30 of the following year. made a final determination, from which no further right of administrative appeal exists, that interest on the Bonds is includable in gross income for federal income tax purposes as a result of any action, or “Bonds” means the Public Finance Authority Retirement Facility Revenue Anticipation Bonds failure to act, by the Authority or the Corporation, (ii) the Authority, the Corporation or the Bond Trustee (Shalom Park Pre-Development Project) Series 2019 authorized and issued under Section 2.08. receives written notice from any existing or former Holder (or Beneficial Owner) of the Bonds that the Internal Revenue Service has issued a statutory notice of deficiency or similar notice to such Holder (or “Book Entry Bonds” means Bonds for which a Securities Depository or its nominee is the Holder. Beneficial Owner) which asserts, in effect, that interest on the Bonds is includable in the gross income of such Holder (or Beneficial Owner) for federal income tax purposes (together with a copy of such notice “Book Entry System” means a book entry system established and operated for the recordation of of deficiency or similar notice), as a result of any action, or failure to act, by the Authority or the Beneficial Owners of the Bonds pursuant to Section 2.11. Corporation or (iii) the Authority, the Corporation or the Bond Trustee receives an opinion of Bond Counsel that concludes in effect that the interest on the Bonds is includable in the gross income of “Business Day” means any day on which banks in the city in which the designated corporate trust existing or former Holder (or Beneficial Owner) of the Bonds for federal income tax purposes. office of the Bond Trustee is located and New York, New York are not authorized to be closed for commercial banking purposes. “Electronic Means” means facsimile transmission, email transmission, secured electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by

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the Bond Trustee, or other similar electronic means of communication providing evidence of transmission Standard & Poor’s, “F-1” by Fitch or “P-1” by Moody’s, and which matures not more than 360 and specified by the Bond Trustee as available for use in connection with its services hereunder, including days after the date of purchase; a telephone communication confirmed by any other method set forth in this definition. (e) commercial paper which is rated at the time of purchase within the classification “Event of Default” means with respect to this Trust Agreement each of those events set forth in or higher, “A-1” by Standard & Poor’s, “F-1” by Fitch or “P-1” by Moody’s, and which matures Section 8.01. not more than 270 days after the date of purchase;

“Fitch” means Fitch Ratings. (f) bonds, notes, debentures or other evidences of indebtedness issued or guaranteed by a corporation which are, at the time of purchase, rated by any Rating Agency in any of the two “Government Obligations” means direct obligations of, or obligations the timely payment of highest rating categories (without regard to any refinement or gradation of rating category by principal of and interest on which are fully and unconditionally guaranteed by, the United States of numerical modifier or otherwise); America. (g) investment agreements with banks that at the time such agreement is executed are “Holder” means the Person in whose name a Bond is registered in the registration books provided rated by any Rating Agency in one of the two highest rating categories assigned by such Rating for in Section 2.06. Agency (without regard to any refinement or gradation of rating category by numerical modifier or otherwise) or investment agreements with non-bank financial institutions which, (1) all of the “Holder Representative” means each HJS Advisors, Inc. and BB&T Capital Markets, or any unsecured, direct long-term debt of either the non-banking financial institution or the related successor appointed in accordance with Section 13.15. guarantor of such non-bank financial institution is rated by any Rating Agency at the time such agreement is executed in one of the two highest rating categories (without regard to any “Indebtedness” has the meaning set forth in the Master Indenture. refinement or gradation of rating category by numerical modifier or otherwise) for obligations of that nature; or (2) if such non-bank financial institutions have no outstanding long-term debt that “Indirect Participant” means a broker-dealer, bank or other financial institution for which the is rated, all of the short-term debt of either the non-banking financial institution or the related Securities Depository holds Bonds as a securities depository through a Participant. guarantor of such non-bank financial institution is rated by any Rating Agency in the highest rating category (without regard to any refinement or gradation of the rating category by numerical D-35 “Interest Account” means the account in the Bond Fund created and so designated by modifier or otherwise) assigned to short term indebtedness by such Rating Agency; provided that Section 5.01. if at any time after purchase the provider of the investment agreement drops below the two highest rating categories assigned by such Rating Agency, the investment agreement must, within “Investment Grade Notice” means any official notice released by any Rating Agency that the 30 days, either (1) be assigned to a provider rated in one of the two highest rating categories or Bonds have been given an Investment Grade Rating. (2) be secured by the provider with collateral securities the fair market value of which, in relation to the amount of the investment agreement including principal and interest, is equal to at least “Investment Grade Rating” means a rating by Standard & Poor’s or Fitch of “BBB-” or higher, or 102%; investment agreements with banks or non-bank financial institutions shall not be permitted by Moody’s of “Baa3” or higher. if no rating is available with respect to debt of the investment agreement provider or the related guarantor of such provider; “Investment Obligations” means dollar denominated investments, to the extent permitted by law, in any of the following: (h) shares of a money market mutual fund or other collective investment fund registered under the federal Investment Company Act of 1940, whose shares are registered under (a) Government Obligations; the Securities Act of 1933, having assets of at least $100,000,000 and having a rating AAm or AAm-G by a Rating Agency, including money market mutual funds from which the Bond (b) debt obligations which are (i) issued by any state or political subdivision thereof Trustee or its affiliates derive a fee for investment advisory or other services to the fund; and or any agency or instrumentality of such state or political subdivision, and (ii) at the time of purchase, rated by any Rating Agency in one of the two highest categories assigned by such (i) any other investment approved in writing by the Holders of not less than a Rating Agency (without regard to any refinement or gradation of rating category by numerical majority in aggregate principal amount of Bonds Outstanding. modifier or otherwise); “Issuance Account” means the account in the Project Fund created and so designated by (c) any bond, debenture, note, participation certificate or other similar obligation Section 4.01 hereof. which is either (i) issued or guaranteed by the Federal National Mortgage Association, the Federal Home Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal “Issuance Costs” means Issuance Costs as defined in Section 4.02. Farm Credit Bank Association, or (ii) backed by the full faith and credit of the United States of America; “Letter of Representations” means, when all the Bonds are Book Entry Bonds, the Blanket Letter of Representations dated December 14, 2018, executed by the Authority and delivered to DTC and any (d) U.S. denominated deposit account, certificates of deposit and banker’s amendments thereto or successor blanket agreements between the Authority and any successor Securities acceptances with domestic commercial banks, including the Bond Trustee or its affiliates, which have a rating on their short-term certificates of deposit on the date of purchase of “A-1” by

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Depository, relating to a system of Book Entry Bonds to be maintained by such Securities Depository “Participant” means a broker-dealer, bank or other financial institution for which the Securities with respect to any bonds, notes or other obligations issued by the Authority. Depository holds Bonds as a securities depository.

“Master Indenture” means the Master Trust Indenture, dated as of November 1, 2019, between “Predecessor Bonds” means, of any particular Bonds, every previous Bond evidencing all or a the Corporation and the Master Trustee, including all amendments or supplements thereto. portion of the same debt as that evidenced by such particular Bond, and, for purposes of this definition, any Bond authenticated and delivered under Section 2.10 in lieu of a lost, destroyed or stolen Bond shall “Master Trustee” means the Master Trustee under the Master Indenture. be deemed to evidence the same debt as the lost, destroyed or stolen Bond.

“Maturity Date” means December 31, 2024. “Principal Account” means the account in the Bond Fund created and so designated by Section 5.01. “Maximum Rate” means the not to exceed interest rate stated in the Bond Resolution (19.5%). “Project Account” means the account in the Project Fund created and so designated by “Moody’s” means Moody’s Investors Service, Inc. Section 4.01 hereof.

“Obligation” means the evidence of particular Indebtedness issued under the Master Indenture. “Project Budget” means the statement filed with the Bond Trustee pursuant to Section 2.08(h).

“Obligation No. 1” means the obligation so designated and issued under the Master Indenture and “Project Fund” means the Public Finance Authority Retirement Facility Revenue Anticipation Supplement No. 1 and delivered to the Authority pursuant to the Agreement and assigned to the Bond Bonds (Shalom Park Pre-Development Project) Series 2019 Project Fund created and so designated by Trustee pursuant hereto. Section 4.01 hereof and consisting of the Project Account and the Issuance Account.

“Opinion of Counsel” means an opinion in writing signed by an attorney or firm of attorneys “Rating Agency” means Fitch, Moody’s and Standard & Poor’s. acceptable to the Bond Trustee and the Authority who may be counsel for the Authority or the Corporation or other counsel. “Redemption Fund” means the Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019 Redemption Fund created and

D-36 “Outstanding” means, when used with reference to Bonds, as of a particular date, all Bonds so designated by Section 5.01. theretofore issued under this Trust Agreement, except: “Redemption Price” means the Accreted Value of the Bonds being redeemed, plus a premium (a) Bonds theretofore canceled by the Bond Trustee or delivered to the Bond Trustee equal to 3% of the principal amount of the Bonds being redeemed if the Bonds are redeemed pursuant to for cancellation; Section 3.01(e) due to a Determination of Taxability.

(b) Bonds for the payment of which money, Defeasance Obligations, or a “Regular Record Date” means the 15th day (whether or not a Business Day) of the month combination of both, sufficient to pay, on the date when such Bonds are to be paid or redeemed, preceding any Interest Payment Date. the principal amount of or the Redemption Price of, and the interest accruing to such date on, the Bonds to be paid or redeemed, has been deposited with the Bond Trustee in trust for the Holders “Securities Depository” means The Depository Trust Company, New York, New York or other of such Bonds; Defeasance Obligations shall be deemed to be sufficient to pay or redeem Bonds recognized securities depository selected by the Authority, which maintains a book entry system in on a specified date if the principal of and the interest on such Defeasance Obligations, when due, respect of the Bonds, and shall include any substitute for or successor to the securities depository initially will be sufficient to pay on such date the Redemption Price of, and the interest accruing on, such acting as Securities Depository. Bonds to such date; “Securities Depository Nominee” means, as to any Securities Depository, such Securities (c) Bonds in exchange for or in lieu of which other Bonds have been issued; and Depository or the nominee of such Securities Depository in whose name there shall be registered on the registration books maintained by the Bond Trustee the Bond certificates to be delivered to and (d) Bonds deemed to have been paid in accordance with Section 12.01; provided, immobilized at such Securities Depository during the continuation with such Securities Depository of however, that Bonds owned or held by or for the account of the Corporation, any Member of the participation in its book entry system. Obligated Group, any Affiliate or any subsidiary or controlled affiliate of the Corporation, any Member of the Obligated Group or any Affiliate shall not be deemed Outstanding for the purpose “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Bond of any consent or other action or any calculation of Outstanding provided for in Article VIII, Trustee pursuant to Section 2.03. Article XI and Article XII hereof or Sections 6.022 and of the10.0 Agreement, and neither the Corporation, any Member of the Obligated Group, any Affiliate nor any subsidiary or controlled “ Sponsor” means the National League of Cities, the National Association of Counties, the affiliate of the Corporation, any Member of the Obligated Group or any Affiliate as registered Wisconsin Counties Association, the League of Wisconsin Municipalities, and any other person that holds owners of such Bonds shall be entitled to consent or take any other action provided for in itself out, or is identified by the Authority, as an organization sponsoring the Authority. Article VIII, Article XI and Article XII hereof or Sections 6.02 and 10.02 of the Agreement. “Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The McGraw–Hill Companies, Inc.

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“Supplement No. 1” means Supplemental Indenture for Obligation No. 1, dated as of November Section 2.03 Details of Bonds. 1, 2019, between the Corporation and the Master Trustee, including all amendments or supplements thereto. The Bonds shall be executed in the name and on behalf of the Authority by the manual or facsimile signature of an Authority Authorized Signatory. “Tax Certificate” means the Tax Certificate and Agreement executed by the Authority and the Corporation in connection with the issuance of the Bonds. In case any Authority Authorized Signatory whose signature or whose facsimile signature shall appear on the Bonds shall cease to be such officer before the authentication of such Bonds, such signature “Trust Agreement” means this Trust Agreement, including all amendments or supplements or the facsimile thereof shall nevertheless be valid and sufficient for all purposes as if he or she had hereto. remained an Authority Authorized Signatory until authentication; and any Bond may be signed on behalf of the Authority by such persons as are at the time of execution of such Bond proper Authority Section 1.02 Rules of Construction. Words of the masculine gender shall be deemed and Authorized Signatory, even though at the date of this Trust Agreement, such person was not such officer. construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, the words “Bond,” “owner,” “Holder” shall include the plural as well as the singular Both the principal of and the interest on the Bonds shall be payable in any coin or currency of the number. United States of America that is legal tender for the payment of public and private debts on the respective dates of payment thereof. The principal of all Bonds shall be payable at the principal corporate trust Headings of articles and sections herein and in the table of contents hereof are solely for office of the Bond Trustee upon the presentation and surrender of such Bonds as the same shall become convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or due and payable. effect hereof. Reference herein to particular articles or sections are references to articles or sections of this Trust Agreement unless some other reference is otherwise indicated. Each Bond shall bear interest from the Interest Payment Date next preceding the date on which it is authenticated unless it is (a) authenticated upon an Interest Payment Date in which event it shall bear ARTICLE II interest from such Interest Payment Date or (b) authenticated prior to the first Interest Payment Date in which event it shall bear interest from its date; provided, however, that if at the time of authentication of DETAILS OF BONDS; ISSUANCE OF BONDS any Bond interest is in default, such Bond shall bear interest from the date to which interest has been paid. Notwithstanding any provision herein to the contrary, at no time, whether as a result of an Event of D-37 Section 2.01 Limitation on Issuance of Bonds. No Bonds may be issued under the provisions Default or otherwise, shall the interest on the Bonds exceed the Maximum Rate. of this Trust Agreement except in accordance with the provisions of this Article. Interest on any Bond which is payable, and is punctually paid or duly provided for, on any Section 2.02 Form and Numbering of Bonds; Limited Obligation. The Bonds are issuable in Interest Payment Date shall be paid by check mailed by the Bond Trustee to the person in whose name fully registered form in denominations of $25,000 and any integral multiple of $5,000 in excess thereof. that Bond is registered at the close of business on the Regular Record Date. The Bonds shall be substantially in the form set forth in Exhibit A, with such appropriate variations, omissions and insertions as may be necessary or appropriate to conform to the provisions of this Trust Interest, premium, if any, and principal due to any person holding Bonds in an aggregate principal Agreement and may be in typewritten, printed, engraved or lithographed form. The Bonds shall be amount of $1,000,000 or more shall be paid, upon the request of any such Holder by wire transfer of numbered from R-1 upwards. All Bonds may have endorsed thereon such legends or text as may be immediately available funds to any account in the continental United States designated by such Holder. necessary or appropriate to conform to any applicable rules and regulations of any governmental authority or of any securities exchange on which the Bonds may be listed or any usage or requirement of law with Any interest on any Bond which is payable, but is not punctually paid or duly provided for, on respect thereto, including the imposition of CUSIP or other identifying numbers. any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date solely by virtue of such Holder having been such Holder; and The Bonds are special limited obligations of the Authority payable solely from the revenues and such Defaulted Interest may be paid by the Authority, at the direction of the Bond Trustee, as provided funds pledged for their payment pursuant to this Trust Agreement and, except from such source, none of below: the Authority, any Authority Member, any Sponsor, any Authority Indemnified Party, the State of Wisconsin or any political subdivision or agency thereof or any political subdivision approving the The Authority shall, if so directed by the Bond Trustee, make payment of any Defaulted issuance of the Bonds shall be obligated to pay the principal of, premium, if any, or interest thereon or Interest on the Bonds (to the extent available) to the persons in whose names such Bonds any costs incidental thereto. The Bonds are not a debt of the State of Wisconsin or any Authority Member (or their respective Predecessor Bonds) are registered at the close of business on a Special and do not, directly, indirectly or contingently, obligate in any manner any Authority Member, the State Record Date for the payment of such Defaulted Interest, which shall be fixed in the of Wisconsin or any political subdivision or agency thereof or any political subdivision approving the following manner. The Bond Trustee shall notify the Corporation in writing of the issuance of the Bonds to levy any tax or to make any appropriation for payment of the principal of, amount of Defaulted Interest proposed to be paid on each Bond and the date of the premium, if any, or interest on, the Bonds or any costs incidental thereto. Neither the faith and credit nor proposed payment (which date shall be such as will enable the Bond Trustee to comply the taxing power of any Authority Member, any Sponsor, the State of Wisconsin or any political with the next sentence hereof), and upon such notice the Corporation shall deposit or subdivision or agency thereof or any political subdivision approving the issuance of the Bonds, nor the cause to be deposited with the Bond Trustee an amount of money equal to the aggregate faith and credit of the Authority, any Sponsor or any Authority Indemnified Party, shall be pledged to the amount proposed to be paid in respect of such Defaulted Interest or shall make payment of the principal of, premium, if any, or interest on, the Bonds or any costs incidental thereto. The arrangements satisfactory to the Bond Trustee for such deposit prior to the date of the Authority has no taxing power. proposed payment, such money when deposited to be held in trust for the benefit of the

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persons entitled to such Defaulted Interest as in this section provided. Thereupon the The transfer of any Bond may be registered only upon the registration books upon surrender Bond Trustee shall fix a Special Record Date for the payment of such Defaulted Interest thereof to the Bond Trustee together with an assignment duly executed by the Holder or such Holder’s which shall be not more than 15 nor less than 10 days prior to the date of the proposed attorney or legal representative in such form as shall be satisfactory to the Bond Trustee. Upon any such payment and not less than 15 days after the receipt by the Bond Trustee of the notice of registration of transfer the Authority shall execute and the Bond Trustee shall authenticate and deliver in the proposed payment. The Bond Trustee shall promptly notify the Authority and the exchange for such Bond a new registered Bond or Bonds, registered in the name of the transferee, of any Corporation of such Special Record Date and, in the name and at the expense of the denomination or denominations authorized by this Trust Agreement in the aggregate principal amount Corporation, shall cause notice of the proposed payment of such Defaulted Interest and equal to the principal amount of such Bond surrendered or exchanged, of the same maturity and bearing the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder interest at the same rate. at such Holder’s address as it appears in the registration books maintained under Section 2.06 not less than 10 days prior to such Special Record Date. Notice of the In all cases in which Bonds shall be exchanged or the transfer of Bonds shall be registered proposed payment of such Defaulted Interest and the Special Record Date therefor having hereunder, the Authority shall execute and the Bond Trustee shall authenticate and deliver at the earliest been mailed as aforesaid, such Defaulted Interest shall be paid to the persons in whose practicable time Bonds in accordance with the provisions of this Trust Agreement. All Bonds surrendered names the Bonds (or their respective Predecessor Bonds) are registered on such Special in any such exchange or registration of transfer shall forthwith be cancelled by the Bond Trustee. Record Date and shall no longer be payable. Registrations of transfer or exchanges of Bonds shall be without charge to the Holders of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Notwithstanding the foregoing, for so long as the Bonds are Book Entry Bonds, payments on the Holder of the Bond requesting such registration of transfer or exchange as a condition precedent to the Bonds shall be made as provided in Section 2.11. exercise of such privilege. Neither the Authority nor the Bond Trustee shall be required (i) to issue, transfer or exchange Bonds during a period beginning at the opening of business fifteen (15) days before Subject to the foregoing provisions of this Section, each Bond delivered under this Trust the day of the mailing of a notice of redemption of Bonds pursuant to Section 3.03 hereof and ending at Agreement upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to the close of business on the day of such mailing or (ii) to transfer or exchange any Bond so selected for interest accrued and unpaid, and to accrue, which were carried by such other Bond and each such Bond redemption in whole or in part. shall bear interest from such date, so that neither gain nor loss in interest shall result from such transfer, exchange or substitution. Notwithstanding the foregoing, for so long as the Bonds are held under a Book Entry System, transfers of beneficial ownership will be effected pursuant to rules and procedures established by the D-38 Section 2.04 Authentication of Bonds. Only such Bonds as shall have endorsed thereon a Securities Depository. certificate of authentication substantially in the form hereinabove set forth, duly executed by the Bond Trustee, shall be entitled to any benefit or security under this Trust Agreement. No Bond shall be valid or Notwithstanding any other provision hereof, each initial Beneficial Owner of the Bonds shall be obligatory for any purpose unless and until such certificate of authentication on the Bond shall have been either (i) a “Qualified Institutional Buyer” (as defined in Rule 144A under the Securities Act of 1933, as duly executed by the Bond Trustee, and such certificate of the Bond Trustee upon any such Bond shall be amended); or (ii) an “accredited investor” (as defined in Rule 501 of Regulation D under the Securities conclusive evidence that such Bond has been duly authenticated and delivered under this Trust Act of 1933, as amended) that, in either case, has provided an “Investor Letter” in the form of Exhibit D Agreement. The Bond Trustee’s certificate of authentication on any Bond shall be deemed to have been hereto to the Authority and the Bond Trustee; thereafter, neither the Bonds nor any beneficial ownership duly executed if signed by an authorized officer of the Bond Trustee, but it shall not be necessary that the interest in the Bonds may be transferred by the Holder of the Bond except: (A) in authorized same officer sign the certificate of authentication on all of the Bonds that may be issued hereunder at any denominations, and (B) to any Beneficial Owner that is a Qualified Institutional Buyer or an accredited one time. investor (and, in the case of an accredited investor who is not a Qualified Institutional Buyer, in a minimum principal amount of $25,000 regardless of any lower minimum denomination authorized Section 2.05 Exchange of Bonds. Bonds, upon surrender thereof at the principal corporate hereby). The Authority may remove the foregoing restrictions without notice to or consent of any trust office of the Bond Trustee, together with an assignment duly executed by the Holder or such Beneficial Owner. At such time as the Corporation shall provide to the Authority and the Bond Trustee Holder’s attorney or legal representative in such form as shall be satisfactory to the Bond Trustee, may, at written evidence of an Investment Grade Notice, this Section shall be of no further force or effect and the the option of the Holder thereof, be exchanged for an equal aggregate principal amount of Bonds of the authorized denominations of the Bonds shall be changed (if necessary) to denominations of $5,000 or any same series and maturity, of any denomination or denominations authorized by this Trust Agreement, integral multiple thereof, in each case, notwithstanding whether at a future time the Bonds are no longer bearing interest at the same rate, and in the same form as the registered Bonds surrendered for exchange. rated in such rating category.

The Authority shall make provision for the exchange of the Bonds at the principal corporate trust Section 2.07 Ownership of Bonds. The Authority, the Bond Trustee and any agent of the office of the Bond Trustee. Authority or the Bond Trustee, may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest on, Section 2.06 Negotiability, Registration and Transfer of Bonds. The Bond Trustee shall keep such Bond, and for all other purposes whatsoever, whether or not such Bond be overdue, and, to the the registration books for the registration and registration of transfer of Bonds as provided in this Trust extent permitted by law, none of the Authority, the Bond Trustee or any such agent shall be affected by Agreement. The registration books shall be available at all reasonable times for inspection by the notice to the contrary. Authority and its agents and representatives, and the Bond Trustee shall provide to the Authority, upon its written request, an accurate copy of the names and addresses of the Holders set forth in the registration Section 2.08 Authorization and Details of Bonds. There shall be issued under and secured by books. this Trust Agreement Bonds of the Authority in the aggregate principal amount of ______

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Dollars ($______). The Bonds shall be designated “Public Finance Authority Retirement Facility of statutory laws or regulations, and (D) to the knowledge of such counsel, do not conflict with, Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019.” violate or result in a breach of any judgment, court order or consent decree that names the Corporation and is specifically directed to it or its properties; (5) the Corporation has been The Bonds shall be dated the date of delivery thereof, November __, 2019, shall be stated to determined to be an organization that is exempt from federal income taxes under Section 501(a) mature (subject to the right of prior redemption) on the Maturity Date and shall bear interest (based on a of the Code, by virtue of being an organization described in Section 501(c)(3) of the Code and is 360-day year of twelve 30-day months) from such date of delivery to the Maturity Date, such interest to not classified as a “private foundation” as defined in Section 509(a) of the Code; to the best of the maturity thereof being payable on each Interest Payment Date, at rate of 0% per annum. For such counsel’s knowledge after due investigation, the Corporation has conducted its operations avoidance of doubt, the Bonds will not bear interest on a current basis and any references in this Trust and has made all necessary filings so as to maintain its status as an organization described in Agreement to interest accruing or being paid on a current basis is not applicable. Section 501(c)(3) of the Code and has done nothing to impair its status as an exempt organization; (6) the Master Indenture is effective to create in favor of the Master Trustee a The Bonds shall be executed substantially in the respective forms and in the manner hereinabove security interest (the “Article 9 Security Interest”) in the collateral described therein in which the set forth and shall be deposited with the Bond Trustee for authentication, but before the Bonds shall be Corporation has rights, to which North Carolina’s version of Article 9 of the Uniform delivered by the Bond Trustee, there shall be filed or deposited with the Bond Trustee the following: Commercial Code (“Article 9”) is applicable, and in which a security interest may be created under Article 9 (the “Article 9 Collateral”); and (7) the Article 9 Security Interest in that portion (a) a copy, certified by an Authority Authorized Signatory to be a true and correct of the Article 9 Collateral in which a security interest may be perfected by the filing of a copy, of the Bond Resolution; financing statement under Article 9 has been, and is as of the date of such opinion, perfected by the filing of financing statements in the offices of the Secretary of State of the State and the (b) fully executed counterparts of this Trust Agreement, the Agreement and the Register of Deeds of Mecklenburg County, North Carolina; Continuing Disclosure Agreement; (g) an opinion of Bond Counsel to the Authority, in substantially the form attached (c) fully executed counterparts of the Master Indenture, Supplement No. 1 and the as Appendix D to the Limited Offering Memorandum, dated ______, 2019, pertaining to Assignment of Contracts; the Bonds;

(d) true and correct copies of all UCC financing statements filed relating to the (h) a copy, certified by an authorized representative of the Corporation, of the D-39 Master Indenture; Project Budget; and

(e) the fully executed Obligation No. 1, which shall either be accompanied by an (i) such other documents, certificates (including certificates issued by public assignment thereof to the Bond Trustee without recourse, or which shall bear evidence that it has officials) and opinions of counsel as the Authority or Bond Counsel may reasonably request. been otherwise assigned to the Bond Trustee; When the documents mentioned in subparagraphs (a) to (i), inclusive, above shall have (f) an opinion of counsel to the Corporation satisfactory to Bond Counsel been filed with the Bond Trustee and when the Bonds shall have been executed and authenticated substantially to the effect that (1) the Corporation is a nonprofit corporation in existence under the as required by this Trust Agreement, the Bond Trustee shall deliver the Bonds at one time to or laws of the State, with power to execute, deliver and perform its obligations under each of the upon the order of the purchasers named in the resolution mentioned in subparagraph (a) of this Agreement, the Continuing Disclosure Agreement, the Master Indenture, Supplement No. 1, Section, but only upon payment to the Bond Trustee of the purchase price of the Bonds. The Obligation No. 1, and the Assignment of Contracts (collectively, the “Corporation Documents”); Bond Trustee shall be entitled to rely upon the resolution mentioned in subparagraph (a) of this (2) each of the Corporation Documents has been duly authorized, executed and delivered by the Section as to all matters stated therein. With respect to the documents mentioned in Corporation and constitutes a legal, valid and binding agreement of the Corporation, enforceable subparagraphs (d) and (f) to (j), inclusive, above, the Bond Trustee shall have no duty or in accordance with its terms, except that the enforceability of the same may be limited by (A) the obligation to review the contents thereof and shall receive such documents solely as a repository provisions of applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, on behalf of the Holders. moratorium and similar laws affecting the enforcement of creditors’ rights generally; (B) general principles of equity, and (C) other customary exceptions to enforceability; (3) the Corporation has Simultaneously with the delivery of the Bonds, the proceeds of the Bonds obtained all consents, approvals, authorizations and orders of governmental or regulatory ($______, representing the par amount of the Bonds less original issue discount of authorities (collectively, “Consents”) that are required to be obtained by the Corporation as a $______) shall be applied or transferred by the Bond Trustee as follows: condition precedent to the execution, delivery and performance of the Corporation Documents, except that the offer and sale of the Bonds in certain jurisdictions may be subject to the provisions (1) to the credit of the Issuance Account, the sum of $______; of the securities or Blue Sky laws of such jurisdictions with respect to which such counsel expresses no opinion; (4) the execution and delivery of the Corporation Documents by the (2) to the credit of the Project Account, the balance of $______. Corporation, and compliance with the terms thereof, (A) do not conflict with the articles of organization or operating agreement of the Corporation, (B) do not in any material respect Simultaneously with the delivery of the Bonds, the Corporation shall deposit $______of its conflict with, or constitute on the part of the Corporation, a breach or default under, any own funds with the Bond Trustee for credit to the Issuance Account. indenture, mortgage, deed of trust, agreement or other instrument to which the Corporation is a party known to such counsel after reasonable inquiry, (C) do not violate any applicable provisions

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Section 2.09 Temporary Bonds. Until definitive Bonds are ready for delivery, there may be The book entry registration system for all of the Book Entry Bonds may be terminated and executed, and upon request of the Authority, the Bond Trustee shall authenticate and deliver, in lieu of certificated Bonds delivered to and registered in the name of the Beneficial Owners, under either of the definitive Bonds and subject to the same limitations and conditions, typewritten, printed, engraved or following circumstances: lithographed temporary Bonds, in the form of fully registered Bonds in denominations of $25,000 and any integral multiple of $5,000 in excess thereof, substantially of the tenor of the Bonds set forth in this Trust (a) DTC notifies the Authority, the Corporation and the Bond Trustee that it is no longer Agreement and with such appropriate omissions, insertions and variations as may be required. willing or able to act as Securities Depository for the Book Entry Bonds and a successor Securities Depository for the Book Entry Bonds is not appointed by the Authority, at the direction of the Until definitive Bonds are ready for delivery, any temporary Bond may, if so provided by the Corporation, prior to the effective date of such discontinuation; or Authority by resolution, be exchanged at the principal corporate trust office of the Bond Trustee, without charge to the Holder thereof, for an equal aggregate principal amount of temporary fully registered Bonds (b) The Authority and the Corporation determine that continuation of the book entry system of authorized denominations, of like tenor, of the same series and maturity and bearing interest at the through DTC (or a successor Securities Depository) is not in the best interest of the Corporation. same rate. In the event a successor Securities Depository is appointed by the Authority, at the direction of If temporary Bonds shall be issued, the Authority shall cause the definitive Bonds to be prepared the Corporation, the Book Entry Bonds will be registered in the name of such successor Securities and to be executed and delivered to the Bond Trustee, and the Bond Trustee, upon presentation to it at its Depository or its nominee. In the event certificated Bonds are required to be issued to Beneficial Owners, principal office of any temporary Bond, shall cancel the same and authenticate and deliver in exchange the Bond Trustee, the Corporation and the Authority shall be fully protected in relying upon a certificate therefor at the place designated by the Holder, without charge to the Holder thereof, a definitive Bond or of DTC or any DTC participant as to the identity and principal amount of Book Entry Bonds held by such Bonds of an equal aggregate principal amount, of the same series and maturity and bearing interest at the Beneficial Owners. same rate as the temporary Bond surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefit and security of this Trust Agreement as the definitive Bonds to be The Beneficial Owners of Bonds will not receive physical delivery of certificates except as issued and authenticated hereunder. provided herein. For so long as there is a Securities Depository for Bonds, all of such Bonds shall be registered in the name of the Securities Depository Nominee, all transfers of beneficial ownership Section 2.10 Mutilated, Destroyed, Stolen or Lost Bonds. In case any Bond secured hereby interests in such Bonds will be made in accordance with the rules of the Securities Depository, and no shall become mutilated or be destroyed, stolen or lost, the Authority shall cause to be executed, and the investor or other party purchasing, selling or otherwise transferring beneficial ownership of such Bonds is D-40 Bond Trustee shall authenticate and deliver, a new Bond of like date and tenor in exchange and to receive, hold or deliver any certificated Bond. The Authority, the Bond Trustee and the Corporation substitution for and upon the cancellation of such mutilated Bond or in lieu of and in substitution for such shall have no responsibility or liability for transfers of beneficial ownership interests in such Bonds. Bond destroyed, stolen or lost, and the Holder shall pay the expenses and charges of the Authority and the Bond Trustee in connection therewith and, in case of a Bond destroyed, stolen or lost, the Holder shall file The Authority, the Corporation and the Bond Trustee will recognize the Securities Depository or with the Bond Trustee evidence satisfactory to it and to the Authority that such Bond was destroyed or its nominee as the Holder of Book Entry Bonds for all purposes, including receipt of payments, notices lost, and of such Holder’s ownership thereof, and shall furnish the Authority and the Bond Trustee and voting; provided, the Bond Trustee may recognize votes by or on behalf of Beneficial Owners as if indemnity satisfactory to them. such votes were made by Holders of a related portion of the Bonds when such votes are received in compliance with an omnibus proxy of the Securities Depository or otherwise pursuant to the rules of the Every Bond issued pursuant to the provisions of this Section in exchange or substitution for any Securities Depository or the provisions of the Letters of Representation or other comparable evidence Bond which is mutilated, destroyed, lost or stolen shall constitute an additional contractual obligation of delivered to the Bond Trustee by the Holders. 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 hereof equally and proportionately with With respect to Book Entry Bonds, the Authority, the Corporation and the Bond Trustee shall be any and all other Bonds duly issued under this Trust Agreement. All Bonds shall be held and owned entitled to treat the person in whose name such Bond is registered as the absolute owner of such Bond for upon the express condition that the foregoing provisions are exclusive with respect to the replacement or all purposes of this Trust Agreement, and none of the Authority, the Corporation or the Bond Trustee payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all other rights or shall have any responsibility or obligation to any Beneficial Owner of such Book Entry Bond. Without remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to limiting the immediately preceding sentence, none of the Authority, the Corporation or the Bond Trustee the replacement or payment of negotiable instruments or other securities without their surrender. shall have any responsibility or obligation with respect to (a) the accuracy of the records of any Securities Depository or any other person with respect to any ownership in Book Entry Bonds, (b) the delivery to Section 2.11 Book Entry System. Initially all Bonds shall be Book Entry Bonds. All Book any person, other than a Holder, of any notice with respect to Book Entry Bonds, including any notice of Entry Bonds shall initially be registered in the name of Cede & Co, as nominee of The Depository Trust redemption or refunding, (c) the selection of the particular Bonds or portions thereof to be redeemed or Company (“DTC”). The Authority acknowledges that it has executed and delivered a Letter of refunded in the event of a partial redemption or refunding of part of the Bonds Outstanding or (d) the Representations to DTC. All payments of principal of, redemption premium, if any, and interest on the payment to any person, other than a Holder, of any amount with respect to the principal of, redemption Book Entry Bonds and all notices with respect thereto, including notices of full or partial redemption, premium, if any, or interest on Book Entry Bonds. shall be made and given at the times and in the manner set out in the Letter of Representations. The terms and provisions of the Letter of Representations shall govern in the event of any inconsistency between provisions of this Trust Agreement and the Letter of Representations. The Letter of Representations may be amended without the consent of Holders.

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ARTICLE III Section 3.03 Redemption Notice.

REDEMPTION OF BONDS (a) Not less than thirty (30) days (fifteen (15) days in the event of a mandatory redemption pursuant to Section 3.01(c) hereof) but not more than sixty (60) days before the redemption date of any Section 3.01 Redemption Dates and Prices. The Bonds may not be called for redemption by Bonds, whether such redemption be in whole or in part, the Bond Trustee shall cause a notice of any such the Authority except as provided below: redemption to be mailed, first-class, postage prepaid (or sent by Electronic Means if so required or requested by a Holder), to all Holders of Bonds to be redeemed in whole or in part. Each such notice (a) If the Corporation exercises its option to prepay the Loan pursuant to Section 7.01 of the shall set forth the CUSIP numbers and, if less than all the Bonds of any maturity are to be redeemed, bond Agreement, the Bonds are required to be redeemed by the Authority, upon the written direction of the certificate numbers of the Bonds to be redeemed, the interest rate of the Bonds to be redeemed, the date of Obligated Group Representative to the Bond Trustee pursuant to Section 7.01(b) of the Agreement, in issuance of the Bonds to be redeemed, the date fixed for redemption, the Redemption Price to be paid, the whole or in part on any date on or after ______, 20__, at the Redemption Price of the Bonds to be maturities of the Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion redeemed, plus accrued interest to the redemption date. Upon the delivery of such written direction by of the principal amount thereof to be redeemed and, in the case that less than the entire principal amount the Obligated Group Representative to the Bond Trustee, the Authority shall be deemed, without any of any one bond certificate is redeemed, the portion of the principal amount thereof to be redeemed, the action on the Authority’s part, to have exercised its option to redeem the Bonds under this Section. address and phone number of the Bond Trustee, the date of the redemption notice and that on the redemption date the Bonds called for redemption will be payable at the principal corporate trust office of (b) [Reserved]. the Bond Trustee, that from that date interest will cease to accrue and be payable and that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the (c) The Bonds are required to be redeemed in whole from the proceeds of any bonds or other Bonds. If any Bond is to be redeemed in part only, the notice of redemption shall state also that on or source of permanent financing for the Facility, as received from the Corporation pursuant to Section 7.05 after the redemption date, upon surrender of such Bond, a new Bond in principal amount equal to the of the Agreement, at the Redemption Price, plus accrued interest to the redemption date. unredeemed portion of such Bond will be issued.

(d) The Bonds are required to be redeemed to the extent any balance in the Project Fund is (b) In the case of an optional redemption under Section 3.01(a) hereof, the redemption notice transferred to the Redemption Fund pursuant to Section 4.06 on any date for which timely notice of may state that (a) it is conditioned upon the deposit of moneys or Defeasance Obligations, or a redemption can be given by the Bond Trustee after such transfer occurs in a principal amount equal to the combination of both, in an amount equal to the amount necessary to effect the redemption, with the Bond D-41 amount so transferred at the Redemption Price, plus accrued interest to the redemption date. Trustee no later than the scheduled redemption date or (b) the Corporation retains the right to rescind such notice on or prior to the scheduled redemption date (in either case, a “Conditional Redemption”), and such (e) The Bonds are required to be redeemed in whole from amounts received from the notice and optional redemption shall be of no effect if such moneys are not so deposited or if the notice is Corporation pursuant to Section 7.04 of the Agreement on any date selected by the Bond Trustee, upon rescinded as described in this Section. In the case of a Conditional Redemption subject to the deposit of the direction of the Obligated Group Representative, which date shall be no later than 120 days after the moneys or Defeasance Obligations, the failure of the Corporation or any other Person to make such date of the occurrence of a Determination of Taxability, at the Redemption Price, plus accrued interest to moneys or obligations available in part or in whole on or before the scheduled redemption date shall not the redemption date. constitute an Event of Default hereunder and any Bonds subject to such Conditional Redemption shall remain Outstanding. Any Conditional Redemption subject to rescission may be rescinded in whole or in Section 3.02 Selection of Bonds to Be Redeemed. The Bonds shall be redeemed only in part at any time on or prior to the scheduled redemption date if the Obligated Group Representative amounts of $25,000 and any integral multiple of $5,000 in excess thereof. The Bond Trustee shall select instructs the Bond Trustee in writing to rescind the redemption notice. Any Bonds subject to Conditional the Bonds to be redeemed in accordance with the terms and provisions of this Trust Agreement. Redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an Event of Default hereunder. If a Conditional Redemption for which notice has been sent to If less than all of the Bonds of any maturity are to be called for redemption, the Bond Trustee Holders pursuant to Section 3.01(a) hereof will not occur, either because moneys or obligations to effect shall select by lot the Bonds (or portions thereof) to be redeemed, each $25,000 portion of principal being such redemption are not available on or before the scheduled redemption date or the Corporation has counted as one Bond for this purpose; provided that for so long as the Holder is a Securities Depository rescinded such notice in accordance with this Section, the Bond Trustee shall immediately give notice by Nominee, such selection shall be made by the Securities Depository. If there shall be called for Electronic Means to the Securities Depository if all of the Bonds are Book Entry Bonds or the affected redemption less than the principal amount of a Bond, the Authority shall execute and the Bond Trustee Holders of any Bonds that are not Book Entry Bonds that the redemption did not occur and that the Bonds shall authenticate and deliver, upon surrender of such Bond, without charge to the Holder thereof in called for redemption and not so paid remain Outstanding. exchange for the unredeemed principal amount of such Bond at the option of such Holder, Bonds in any denomination or denominations authorized by this Trust Agreement or, if the Bonds are held in the Book (c) Not less than thirty (30) days (fifteen (15) days in the event of a mandatory redemption Entry System, the Securities Depository shall, acting pursuant to its rules and procedures, reflect in the pursuant to Section 3.01(c) hereof) prior to the date of redemption, notice of such redemption shall be Book Entry System the partial redemption and the Bond Trustee shall (i) either exchange the Bond or given by the Bond Trustee to the Municipal Securities Rulemaking Board (the “MSRB”) using the Bonds held by the Securities Depository for a new Bond or Bonds in the appropriate principal amount, if MSRB’s Electronic Municipal Market Access system or such other means permitted by the rules of the such Bond is presented to the Bond Trustee by the Securities Depository, or (ii) obtain from the Securities MSRB. Depository a written confirmation of the reduction in the principal amount of the Bonds held by such Securities Depository. (d) Failure by the Bond Trustee to give notice pursuant to paragraph (c) the MSRB shall not affect the sufficiency of the proceedings for redemption. Failure of the Bond Trustee to give notice to a

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Holder or any defect in such notice shall not affect the validity of the proceedings for redemption of the Section 3.08 Purchase in Lieu of Redemption. When Bonds are subject to optional Bonds of any Holder to whom notice shall have been properly given. redemption pursuant to Section 3.01(a) of this Trust Agreement, Bonds to be redeemed may be purchased by the Corporation in lieu of redemption on the applicable redemption date at a purchase price equal to (e) Each check or other transfer of funds issued by the Bond Trustee for the purpose of the Redemption Price thereof if the Bond Trustee has received a written request on or before said redeeming Bonds shall bear, to the extent practicable, the CUSIP number identifying the Bonds being purchase date from the Corporation specifying that the moneys provided or to be provided by the redeemed with the proceeds of such check or other transfer. Corporation shall be used to purchase Bonds in lieu of redemption. No purchase of Bonds by the Corporation pursuant to this Trust Agreement or advance or use of any moneys to effectuate any such (f) Notice of redemption of Bonds shall be given by the Bond Trustee, at the expense of the purchase shall be deemed to be a payment or redemption of the Bonds or any portion thereof, and such Corporation, for and on behalf of the Authority. purchase shall not operate to extinguish or discharge the indebtedness evidenced by such Bonds.

Section 3.04 Effect of Calling for Redemption. Not later than 11:00 A.M. on the date fixed ARTICLE IV for redemption, moneys, Defeasance Obligations or a combination of both shall be deposited with the Bond Trustee to pay the principal of and the premium, if any, and interest accruing thereon to the PROJECT FUND redemption date of the Bonds called for redemption. Section 4.01 Project Fund. A special fund is hereby established with the Bond Trustee and On the date fixed for redemption, notice having been given in the manner and under the designated the Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park conditions hereinabove provided, the Bonds or portions thereof called for redemption shall be due and Pre-Development Project) Series 2019 Project Fund, in which there are established a Project Account, an payable at the Redemption Price provided therefor, plus accrued interest to such date. If, on the date Issuance Account and Liquidity Account. The Bond Trustee shall make the deposits to the Project fixed for redemption, money, Defeasance Obligations or a combination of both, sufficient to pay the Account and the Issuance Account required by the provisions of Section 2.08 hereof. All money received Redemption Price of the Bonds to be redeemed, plus accrued interest thereon to the date fixed for by the Authority from any source, including the Corporation, for the completion of the Project shall be redemption, are held by the Bond Trustee in trust for the Holders of Bonds to be redeemed, interest on the deposited immediately upon its receipt to the credit of the Project Account. Bonds called for redemption shall cease to accrue; such Bonds shall cease to be entitled to any benefits or security under this Trust Agreement or to be deemed Outstanding; and the Holders of such Bonds shall The money in the Project Account and the Interest Account shall be held by the Bond Trustee in have no rights in respect thereof except to receive payment of the Redemption Price thereof, plus accrued trust and, subject to the provisions of Section 4.05 hereof, shall be applied to the payment of Cost of the D-42 interest to the date fixed for redemption. Bonds and portions of Bonds for which irrevocable instructions Project and, pending such application, shall be subject to a lien and charge in favor of the Holders and for to pay on one or more specified dates or to call for redemption on a specified redemption date have been the further security of such Holders until paid out or transferred as provided in this Article. If directed in given to the Bond Trustee in form satisfactory to it shall not thereafter be deemed to be Outstanding under writing by each Holder Representative upon the occurrence of an Event of Default hereunder, the Bond this Trust Agreement and shall cease to be entitled to the security of or any rights under this Trust Trustee shall transfer the remaining funds in the Project Account to the Bond Fund. In no event shall the Agreement, other than rights to receive payment of the Redemption Price thereof and accrued interest Liquidity Account be subject to a lien and charge in favor of the Holders and for the further security of thereon to the date fixed for redemption, to be given notice of redemption in the manner provided in such Holders. If directed in writing by each Holder Representative upon the occurrence of an Event of Section 3.03, and, to the extent hereinafter provided, to receive Bonds for any unredeemed portions of Default hereunder, the Bond Trustee shall transfer the remaining funds in the Liquidity Account to the Bonds if money, Defeasance Obligations or a combination of both, sufficient to pay the Redemption Price Borrower. of such Bonds or portions thereof, together with accrued interest thereon to the date upon which such Bonds are to be paid or redeemed, are held in separate accounts by the Bond Trustee in trust for the Section 4.02 Payments from Project Fund. Payment of the Cost of the Project shall be made Holders of such Bonds. from the Project Account or the Issuance Account. All payments from the Project Fund shall be subject to the provisions and restrictions set forth in this Article, and the Authority covenants that it will not cause Section 3.05 Redemption of Portion of Bonds. If a portion of an Outstanding Bond shall be or permit to be paid from the Project Fund any sums except in accordance with such provisions and selected for redemption, the Holder thereof or his attorney or legal representative shall present and restrictions. surrender such Bond to the Bond Trustee for payment of the principal amount thereof so called for redemption and the redemption premium, if any, on such principal amount, and the Authority shall (a) All issuance costs within the meaning of Section 147(g) of the Code (“Issuance Costs”) execute and the Bond Trustee shall authenticate and deliver to or upon the order of such registered owner incurred in connection with the Bonds shall be paid only from the Issuance Account. All money received or his legal representative, without charge therefor, for the unredeemed portion of the principal amount of by the Authority from any source for Issuance Costs shall be deposited immediately upon its receipt to the the Bond so surrendered, a Bond of the same series and maturity and bearing interest at the same rate. credit of the Issuance Account. Examples of such Issuance Costs include, but are not limited to, the following, if any: Section 3.06 Cancellation. Bonds so redeemed, presented and surrendered shall be canceled upon the surrender thereof. (i) counsel fees (including Bond Counsel, underwriter’s counsel, issuer’s counsel, Corporation’s counsel, trustee’s counsel, purchaser’s counsel as well as any other specialized Section 3.07 Use of Defeasance Obligations to Redeem Bonds. For purposes of all Sections counsel fees incurred in connection with the borrowing); in this Article, Defeasance Obligations shall be deemed to be sufficient to pay or redeem Bonds on a specified date if the principal of and the interest on such Defeasance Obligations, when due, will be (ii) underwriter’s compensation and financial advisor fees, if any, incurred in sufficient to pay on such date the Redemption Price of, and the interest accruing on, such Bonds to such connection with the borrowing; date.

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(iii) rating agency fees; expenses, the acquisition of lands, property rights, rights of way, easements, franchises and interests in or relating to lands, including title insurance, cost of surveys and other expenses in (iv) depositary fees incurred in connection with the borrowing; connection with such acquisition, and expenses of administration, all properly chargeable, in the opinion of the Obligated Group Representative, to the acquisition of the Project; (v) trustee, paying agent and certifying and authenticating agent fees related to issuance of the Bonds; (e) any interest accruing on the Bonds prior to the completion of the Project and for an additional period not to exceed two (2) years after the date of completion of the Project; and (vi) the Authority’s closing expenses as provided for in Section 10.13 of the Agreement; (f) any obligation or expense heretofore or hereafter incurred or paid by the Authority or the Corporation for any of the foregoing purposes. (vii) accountant’s fees related to issuance of the Bonds; Section 4.04 Requisitions from the Project Account and Issuance Account. Payments from (viii) printing costs (for the Bonds and of preliminary and final offering materials); the Project Account and the Issuance Account shall be made in accordance with the provisions of this Section. Before any such payment shall be made, there shall be filed with the Bond Trustee (which may (ix) costs incurred in connection with the required public approval process (e.g., be accomplished by Electronic Means): (a) a requisition, accompanied by copies of the invoices, publication costs for public notices generally and costs of the public hearing or voter payment or reimbursement of which is sought, signed by the Obligated Group Representative and referendum); and approved in writing by each Holder Representative, in substantially the form attached hereto as Exhibit B, stating: (x) costs of engineering and feasibility studies necessary to the issuance of the Bonds (as opposed to such studies related to completion of the Project, but not to the financing). (i) no default of Event of Default has occurred and is continuing;

Furthermore, other items which constitute a Cost of the Project (as described in Section 4.03 (ii) all permits, licenses, approvals and other authorizations of governmental hereof) may be paid from the Issuance Account. authorities required for the work in question have been obtained;

D-43 (b) Items which constitute a Cost of the Project other than Issuance Costs shall be paid from (iii) the item number of each such payment, the Project Account or, at the Corporation’s option, from the Issuance Account. (iv) the name of the person, firm or corporation to whom each such payment has been Section 4.03 Cost of Project. For the purpose of this Trust Agreement, the Cost of the Project (together with applicable receipts) or should be made, shall embrace such costs as are eligible costs within the purview of the Act and, without intending thereby to limit or restrict any proper definition of such Cost, shall include the following: (v) the respective amounts paid or to be paid, excluding any applicable sales tax,

(a) the cost of all labor, materials and services, the cost of all lands, property, rights, (vi) the purpose by general classification for which each obligation paid or to be paid rights of way, easements, franchises and other interests as may be deemed necessary or was incurred, convenient by the Obligated Group Representative for such acquisition, construction and equipping, the cost of all machinery and equipment, financing charges, engineering and legal (vii) that obligations in the stated amounts have been incurred by the Corporation and expenses, costs of plans, specifications, surveys, other expenses necessary or incident to are presently due and payable and that each item thereof is a proper charge against the Project determining the feasibility or practicality of such acquisition, construction and equipping, Fund and has not been paid, marketing and development expenses, administrative expenses, and such other expenses as may be necessary or incident to the financing, construction and equipping of the Project and the (viii) that no notice of any lien, right to lien or attachment upon, or claim affecting the placing of the Project in operation; right of any such persons, firms or corporations to receive payment of the respective amounts stated in such requisition, has been filed or attached or, if any of the foregoing have been filed or (b) Issuance Costs; attached, that the same has been satisfied or discharged or that a lien bond has been obtained from a reputable and adequately capitalized bonding company or surety in the amount of the lien, (c) the cost of borings and other preliminary investigations to determine foundation attachment, or claims to adequately protect the Bond Trustee and the Holders from incurring any or other conditions, expenses necessary or incident to determining the feasibility or practicability loss as a result of the same, of constructing the Project and fees and expenses of engineers, architects, management consultants and health care consultants for making studies, surveys and estimates of expenses of (ix) that the Cost incurred is consistent with the Project Budget and the Project engineers and architects for preparing plans and specifications and supervising construction as Documents; well as for the performance of all other duties of engineers and architects set forth herein in relation to the acquisition and construction of the Project; (x) that such requisition contains no item representing payment on account of any retainage to which the Corporation is entitled at the date of such requisition, and (d) all other items of expense not elsewhere in this Section specified incident to the acquisition of the Project and the financing thereof, including operating reserves, moving

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(xi) whether such requisition shall be paid from the Project Account or the Issuance conclusively rely, the Holder Representative shall be entitled to requisition payments without that consent Account; of the Obligated Group Representative. (b) The Liquidity Account has been funded by or behalf of the Obligated Group and shall in (b) as to obligations payable from the Project Account, a certification of the Obligated Group no event be subject to a lien and charge in favor of the Holders and for the further security of such Representative contained in such requisition that such obligations do not represent Issuance Costs. Holders. Any amounts remaining in the Liquidity Account upon payment of all Outstanding Bonds shall Upon receipt of each requisition, the Bond Trustee shall pay the obligations set forth in such be paid to the Corporation without any requisition therefor. requisition out of money in the Project Account or Issuance Account, as applicable, and each such ARTICLE V obligation shall be paid by check signed by one or more officers or employees of the Bond Trustee designated for such purpose by the Bond Trustee or by other appropriate means. In making such REVENUES AND FUNDS payments the Bond Trustee may rely upon such requisitions and shall have no obligation to review the accompanying invoices or other supporting documentation. If for any reason the Corporation should Section 5.01 Establishment of Funds. In addition to the Project Fund established by decide prior to the initiation of payment by the Bond Trustee of any item in a requisition not to pay such Article IV, there are hereby established the following funds: item, it shall give written notice of such decision to the Bond Trustee and the Authority and thereupon the Bond Trustee shall not make such payment. (a) Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019 Bond Fund, in which there is established an Interest Account and a Section 4.05 Reliance Upon Requisitions from the Project Account and Issuance Account. Principal Account; All requisitions and accompanying documents received by the Bond Trustee as conditions of payment from the Project Account and the Issuance Account may be relied upon by the Bond Trustee and shall be (b) Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park retained by the Bond Trustee, subject at all reasonable times upon reasonable notice to the Bond Trustee Pre-Development Project) Series 2019 Redemption Fund; and to examination by the Authority, the Corporation and the Holders of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds Outstanding. The Bond Trustee has no duty or (c) Any temporary fund necessary for the Bond Trustee to create in order to accomplish the obligation to confirm whether or not any requested payments are proper costs or constitute either a Cost application of the Bond proceeds in accordance with Section 2.08. of the Project or Issuance Costs. D-44 The money and securities in each of said funds and accounts shall be held in trust by the Bond Section 4.06 Completion of the Project and Disposition of Project Account and Issuance Trustee and applied as hereinafter provided and, pending such application, the money and securities in Balances. Upon completion of payment of all the Costs of the Project intended to be paid by the each of said funds and accounts shall be subject to a lien and charge in favor of the Holders and for the Corporation from the proceeds of the Bonds, which fact shall be evidenced to the Bond Trustee by an further security of such Holders. Officer’s Certificate of the Obligated Group Representative, and approved in writing by each Holder Representative, delivered to the Bond Trustee and the Authority pursuant to Section 4.05 of the Section 5.02 Funds Received. The Bond Trustee shall deposit all amounts received as Loan Agreement, any balance in the Project Account or the Issuance Account shall be transferred by the Bond Repayments in the following order, subject to credits as provided in this Article: Trustee to the Redemption Fund. (a) to the credit of the Interest Account, three (3) Business Days prior to each Section 4.07 The Liquidity Account. Interest Payment Date, that amount which shall be equal to the interest payable on the Bonds on the next ensuing Interest Payment Date; (a) Payments from the Liquidity Account shall be made in accordance with the provisions of this Section. All moneys in the Project Account and the Issuance Account shall be depleted before there (b) to the credit of the Principal Account, three (3) Business Days prior to the are payments from the Liquidity Account. Before any such payment from the Liquidity Account shall be Maturity Date, that amount which shall be equal to the principal of all Bonds due on the Maturity made, there shall be filed with the Bond Trustee (which may be accomplished by Electronic Means) a Date; and requisition, accompanied by copies of the invoices, payment or reimbursement of which is sought, signed by the Obligated Group Representative and approved in writing by each Holder Representative in (c) to the credit of the Interest Account or the Redemption Fund, as applicable, any substantially the form attached hereto as Exhibit C, stating: amount that may from time to time be required to enable the Bond Trustee to pay the interest on and the Redemption Price of Bonds as and when Bonds are called for redemption. (i) the name of the person, firm or corporation to whom each such payment has been (together with applicable receipts) or should be made, To the extent that investment earnings are credited to the Bond Fund in accordance with Section 6.02 or amounts are credited thereto as a result of the application of the proceeds of the Bonds or (ii) the payments to be made are for marketing costs of the Project; and a transfer of investment earnings on any other fund or account held by the Bond Trustee, or otherwise, future deposits to such accounts shall be reduced by the amount so credited, and the Loan Repayments (iii) the respective amounts paid or to be paid. due from the Corporation in the months following the date upon which such amounts are credited shall be reduced by the amounts so credited. If there exists event of default under Appendix B to the Supplemental Indenture as set forth in a written certificate from the Holder Representative to the Bond Trustee upon which the Bond Trustee shall

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All amounts received by the Bond Trustee as payments for the Bonds to be redeemed as a result (b) Subject to the provisions of subsection (c) of this Section, the Bond Trustee shall call for of a prepayment of Obligation No. 1 shall be deposited in the Redemption Fund and the Interest Account, redemption on the redemption date specified by the Authority at the written direction of the Obligated as directed in writing by the Corporation, when received. All amounts received by the Bond Trustee as Group Representative such amount of Bonds or portions thereof as, with the redemption premium, if any, redemption premiums shall be deposited in the Redemption Fund when received. will exhaust the money then held for the credit of the Redemption Fund as nearly as may be practicable; provided, however, that not less than Fifty Thousand Dollars ($50,000) principal amount of Bonds shall Section 5.03 Application of Money in Interest Account. If the Bonds are not in a Book Entry be called for redemption at any one time. Such redemption shall be made pursuant to the provisions of System, not later than 10:00 A.M. on each Interest Payment Date, or date for the payment of Defaulted Article III. On the redemption date the Bond Trustee shall withdraw from the Interest Account and from Interest, or date upon which Bonds are to be redeemed, the Bond Trustee shall withdraw from the Interest the Redemption Fund and set aside the respective amounts required for paying the interest on and the Account and remit by mail, or to the extent permitted by Section 2.03, by wire transfer the amount Redemption Price of the Bonds or portions thereof so called for redemption; and required for paying interest on such Bonds when due and payable. (c) Money in the Redemption Fund shall be applied by the Bond Trustee in each Bond Year If the Bonds are in a Book Entry System, at such time as to enable the Bond Trustee to make to the purchase or the redemption of Bonds then Outstanding in accordance with the latest Officer’s payments of interest on the Bonds in accordance with any existing agreement between the Bond Trustee Certificate of the Obligated Group Representative filed with the Bond Trustee designating the Bonds to and any Securities Depository, the Bond Trustee shall withdraw from the Interest Account and remit by be purchased or redeemed. In the event no such Officer’s Certificate is filed, the Bond Trustee shall wire transfer, in Federal Reserve or other immediately available funds, the amounts required to pay to any apply such money to the purchase or redemption of such Bonds in inverse order of maturity. Holder which is a Securities Depository Nominee interest on the Bonds on the next succeeding Interest Payment Date; provided, however, that in no event shall the Bond Trustee be required to make such wire Upon the retirement of any Bonds by purchase or redemption pursuant to the provisions of this transfer prior to the Business Day next preceding each Interest Payment Date, and provided further that Section, the Bond Trustee shall file with the Authority and the Corporation a statement identifying such such wire transfer shall be made not later than 10:00 A.M. on each Interest Payment Date. Bonds and setting forth the date of purchase or redemption, the amount of the purchase price or the Redemption Price of such Bonds and the amount paid as interest thereon. The expenses in connection In the event the balance in the Interest Account on the second Business Day next preceding an with the purchase or redemption of any such Bonds are required to be paid by the Corporation as part of Interest Payment Date or date upon which Bonds are to be redeemed is insufficient to pay the interest the Required Payments under the Agreement. becoming due on the Bonds on the next ensuring Interest Payment Date or date upon which Bonds are to be redeemed, the Bond Trustee shall notify the Corporation of the amount of the deficiency. Section 5.07 [Reserved]. D-45 Section 5.04 Application of Money in Principal Account. Not later than 12:00 P.M. on the Section 5.08 Money Held in Trust. All money that the Bond Trustee shall have withdrawn Maturity Date, the Bond Trustee shall withdraw from the Principal Account and remit by wire transfer to from the Bond Fund or shall have received from any other source and set aside for the purpose of paying the Holder which is a Securities Depository Nominee, in Federal Reserve or other immediately available any of the Bonds hereby secured, either at the maturity thereof or by purchase or call for redemption or funds, the amount required to pay the principal of all Bonds maturing on the Maturity Date. for the purpose of paying any interest on the Bonds hereby secured, shall be held in trust for the respective Holders. Any money that is so set aside and that remains unclaimed by the Holders for a In the event the balance in the Principal Account on the second Business Day next preceding the period of five (5) years after the date on which such Bonds have become payable shall be treated as Maturity Date is insufficient to pay the principal becoming due on the Bonds on the Maturity Date, the abandoned property pursuant to the provisions of the Section 116B-53 of the General Statutes of North Bond Trustee shall notify the Corporation of the amount of the deficiency. Carolina, as amended, and the Bond Trustee shall report and remit this property to the Escheat Fund according to the requirements of Chapter 116B of the General Statutes of North Carolina, as amended, Section 5.05 [Reserved]. and thereafter the Holders shall look only to the Escheat Fund for payment and then only to the extent of the amounts so received, without any interest thereon, and the Bond Trustee, the Corporation and the Section 5.06 Application of Money in Redemption Fund. Money held for the credit of the Authority shall have no responsibility with respect to such money. Redemption Fund shall be applied to the purchase or redemption of Bonds, as follows: Section 5.09 Cancellation of Bonds. All Bonds paid, redeemed or purchased, either at or (a) Subject to the provisions of subsection (c) of this Section, at the written direction of the before maturity, shall be delivered to the Bond Trustee when such payment, redemption or purchase is Obligated Group Representative the Bond Trustee shall attempt to purchase and cancel Bonds or portions made, and such Bonds shall be canceled. The Bond Trustee shall certify to the Authority and the thereof, whether or not such Bonds or portions thereof shall then be subject to redemption, at the market Corporation the details of all Bonds so canceled. All Bonds canceled under any of the provisions of this price available, such price not to exceed the Redemption Price that would be payable on the next Trust Agreement shall, as permitted by applicable governmental regulations and as directed in writing by redemption date to the Holder of such Bonds under the provisions of Article III of this Trust Agreement the Authority Authorized Signatory, be either delivered to the Authority or destroyed by the Bond if such Bonds or portions thereof should be called for redemption on such date from the money in the Trustee, which shall, in such event, execute a certificate in duplicate, describing the Bonds so destroyed, Redemption Fund. The Bond Trustee shall pay the interest accrued on such Bonds or portions thereof to and one executed certificate shall be filed with the Authority and one executed certificate shall be filed the date of settlement therefor from the Interest Account and the purchase price from the Redemption with and retained by the Bond Trustee. Fund, but no such purchase shall be made by the Bond Trustee from money in the Redemption Fund within the period of seventy-five (75) days immediately preceding any date on which such Bonds are Section 5.10 Disposition of Fund Balances. After provision shall be made for the payment of subject to redemption; all Outstanding Bonds, including the interest thereon, and for the payment of all other obligations, expenses and charges required to be paid under or in connection with this Trust Agreement, Obligation No. 1, the Master Indenture and the Agreement and assuming the existence of no other indentures or other

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agreements imposing a continuing lien on the balances hereinafter mentioned, the Bond Trustee shall, repurchase agreements and not the maturity date of the underlying Government Obligations or other upon prior written consent from each Holder Representative and prior written notice to the Authority, obligations. pay, as an overpayment of Total Required Payments, all amounts in any fund or account then held by it under this Trust Agreement to the Corporation; provided, however, that if a continuing lien has been The Corporation shall give to the Bond Trustee written directions or telephonic instructions that imposed on any such balance by another indenture or agreement as to which the Bond Trustee has are confirmed immediately in writing respecting the investment of any money required to be invested received notice, the Bond Trustee shall pay such balance to such person as such indenture or agreement hereunder, subject, however, to the provisions of this Article, and the Bond Trustee shall then invest such shall provide. money under this Section as so directed by the Corporation. The Bond Trustee shall be fully protected in relying on the investment direction of the Corporation as to the suitability and the legality of such directed ARTICLE VI investments.

SECURITY FOR DEPOSITS, INVESTMENT OF FUNDS Investment Obligations credited to any fund or account established under this Trust Agreement shall be held by or under the control of the Bond Trustee and while so held shall be deemed at all times to AND COVENANT AS TO ARBITRAGE be part of such fund or account in which such money was originally held, and the interest accruing Section 6.01 Security for Deposits. Any and all money received by the Authority under the thereon and any profit or loss realized upon the disposition or maturity of such investment shall be provisions of this Trust Agreement (except amounts received in respect of the Authority Unassigned credited to or charged against such fund or account. The Bond Trustee shall sell at the market price Rights) shall be deposited as received by the Authority with the Bond Trustee and shall be trust funds available or reduce to cash a sufficient amount of such Investment Obligations whenever it shall be under the terms hereof and shall not be subject to any lien or attachment by any creditor of the Authority necessary so to do in order to provide moneys to make any payment or transfer of moneys from any such or the Corporation. Such money shall be held in trust and applied in accordance with the provisions of fund or account. The Bond Trustee shall not be liable or responsible for any loss resulting from any such this Trust Agreement. investment.

All money deposited with the Bond Trustee hereunder in excess of the amount guaranteed by the Whenever a payment or transfer of money between two or more of the funds or accounts Federal Deposit Insurance Corporation or other federal agency shall be continuously secured, for the established pursuant to Article IV or Article V is permitted or required, such payment or transfer may be benefit of the Authority and the Holders, either (a) by lodging with a bank or trust company chosen by the made in whole or in part by transfer of one or more Investment Obligations at a value determined in accordance with this Article, provided that the Investment Obligations transferred are those in which

D-46 Bond Trustee or custodian or, if then permitted by law, by setting aside under control of the trust department of the bank holding such deposit, as collateral security, Government Obligations or other moneys of the receiving fund or account could be invested at the date of such transfer. marketable securities eligible as security for the deposit of trust funds under regulations of the Comptroller of the Currency of the United States or applicable state law or regulations, having a market Although the Issuer recognizes that it may obtain a broker confirmation or written statement value (exclusive of accrued interest) not less than the amount of such deposit, or (b) if the furnishing of containing comparable information at no additional cost, the Issuer agrees that confirmations of permitted security as provided in clause (a) above is not permitted by applicable law, then in such other manner as investments are not required to be issued by the Trustee for each month in which a monthly statement is may then be required or permitted by applicable state or federal laws and regulations regarding the rendered and that no statement need be rendered for any fund or account if no activity occurred in such security for, or granting a preference in the case of, the deposit of trust funds; provided, however, that it fund or accounts during such month. shall not be necessary for the Bond Trustee to give security for the deposit of any money with it for the Section 6.03 Valuation. For the purpose of determining the amount on deposit in any fund or payment of the principal of or the redemption premium or the interest on any Bonds, or for the Bond account, Investment Obligations in which money in such fund or account is invested shall be valued (a) at Trustee to give security for any money that shall be represented by obligations purchased under the face value if such Investment Obligations mature within six months from the date of valuation thereof, provisions of this Article as an investment of such money. and (b) if such Investment Obligations mature more than six months after the date of valuation thereof at All money deposited with the Bond Trustee shall be credited to the particular fund or account to the price at which such Investment Obligations are redeemable by the holder at such holder’s option if so which such money belongs. redeemable, or, if not so redeemable, at the lesser of (i) the cost of such Investment Obligations minus the amortization of any premium or plus the amortization of any discount thereon and (ii) the market value of Section 6.02 Investment of Money. Money held for the credit of all funds and accounts such Investment Obligations as determined by the Bond Trustee in its ordinary course of business. created under this Trust Agreement and held by the Bond Trustee shall be continuously invested and reinvested by the Bond Trustee in Investment Obligations to the extent practicable in accordance with the The Bond Trustee shall send a monthly statement to the Corporation summarizing the written instructions of the Corporation as provided herein or, if no such instruction is given, shall be held transactions and balances of each fund and account established under this Trust Agreement and held by uninvested. Any such Investment Obligations shall mature not later than the respective dates when the the Bond Trustee. In addition, the Investment Obligations shall be valued by the Bond Trustee and given money held for the credit of such funds or accounts will be required for the purposes intended. to the Corporation or the Authority, as applicable, at any time requested by the Authority Authorized Signatory or the Obligated Group Representative on reasonable notice to the Bond Trustee; provided, No Investment Obligations in any fund or account may mature beyond the latest maturity date of however, that the Bond Trustee shall not be required to value the Investment Obligations more than once any Bonds Outstanding at the time such Investment Obligations are deposited unless irrevocable in any calendar month other than as provided herein. instructions shall have been given to redeem such Investment Obligations on a date or dates not later than the latest maturity date of any Bonds Outstanding. For the purposes of this section, the maturity date of repurchase agreements for Government Obligations or other obligations is the maturity date of such

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ARTICLE VII Section 7.06 Unrelated Bond Issues. The Authority has, prior to the issuance of the Bonds, issued, and subsequent to the issuance of the Bonds, the Authority expects to issue, various series of GENERAL COVENANTS AND REPRESENTATIONS bonds in connection with the financing of other projects (said bonds together with any bonds issued by the Authority between the date hereof and issuance of the Bonds shall be referred to herein as the “Other Section 7.01 Payment of Principal, Interest and Premium. The Authority shall not be Bonds”). Any pledge, mortgage, or assignment made in connection with any Other Bonds shall be obligated to pay the principal of, premium, if any, or interest on the Bonds or any costs incidental thereto, protected, and any funds pledged or assigned for the payment of principal, premium, if any, or interest on except from revenues and funds pledged for their payment pursuant to this Trust Agreement. The the Other Bonds shall not be used for the payment of principal, premium, if any, or interest on the Bonds. Authority shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, Correspondingly, any pledge, mortgage, or assignment made in connection with the Bonds shall be damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or protected, and any funds pledged or assigned for the payment of the Bonds shall not be used for the in connection with this Trust Agreement, the Bonds or the Agreement, except only to the extent amounts payment of principal, premium, if any, or interest on the Other Bonds. are received for the payment thereof from the Corporation under the Agreement. ARTICLE VIII The Bond Trustee hereby acknowledges that the Authority’s sole source of moneys to repay the Bonds will be provided by the revenues and funds assigned to the Bond Trustee or otherwise pledged EVENTS OF DEFAULT AND REMEDIES therefor, and hereby agrees that if such amounts shall ever prove insufficient to pay all the principal of, premium, if any, and interest on the Bonds as the same shall become due (whether by maturity, Section 8.01 Events of Default. Each of the following events is hereby declared an Event of redemption, acceleration or otherwise) or any costs incidental thereto, then the Bond Trustee shall give Default: notice to the Corporation in accordance with Section 8.01 to pay such amounts as are required from time to time to prevent any deficiency or default in the payment of such principal, premium, if any, or interest, (a) payment of any installment of interest on any Bond shall not be made by the or costs incidental thereto including, but not limited to, any deficiency caused by acts, omissions, Authority when the same shall become due and payable; nonfeasance or malfeasance on the part of the Bond Trustee, the Authority, the Corporation or any third party, subject to any right of reimbursement from the Bond Trustee, the Authority or any such third party, (b) payment of the principal or redemption premium, if any, of any Bond shall not be as the case may be, therefor. made by the Authority when the same shall become due and payable, whether at maturity or by proceedings for redemption (other than optional redemption); D-47 Section 7.02 Covenant to Perform and Authority of Authority. The Authority covenants that it will fulfill its obligations under Obligation No. 1 and the Agreement. The Authority shall promptly (c) default in the due and punctual performance of any other of the covenants, notify the Bond Trustee and the Corporation of any actual or alleged Event of Default of which it has conditions, agreements and provisions contained in this Trust Agreement or any agreement knowledge (provided, however, that failure to give such notice shall not be deemed a waiver of, or pre- supplemental hereto or thereto and such default shall continue for thirty (30) days after receipt by requisite to, the occurrence of such Event of Default; and provided, further, that the Authority shall not be the Authority, of a written notice from the Bond Trustee specifying such default and requiring the liable for any failure or delay in giving such notice), and shall not execute or agree to any change, same to be remedied; provided, however, if prior to the expiration of such 30-day period the amendment, modification or supplement of or to the Agreement, except as is provided in the Agreement Authority institutes action reasonably designed to cure such default, no Event of Default shall be and this Trust Agreement. The Authority shall administer the Agreement in accordance with its terms deemed to have occurred upon the expiration of such 30-day period for so long as the Authority and shall not agree to any reduction, abrogation, waiver, diminution or other modification in any manner pursues such curative action with reasonable diligence and provided that such curative action can and to any extent whatsoever of the obligation of the Corporation to make the Total Required Payments be completed within a reasonable time, provided such default is cured within ninety (90) days as provided in the Agreement. after receipt by the Authority of such notice; or

Section 7.03 Covenant as to Obligation No. 1, Master Indenture and Agreement. The Bond (d) an “Event of Default” shall have occurred under the Agreement or the Master Trustee may enforce all rights (except for the Authority Unassigned Rights) of the Authority and all Indenture, and such “Event of Default” shall not have been remedied or waived. obligations of the Corporation under the Agreement and Obligation No. 1 for and on behalf of the Holders, whether or not the Authority is in default hereunder. Section 8.02 Acceleration. Upon the happening and continuance of any Event of Default specified in Section 8.01, the Bond Trustee may, and upon the written request of the Holders of not less Section 7.04 Enforcement of Security Documents. Subject to Section 13.14 hereof, at the than twenty-five percent (25%) in aggregate principal amount of Bonds then Outstanding shall, by notice request of the Corporation or the Bond Trustee, the Authority shall execute and deliver such further in writing to the Authority and the Corporation, declare the principal of all Bonds then Outstanding (if not instruments or take such further actions as may be required to carry out the purposes of this Trust then due and payable) to be due and payable immediately, and upon such declaration the Redemption Agreement and the Agreement. Price of all Bonds shall become and be immediately due and payable, anything contained in the Bonds or in this Trust Agreement to the contrary notwithstanding; provided, however, that if at any time after the Section 7.05 Further Instruments and Actions. Subject to Section 13.14 hereof, at the principal of Bonds shall have been so declared to be due and payable, and before the entry of final request of the Corporation or the Bond Trustee, the Authority shall execute and deliver such further judgment or decree in any suit, action or proceeding instituted on account of such default, or before the instruments or take such further actions as may be required to carry out the purposes of this Trust completion of the enforcement of any other remedy under this Trust Agreement, money shall have Agreement and the Agreement. accumulated in or shall have been paid into the Bond Fund sufficient to pay the Redemption Price of all matured Bonds and all arrears of interest, if any, upon all Bonds then Outstanding (except the principal of any Bond not then due and payable by its terms and the interest accrued on such since the last Interest

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Payment Date), and the charges, compensations, expenses, disbursements, advances and liabilities of the (a) if the principal of all Bonds shall not have become or shall not have been declared due Bond Trustee and all other amounts then payable by the Authority hereunder shall have been paid or a and payable, such money shall be applied: sum sufficient to pay the same shall have been deposited with the Bond Trustee, and every other default known to the Bond Trustee in the observance or performance of any covenant, condition or agreement FIRST: to the payment to the persons entitled thereto of all installments of interest on contained in the Bonds or in this Trust Agreement (other than a default in the payment of the principal of Bonds then due and payable in the order in which such installments became due and payable and, such Bonds then due only because of a declaration under this Section) shall have been remedied to the if the amount available shall not be sufficient to pay in full any particular installment, then to the satisfaction of the Bond Trustee, then and in every such case the Bond Trustee may, and upon the written payment, ratably according to the amounts due on such installment, to the persons entitled request of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds thereto, without any discrimination or preference except as to any difference in the respective not then due and payable by their terms (Bonds then due and payable only because of a declaration under rates of interest specified in such Bonds; and this Section shall not be deemed to be due and payable by their terms) and then Outstanding shall, by written notice to the Authority and the Corporation, rescind and annul such declaration and its SECOND: to the payment of the interest on and the Redemption Price of Bonds, all in consequences, but no such rescission or annulment shall extend to or affect any subsequent Event of accordance with the provisions of Article III. Default or impair any right consequent thereon. (b) If the principal of all Bonds shall have become or shall have been declared due and Section 8.03 Enforcement of Remedies. Upon the happening and continuance of any Event payable, all such money shall be applied to the payment of principal and interest then due upon the Bonds of Default specified in Section 8.01, then and in every such case the Bond Trustee may, and upon the without preference to the persons entitled thereto and without preference or priority of principal over written request of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of interest or interest over principal, or any Bond over any other Bond ratably, according to the amounts due Bonds then Outstanding shall, proceed, subject to the provisions of Section 9.02, to protect and enforce respectively for principal and interest, to the persons entitled thereto, without any discrimination or its rights and the rights of the Holders under the laws of the State, the laws of the State of Wisconsin or preference. under this Trust Agreement by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board or officer having jurisdiction, either for the specific performance of (c) If the principal of all Bonds shall have been declared due and payable and if such any covenant or agreement contained herein or in aid or execution of any power herein granted or for the declaration shall thereafter have been rescinded and annulled under the provisions of Section 8.02, then, enforcement of any proper legal or equitable remedy, as the Bond Trustee, being advised by counsel subject to the provisions of subsection (b) of this Section in the event that the principal of all Bonds shall chosen by the Bond Trustee, shall deem most effectual to protect and enforce such rights. later become due and payable or be declared due and payable, the money then remaining in and thereafter D-48 accruing to the Bond Fund shall be applied in accordance with the provisions of subsection (a) of this In the enforcement of any remedy under this Trust Agreement, the Bond Trustee shall be entitled Section. to sue for, enforce payment of and receive any and all amounts then or during any Event of Default becoming and remaining due from the Authority for principal, interest or otherwise under any of the Whenever money is to be applied by the Bond Trustee pursuant to the provisions of this Section, provisions of this Trust Agreement or of the Bonds, together with interest on overdue payments of such money shall be applied by the Bond Trustee at such times and from time to time, as the Bond principal at the rate or rates of interest payable on any Bonds Outstanding, and all costs and expenses of Trustee in its sole discretion shall determine, having due regard for the amount of such money available collection and of all proceedings hereunder, without prejudice to any other right or remedy of the Bond for such application and the likelihood of additional money becoming available for such application in the Trustee or the Holders and to recover and enforce any judgment or decree against the Authority, but future; the setting aside of such money, in trust for the proper purpose, shall constitute proper application solely as provided herein, for any portion of such amounts remaining unpaid and interest, costs and by the Bond Trustee, and the Bond Trustee shall incur no liability whatsoever to the Authority, to any expenses as above provided, and to collect (but solely from money available for such purposes), in any Holder or to any other person for any delay in applying any such money so long as the Bond Trustee acts manner provided by law, the money adjudged or decreed to be payable. with reasonable diligence, having due regard for the circumstances, and ultimately applies the same in accordance with such provisions of this Trust Agreement as may be applicable at the time of application Section 8.04 Pro-Rata Application of Funds. Anything in this Trust Agreement to the by the Bond Trustee. Whenever the Bond Trustee shall exercise such discretion in applying such money, contrary notwithstanding, if at any time the money in the Bond Fund shall not be sufficient to pay the it shall fix the date (which shall be an Interest Payment Date unless the Bond Trustee shall deem another interest on or the principal of Bonds as the same shall become due and payable (either by their terms or by date more suitable) upon which such application is to be made and upon such date interest on the amounts acceleration of maturities under the provisions of Section 8.02), such money, together with any money of principal to be paid on such date shall cease to accrue. The Bond Trustee shall give notice by first then available or thereafter becoming available for such purpose, whether through the exercise of the class mail, postage prepaid, to all Holders of the fixing of any such date, and shall not be required to make remedies provided for in this Article or otherwise, shall, after the payment of any fees and expenses due payment to the Holder of any Bonds until such Bonds shall be surrendered to the Bond Trustee for the Bond Trustee hereunder (including the fees and expenses of its agents and counsel), any fees, costs cancellation if fully paid. and expenses of the Authority and the Authority Indemnified Parties and any other payments due them in respect of the Authority Unassigned Rights (including, without limitation, indemnification payments); Section 8.05 Effect of Discontinuance of Proceedings. If any proceeding taken by the Bond provided, that payment of amounts due to the Authority or the Authority Indemnified Parties under this Trustee or Holders on account of any Event of Default shall have been discontinued or abandoned for any Section shall not absolve the Corporation from the liability therefor except to the extent of the amounts reason, then and in every such case, the Authority, the Bond Trustee and the Holders shall be restored to received from the Bond Trustee and any extraordinary fees and expenses of each Holder Representative, their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of be applied as follows: the Bond Trustee shall continue as though no proceeding had been taken.

Section 8.06 Control of Proceedings by Holders. The Holders of a majority in aggregate principal amount of Bonds then Outstanding shall have the right, by an instrument or concurrent

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instruments in writing executed and delivered to the Bond Trustee, to direct the method and place of The Bond Trustee may, and upon written request of the Holders of not less than a majority in conducting all remedial proceedings to be taken by the Bond Trustee hereunder, provided that such principal amount of the Bonds then Outstanding shall, waive any Event of Default which in its opinion direction shall be in accordance with law and the provisions of this Trust Agreement. 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 this Trust Agreement or before the completion of the enforcement Section 8.07 Restrictions upon Actions by Individual Holders. Except as provided in of any rights of the Bond Trustee hereunder, but such waiver shall not waive any subsequent Event of Section 8.11, no Holder shall have any right to institute any suit, action or proceeding in equity or at law Default or impair any rights or remedies consequent thereon. on any Bond or for the execution of any trust hereunder or for any other remedy hereunder unless such Holder previously shall have given to the Bond Trustee written notice of the Event of Default on account Section 8.10 Notice of Default. The Bond Trustee shall mail, first class, postage prepaid, to of which such suit, action or proceeding is to be instituted, and unless also the Holders of not less than the Authority, the Corporation, each Holder Representative and all Holders at their addresses as they twenty-five percent (25%) in aggregate principal amount of Bonds then Outstanding shall have made a appear on the registration books written notice of the occurrence of any Event of Default set forth in written request of the Bond Trustee after the right to exercise such powers or right of action as the case Section 8.01 within five (5) days after the Bond Trustee shall have received notice or is deemed to have may be, shall have accrued, and shall have afforded the Bond Trustee a reasonable opportunity either to notice of the same, pursuant to the provisions of Section 9.08, that any such Event of Default shall have proceed to exercise the powers hereinabove granted or to institute such action, suit or proceedings in its or occurred; provided that, the Bond Trustee shall not be subject to any liability to any Holder by reason of their name, and unless, also, there shall have been offered to the Bond Trustee reasonable security and its failure to mail any such notice. indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Bond Trustee shall have refused or neglected to comply with such request within a reasonable time. Such Section 8.11 Right to Enforce Payment of Bonds Unimpaired. Nothing in this Article shall notification, request and offer of indemnity are hereby declared in every such case, at the option of the affect or impair the right of any Holder to enforce the payment of the principal of and interest on his Bond Bond Trustee, to be conditions precedent to the execution of the powers and trusts of this Trust or the obligation of the Authority to pay the principal of and interest on each Bond to the Holder thereof Agreement or to any other remedy hereunder. Notwithstanding the foregoing provisions of this Section at the time and place in said Bond expressed. and without complying therewith, the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds then Outstanding may institute any such suit, action or proceeding in their own ARTICLE IX names for the benefit of all Holders hereunder. It is understood and intended that, except as otherwise above provided, no one or more Holders shall have any right in any manner whatsoever by his or their CONCERNING THE BOND TRUSTEE action to affect, disturb or prejudice the security of this Trust Agreement, or to enforce any right D-49 hereunder except in the manner provided, that all proceedings at law or in equity shall be instituted, had Section 9.01 Acceptance of Duties. The Bond Trustee by execution hereof accepts and agrees and maintained in the manner herein provided and for the benefit of all Holders and that any individual to fulfill the trusts imposed upon it by this Trust Agreement, but only upon the terms and conditions set rights of action or other right given to one or more of such Holders by law are restricted by this Trust forth in this Article and subject to the provisions of this Trust Agreement, to all of which the Authority Agreement to the rights and remedies herein provided. and the respective Holders agree. Prior to the occurrence of any Event of Default and after the curing of all such Events of Default that may have occurred, the Bond Trustee shall perform such duties and only Section 8.08 Enforcement of Rights of Action. Notwithstanding anything to the contrary in such duties of the Bond Trustee as are specifically set forth in this Trust Agreement. During the existence this Trust Agreement, the Authority shall have no obligation to and instead the Bond Trustee, in of any such Event of Default that has not been cured the Bond Trustee shall exercise such of the rights accordance with this Trust Agreement or the Agreement, shall have the right, without any direction from and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their or action by the Authority, to take any and all steps, actions and proceedings, to enforce any or all rights exercise, as a prudent person would exercise or use under the circumstances. of the Authority (other than the Authority Unassigned Rights) under this Trust Agreement and the Agreement, including, without limitation, the rights to enforce the remedies upon the occurrence and No provision of this Trust Agreement, any Bond or the Agreement shall be construed to relieve continuation of an Event of Default and the obligations of the Corporation under the Agreement. the Bond Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: No provision of this Trust Agreement or the Agreement shall be deemed or construed as limiting, affecting or impairing in any way the Authority’s or any Authority Indemnified Party’s right to enforce (a) prior to any such Event of Default hereunder, and after the curing of any other Events of the Authority Unassigned Rights, regardless of whether there is then existing an Event of Default Default that may have occurred: (including, without limitation, a payment default) or any action based thereon or occasioned by an Event of Default or alleged Event of Default, and regardless of any waiver or forbearance by the Bond Trustee (i) the duties and obligations of the Bond Trustee shall be determined solely by the or the Beneficial Owners in respect thereof. Any default or Event of Default in respect of the Authority express provisions of this Trust Agreement and the Agreement and the Bond Trustee shall not be Unassigned Rights may only be waived with the Authority’s written consent. liable except for the performance of such duties and obligations of the Bond Trustee as are specifically set forth in this Trust Agreement and the Agreement, and no implied covenants or Section 8.09 Waivers. No delay or omission by the Bond Trustee or of any Holder in the obligations shall be read into this Trust Agreement or the Agreement against the Bond Trustee, exercise of any right or power accruing upon any Event of Default shall impair any such right or power or and shall be construed to be a waiver of any such Event of Default or any acquiescence therein; and every power or remedy given by this Trust Agreement to the Bond Trustee and to the Holders may be exercised (ii) in the absence of bad faith on its part, the Bond Trustee may conclusively rely, as from time to time and as often as may be deemed expedient. to the accuracy of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to it conforming to the requirements of this Trust Agreement and the Agreement, but in the case of any such certificate or opinion by which any provision hereof is

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specifically required to be furnished to the Bond Trustee, the Bond Trustee shall be under a duty by its execution of this Trust Agreement, the Bond Trustee shall have no responsibility in respect of the to confirm such certificate or opinion received is in the format prescribed by this Trust validity, sufficiency, due execution or acknowledgment of this Trust Agreement, or in respect of the Agreement and the Agreement, provided, though, that the Bond Trustee has no duty to examine validity of Bonds or the due execution or issuance thereof. The Bond Trustee shall be under no obligation or investigate the substantive content of any such certificate or opinion; and to see that any duties herein imposed upon the Authority, any depositary other than the Bond Trustee acting as a depositary, or any party other than itself, or any covenants herein contained on the part of any (b) at all times, regardless of whether or not any such Event of Default shall exist: party other than itself to be performed, shall be done or performed, and the Bond Trustee shall be under no obligation for failure to see that any such duties or covenants are so done or performed. The Bond (i) the Bond Trustee shall not be liable for any error of judgment made in good faith Trustee shall have no duty or responsibility to examine or review, and shall have no liability for the by a responsible officer or officers of the Bond Trustee unless it shall be proved that the Bond contents of, any documents submitted to or delivered to any Holder in the nature of a preliminary or final Trustee was negligent in ascertaining the pertinent facts, and placement memorandum, official statement, offering circular or similar disclosure document. The Bond Trustee shall not be liable to the Corporation, any Holder or any other Person for any loss suffered in (ii) the Bond Trustee shall not be liable with respect to any action taken or omitted to connection with any investment of funds made by it in accordance with the provisions of Section 6.02. be taken by it in good faith in accordance with the direction of the Holders of not less than The Bond Trustee shall not be responsible for the sufficiency of the security for the Bonds described in twenty-five percent (25%) or a majority, as this Trust Agreement shall require, in aggregate the granting clause of this Trust Agreement or otherwise as to the maintenance of such security. principal amount of Bonds then Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Bond Trustee, or exercising any power conferred The Bond Trustee shall not be responsible or liable for the environmental condition or any upon the Bond Trustee under this Trust Agreement and the Agreement. contamination of any property which secures the Bonds or for any diminution in value of any such property as a result of any contamination of the property by any hazardous substance, hazardous material, None of the provisions contained in this Trust Agreement, the Agreement, the Bonds, the pollutant or contaminant. The Bond Trustee shall not be liable for any claims by or on behalf of the Assignment of Contracts or any other agreement related to the Bonds shall require the Bond Trustee to Holders or any other person or entity arising from contamination of the property by any hazardous expend or risk its own funds or otherwise incur individual financial liability in the performance of any of substance, hazardous material, pollutant or contaminant, and shall have no duty or obligation to assess the its duties or in the exercise of any of its rights or powers. environmental condition of any such property or with respect to compliance of any such property under state or federal laws pertaining to the transport, storage, treatment or disposal of, hazardous substances, The Bond Trustee is not required to give any bond or surety with respect to the performance of its hazardous materials, pollutants, or contaminants or regulations, permits or licenses issued under such D-50 duties or the exercise of its powers under this this Trust Agreement, the Agreement, the Bonds, the laws. Assignment of Contracts or any other agreement related to the Bonds. No permissive right of the Bond Trustee hereunder, including the authority to enter into Whether or not expressly so provided, every provision of this Trust Agreement, the Agreement, supplemental trust agreements or take other actions, shall be construed as a duty, and the Bond Trustee the Bonds, the Assignment of Contracts or any other agreement related to the Bonds relating to the shall be under no obligation to take any such action or exercise any such right. conduct or affecting the liability of or affording protection to the Bond Trustee is subject to the provisions of this Article IX. The Bond Trustee may act through agents or attorneys, may in all cases pay, subject to reimbursement as provided in Section 9.02, such compensation as it deems proper to all such agents and Section 9.02 Indemnification of Bond Trustee. The Bond Trustee shall be under no attorneys employed or retained by it and shall not be responsible for the misconduct or negligence of obligation to institute any suit or to take any remedial proceeding (including, but not limited to, the agents or attorneys appointed with due care. appointment of a receiver or the acceleration of the maturity date of any or all Bonds) under this Trust Agreement, the Agreement the Assignment of Contracts and other agreement related to the Bonds or to The Bond Trustee shall not be responsible or liable for any failure or delay in the performance of enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any its obligations under this Trust Agreement or the Agreement arising out of or caused, directly or steps in the execution of any of the trusts hereby created or in the enforcement of any rights and powers indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; hereunder, until it shall be indemnified to its satisfaction against any and all costs and expenses, outlays earthquakes; fire; flood; hurricanes or other storms; wars; terrorism; similar military disturbances; and counsel fees and other reasonable disbursements, and against all liability. The Bond Trustee sabotage; epidemic; pandemic; riots; interruptions, loss or malfunctions of utilities, computer (hardware nevertheless may begin suit, or appear in and defend suit, or do anything else in its judgment proper to be or software) or communications services; accidents; labor disputes; acts of civil or military authority or done by it as such Bond Trustee, without indemnity, and in such case the Bond Trustee may reimburse governmental action; it being understood that the Bond Trustee shall use commercially reasonable efforts itself for all costs, expenses, outlays and counsel fees and other disbursements properly incurred in which are consistent with accepted practices in the banking industry to resume performance as soon as connection therewith from any money in its possession under the provisions of this Trust Agreement and reasonably practicable under the circumstances. shall be entitled to a preference therefor over any Bonds Outstanding hereunder. Section 9.04 Bond Trustee Not Liable for Failure of Authority to Act. The Bond Trustee Section 9.03 Limitations on Obligations and Responsibilities of Bond Trustee and Certain shall not be liable or responsible because of the failure of the Authority or of any of its employees or Rights of Bond Trustee. The Bond Trustee shall be under no obligation to effect or maintain insurance or agents to make any collections or deposits or to perform any act herein required of the Authority or to renew any policies of insurance or to inquire as to the sufficiency of any policies of insurance carried because of the loss of any money arising through the insolvency or the act or default or omission of any by the Authority or the Corporation, or to report, or make or file claims or proof of loss for, any loss or depositary other than the Bond Trustee acting as a depositary in which such money shall have been damage insured against or that may occur, or to keep itself informed or advised as to the payment of any deposited under the provisions of this Trust Agreement. The Bond Trustee shall not be responsible for taxes or assessments, or to require any such payment to be made. Except as to the acceptance of the trusts the application of any of the proceeds of Bonds or any other money deposited with it and paid out,

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withdrawn or transferred hereunder if such application, payment, withdrawal or transfer shall be made in All records and files pertaining to Bonds and the Corporation in the custody of the Bond Trustee accordance with the provisions of this Trust Agreement. The immunities and exemptions from liability of shall be open at all reasonable times to the inspection of the Authority, the Corporation and their the Bond Trustee hereunder shall extend to its directors, officers, employees and agents. respective agents and representatives; provided, however, that the Corporation and its agents and representatives shall not have access to any list of the Holders. Section 9.05 Compensation and Indemnification of Bond Trustee. The Authority shall cause the Corporation to pay to the Bond Trustee reasonable compensation for all services performed by it Section 9.07 Bond Trustee May Rely on Certificates and Advice. If at any time it shall be hereunder (including, should it becomes necessary, additional compensation for extraordinary services) necessary or desirable for the Bond Trustee to make any investigation respecting any fact preparatory to and also all its reasonable expenses, charges and other disbursements and those of its attorneys, agents taking or not taking any action or doing or not doing anything as such Bond Trustee, and in any case in and employees incurred in and about the administration and the performance of its powers and duties which this Trust Agreement provides for permitting or taking any action, the Bond Trustee may rely upon hereunder (including, but not limited to, extraordinary and out-of-pocket costs and expenses) and, to the any certificate required or permitted to be filed with it under the provisions of this Trust Agreement, and extent permitted by law, and shall cause the Corporation to indemnify and save the Bond Trustee any such certificate shall be evidence of such fact or protect the Bond Trustee in any action that it may or harmless against any liabilities that it may incur in the proper exercise and performance of its powers and may not take or in respect of anything it may or may not do, in good faith, by reason of the supposed duties hereunder and such indemnification obligation shall survive the resignation or removal of the Bond existence of such fact. Except as otherwise provided in this Trust Agreement, any request, notice, Trustee. If the Authority shall fail to cause any payment required by this Section to be made, the Bond certificate or other instrument from the Authority to the Bond Trustee shall be deemed to have been Trustee may make such payment from any money in its possession under the provisions of this Trust signed by the proper party or parties if signed by any Authority Authorized Signatory, and the Bond Agreement and shall be entitled to a preference therefor over any Bonds Outstanding hereunder. It is Trustee may accept and rely upon a certificate signed by any Authority Authorized Signatory as to any expressly acknowledged that the Authority shall be deemed to have satisfied and fully discharged its action taken by the Authority. Any request, notice, certificate or other instrument from the Holder obligations under this Section 9.05 by entering into the Agreement and not waiving the Corporation’s Representative to the Bond Trustee shall be deemed to have been signed by the proper party or parties if performance of any obligation thereunder without the Bond Trustee’s prior written consent. signed by any Holder Representative Authorized Signatory, and the Bond Trustee may accept and rely upon a certificate signed by any Holder Representative Authorized Signatory as to any action taken by the Section 9.06 Monthly Statements and Other Information from Bond Trustee. It shall be the Holder Representative. duty of the Bond Trustee, on or before the 15th day of each month, to file with the Authority and the Corporation a statement setting forth in respect of the preceding calendar month: The Bond Trustee may consult with counsel or independent auditor and the written advice of such counsel or independent auditor or any Opinion of Counsel shall be full and complete authorization and D-51 (a) the amount withdrawn or transferred by it and the amount deposited with it on protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance account of each fund or account held by it under the provisions of this Trust Agreement, thereon.

(b) the amount on deposit with it at the end of such month in each such fund or Section 9.08 Notice of Default. Except upon the happening of any Event of Default specified account, in clause (a) of Section 6.01 of the Agreement or clauses (a) or (b) of Section 8.01, the Bond Trustee shall not be obliged to take notice or be deemed to have notice of any Event of Default under this Trust (c) a brief description of all obligations held by it as an investment of money in each Agreement or the Agreement, unless specifically notified in writing of such Event of Default by the such fund or account, Corporation, the Authority, each Holder Representative or the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds then Outstanding, and in the absence of any such (d) the amount applied to the purchase or redemption of Bonds under the provisions notice, the Bond Trustee may conclusively assume that no such default or Event of Default exists. of Article V and a description of the Bonds or portions thereof so purchased or redeemed, and Section 9.09 Bond Trustee Protected in Relying on Certain Documents. The Bond Trustee (e) any other information that the Authority or the Corporation may reasonably shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in request. good faith, reasonably and in accordance with the terms of this Trust Agreement, upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other paper or The Bond Trustee shall also file with the Authority and the Corporation an annual statement document that it shall in good faith reasonably believe to be genuine and to have been adopted or signed covering the matters set forth in clauses (a) through (e) of the preceding paragraph on a basis coinciding by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of with the fiscal year of the Corporation. this Trust Agreement, or upon the written opinion of any attorney, engineer or accountant, and the Bond Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or The Bond Trustee shall provide a copy of all monthly and annual statements to any Holder or matters referred to in any such instrument. The Bond Trustee shall not be under any obligation to see to Beneficial Owner upon request. the recording or filing of this Trust Agreement, the Agreement or otherwise to the giving to any person of notice of the provisions hereof. The Bond Trustee shall have no obligation to file any initial Uniform In addition, promptly upon request by the Corporation or the Authority, the Bond Trustee shall Commercial Code financing statements. file with the Corporation and the Authority such information in the possession of the Bond Trustee as the Corporation shall request in order for the Corporation to determine the amount, if any, to be rebated to the Section 9.10 Bond Trustee May Pay Taxes and Assessments. In case the Corporation shall United States of America pursuant to Section 148 of the Code, provided that the Corporation shall fail to pay or cause to be paid any tax, assessment or governmental or other charge, to the extent, if any, reimburse the Bond Trustee for the reasonable costs (if any) incurred by the Bond Trustee in connection that the Corporation may be deemed by the Bond Trustee liable for same, the Bond Trustee may pay such with any such request. tax, assessment or governmental charge, without prejudice, however, to any rights of the Bond Trustee or

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the Holders hereunder arising in consequence of such failure; and any amount at any time so paid under If no appointment of a successor Bond Trustee shall be made pursuant to the foregoing provisions this Section shall be repaid upon demand by the Bond Trustee or the Authority from funds made available of this Section within 60 days of such vacancy, any Holder hereunder or any retiring Bond Trustee may by the Corporation, but the Authority and the Bond Trustee shall be under no obligation to make any such apply to any court of competent jurisdiction to appoint a successor Bond Trustee. Such court may payment from sources provided in the Trust Agreement or the Agreement unless, in either case, it shall thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor have available or be provided with adequate funds for the purpose of such payment. Bond Trustee.

Section 9.11 Resignation and Removal of Bond Trustee Subject to Acceptance by Successor Any successor Bond Trustee hereafter appointed shall be (i) a bank or trust company having the of Appointment. No resignation or removal of the Bond Trustee and no appointment of a successor Bond powers of a trust company as to trusts, qualified to do and doing trust business in one or more states of the Trustee pursuant to this Article shall become effective until the acceptance of appointment by the United States of America, (ii) of good standing, and (iii) having a combined capital and surplus successor Bond Trustee under Section 9.14. aggregating not less than One Hundred Million Dollars ($100,000,000).

Section 9.12 Resignation of Bond Trustee. Subject to the provisions of Section 9.11, the Section 9.15 Vesting of Duties in Successor Bond Trustee. Every successor Bond Trustee Bond Trustee may resign and thereby become discharged from the trusts hereby created, by notice in appointed hereunder shall execute, acknowledge and deliver to its predecessor, and also to the Authority, writing given to the Authority, the Master Trustee and the Corporation, and mailed, postage prepaid, at an instrument in writing accepting such appointment hereunder, and thereupon such successor Trustee, the Bond Trustee’s expense, to each Holder, not less than sixty (60) days before such resignation is to without any further act, shall become fully vested with all the rights, immunities and powers, and subject take effect, but such resignation shall take effect immediately upon the appointment of a new Bond to all the duties and obligations, of its predecessor; but such predecessor shall nevertheless, on the written Trustee hereunder if such new Bond Trustee shall be appointed before the time limited by such notice and request of its successor or of the Authority and upon payment of the expenses, charges and other shall then accept the trusts hereof. disbursements of such predecessor that are payable pursuant to the provisions of Section 9.05, execute and deliver an instrument transferring to such successor Bond Trustee all the rights, immunities and Section 9.13 Removal of Bond Trustee. The Bond Trustee may be removed (a) at any time by powers of such predecessor hereunder; and every predecessor Bond Trustee shall deliver all property and an instrument or concurrent instruments in writing, executed by the Holders of not less than a majority in money held by it hereunder to its successor. Should any instrument in writing from the Authority be aggregate principal amount of Bonds then Outstanding and filed with the Authority, or (b) so long as no required by any successor Bond Trustee for more fully and certainly vesting in such Bond Trustee the Event of Default shall have occurred and be continuing, by an instrument in writing executed by the rights, immunities, powers and trusts hereby vested or intended to be vested in the predecessor Bond Corporation, subject to the prior written consent of the Authority, and filed with the Authority not less Trustee, any such instrument in writing shall and will, on request, be executed, acknowledged and D-52 than sixty (60) days before such removal is to take effect as stated in such instrument or instruments. A delivered by the Authority. photographic copy of any instrument or instruments filed with the Authority under the provisions of this paragraph, duly certified by an Authority Authorized Signatory as having been received by the Authority, Section 9.16 Required Payments. The Bond Trustee shall transfer all Required Payments that shall be delivered promptly by an Authority Authorized Signatory to the Bond Trustee. may come into its possession and that are required to be paid to the Authority pursuant to the Agreement promptly upon receipt thereof from the Corporation to the Authority at the address specified herein for The Bond Trustee may also be removed at any time for acting or proceeding in violation of, or for notice to the Authority or as otherwise directed by the Authority except that payments of the Authority’s failing to act or proceed in accordance with, any provisions of this Trust Agreement with respect to the Annual Fee shall be remitted to the Authority at the times specified in the Agreement duties and obligations of the Bond Trustee by any court of competent jurisdiction upon the application of the Authority or the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Section 9.17 Bond Trustee Receipt of Instructions or Directions via Electronic Means. The Bonds then Outstanding. Bond Trustee, the Authority and the Corporation agree that the Bond Trustee will accept and act upon instructions, including funds transfer instructions (“Instructions”), given pursuant to this Trust Agreement Section 9.14 Appointment of Successor Bond Trustee. If at any time hereafter the Bond or the Agreement and delivered using Electronic Means; provided, however, that the Authority and the Trustee shall resign, be removed, be dissolved or otherwise become incapable of acting, or the bank or Corporation shall provide to the Bond Trustee an incumbency certificate listing officers with the authority trust company acting as Bond Trustee shall be taken over by any governmental official, agency, to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such department or board, the position of Bond Trustee shall thereupon become vacant. If the position of Bond Authorized Officers, which incumbency certificate shall be amended by the Authority and the Trustee shall become vacant for any reason, (a) the Holders of not less than a majority in aggregate Corporation, as applicable, whenever a person is to be added or deleted from the listing. If the Authority principal amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing, may or the Corporation elects to give the Bond Trustee Instructions using Electronic Means, the Bond appoint a successor Bond Trustee, and (b) so long as no Event of Default shall have occurred and be Trustee’s understanding of such Instructions shall be deemed controlling. Each of the Authority and the continuing, the Corporation may recommend and the Authority shall appoint a Bond Trustee to fill such Corporation understands and agrees that the Bond Trustee cannot determine the identity of the actual vacancy. A successor Bond Trustee shall not be required if the Bond Trustee shall sell or assign sender of such Instructions and that the Bond Trustee shall conclusively presume that directions that substantially all of its trust business and the vendee or assignee shall continue in the trust business, of if a purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the transfer of the trust department of the Bond Trustee is required by operation of law, provided that such Bond Trustee have been sent by such Authorized Officer. Each of the Authority and the Corporation vendee, assignee or transferee is (i) a trust company or bank having the powers of a trust company as to shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Bond trusts, qualified to do and doing trust business in one or more states of the United States of America, Trustee and that the Authority and the Corporation and all Authorized Officers are solely responsible to (ii) of good standing, and (iii) having a combined capital and surplus aggregating not less than One safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or Hundred Million Dollars ($100,000,000). The Authority shall cause the Bond Trustee, and the Bond authentication keys upon receipt by the Authority or the Corporation. The Bond Trustee shall not be Trustee agrees, to give notice of any such appointment made by it by first class mail, postage prepaid, to liable for any losses, costs or expenses arising directly or indirectly from the Bond Trustee’s reliance all Holders. upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent

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with a subsequent written instruction. Each of the Authority and the Corporation agrees: (i) to assume all Section 10.02 Preservation of Information; Communications to Holders. risks arising out of the use of Electronic Means to submit Instructions to the Bond Trustee, including without limitation the risk of the Bond Trustee acting on unauthorized Instructions, and the risk of (a) The Bond Trustee shall preserve, in as current a form as is reasonably practicable, the interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated names and addresses of Holders received by the Bond Trustee. with the various methods of transmitting Instructions to the Bond Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority or the (b) If three or more Holders (hereinafter collectively referred to as “applicants”) apply in Corporation; (iii) that the security procedures (if any) to be followed in connection with its transmission writing to the Bond Trustee and furnish reasonable proof that each such applicant has owned a Bond for a of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs period of at least six months preceding the date of such application, and such application states that the and circumstances; and (iv) to notify the Bond Trustee immediately upon learning of any compromise or applicants desire to communicate with other Holders with respect to their rights under this Trust unauthorized use of the security procedures. Agreement or under the Bonds and such application is accompanied by a copy of the form of communication which such applicants propose to transmit, then the Bond Trustee shall, within five Business Days after the receipt of such application, inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Bond ARTICLE X Trustee in accordance with paragraph (a) of this Section, and as to the approximate cost of mailing to such Holders the form of communication, if any, specified in such application. EXECUTION OF INSTRUMENTS BY HOLDERS, PROOF OF OWNERSHIP OF BONDS AND DETERMINATION OF CONCURRENCE OF HOLDERS The Bond Trustee shall, upon the written request of such applicants, mail, first class, postage prepaid, to each Holder whose name and address appears in the information preserved at the time by the Section 10.01 Execution of Instruments by Holders. Any request, direction, consent or other Bond Trustee in accordance with paragraph (a) of this Section 10.02 a copy of the form of instrument in writing required or permitted by this Trust Agreement to be signed or executed by any communication which is specified in such request, with reasonable promptness after a tender to the Bond Holder may be in any number of concurrent instruments of similar tenor and may be signed or executed Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable by such Holders or their attorneys or legal representatives; provided, however, for so long as the Bonds expenses of mailing. are Book Entry Bonds, references to the Holders of Bonds in this sentence shall mean the Beneficial Owners of Bonds. In connection with the initial offering and sale of the Bonds, the underwriters (or their (c) Every Holder, by receiving and holding one or more Bonds, agrees with the Authority D-53 representative) of the Bonds, as the Bonds so provide, may be appointed as attorney-in-fact by the initial and the Bond Trustee that neither the Authority nor the Bond Trustee shall be held accountable by reason purchasers of the Bonds for the purpose of consenting to any request, direction, consent or other of mailing any material pursuant to a request made under such subsection. instrument (except for the Investor Letter delivered pursuant to Section 2.06 hereof) to be signed and executed by the Holders. Proof of the execution of any such instrument and of the ownership of Bonds Section 10.03 Holders of Bonds Deemed Holders of Obligation No. 1. In the event that any shall be sufficient for any purpose of this Trust Agreement and shall be conclusive in favor of the Bond request, direction or consent is required or permitted by the Master Indenture to be given by the registered Trustee and the Authority with regard to any action taken by either under such instrument if made in the owners of Obligations issued thereunder, including Obligation No. 1, the Holders of Bonds then following manner: Outstanding shall be deemed to be registered owners of Obligation No. 1 for the purpose of any such request, direction or consent in the proportion that the aggregate principal amount of Bonds then (a) The fact and date of the execution by any person of any such instrument may be proved Outstanding held by each such Holder of Bonds bears to the aggregate principal amount of all Bonds then by the verification of any officer in any jurisdiction who, by the laws thereof, has power to take affidavits Outstanding. The provisions of this Article and of Article VIII of the Master Indenture, as applicable, within such jurisdiction, to the effect that such instrument was subscribed and sworn to before such shall govern the execution of any such request, direction, consent or other instrument in writing required officer, or by an affidavit of a witness to such execution. Where such execution is on behalf of a person or permitted to be signed by Holders and registered owners of Obligation No. 1. Notwithstanding the other than an individual, such verification or affidavit shall also constitute sufficient proof of the authority foregoing, for so long as the Bonds are Book Entry Bonds, references to the Holders of Bonds in this of the signer thereof. Section shall mean the Beneficial Owners of Bonds.

(b) The ownership of Bonds shall be proved by the registration books kept under the Section 10.04 Holder Representative Deemed Holder of Bonds. For purposes of giving any provisions of Section 2.06. consents or directions, including the pursuit of remedial actions, contemplated under this Trust Agreement, or exercising any voting rights given to Holders under this Trust Agreement, subject to Nothing contained in this Article shall be construed as limiting the Bond Trustee to such proof, it Section 13.15, each Holder Representative shall be deemed to be the Holder of the Bonds. being intended that the Bond Trustee may accept any other evidence of the matters herein stated which it may deem sufficient. Any request or consent of any Holder shall bind every future Holder of the same ARTICLE XI Bond in respect of anything done by the Bond Trustee in pursuance of such request or consent. SUPPLEMENTAL TRUST AGREEMENTS Notwithstanding any of the foregoing provisions of this Section, the Bond Trustee shall not be required to recognize any person as a Holder or to take any action at his request unless the Bonds of such Section 11.01 Supplemental Trust Agreements without Consent of Holders. The Authority person shall be deposited with the Bond Trustee. and the Bond Trustee may, from time to time and at any time, enter into agreements supplemental hereto, with the consent of each Holder Representative, but without the consent of or notice to any Holder, to effect any one or more of the following:

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(a) cure any ambiguity or defect or omission, or correct or supplement any provision any Bond over any other Bond without the consent of the Holders of all Bonds Outstanding, or (e) a herein or any supplemental trust agreement hereto; reduction in the aggregate principal amount of Bonds required for consent to such supplemental trust agreement without the consent of the Holders of all Bonds Outstanding. Nothing contained in this (b) grant to or confer upon the Bond Trustee for the benefit of the Holders any Section, however, shall be construed as making necessary the approval by the Holders of the execution of additional rights, remedies, powers, authority or security that may lawfully be granted to or any supplemental trust agreement as authorized in Section 11.01. conferred upon the Holders or the Bond Trustee which are not contrary to or inconsistent with this Trust Agreement as then in effect or to subject to the pledge and lien of this Trust Agreement If at any time the Authority shall request the Bond Trustee to enter into any supplemental trust additional revenues, properties or collateral, including Defeasance Obligations; agreement for any of the purposes of this Section, the Bond Trustee shall, at the expense of the Corporation, cause notice of the proposed execution of such supplemental trust agreement to be mailed, (c) add to the provisions of this Trust Agreement other conditions, limitations and first class, postage prepaid, to all Holders. Such notice shall briefly set forth the nature of the proposed restrictions thereafter to be observed which are not contrary to or inconsistent with this Trust supplemental trust agreement and shall state that copies thereof are on file at the principal corporate trust Agreement as then in effect; office of the Bond Trustee for inspection by all Holders. The Bond Trustee shall not, however, be subject to any liability to any Holder by reason of its failure to mail the notice required by this Section, and any (d) add to the covenants and agreements of the Authority in this Trust Agreement such failure shall not affect the validity of such supplemental trust agreement when approved and other covenants and agreements thereafter to be observed by the Authority or to surrender any consented to as provided in this Section. right or power herein reserved to or conferred upon the Authority which are not contrary to or inconsistent with this Trust Agreement as then in effect; Whenever, at any time within three years after the date of the mailing of such notice, the Authority shall deliver to the Bond Trustee an instrument or instruments in writing purporting to be (e) permit the qualification of this Trust Agreement under any federal statute now or executed by the Holders of not less than a majority of the aggregate principal amount of Bonds then hereafter in effect or under any state Blue Sky law, and, in connection therewith, if the Authority Outstanding, which instrument or instruments shall refer to the proposed supplemental trust agreement so determines, to add to this Trust Agreement or any supplemental trust agreement such other described in such notice and shall specifically consent to and approve the execution thereof in terms, conditions and provisions as may be permitted or required by such federal statute or Blue substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Sky law; Bond Trustee may execute such supplemental trust agreement in substantially such form, without liability or responsibility to any Holder, whether or not such Holder shall have consented thereto. D-54 (f) [Reserved]; If the Holders of not less than a majority in aggregate principal amount of Bonds Outstanding at (g) if all of the Bonds are Book Entry Bonds, amend, modify, alter or replace the the time of the execution of such supplemental trust agreement shall have consented to and approved the Letter of Representations as provided in Section 2.11 or other provisions relating to Book Entry execution thereof as herein provided, no Holder shall have any right to object to the adoption of such Bonds; and supplemental trust agreement, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or (h) facilitate the issuance and delivery of certificated Bonds to Beneficial Owners if restrain the Authority and the Bond Trustee from executing the same or from taking any action pursuant the book entry system for the Bonds is discontinued. to the provisions thereof.

When requested by the Authority, and if all conditions precedent under this Trust Agreement Upon the execution of any supplemental trust agreement pursuant to the provisions of this have been met, the Bond Trustee shall join the Authority in the execution of any such supplemental trust Section, this Trust Agreement shall be and be deemed to be modified and amended in accordance agreement unless it imposes additional obligations on the Bond Trustee or affects the Bond Trustee’s therewith, and the respective rights, duties and obligations under this Trust Agreement of the Authority, rights and immunities under this Trust Agreement or otherwise. the Bond Trustee and all Holders shall thereafter be determined, exercised and enforced in all respects pursuant to the provisions of this Trust Agreement as so modified and amended. Section 11.02 Modification of Trust Agreement with Consent of Holders. Subject to the terms and provisions contained in this Section, and not otherwise, the Holders of not less than a majority of the Section 11.03 Exclusion of Bonds. Bonds owned or held by or for the account of the aggregate principal amount of Bonds then Outstanding shall have the right, from time to time, anything Corporation, any Affiliate or any subsidiary or controlled Affiliate of the Corporation or any Affiliate contained in this Trust Agreement to the contrary notwithstanding, to consent to and approve the shall not be deemed Outstanding Bonds for the purpose of any consent or other action or any calculation execution by the Authority and the Bond Trustee of such trust agreement or trust agreements of Outstanding Bonds provided for in this Article and Articles VIII and XII hereof or Sections 6.02 and supplemental hereto as shall be deemed necessary or desirable by the Authority for the purpose of 10.02 of the Agreement, and neither the Corporation nor any Affiliate as registered owners of such Bonds modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions shall be entitled to consent or take any other action provided for in this Article and Articles VIII and XII contained in this Trust Agreement; provided, however, that nothing herein contained shall permit, or be hereof or Sections 6.02 and 10.02 of the Agreement. At the time of any consent or other action taken construed as permitting (a) an extension of the maturity of the principal of or the interest on any Bonds under this Article and Articles VIII and XII, the Corporation shall furnish the Bond Trustee a certificate issued hereunder without the consent of the Holders of such Bonds, or (b) a reduction in the principal signed by an Obligated Group Representative, upon which the Bond Trustee may rely, describing all amount or Redemption Price of any Bonds or the redemption premium or the rate of interest thereon Bonds so to be excluded. without the consent of the Holders of such Bonds, or (c) the creation of a pledge of receipts and revenues to be received by the Authority under the Agreement superior to the pledge created by this Trust Section 11.04 Responsibilities of Bond Trustee and Authority under this Article. The Bond Agreement without the Consent of the Holders of all Bonds Outstanding, or (d) a preference or priority of Trustee and the Authority shall be entitled to exercise their discretion in determining whether or not any

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proposed supplemental trust agreement or any term or provision therein contained is desirable, after failure to mail such notice to any Holder or to the Holders or any defect in such notice so mailed shall not considering the purposes of such instrument, the needs of the Authority, the rights and interests of the affect the validity of the proceedings for the release of this Trust Agreement. Holders, and the rights, obligations and interests of the Bond Trustee, and neither the Bond Trustee nor the Authority shall be under any responsibility or liability to the other or to any Holder or to anyone All money and Defeasance Obligations held by the Bond Trustee pursuant to this Section shall be whomsoever for its refusal in good faith to execute any such supplemental trust agreement. The Bond held in trust and applied to the payment, when due, of the obligations payable therewith. Trustee and the Authority shall be entitled to receive, and shall be fully protected in relying upon, the opinion of any counsel approved by it as conclusive evidence that any such proposed supplemental trust ARTICLE XIII agreement does or does not comply with the provisions of this Trust Agreement and does or does not materially impact the rights and interests of the Holders. The Authority’s actions under this Section shall MISCELLANEOUS PROVISIONS in all cases be subject to Section 13.14. Section 13.01 Legal Holidays; Time. In any case where an Interest Payment Date, the Maturity Section 11.05 Consent of Corporation. Anything herein to the contrary notwithstanding, no Date or the date fixed for redemption of any such Bond shall be on a day that is not a Business Day, then such supplement or amendment to this Trust Agreement which affects the rights and obligations of the any payment due on such date need not be made on such date but may be made on the next succeeding Corporation shall become effective unless and until the Corporation shall have consented thereto. Business Day with the same force and effect as if made on such Interest Payment Date, the Maturity Date or the date fixed for redemption, and in the case of such payment, no interest shall accrue for the period ARTICLE XII from and after such date. All references to times herein shall refer to New York City Time.

DEFEASANCE Section 13.02 Manner of Giving Notice. All notices, demands and requests to be given to or made hereunder by the Corporation, the Authority, the Bond Trustee shall be given or made in writing Section 12.01 Release of Trust Agreement. If (a) with respect to any Bonds secured hereby and shall be deemed to be properly given or made if sent by United States registered mail or certified, that have become due and payable in accordance with their terms or otherwise as provided in this Trust return receipt requested, postage prepaid, addressed as follows: Agreement, the whole amount of the principal and the interest and premium, if any, or Redemption Price so due and payable upon all Bonds shall be paid; and (b) with respect to any Bonds that have not become As to the Corporation: Aldersgate at Shalom Park, Inc. due and payable in accordance with their terms, the Bond Trustee holds sufficient (i) money and/or 3800 Shamrock Road D-55 (ii) Defeasance Obligations, the principal of and the interest on which, when due and payable, will Charlotte, NC 28215 provide sufficient money, as verified by a nationally recognized independent certified public accountant, Attention: Suzanne H. Pugh to pay the principal and the interest and premium, if any, or Redemption Price on all such Bonds Outstanding to the maturity date or dates of such Bonds or to the date or dates specified for the As to the Authority: Public Finance Authority redemption thereof pursuant to irrevocable instructions to call given by the Authority to the Bond Trustee; 22 E. Mifflin Street, Suite 900 (c) sufficient funds shall also have been provided or provision made for paying all other obligations Madison, WI 53703 payable hereunder by the Authority; and (d) if the Bond Trustee holds Defeasance Obligations, the Bond Attention: Scott Carper and Michael LaPierre Trustee shall have received evidence that at least one Rating Agency has assigned short-term and/or long- term ratings to the Bonds that are equivalent to the ratings on such Defeasance Obligations, then and in As to the Bond Trustee: The Bank of New York Mellon Trust Company, N.A. that case the right, title and interest of the Bond Trustee in the funds and accounts mentioned in this Trust 10161 Centurion Parkway North Agreement shall thereupon cease, determine and become void and, on demand of the Authority and upon Jacksonville, Florida 32256 being furnished with an Opinion of Counsel to the effect that all conditions precedent to the release of Attention: Corporate Trust Services this Trust Agreement have been satisfied, the Bond Trustee shall release this Trust Agreement and shall execute such documents to evidence such release as may reasonably be required by the Authority and As to the Holder Representatives: HJS Advisors, Inc. shall turn over to the Authority, for the benefit of the Corporation, any surplus in, and all balances 2150 Post Road, Suite 301 remaining in, all funds and accounts, other than money held for the redemption or payment of Bonds. Westport, Connecticut 06824 Otherwise, this Trust Agreement shall be, continue and remain in full force and effect; provided, that, in Attention: General Counsel Office the event Defeasance Obligations shall be deposited with and held by the Bond Trustee as hereinabove Executive Vice President provided, (i) in addition to the requirements set forth in Article III, the Bond Trustee, within thirty (30) days after such Defeasance Obligations shall have been deposited with it, shall cause a notice signed by BB&T Capital Markets, a division of BB&T Securities, the Bond Trustee to be mailed, first class, postage prepaid, to all Holders, setting forth (a) the date or LLC dates, if any, designated for the redemption of the Bonds, (b) a description of the Defeasance Obligations 901 East Byrd Street, Suite 260 so held by it, and (c) that this Trust Agreement has been released in accordance with the provisions of this Richmond, Virginia 23219 Section, and (ii)(a) the Bond Trustee shall nevertheless retain such rights, powers and privileges under Attention: John Franklin this Trust Agreement as may be necessary and convenient in respect of the Bonds for the payment of the principal, interest and any premium for which such Defeasance Obligations have been deposited and Any such notice, demand or request may also be transmitted to the appropriate above-mentioned (b) the Bond Trustee shall retain such rights, powers and privileges under this Trust Agreement as may be party by telegram, telecopy or telephone and shall be deemed to be properly given or made at the time of necessary and convenient for the registration, transfer and exchange of Bonds; provided, however, that

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such transmission if, and only if, such transmission of notice shall be confirmed in writing and sent as under the Agreement or any claim based hereon or thereon, or be subject to any personal liability or specified above. accountability by reason of the execution and delivery of this Trust Agreement or the Agreement.

Any of such addresses may be changed at any time upon written notice of such change sent by Section 13.08 Expenses Payable Under Trust Agreement. All expenses incurred in carrying United States registered or certified mail, postage prepaid, to the other parties by the party effecting the out this Trust Agreement, except those expenses incurred by the Bond Trustee in mailing its own change. resignation notice, shall be payable solely from the revenues and funds pledged for the payment of the Bonds. Anything in this Trust Agreement to the contrary notwithstanding, the performance by the All documents received by the Bond Trustee under the provisions of this Trust Agreement, or Authority of all duties and obligations imposed upon it hereby, the exercise by it of all powers granted to photographic copies thereof, shall be retained in its possession until this Trust Agreement shall be it hereunder, the carrying out of all covenants, agreements and promises made by it hereunder, and the released under the provisions of Section 12.01, subject at all reasonable times to the inspection of the liability of the Authority for all warranties and other covenants herein shall be limited solely to the Authority, the Corporation and any Holder and the respective agents and representatives thereof; revenues and funds pledged for the payment of the Bonds; and the Authority shall not be required to provided, however, that the Corporation and its agents and representatives shall not have access to any list effectuate any of its duties, obligations, powers or covenants except from, and to the extent of, such of the Holders. moneys, revenues, proceeds and payments.

Section 13.03 Substitute Mailing. If, because of the temporary or permanent suspension of Section 13.09 Dealing in Bonds. The Bond Trustee and its directors, officers, employees or postal service, the Corporation, the Authority or the Bond Trustee shall be unable to mail any notice agents, and any officer, employee or agent of the Authority, may in good faith, buy, sell, own, hold and required to be given by the provisions of this Trust Agreement, the Corporation, the Authority or the deal in any Bonds issued under the provisions of this Trust Agreement and may join in any action which Bond Trustee shall give notice in such other manner as in the judgment of the Corporation, the Authority any Holder may be entitled to take with like effects as if such Bond Trustee were not the Bond Trustee or the Bond Trustee shall most effectively approximate mailing, and the giving of notice in such manner under this Trust Agreement or as if such officer, employee or agent of the Authority did not serve in such shall for all purposes of this Trust Agreement be deemed to be in compliance with the requirement for the capacity. mailing thereof. Section 13.10 Multiple Counterparts. This Trust Agreement may be executed in multiple Section 13.04 Parties and Holders Alone Have Rights under Trust Agreement. Except as counterparts, each of which shall be regarded for all purposes as an original, and such counterparts shall herein otherwise expressly provided, nothing in this Trust Agreement, express or implied, is intended or constitute but one and the same instrument. D-56 shall be construed to confer upon any person, firm or corporation, other than the Bond Trustee, the Authority and the Holders, any right, remedy or claim, legal or equitable, under or by reason of this Trust Section 13.11 Headings. Any heading preceding the text of the several articles hereof, and any Agreement or any provision being intended to be and being for the sole and exclusive benefit of the Bond table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference Trustee, the Authority and the Holders. and shall not constitute a part of this Trust Agreement, nor shall they affect its meaning, construction or effect. Notwithstanding any other provision hereof to the contrary, it is specifically acknowledged and agreed that, to the extent of their rights hereunder (including, without limitation, their rights to immunity Section 13.12 Governing Law; Jurisdiction. This Trust Agreement shall be governed by and and exculpation from pecuniary liability) each Authority Indemnified Party is a third-party beneficiary of construed in accordance with the laws and judicial decisions of the State of Wisconsin, excluding its this Trust Agreement entitled to enforce such rights in his, her, its or their own name. conflicts of law provisions. All claims of whatever character arising out of this Trust Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or Section 13.05 Effect of Partial Invalidity. In case any one or more of the provisions of this to the dealings between the Authority and any other party hereto, if and to the extent that such claim Trust Agreement, the Agreement or the Bonds shall for any reason be held to be illegal or invalid, such potentially could or actually does involve the Authority or any Authority Indemnified Party, shall be illegality or invalidity shall not affect any other provisions of this Trust Agreement, the Agreement or the brought in any state or federal court of competent jurisdiction located in Dane County, Wisconsin. By Bonds, but this Trust Agreement, the Agreement and the Bonds shall be construed and enforced as if such executing and delivering this Trust Agreement, each party hereto irrevocably: (i) accepts generally and illegal or invalid provisions had not been contained therein. In case any covenant, stipulation, obligation unconditionally the exclusive jurisdiction and venue of such courts; (ii) waives any defense of forum non or agreement contained in the Bonds, this Trust Agreement or the Agreement shall for any reason be held conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be specified above. The foregoing shall not be deemed or construed to constitute a waiver by the Authority the covenant, stipulation, obligation or agreement of the Authority or the Corporation to the full extent of any prior notice or procedural requirements applicable to actions or claims against or involving joint permitted by law. powers commissions or other governmental units of the State of Wisconsin that may exist at the time of and in connection with such matter. Section 13.06 Effect of Covenants. All covenants, stipulations, obligations and agreements of the Authority contained in this Trust Agreement shall be deemed to be covenants, stipulations, obligations Section 13.13 Consents and Approvals. Whenever the written consent or approval of the and agreements of the Authority to the full extent permitted by the Constitution and laws of the State of Authority, the Corporation or the Bond Trustee shall be required under the provisions of this Trust Wisconsin. Agreement, such consent or approval shall not be unreasonably withheld or delayed. Unless otherwise specified herein, consents of the Authority shall be executed and delivered on behalf of the Authority by Section 13.07 No Recourse Against Authority Members, Officers or Employees of Authority. the Authority Authorized Signatory and consents of the Corporation shall be executed and delivered on No Authority Indemnified Party shall be individually or personally liable for the payment of any principal behalf of the Corporation by the Obligated Group Representative. of, premium, if any, or interest on the Bonds or any costs incidental thereto or any sum hereunder or

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Notwithstanding any other provision hereof to the contrary, whenever any certificate or opinion is authentic and valid counterparts of such original documents for all purposes, including the filing of any required by the terms of this Agreement to be given by the Authority on its own behalf, any such claim, action or suit in the appropriate court of law. certificate or opinion may be made or given by an Authority Authorized Signatory (and in no event individually) and may be based (i) insofar as it relates to factual matters, upon a certificate of or [SIGNATURES ARE ON THE FOLLOWING PAGE] representation by the Bond Trustee or the Corporation; and (ii) insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, in each case under clause (i) or (ii) without further investigation or inquiry by such Authority Authorized Signatory or otherwise on behalf of the Authority

Section 13.14 Authority’s Performance. None of the provisions of this Trust Agreement or the Agreement shall require the Authority to expend or risk its own funds or to otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder or thereunder, unless payable from the revenues and funds assigned to the Bond Trustee or otherwise pledged for payment of the Bonds, or unless the Authority shall first have been adequately indemnified to its satisfaction against the cost, expense, and liability which may be incurred thereby. The Authority shall not be under any obligation hereunder or under the Trust Agreement to perform any administrative service with respect to the Bonds or the Project (including, without limitation, any record keeping or legal services), it being understood that such services shall be performed or provided by the Bond Trustee or the Corporation. The Authority covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions expressly contained in this Trust Agreement, the Agreement, and in any and every Bond executed, authenticated, and delivered under this Trust Agreement; provided, however, that the Authority shall not be obligated to take any action or execute any instrument pursuant to any provision hereof unless and until it shall have (i) been directed in writing to do so by the Corporation or the Bond Trustee having the authority to so direct, (ii) received from the Person requesting such action D-57 or execution assurance satisfactory to the Authority that the Authority’s expenses incurred or to be incurred in connection with taking such action or executing such instrument have been or will be paid or reimbursed to the Authority, and (iii) if applicable, received in a timely manner the instrument to be executed, in form and substance satisfactory to the Authority. In complying with any provision herein or in the Agreement, including, but not limited to, any provision requiring the Authority to “cause” another Person to take or omit any action, the Authority shall be entitled to rely conclusively (and without independent investigation or verification) (a) on the faithful performance by the Bond Trustee or the Corporation, as the case may be, of their respective obligations hereunder and under the Agreement, and (b) upon any written certification or opinion furnished to the Authority by the Bond Trustee or the Corporation, as the case may be. In acting, or in refraining from acting, under this Trust Agreement or the Agreement, the Authority may conclusively rely on the advice of its counsel. The Authority shall not be required to take any action hereunder or under the Agreement that it reasonably believes to be unlawful or in contravention hereof or thereof.

Section 13.15 Holder Representative; Limitation on Liability. Each Holder Representative is expected to fulfill its duties in good faith, but without assuming any responsibility or liability to the Authority or the Bond Trustee. All rights of each Holder Representative under Section 10.04 to consent to declarations of acceleration, to consent to enforcement of remedies, to direct proceedings, to compel waivers, to consent to amendments and to give any other consents or to vote hereunder shall be suspended if the Bond Trustee has been notified in writing by the beneficial holders of at least seventy-five percent (75%) of the principal amount of the Bonds outstanding that the position of Holder Representative has been suspended or eliminated. In such event, the beneficial holders of at least seventy-five percent (75%) of the principal amount of the Bonds outstanding may appoint a new Person to serve as the Holder Representative by giving written notice thereof to the Bond Trustee, the Authority and the Corporation.

Section 13.16 Electronic Transactions. The parties agree that the transaction described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be

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IN WITNESS WHEREOF, the Authority and the Bond Trustee have caused this Trust EXHIBIT A Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written. [FORM OF BONDS]

PUBLIC FINANCE AUTHORITY [FORM OF BONDS]

NEITHER THIS BOND NOR ANY BENEFICIAL OWNERSHIP INTEREST HEREIN MAY BE TRANSFERRED BY THE REGISTERED OWNER HEREOF EXCEPT (A) IN AUTHORIZED By: DENOMINATIONS TO (B) ANY PERSON THAT IS EITHER (I) A “QUALIFIED INSTITUTIONAL Name: BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933, AS AMENDED); Title: Assistant Secretary OR (II) AN “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED) AND, IN THE CASE OF ANY ACCREDITED INVESTOR WHO IS NOT A QUALIFIED INSTITUTIONAL BUYER, IN A MINIMUM PRINCIPAL THE BANK OF NEW YORK MELLON TRUST COMPANY, AMOUNT OF $25,000 REGARDLESS OF ANY LOWER MINIMUM DENOMINATION N.A., as Bond Trustee AUTHORIZED BY THE TRUST AGREEMENT.

THIS BOND HAS BEEN AUTHORIZED AND ISSUED PURSUANT TO THE LAWS OF THE STATE OF WISCONSIN, INCLUDING PARTICULARLY SECTION 66.0304 OF THE WISCONSIN By: STATUTES, AS AMENDED. BONDS ISSUED UNDER SECTION 66.0304 SHALL NOT BE Vice President INVALID FOR ANY IRREGULARITY OR DEFECT IN THE PROCEEDINGS FOR THEIR SALE OR ISSUANCE.

PUBLIC FINANCE AUTHORITY RETIREMENT FACILITY REVENUE ANTICIPATION BONDS D-58 (SHALOM PARK PRE-DEVELOPMENT PROJECT) SERIES 2019

No. R-____ $______

INTEREST RATE DATED DATE MATURITY DATE CUSIP % November __, 2019 December 31, 2024

PUBLIC FINANCE AUTHORITY (the “Authority”), a unit of government and a body corporate and politic of the State of Wisconsin, pursuant to Sections 66.0301, 66.0303 and 66.0304 Wisconsin Statutes, as amended (the “Act”), for value received, promises to pay, but solely from the sources and in the manner hereinafter provided, to CEDE & CO., or registered assigns, ______DOLLARS ($______) on the Maturity Date set forth above (or earlier as hereinafter referred to), upon the presentation and surrender hereof, at the designated corporate trust office of The Bank of New York Mellon Trust Company, N.A., Jacksonville, Florida (the “Bond Trustee”). [This Bond will not bear interest on a current basis.] [DELETE IF NO CURRENT INTEREST PAYABLE: The Authority also promises to pay, solely from such sources, interest on this Bond (calculated based upon a 360-day year consisting of twelve 30-day months) from the interest payment date next preceding the date on which it is authenticated, unless it is authenticated on an interest payment date, in which event it shall bear interest from such date, or it is authenticated prior to April 1, 2020 in which event it shall bear interest from its date, payable on April 1, 2020 and semiannually thereafter on April 1 and October 1 of each year (an “Interest Payment Date”), at the rate per annum set forth above until the principal sum hereof is paid. The interest so payable and punctually paid or duly provided for, on any Interest Payment Date, will, as provided in the Trust Agreement hereinafter referred to, be paid by the Bond Trustee to the person in whose name this Bond is registered at the close of business on the Regular Record Date for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith

53 A-1

cease to be payable to the registered owner on such Regular Record Date, and may be paid to the person THIS BOND IS A SPECIAL LIMITED OBLIGATION OF THE AUTHORITY PAYABLE in whose name this Bond is registered at the close of business on a Special Record Date for the payment SOLELY FROM THE REVENUES AND FUNDS PLEDGED FOR ITS PAYMENT PURSUANT TO of such defaulted interest to be fixed by the Bond Trustee hereinafter mentioned, notice whereof being THE TRUST AGREEMENT AND, EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, given to the registered owners not less than 10 days prior to such Special Record Date, or may be paid at ANY AUTHORITY MEMBER (AS DEFINED IN THE TRUST AGREEMENT), ANY SPONSOR (AS any time in any other lawful manner not inconsistent with the requirements of any securities exchange on DEFINED IN THE TRUST AGREEMENT), ANY AUTHORITY INDEMNIFIED PARTY (AS which the Bonds may be listed and upon such notice as may be required by such exchange, or as more DEFINED IN THE TRUST AGREEMENT), THE STATE OF WISCONSIN OR ANY POLITICAL fully provided in said Trust Agreement.] [Bonds not issued by means of a book entry system shall SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE contain the following statement: Such payment of interest shall be by check mailed to the registered ISSUANCE OF THIS BOND SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, INTEREST owner at his address as it appears on the bond registration books maintained by the Bond Trustee.] All OR PREMIUM, IF ANY, HEREON OR ANY COSTS INCIDENTAL HERETO. THIS BOND IS NOT such payments shall be made in such coin or currency of the United States of America as at the time of A DEBT OF THE STATE OF WISCONSIN OR OF ANY MEMBER AND DOES NOT, DIRECTLY, payment is legal tender for payment of public and private debts. Notwithstanding any provision herein to INDIRECTLY OR CONTINGENTLY, OBLIGATE, IN ANY MANNER, ANY AUTHORITY the contrary, at no time, whether as a result of an Event of Default or otherwise, shall the interest on this MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY Bond exceed the Maximum Rate THEREOF OR OF ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THIS BOND TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF PRINCIPAL OF, [Printed Bonds shall contain the following statement: THE TERMS AND PROVISIONS OF INTEREST OR PREMIUM, IF ANY ON THIS BOND OR ANY COSTS INCIDENTAL HERETO. THIS BOND ARE CONTINUED ON THE REVERSE HEREOF AND SHALL FOR ALL PURPOSES NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF ANY AUTHORITY HAVE THE SAME EFFECT AS THOUGH SET FORTH AT THIS PLACE.] MEMBER, THE STATE OF WISCONSIN OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THIS BOND This Bond is one of a duly authorized series of revenue bonds of the Authority, designated NOR THE FAITH AND CREDIT OF THE AUTHORITY, ANY SPONSOR OR ANY AUTHORITY “Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre- INDEMNIFIED PARTY SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, Development Project) Series 2019” (the “Bonds”), issued under a Trust Agreement, dated as of November INTEREST, OR PREMIUM, IF ANY, ON THIS BOND OR ANY COSTS INCIDENTAL HERETO. 1, 2019 (said Trust Agreement, together with all supplements thereto as therein permitted, being THE AUTHORITY HAS NO TAXING POWER. hereinafter referred to as the “Trust Agreement”), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (said bank and any bank or trust company becoming successor NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR D-59 bond trustee under the Trust Agreement being hereinafter referred to as the “Bond Trustee”). The Bonds PREMIUM, IF ANY, OR INTEREST ON THIS BOND AGAINST THE AUTHORITY OR ANY are being issued for the purpose of providing funds, together with other available funds, to (a) pay a AUTHORITY INDEMNIFIED PARTY, UNDER ANY RULE OF LAW OR EQUITY, STATUTE, OR portion of the Cost of the Project (each as defined in the Trust Agreement) and (b) pay certain expenses CONSTITUTION OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR incurred in connection with the issuance of the Bonds. OTHERWISE, AND ALL SUCH LIABILITY OF ANY AUTHORITY INDEMNIFIED PARTY, IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A CONDITION OF AND [Bonds issued pursuant to a book entry system shall contain the following paragraph: The Bonds CONSIDERATION FOR THE EXECUTION AND ISSUANCE OF THIS BOND. are being issued by means of a book entry system with no physical distribution of bond certificates to be made except as provided in the Trust Agreement. One Bond certificate with respect to each date on The Authority has entered into a Loan Agreement, dated as of November 1, 2019 (said Loan which the Bonds are stated to mature, registered in the name of the Securities Depository Nominee (as Agreement, together with all amendments thereto as therein permitted, being hereinafter referred to as the defined in the Trust Agreement), is being issued and required to be deposited with the Securities “Agreement”), with Aldersgate at Shalom Park, Inc. (the “Corporation”) under which the Authority has Depository (as defined in the Trust Agreement) and immobilized in its custody. The book entry system agreed to lend to the Corporation the proceeds of the Bonds and in consideration and as evidence of the will evidence positions held in the Bonds by the Securities Depository’s participants, beneficial loan the Corporation has agreed to make payments to the Bond Trustee (the “Loan Repayments”) in such ownership of the Bonds in the principal amount of $25,000 and any integral multiple of $5,000 in excess amounts and at such times as are required to provide for the timely payment of the principal of, premium, thereof being evidenced in the records of such participants. Transfers of ownership shall be effected on if any, and interest on the Bonds. The Agreement further obligates the Corporation to perform, observe the records of the Securities Depository and its participants pursuant to rules and procedures established and comply with certain covenants, conditions and agreements set forth in the Master Trust Indenture, by the Securities Depository and its participants. The Authority and the Bond Trustee will recognize the dated as of November 1, 2019 (said Master Trust Indenture, together with all supplements thereto, being Securities Depository Nominee, while the registered owner of this Bond, as the owner of this Bond for all hereinafter referred to as the “Master Indenture”), between the Corporation and The Bank of New York purposes, including (i) payments of all amounts due on this Bond, (ii) notices and (iii) voting. Transfer of Mellon Trust Company, N.A., as master trustee (the “Master Trustee”), including covenants, conditions any payments due on this Bond to participants of the Securities Depository, and transfer of any payments and agreements with respect to the operation of the Corporation and other Members of the Obligated due on this Bond to beneficial owners of the Bonds by participants of the Securities Depository will be Group (as defined in the Master Indenture). As security for all Obligations (as defined in the Master the responsibility of such participants and other nominees of such beneficial owners. The Authority will Indenture) issued under the Master Indenture, the Corporation has granted to the Master Trustee a security not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing interest in its Pledged Assets (as defined in the Master Indenture). As additional security for all the records maintained by the Securities Depository, the Securities Depository Nominee, its participants Obligations, the Corporation has executed and delivered an Assignment of Contracts dated as of or persons acting through such participants. While the Securities Depository Nominee is the owner of November 1, 2019 (the “Assignment of Contracts”) from the Corporation to the Master Trustee, pursuant this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption to which the Corporation will assign to the Master Trustee all of its respective rights, title and interests in premium, if any, and interest on this Bond shall be made in accordance with existing arrangements certain contracts relating to the Project. between the Bond Trustee or its successors under the Trust Agreement and the Securities Depository.]

A-2 A-3

As evidence of its indebtedness under the Agreement, the Corporation has executed and delivered The Bonds are subject to redemption by the Authority, upon the direction of the Obligated Group to the Authority its Obligation No. 1, dated as of the date of delivery of the Bonds (the “Obligation Representative, in whole or in part on any date (by lot) on or after ______, 20__, upon payment of the No. 1”). Obligation No. 1 is issued under and secured by the Master Indenture. The Master Indenture Redemption Price of the Bonds to be redeemed, plus accrued interest to the redemption date. provides that the Corporation and other Members of the Obligated Group may issue additional Obligations secured pari passu under the Master Indenture under the terms and conditions and to the The Bonds are required to be redeemed in whole from the proceeds of any bonds or other source extent described in the Master Indenture. of permanent financing for the Facility (as defined in the Agreement), at the Redemption Price, plus accrued interest to the redemption date. Pursuant to the Trust Agreement, the Authority has, for the benefit of the registered owners of the Bonds assigned Obligation No. 1, assigned the Authority’s rights under the Agreement, including all its The Bonds are required to be redeemed in whole from amounts received from the Corporation rights, title and interest to receive the Loan Repayments (subject to the reservation of the Authority pursuant to the Agreement on any date selected by the Bond Trustee, upon the direction of the Obligated Unassigned Rights (as defined therein), including its rights to notices, payment of certain expenses and Group Representative, which date shall be no later than 120 days after the date of the occurrence of a indemnity), its rights under the Master Indenture and the Assignment of Contracts as owner of Obligation Determination of Taxability, at the Redemption Price, plus accrued interest to the redemption date. No. 1 (if any), and its rights to any and all moneys and securities in the Bond Fund and the Redemption Fund (each as defined in the Trust Agreement) and, until applied in payment of costs of the Project, the When Bonds are subject to optional redemption pursuant to the Trust Agreement as described Project Fund (as defined in the Trust Agreement) under the Trust Agreement, to the Bond Trustee in trust. above, Bonds to be redeemed may be purchased by the Corporation in lieu of redemption on the applicable redemption date at a purchase price equal to the Redemption Price thereof if the Bond Trustee By purchasing this Bond, the registered owner and any beneficial owner hereof appoint HJS has received a written request on or before said purchase date from the Corporation specifying that the Advisors, Inc. (the “Holder Representative”) as their attorney-in-fact for the purpose of giving any moneys provided or to be provided by the Corporation shall be used to purchase Bonds in lieu of consents or directions, including the pursuit of remedial actions, contemplated under the Trust redemption. No purchase of Bonds by the Corporation pursuant to the Trust Agreement or advance or use Agreement, or exercising any voting rights given to Holders under the Trust Agreement. Both Holder of any moneys to effectuate any such purchase shall be deemed to be a payment or redemption of the Representatives will be deemed to be the Holders of the Bonds for such purposes unless the Bond Trustee Bonds or any portion thereof, and such purchase shall not operate to extinguish or discharge the has been notified in writing by the beneficial holders of at least seventy-five percent (75%) of the indebtedness evidenced by such Bonds. principal amount of the Bonds outstanding that the position of Holder Representative has been suspended or eliminated. In such event, the beneficial holders of at least seventy-five percent (75%) of the principal Not less than thirty (30) days (fifteen (15) days in the event of a mandatory redemption in whole D-60 amount of the Bonds outstanding may appoint a new Person to serve as the Holder Representative by from proceeds of permanent financing) but not more than sixty (60) days before the redemption date of giving written notice thereof to the Bond Trustee, the Authority and the Corporation. any Bonds, whether such redemption is in whole or in part, the Bond Trustee shall cause a notice of any such redemption signed by the Bond Trustee to be mailed, first-class, postage prepaid, to all registered Reference is made to the Master Indenture, the Agreement and the Trust Agreement for a more owners owning or holding Bonds to be redeemed in whole or in part, but failure so to mail any such complete statement of the provisions thereof and of the rights of the Authority, the Bond Trustee, the notice to any registered owner or any defect in any notice so mailed shall not affect the validity of the Master Trustee, the Corporation and the registered owners of the Bonds. Copies of Obligation No. 1, the proceedings for the redemption of the Bonds of any other registered owner as to which notice shall have Trust Agreement, the Master Indenture and the Agreement are on file and may be inspected at the been properly given. On the date fixed for redemption, notice having been mailed in the manner provided principal corporate trust office of the Bond Trustee in Charlotte, North Carolina. By the purchase and in the Trust Agreement, the Bonds or portions thereof called for redemption shall be due and payable at acceptance of this Bond, the registered owner hereof signifies assent to all of the provisions of the the Redemption Price provided therefor, plus accrued interest to such date. If there has been delivered to aforementioned documents. Capitalized terms used herein and not otherwise defined have the meanings the Bond Trustee, and the Bond Trustee is then holding in trust, moneys or Defeasance Obligations (as given such terms in the Master Indenture, the Agreement and the Trust Agreement. defined in the Trust Agreement), or a combination of both, sufficient to pay the Redemption Price of the Bonds to be redeemed plus accrued interest to the redemption date, interest on the Bonds called for The Bonds are issuable as fully registered Bonds in denominations of $25,000 and any integral redemption shall cease to accrue; such Bonds or portions thereof shall cease to be entitled to any benefits multiple of $5,000 in excess thereof. Bonds may be exchanged at the principal corporate trust office of or security under the Trust Agreement or to be deemed Outstanding (as defined in the Trust Agreement); the Bond Trustee, in the manner and subject to the limitations and conditions provided in the Trust and the registered owners of such Bonds or portions thereof shall have no rights in respect thereof except Agreement, for an equal aggregate principal amount of Bonds of the same maturity, of other authorized to receive payment of the Redemption Price thereof and plus accrued interest to the redemption date. denominations and bearing interest at the same rate. “Redemption Price” means the Accreted Value of the Bonds being redeemed, plus a premium The transfer of this Bond is registrable by the registered owner hereof in person or by such equal to 3% of the principal amount of the Bonds being redeemed if the Bonds are redeemed pursuant to registered owner’s attorney or legal representative at the principal corporate trust office of the Bond the Trust Agreement due to a Determination of Taxability. Trustee, but only in the manner and subject to the limitations and conditions provided in the Trust Agreement and upon surrender and cancellation of this Bond. Upon any such registration of transfer, the “Accreted Value” means, with respect to Bonds or a portion thereof, (i) if calculated on a Authority shall execute and the Bond Trustee shall authenticate and deliver in exchange for this Bond a Calculation Date, the dollar amount per $1,000 due at maturity of the Bonds set forth in Exhibit 1 new Bond or Bonds, registered in the name of the transferee, of authorized denominations, in an attached hereto for such Calculation Date and (ii) if calculated on a date other than a Calculation Date, the aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing dollar amount per $1,000 due at maturity of the Bonds, such amount being determined conclusively by interest at the same rate. the Bond Trustee or a certified public accountant selected by the Bond Trustee, by interpolating such dollar amount, using the straight-line method, by reference to the dollar amounts for the Calculation Dates listed on the table in Exhibit 1 attached hereto which are immediately prior to and immediately

A-4 A-5

subsequent to such date, and the number of calendar days elapsed since the date listed which is IN WITNESS WHEREOF, the Public Finance Authority has caused this Bond to be signed in its immediately prior to such date. name and on its behalf by the manual or facsimile signature of an Authority Authorized Signatory.

In the case of an optional redemption of the Bonds, the redemption notice may state that (a) it is PUBLIC FINANCE AUTHORITY conditioned upon the deposit of moneys or Defeasance Obligations, or a combination of both, in an amount equal to the amount necessary to effect the redemption, with the Bond Trustee no later than the scheduled redemption date or (b) the Corporation retains the right to rescind such notice on or prior to the scheduled redemption date (in either case, a “Conditional Redemption”), and such notice and optional By: redemption shall be of no effect if such moneys are not so deposited or if the notice is rescinded as Name: described below. In the case of a Conditional Redemption subject to the deposit of moneys or Defeasance Title: Assistant Secretary Obligations, the failure of the Corporation or any other Person to make such moneys or obligations available in part or in whole on or before the scheduled redemption date shall not constitute an Event of Default under the Trust Agreement and any Bonds subject to such Conditional Redemption shall remain Outstanding. Any Conditional Redemption subject to rescission may be rescinded in whole or in part at any time on or prior to the scheduled redemption date if the Obligated Group Representative instructs the Bond Trustee in writing to rescind the redemption notice. Any Bonds subject to Conditional Redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an Event of Default under the Trust Agreement.

The registered owner of this Bond shall have no right to enforce the provisions of the Trust Agreement or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Trust Agreement, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Trust Agreement and except that any registered owner may institute action to enforce the payment of the principal of or the interest on such registered D-61 owner’s Bond.

Upon the occurrence of certain events, and on the conditions, in the manner and with the effect set forth in the Trust Agreement, the principal of all Bonds then Outstanding under the Trust Agreement may become or may be declared due and payable before the stated maturity thereof and upon such declaration, the Redemption Price of all Bonds will become and be immediately due and payable, together with any interest accrued thereon.

Modifications or alterations of the Trust Agreement or any trust agreement supplemental thereto, the Agreement or any agreement supplemental thereto, or the Master Indenture or any indenture supplemental thereto may be made only to the extent and in the circumstances permitted by the Trust Agreement, the Agreement and the Master Indenture.

This Bond, notwithstanding the provisions for registration of transfer stated herein and contained in the Trust Agreement, at all times shall be and shall be understood to be an investment security within the meaning of and for all the purposes of Article 8 of the Uniform Commercial Code of Wisconsin. This Bond is issued with the intent that the laws of the State of Wisconsin shall govern its construction.

All acts, conditions and things required to happen, exist and be performed precedent to and in the issuance of this Bond and the execution of the Trust Agreement and the Agreement have happened, exist and have been performed as so required.

This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Trust Agreement until it shall have been authenticated by the execution by the Bond Trustee of the certificate of authentication hereon.

[SIGNATURES BEGIN ON THE FOLLOWING PAGE]

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[TO BE ENDORSED ON ALL BONDS] ASSIGNMENT CERTIFICATE OF AUTHENTICATION FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto This Bond is a Bond issued under the provisions of the within-mentioned Trust Agreement.

THE BANK OF NEW YORK MELLON TRUST COMPANY, [Please Print or Typewrite Name and Address of Transferee] N.A., as Bond Trustee

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints By: Authorized Signatory

attorney to register the transfer of the within Bond on the books kept for registration thereof, with full Date of authentication: ______power of substitution in the premises.

Dated: ______

Signature Guaranteed: D-62

NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature to this assignment must institution which is a participant in the Securities correspond with the name as it appears upon the Transfer Agent Medallion Program (STAMP) or face of the within Bond in every particular, without similar program. alteration or enlargement or any change whatever.

A-8 A-9

EXHIBIT 1 EXHIBIT B [COPY EXHIBIT D TO TRUST AGREEMENT FOR EXHIBIT 1 TO BOND] REQUEST FOR DISBURSEMENT PUBLIC FINANCE AUTHORITY RETIREMENT FACILITY REVENUE ANTICIPATION BONDS (SHALOM PARK PRE-DEVELOPMENT PROJECT) SERIES 2019

PROJECT ACCOUNT AND/OR ISSUANCE ACCOUNT

REQUISITION NUMBER: ____ DATE: ______

CORPORATION/PROJECT NAME: Aldersgate at Shalom Park, Inc.

TO: The Bank of New York Mellon Trust Company, N.A., Bond Trustee

1. It is hereby certified in accordance with the Trust Agreement and the Loan Agreement that the following is/are due payment in the amount(s) indicated for:

PAYEE FINAL BUDGET LINE ITEM AMOUNT DUE

D-63

Total Amount of this Requisition $______Note: Multiple payees may be submitted on one requisition provided all information is attached in spreadsheet format.

Invoices and receipts, if applicable, with respect to the foregoing amounts are enclosed herewith.

2. The amount stated above has been incurred by the Corporation, is due, is a proper charge against the [Project Account] [Issuance Account], and does not contain any retainage to which the Corporation is entitled. Further, the stated amount herein does not contain any sales or use taxes.

3. There has not been filed with or served upon the Corporation notice of any lien, right to lien or attachment upon, or claim affecting the right of any such persons, firms or corporations to receive payment of the respective amounts stated in this requisition [OR: if any of the foregoing have been filed or attached, that the same has been satisfied or discharged or that a lien bond has been obtained from a reputable and adequately capitalized bonding company or surety in the amount of the lien, attachment, or claims to adequately protect the Bond Trustee and the Holders from incurring any loss as a result of the same].

4. No default or Event of Default under the Trust Agreement has occurred and is continuing.

5. All permits, licenses, approvals and other authorizations of governmental authorities required for the work in question have been obtained.

6. The purpose by general classification for which each obligation paid or to be paid was incurred is as follows: ______.

B-1

7. The Cost incurred is consistent with the Project Budget and the Project Documents. EXHIBIT C 4. [Use when requisition is from Project Account: These obligations payable from the Project Account do not represent Issuance Costs.] REQUEST FOR DISBURSEMENT PUBLIC FINANCE AUTHORITY You are authorized and directed to pay the above sum (sums) to the party (parties) named in RETIREMENT FACILITY REVENUE ANTICIPATION BONDS paragraph 1 from money in the [Project Account] [Issuance Account] held under the terms of the Trust (SHALOM PARK PRE-DEVELOPMENT PROJECT) Agreement. SERIES 2019 CERTIFIED BY: QUESTIONS REGARDING THIS REQUISITION SHOULD BE DIRECTED LIQUIDITY ACCOUNT

______TO: ______REQUISITION NUMBER: ____ DATE: ______Obligated Group Representative (type or print name) CORPORATION/PROJECT NAME: Aldersgate at Shalom Park, Inc. ______Email address: ______TO: The Bank of New York Mellon Trust Company, N.A., Bond Trustee (type or print name) 1. It is hereby certified in accordance with the Trust Agreement and the Loan Agreement that the Date: ______Telephone number: ______following is/are due payment in the amount(s) indicated for marketing costs: Email address: ______Fax number: ______PAYEE DESCRIPTION AMOUNT DUE

APPROVED BY HOLDER REPRESENTATIVE:

D-64 HJS Advisors, Inc./BB&T Capital Markets, a division of BB&T Securities LLC Total Amount of this Requisition $______Note: Multiple payees may be submitted on one requisition provided all information is attached in spreadsheet format. By: Name: Invoices and receipts, if applicable, with respect to the foregoing amounts are enclosed herewith. Title: 2. The amount stated above has been incurred by the Corporation, is due, is a proper charge against the Liquidity Account.

You are authorized and directed to pay the above sum (sums) to the party (parties) named in paragraph 1 from money in the Liquidity Account held under the terms of the Trust Agreement.

CERTIFIED BY: QUESTIONS REGARDING THIS REQUISITION SHOULD BE DIRECTED

______TO: ______Obligated Group Representative or (type or print name) Holder Representative Email address: ______(type or print name)

Date: ______Telephone number: ______

Email address: ______Fax number: ______

B-2 C-1

EXHIBIT D APPROVED BY HOLDER REPRESENTATIVE: FORM OF INVESTOR LETTER HJS Advisors, Inc./BB&T Capital Markets, a division of BB&T Securities LLC Public Finance Authority 22 E. Mifflin Street, Suite 900 Madison, Wisconsin 53703 By: Name: The Bank of New York Mellon Trust Company, N.A. Title: 10161 Centurion Parkway North Jacksonville, Florida 32256 Re: Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019

Ladies and Gentlemen:

The undersigned (“Investor”) is a purchaser of the above-captioned bonds (the “Bonds”) issued by the Public Finance Authority (the “Authority”) pursuant to that certain Trust Agreement dated as of November 1, 2019 (the “Trust Agreement”) between the Authority and The Bank of New York Mellon Trust Company, N.A., as bond trustee.

Capitalized terms not defined herein shall be given the meaning ascribed thereto in the Trust

D-65 Agreement.

In connection with the sale of the Bonds to Investor, Investor hereby makes the following representations upon which you may rely:

1. Investor has received and read a copy of (i) the Agreement; (ii) the Trust Agreement (including the form Bond); (iii) the Master Indenture; (iv) Supplement No. 1; (v) the Assignment of Contracts; and (vi) such other documents, agreements, certificates and instruments referenced therein or pertaining thereto or to the Bonds to which Investor is a party or deems necessary and appropriate in its evaluation of the Bonds.

2. Investor has sufficient knowledge and experience in financial and investment matters to be able to evaluate the risks and merits of an investment in the Bonds.

3. Investor is acquiring the Bonds for its own account for investment purposes and not with a view to the resale or other distribution thereof, and Investor intends to hold the Bonds for its own account to maturity, and does not intend to dispose of all or any part of the Bonds.

4. Investor understands that it may be required to bear the risks of this investment in the Bonds for an indefinite time, since any sale prior to maturity may not be possible.

5. The Bonds are a financially suitable investment for Investor consistent with Investor’s investment needs and objectives.

C-2 D-1

registration is not legally required as of the date hereof; and further understands that the EXHIBIT E Bonds (i) are not being registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any state, (ii) will not be listed in any stock or other securities ACCRETED VALUE TABLE exchange, (iii) will not carry a rating from any rating service, and (iv) will be delivered in a form which may not be readily marketable. ACCRETED VALUE PER CALCULATION $1,000 DUE AT MATURITY 7. Investor acknowledges that the Bonds are not transferable except to (i) another DATE OF THE BONDS “accredited investor” or (ii) another “Qualified Institutional Buyer” as provided by the Trust Agreement, and Investor agrees to abide by the transfer restrictions set forth in the Trust Agreement; and that Investor shall be solely and exclusively responsible for compliance with such transfer restrictions, including verifying that its transferee is an accredited investor or a Qualified Institutional Buyer, as the case may be.

8. Investor acknowledges that it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and Investor has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Corporation and the Bonds and the security therefor so that, as a reasonable investor, the Investor has been able to make its decision to purchase the Bonds. Investor acknowledges that it has not relied upon the Authority for any information in connection with the Investor’s purchase of the Bonds.

9. INVESTOR ACKNOWLEDGES THAT THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE D-66 REVENUES OF THE CORPORATION AND OTHER FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE TRUST AGREEMENT AND THE AUTHORITY SHALL NOT BE DIRECTLY OR INDIRECTLY OR CONTINGENTLY OR MORALLY OBLIGATED TO USE ANY OTHER MONEYS OR ASSETS OF THE AUTHORITY FOR ALL OR ANY PORTION OF THE PRINCIPAL OF AND INTEREST ON THE BONDS.

10. Investor has made its own inquiry and analysis with respect to the Bonds and the security therefor (including, without limitation, a credit evaluation of the Corporation and any guarantors, obligors or lessees of the Project, to the extent Investor deemed it necessary or appropriate), and other material factors affecting the security and payment of the Bonds. Investor is aware that the business of the Corporation involves certain economic variables and risks that could adversely affect the security for the Bonds.

11. Investor agrees to indemnify and hold harmless the Authority and each Authority Indemnified Party (as defined in the Trust Agreement) with respect to any claim asserted against the Authority or any such Authority Indemnified Party that is based upon Investor’s breach of any representation, warranty or agreement made by it herein, other than any claim that is based upon the willful misconduct of the Authority Indemnified Party seeking indemnification.

______, as Investor

By: Name: Title:

D-2 E-1

PUBLIC FINANCE AUTHORITY

and

ALDERSGATE AT SHALOM PARK, INC.

______

D-67 LOAN AGREEMENT [THIS PAGE INTENTIONALLY LEFT BLANK] Dated as of November 1, 2019 ______

Relating to

$______Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019

PPAB 4993592v5 Page

TABLE OF CONTENTS Section 7.04 Mandatory Prepayment upon Determination of Taxability ...... 13 Section 7.05 Mandatory Prepayment upon Permanent Financing for Facility ...... 13 Page ARTICLE VIII INDEMNIFICATION AND NON-LIABILITY OF THE AUTHORITY, THE MASTER ARTICLE I DEFINITIONS ...... 1 TRUSTEE, THE BOND TRUSTEE AND THE DEED OF TRUST TRUSTEE ...... 14 Section 1.01 Definitions ...... 1 Section 8.01 General ...... 14 Section 1.02 Rules of Construction ...... 3 Section 8.02 Payment of Costs ...... 16

ARTICLE II REPRESENTATIONS ...... 3 ARTICLE IX TERMINATION OF AGREEMENT ...... 16 Section 2.01 Representations by the Authority ...... 3 Section 9.01 Termination of Agreement ...... 16 Section 2.02 Representations by the Corporation ...... 4 ARTICLE X MISCELLANEOUS ...... 16 ARTICLE III THE LOAN ...... 5 Section 10.01 Authority Members, Officers and Employees of the Authority Section 3.01 Issuance of the Bonds to Fund Loan; Making of the Loan; and the Corporation Not Liable ...... 16 Security for the Loan ...... 5 Section 10.02 Amendment of Agreement ...... 16 Section 3.02 Total Required Payments ...... 6 Section 10.03 Redemption of Bonds ...... 17 Section 3.03 Loan Repayments ...... 6 Section 10.04 Surplus Funds ...... 17 Section 3.04 Required Payments under the Agreement ...... 7 Section 10.05 Limitation on the Authority’s Liability and Performance ...... 17 Section 3.05 Corporation’s Payments as Trust Funds ...... 8 Section 10.06 Corporation’s Remedies ...... 19 Section 3.06 No Set-Off ...... 8 Section 10.07 Consents and Approvals ...... 19 Section 3.07 Assignment to Bond Trustee ...... 9 Section 10.08 Extent of Covenants; Corporation Bound by Trust Agreement ...... 19 Section 10.09 Arbitrage ...... 19 ARTICLE IV THE PROJECT ...... 9 Section 10.10 Exclusion From Gross Income Covenant ...... 19 Section 4.01 Completion of the Project; Development of the Facility ...... 9 Section 10.11 Notices; Demands; Requests ...... 20 D-68 Section 4.02 Revision of Project Documents ...... 9 Section 10.12 Closing Expenses ...... 20 Section 4.03 Disbursements from Project Fund ...... 10 Section 10.13 Multiple Counterparts ...... 21 Section 4.04 Completion of Payment of the Cost of the Project ...... 10 Section 10.14 Severability ...... 21 Section 4.05 Establishment of Completion Date ...... 10 Section 10.15 State Law Controlling; Jurisdiction ...... 21 Section 4.06 No Warranty of Condition or Suitability ...... 10 Section 10.16 Survival of Provisions ...... 21 Section 10.17 Effective Date of this Agreement ...... 22 ARTICLE V PARTICULAR COVENANTS ...... 10 Section 10.18 Third Party Beneficiaries ...... 22 Section 5.01 Compliance with Covenants, Conditions and Agreements in Master Indenture ...... 10 EXHIBIT A - DESCRIPTION OF THE PROJECT AND THE FACILITY ...... A-1 Section 5.02 Examination of Books and Records ...... 10 Section 5.03 Further Assurances and Corrective Instruments ...... 11 Section 5.04 Investment of Funds ...... 11 Section 5.05 Continuing Disclosure ...... 11

ARTICLE VI EVENTS OF DEFAULT AND REMEDIES ...... 11 Section 6.01 Events of Default Defined ...... 11 Section 6.02 Remedies on Default ...... 12 Section 6.03 Application of Amounts Realized in Enforcement of Remedies ...... 12 Section 6.04 No Remedy Exclusive ...... 12 Section 6.05 Agreement to Pay Attorneys’ Fees and Expenses ...... 12 Section 6.06 Authority and Corporation to Give Notice of Default ...... 12 Section 6.07 Correlative Waivers ...... 12 Section 6.08 No Obligation to Enforce Assigned Rights ...... 13

ARTICLE VII PREPAYMENTS ...... 13 Section 7.01 Optional Prepayment ...... 13 Section 7.02 [Reserved] ...... 13 Section 7.03 Right of Revocation ...... 13 i ii PPAB 4993592v5 PPAB 4993592v5

“Completion Date” means the date of completion of the Project, as such date shall be certified LOAN AGREEMENT pursuant to SECTION 4.05 hereof.

THIS LOAN AGREEMENT, dated as of November 1, 2019 (the “Agreement”), between the “Continuing Disclosure Agreement” means the agreement of the Corporation to comply with PUBLIC FINANCE AUTHORITY a joint powers commission and a unit of government and a body Rule 15c2-12 of the Securities and Exchange Commission, as amended and supplemented. corporate and politic under the laws of the State of Wisconsin (together with its successors and assigns, the “Authority”), and ALDERSGATE AT SHALOM PARK, INC., a nonprofit corporation duly organized and “Corporation” means Aldersgate at Shalom Park, Inc., a nonprofit corporation duly organized validly existing under and by virtue of the laws of the State of North Carolina (the “Corporation”), and validly existing under and by virtue of the laws of the State, and any successor or successors thereto.

W I T N E S S E T H: “Electronic Means” means facsimile transmission, email transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by WHEREAS, the Corporation has applied for the financial assistance of the Authority in the the Bond Trustee, or other similar electronic means of communication providing evidence of transmission financing and refinancing of the Project (as defined herein); and and specified by the Bond Trustee as available for use in connection with its services hereunder.

WHEREAS, the Facility (as defined herein) is to be located within the territorial limits of the “Event of Default” means, with respect to this Agreement, each of those events set forth in City of Charlotte, County of Mecklenburg, State of North Carolina (the “Facility Jurisdiction”) and the Section 6.01. Authority, based on representations of the Corporation, but without independent investigation, has found and determined that the financing of the Project will promote significant economic, cultural and “Facility” means the Facility described in Exhibit A hereto. community development opportunities, including the creation or retention of employment, the stimulation of economic activity and the promotion of improvements in the health, safety and welfare of persons in “Joint Exercise Agreement” means the Amended and Restated Joint Exercise of Power the Facility Jurisdiction; and Agreement Relating to the Public Finance Authority, dated as of September 28, 2010 by and among Marathon County, Wisconsin, Waupaca County, Wisconsin, Bayfield County, Wisconsin, Adams WHEREAS, the Authority has authorized the issuance of its Retirement Facility Revenue County, Wisconsin and the City of Lancaster, Wisconsin, as may be amended from time to time. Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019 (the “Bonds”), pursuant to the D-69 Trust Agreement (as defined herein) to provide funds for the financing and refinancing of the Project and “Loan” means the loan of the proceeds of the Bonds made by the Authority to the Corporation certain costs incidental thereto; pursuant to Section 3.01; provided, however, that notwithstanding the stated principal amount of the Loan, if the Bonds are redeemed prior to the Maturity Date, the Loan will be considered paid in full when NOW THEREFORE, in consideration of the respective representations and agreements herein all of the Bonds have been redeemed in accordance with Article III of the Trust Agreement. contained, the parties hereto agree as follows: “Loan Repayments” means those payments designated by and set forth in Section 3.03. ARTICLE I “Management Consultant” means any nationally or regionally recognized firm of public accountants or specialists selected by the Corporation and possessing significant management consulting DEFINITIONS experience. Section 1.01 Definitions. Unless otherwise required by the context, all capitalized terms used “Member of the Obligated Group” means, initially, the Corporation and, thereafter, any Person herein shall have the meanings assigned to such terms in Section 1.01 of the Trust Agreement (as defined which shall become a Member of the Obligated Group in accordance with the Master Indenture and not below) or in Section 1.01 of the Master Indenture (as defined below), or as set forth below: including any Person which shall have withdrawn from the Obligated Group in accordance with the “Act” means Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, as amended from Master Indenture. time to time. “Officer’s Certificate” means a certificate signed by an Authority Authorized Signatory or an “Agreement” means this Loan Agreement, including any amendments or supplements hereto. Obligated Group Representative, as the case may be.

“Authority” means the Public Finance Authority, its successors and assigns. “Person” means an individual, association, unincorporated organization, corporation, limited liability company, partnership, joint venture, business trust or a government or an agency or a political “Authority’s Annual Fee” means the Authority’s annual administration fee determined and subdivision thereof, or any other entity. payable in the amounts and at the times specified in Section 3.04(a) hereof. “Project” means the Project described in Exhibit A hereto, including any modifications thereof, “Closing” means the date on which this Agreement becomes legally effective, the same being the substitutions therefor or additions thereto and excluding deletions therefrom. date on which the Bonds are delivered against payment therefor. “Project Documents” means, collectively, contracts, documents and agreements, and surety bonds and instruments pertaining to the Project.

2 PPAB 4993592v5 PPAB 4993592v5

“Property” means any and all rights, titles and interests in and to any and all property, whether appropriate cases and by the limitation on legal remedies against joint powers commissions or real or personal, tangible (including cash) or intangible, wherever situated and whether now owned or governmental units of the State of Wisconsin. hereafter acquired. (d) By official action of the Authority prior to or concurrently herewith, the Authority has “Rebate Requirement” means Rebate Requirement as defined in the Tax Certificate. authorized and approved the execution and delivery of the Authority Documents and the consummation by the Authority of the transactions contemplated thereby. “Required Payments under the Agreement” means the payments so designated by and set forth in Section 3.04. (e) The execution and delivery by the Authority of this Agreement and the other Authority Documents and the compliance with the provisions on Authority’s part contained therein will neither (i) “State” means the State of North Carolina. conflict with, or constitute a material breach of or a default under, any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to “Total Required Payments” means the sum of Loan Repayments and Required Payments under which the Authority is a party or is otherwise subject, nor (ii) result in the creation or imposition of any this Agreement. lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority under the terms of any such law, administrative regulation, judgment, decree, “Trust Agreement” means the Trust Agreement securing the Bonds, dated as of November 1, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by 2019, between the Authority and the Bond Trustee, including any trust agreement amendatory thereof or the Authority Documents. supplemental thereto. (f) To the knowledge of the Authority, there is no action, suit, proceeding, inquiry or Section 1.02 Rules of Construction. Words of the masculine gender shall be deemed and investigation, at law or in equity, before or by any court, governmental agency, public board or body construed to include correlative words of the feminine and neuter genders. Unless the context shall pending against the Authority seeking to restrain or enjoin the sale or issuance of the Bonds, or in any otherwise indicate, the words “Bond,” “owner,” “Holder” and “Person” shall include the plural as well as way contesting or affecting any proceedings of the Authority taken concerning the sale thereof, the pledge the singular number. or application of any moneys or security provided for the payment of the Bonds, in any way contesting the validity or enforceability of the Authority Documents or contesting in any way the existence or Headings of articles and sections herein and in the table of contents hereof are solely for powers of the Authority relating to the authorization, issuance and sale of the Bonds. D-70 convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof. Reference herein to particular articles or sections are references to articles or sections of Section 2.02 Representations by the Corporation. The Corporation represents and warrants this Agreement unless some other reference is otherwise indicated. on its own behalf and on behalf of its successors and assigns that as of the date of execution of this Agreement and as of the date of delivery of the Bonds to the initial purchasers thereof (such ARTICLE II representations and warranties survive the issuance of the Bonds and are to remain operative and in full force and effect regardless of the issuance of the Bonds, and regardless of any investigations by or on REPRESENTATIONS behalf of the Authority or the results thereof):

Section 2.01 Representations by the Authority. As of the date hereof, the Authority (a) The Corporation has been duly organized and is validly existing as a limited liability represents as set forth in this Section; provided, however, that as to information furnished by the company in good standing under the laws of the State. Corporation pursuant to this Agreement, the Authority is relying solely on such information in making the Authority’s representations and agreements, and as to all matters of law, the Authority is relying upon the (b) The Corporation has been duly incorporated and is validly existing as a private nonprofit advice of Bond Counsel; and, provided, further, that no Authority Indemnified Party shall be individually corporation in good standing under the laws of the State, no part of the net earnings of which inures to the liable for the breach of any representation, warranty, or agreement contained herein. benefit of any private shareholder or individual, is not a private foundation under Section 509(a) of the Code, and is an organization described in Section 501(c)(3) of the Code. (a) The Authority is a joint powers commission under the Act, the “commission” under Section 66.0304 of the Wisconsin Statutes, and a unit of government and a body corporate and politic (c) The Corporation has authority to enter into this Agreement, Supplement No. 1, duly organized and existing under the laws of the State of Wisconsin. Obligation No. 1 and the Assignment of Contracts (collectively, the “Corporation Documents”) and, by proper corporate action, has been duly authorized to execute and deliver each of the Corporation (b) The Authority has full power and authority under the Act to adopt the Bond Resolution, Documents. to enter into and to perform its obligations under the Authority Documents. (d) (i) the Company Documents, when assigned to the Bond Trustee pursuant to the Trust (c) When executed and delivered by the respective parties thereto, the Authority Documents Agreement, will constitute the legal, valid and binding agreements of the Company enforceable against will constitute the legal, valid and binding obligations of the Authority enforceable in accordance with the Company by the Bond Trustee in accordance with their terms for the benefit of the Holders of the their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, Bonds, and (ii) the Authority Unassigned Rights constitute the legal, valid, and binding agreements of the reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting Company enforceable against the Company (A) by the Authority in its own right, or (B) in the case of the creditors’ rights, by the application of equitable principles, by the exercise of judicial discretion in rights of any Authority Indemnified Party (including, without limitation, the right of any Authority Indemnified Party to indemnification and immunity from liability) by such Authority Indemnified Party 3 4 PPAB 4993592v5 PPAB 4993592v5

in his, her or its own right in accordance with their respective terms; except in each case as enforcement underwriter’s discount and original issue discount on the Bonds shall be deemed to have been loaned to may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights the Corporation. generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy. The Corporation hereby accepts the Loan and, as evidence of its direct, general and unconditional obligation to repay the same, shall deliver to the Authority herewith Obligation No. 1. The Corporation (e) The execution and delivery of the Corporation Documents by the Corporation, the shall repay the Loan in accordance with the provisions of Obligation No. 1 and this Agreement. The consummation of the transactions contemplated hereby and thereby, and the fulfillment of or compliance Corporation acknowledges that the proceeds of the Loan will be delivered to the Bond Trustee and with the terms and conditions hereof and thereof do not and will not conflict with the articles of applied on behalf of the Corporation in accordance with this Agreement and the Trust Agreement. organization or operating agreement of the Corporation and do not and will not in any material respect conflict with, or constitute on the part of the Corporation a breach of or default under, any indenture, deed Obligation No. 1 is issued under and secured by the Master Indenture, Supplement No. 1 and the of trust, mortgage, agreement or other instrument to which the Corporation is a party or conflict with, Assignment of Contracts. The Master Indenture provides that the Members of the Obligated Group may violate or result in a breach of any existing law, public administrative rule or regulation, judgment, court issue additional Obligations secured pari passu with Obligation No. 1 under the terms and conditions order or consent decree to which the Corporation is subject. described in the Master Indenture.

(f) The Corporation has authority to own and operate a life care retirement facility. Section 3.02 Total Required Payments. The Corporation shall make the Total Required Payments under this Agreement when due. (g) The representations, covenants and warranties relating to tax matters set forth in the Tax Certificate are true and correct on the date hereof and are hereby incorporated herein by reference in their The Corporation’s obligation to make the Total Required Payments and to satisfy any other entirety. financial liabilities incurred under this Agreement shall be a direct, general and unconditional obligation of the Corporation. (h) No written information, exhibit or report furnished to the Authority by the Corporation in its application for financing or by the Corporation or its representative in connection with the negotiation The Corporation shall make Loan Repayments directly to the Bond Trustee for deposit in the of this Agreement or the Corporation Documents, regardless of whether the Authority is a party thereto Bond Fund or the Redemption Fund, as the case may be. Required Payments under the Agreement (including any financial statements, whether audited or unaudited, and any other financial information pursuant to Section 3.04(a) shall be made by the Corporation directly to the Persons entitled to such D-71 provided in connection therewith) contains any untrue statement of a material fact or omits to state a payments. Required Payments under the Agreement pursuant to Section 3.04(b) shall be made directly to material fact required to be stated therein or necessary to make the statements therein, in the light of the the United States of America as specified in the Tax Certificate. circumstances under which they were made, not misleading; provided, however, that the representation and warranty in this subsection (g) is made only to the Authority and may not be relied upon by any other Neither the Authority nor the Bond Trustee is required to give the Corporation notice of any date person. upon which any of the Total Required Payments is due, except notice of a declaration that all Bonds then Outstanding are due and payable pursuant to Section 8.02 of the Trust Agreement and a corresponding (i) To the knowledge of the Corporation, no officer of the Authority who is authorized to declaration that the entire unpaid aggregate amount of the Loan is due and payable pursuant to Section take part in any manner in making this Agreement or the Trust Agreement or any contract contemplated 6.02. hereby or thereby has a personal financial interest in or has personally and financially benefited from this Agreement or the Trust Agreement or any such contract. All of the Total Required Payments shall be made in lawful money of the United States of America at the time each of the Total Required Payments is made. ARTICLE III Section 3.03 Loan Repayments. THE LOAN (a) The Corporation shall repay the Loan as set forth in (b) below. Such payment shall be Section 3.01 Issuance of the Bonds to Fund Loan; Making of the Loan; Security for the deemed to be a Loan Repayment and shall be paid, together with other required deposits and payments, at Loan. Simultaneously with the delivery of this Agreement, the Authority shall issue and deliver the the times and in the amounts set forth below. Loan Repayments shall be sufficient in the aggregate to Bonds to provide it with funds to be loaned to the Corporation pursuant to this Agreement. The Bonds repay the Loan, together with the interest thereon and to pay in full all Bonds issued under the Trust shall be issued in accordance with the Trust Agreement. The Corporation’s approval of the terms of the Agreement, together with the total interest and any redemption premium thereon. Bonds and the Trust Agreement shall be conclusively established by its execution and delivery of this Agreement. (b) The Loan Repayments shall be due and payable as follows:

Upon the terms and conditions of this Agreement, the Authority hereby makes a loan to the (i) the Corporation shall pay the Bond Trustee, for deposit in the Interest Account, Corporation in the principal amount of $______, the same being the aggregate principal amount of three (3) Business Days prior to each Interest Payment Date, that amount which shall be equal to the Bonds. The Loan shall be deemed to have been made when the proceeds of the sale of the Bonds are the interest payable on the Bonds on the next ensuing Interest Payment Date, if any; delivered to the Bond Trustee. The proceeds of the Loan shall be used, together with other available funds, to (i) pay a portion of the Cost of the Project and (ii) pay certain expenses incurred in connection with the authorization and issuance of the Bonds. For the purposes of this Agreement, the amount of any 5 6 PPAB 4993592v5 PPAB 4993592v5

(ii) the Corporation shall pay the Bond Trustee, for deposit in the Principal Account, Agreement, including, but not limited to, any audit or inquiry by the Internal Revenue Service or three (3) Business Days prior to the Maturity Date, an amount equal to the principal of all Bonds any other governmental body; and due on the Maturity Date; and (vi) the Authority’s Annual Fee and the fees and expenses of the Authority or any (iii) to the extent the Bonds are called for redemption prior to the Maturity Date in agent or attorney selected by the Authority to act on its behalf in connection with this Agreement, accordance with the Trust Agreement and this Agreement, the Corporation shall pay the Bond the Corporation Documents, the Bonds or the Trust Agreement, including, without limitation, any Trustee, for deposit in the Interest Account or the Redemption Fund, as applicable, any amount and all expenses incurred in connection with the authorization, issuance, sale and delivery of any that may from time to time be required to enable the Bond Trustee to pay the interest on and the such Bonds or in connection with any litigation, investigation, inquiry or other proceeding which Redemption Price of Bonds so called for redemption. may at any time be instituted involving this Agreement, the Corporation Documents, the Bonds or the Trust Agreement or any of the other documents contemplated thereby or in connection with (c) To the extent that the investment earnings are transferred or credited to the Bond Fund or the reasonable supervision or inspection of the Corporation, its properties, assets or operations or any account therein in accordance with Articles V or VI of the Trust Agreement or amounts are otherwise in connection with the administration of this Agreement and the Corporation transferred or credited to such Fund or accounts as a result of the application of Bond proceeds, or a Documents. transfer of surplus funds from the Project Fund or otherwise, future Loan Repayments shall be proportionately reduced by the amount so credited. The Required Payments pursuant to subsections (iv), (v) and (vi) above shall be billed to the Corporation by the Authority or the Bond Trustee from time to time, together with a statement certifying Section 3.04 Required Payments under the Agreement. that the amount billed has been incurred or paid by the Authority or the Bond Trustee for one or more of the above items. After such a demand, amounts so billed shall be paid by the Corporation within thirty (a) The Corporation shall pay, when due and payable, as Required Payments under the (30) days after receipt of the bill by the Corporation. Notwithstanding the foregoing, the Authority shall Agreement, certain fees and costs, exclusive of fees and costs payable from the proceeds of the Bonds, as not be required to submit a bill to the Corporation for payment of the Authority’s Annual Fee. Such follows: Authority’s Annual Fee shall be calculated, and shall be due and payable to the Authority in semi-annual installments due and payable on the six-month anniversary of the Closing and subsequently on the same (i) the fees and other costs payable to the Master Trustee, the Bond Trustee and each day each sixth month thereafter. The amount of each semiannual payment shall be in an amount Holder Representative; determined by multiplying (i) the principal amount of the Bonds Outstanding as of the last day of the D-72 calendar month preceding such payment due date by (ii) 0.03% (3 basis points) by (iii) one-half (1/2). (ii) all costs incurred in connection with the purchase or redemption of Bonds to the extent money is not otherwise available therefor; Any invoice furnished to the Company by the Authority or the Bond Trustee pursuant to this Section 3.04 shall be deemed to constitute a written notice under Section 6.01(b) sufficient to cause the (iii) fees and other costs incurred in connection with the issuance of the Bonds to the 30-day period specified in said Section 6.01 to commence. extent such fees and other costs are not paid from the proceeds of the Bonds; provided, however, that in no event shall the amount of such fees and other costs paid from proceeds of the Bonds (b) The Corporation shall also cause to be paid on or before the sixtieth (60th) day following exceed two percent (2%) of the proceeds of the Bonds (determined by deducting any original each computation date as described in the Tax Certificate the Rebate Requirement to the United States of issue discount from the face amount of the Bonds), less the underwriters’ discount; America. The Corporation further agrees to pay all costs incurred by the Authority in connection with the filing of Internal Revenue Service Form 8038-T with respect to the Bonds. The obligation of the (iv) all taxes and assessments of any type or character charged to the Authority or to Corporation to make such payments shall survive the termination of this Agreement. the Bond Trustee affecting the amount available to the Authority or the Bond Trustee from payments to be received hereunder or in any way arising due to the transactions contemplated The Required Payments under the Agreement shall be equal to the amounts specified in hereby (including taxes and assessments levied or assessed by any public agency or governmental subsections (a) and (b), inclusive, of this Section. authority of whatsoever character having power to levy taxes or assessments) but excluding franchise taxes based upon the capital and/or income of the Bond Trustee and taxes based upon or Section 3.05 Corporation’s Payments as Trust Funds. All payments of the Total Required measured by the net income of the Bond Trustee; provided, however, that the Corporation shall Payments under the Agreement made by or on behalf of the Corporation under this Agreement to the have the right to protest any such taxes or assessments and to require the Authority or the Bond Bond Trustee shall be and constitute trust funds and shall continue to be impressed with a trust until such Trustee, at the Corporation’s expense, to protest and contest any such taxes or assessments levied money is applied in the manner provided in the Trust Agreement. upon them and that the Corporation shall have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest unless such withholding, protest or The Corporation shall give to the Bond Trustee written directions respecting the investment of contest would adversely affect the rights or interests of the Authority or the Bond Trustee; any money held in any of the funds or accounts established under the Trust Agreement, subject, however, to the provisions of Article VI of the Trust Agreement. (v) all fees and expenses of such accountants, Management Consultants, Insurance Consultants, attorneys and other experts as may be engaged by the Authority or the Bond Trustee Section 3.06 No Set-Off. The obligation of the Corporation to make the Loan Repayments, all in connection with the performance of its duties hereunder or in the Trust agreement and to Required Payments under the Agreement and all payments under Obligation No. 1 and to perform and prepare audits, financial statements, reports, opinions or provide such other services required observe the other agreements contained in this Agreement shall be absolute and unconditional. The under this Agreement, the Master Indenture, the Company Documents, the Bonds or the Trust Corporation will pay without abatement, diminution or deduction (whether for taxes or otherwise) all 7 8 PPAB 4993592v5 PPAB 4993592v5

such amounts regardless of any cause or circumstance whatsoever including, without limitation, any Representative, that funds will be available to pay such excess; provided, however, that nothing in this defense, set-off, recoupment or counterclaim that the Corporation may have or assert against the Agreement shall restrict or limit the power of the Corporation to make such changes as may be required Authority or the Bond Trustee or any other Person. by law or governmental authority.

Section 3.07 Assignment to Bond Trustee. Simultaneously with the delivery of this Section 4.03 Disbursements from Project Fund. The money in the Project Fund shall be Agreement, the Authority shall assign to the Bond Trustee as security for the Bonds all of the Authority’s applied by the Bond Trustee, upon receipt of a requisition of the Corporation signed by an Obligated right, title and interest in and to Obligation No. 1 and all of the Authority’s right, title and interest in and Group Representative and each Holder Representative, to pay the Cost of the Project, or to reimburse the to this Agreement (except for the Authority Unassigned Rights). The Corporation hereby (i) consents to Corporation for its prior payment thereof, in accordance with Article IV of the Trust Agreement, and such assignment, (ii) agrees that the Bond Trustee may enforce any and all rights, privileges and remedies pending such application such money shall be invested and reinvested in accordance with Article VI of of the Authority (except for the Authority Unassigned Rights) under or with respect to this Agreement, the Trust Agreement. Obligation No. 1, and (iii) agrees that the Bond Trustee shall be entitled to enforce and to benefit from the terms and conditions of this Agreement that relate to it notwithstanding the fact that it is not a signatory Section 4.04 Completion of Payment of the Cost of the Project. If, after exhaustion of the hereto. money in the Project Fund, the Corporation or another Member of the Obligated Group should pay any portion of the Cost of the Project, the Corporation shall not be entitled to any reimbursement therefor Nothing in this Agreement shall be deemed or construed to limit, impair, or affect in any way the from the Authority or from the Bond Trustee, and shall not be entitled to any abatement, diminution or Authority’s (or any Authority Indemnified Party’s) right to enforce the Authority Unassigned Rights, postponement of Total Required Payments. regardless of whether there is then existing an Event of Default (including, without limitation, a payment default), or any action based thereon or occasioned by an Event of Default or alleged Event of Default, Section 4.05 Establishment of Completion Date. The completion date for the Project shall be and regardless of any waiver or forbearance granted by the Master Trustee, the Bond Trustee or any evidenced to the Authority and the Bond Trustee by a certificate signed by the Obligated Group Holder in respect thereof. Any default or Event of Default in respect of the Authority Unassigned Rights Representative, and approved by each Holder Representative, setting forth the Cost of the Project and may only be waived with the Authority’s written consent. stating that, except for amounts not then due and payable, or the liability for the payment of which is being contested or disputed in good faith by the Corporation, all Costs of the Project intended to be paid ARTICLE IV by the Corporation from the proceeds of the Bonds have been paid or provision for such payment shall have been made by a surety bond or irrevocable bank letter of credit adequately securing such payment, D-73 THE PROJECT and all costs and expenses incurred in connection therewith have been paid. Notwithstanding the foregoing, each such certificate shall state that it is given without prejudice to any rights against third Section 4.01 Completion of the Project; Development of the Facility. The Corporation shall parties that exist at the date of such certificate or which may subsequently come into being. The diligently pursue the completion of the Project and the development of the Facility in accordance with the certificate of the Obligated Group Representative shall be accompanied by a final accounting of all funds Project Budget. The Corporation shall diligently pursue construction and permanent financing for the expended from the Project Fund and the purposes for which such funds were expended. Facility in such amounts that will permit payment of the Bonds and the construction of the Facility. Section 4.06 No Warranty of Condition or Suitability. The Corporation acknowledges its full Section 4.02 Revision of Project Documents. Subject to the prior written approval of each familiarity with the Project and that the Authority has no responsibility for the Project Documents. The Holder Representative, the Corporation may revise the description of the Project in Exhibit A hereto from Authority makes no representation or warranty, either express or implied, and offers no assurance that the time to time. In the case of any change that would render materially inaccurate the description of the proceeds of the Bonds will be sufficient to pay in full the Cost of the Project in accordance with the Project in Exhibit A hereto, there shall be delivered to the Bond Trustee, the Authority and each Holder Project Documents or that the Facility will be suitable for its intended purpose. Representative a revised Exhibit A containing a description of the Project that reflects the change in the Project, the accuracy of which shall have been certified by the Obligated Group Representative. The ARTICLE V Corporation shall not make (i) any material revision to Exhibit A or (ii) any revision to Exhibit A that would cause any representation of the Corporation set forth in the Tax Certificate to be untrue unless prior PARTICULAR COVENANTS to the making of such revision, the Corporation shall deliver to the Authority and the Bond Trustee an opinion of Bond Counsel to the effect that such revision will not affect the exclusion of interest on the Section 5.01 Compliance with Covenants, Conditions and Agreements in Master Indenture. Bonds from the gross income of the owners thereof for purposes of federal income taxation. The Corporation covenants that so long as the Bonds are Outstanding it shall comply with each and every covenant, condition and agreement set forth in the Master Indenture. Each such covenant, condition and Prior to effecting any change in or revision of the Project, the Corporation shall deliver or cause agreement set forth in the Master Indenture is hereby incorporated by reference and made a part of this to be delivered to the Authority, the Bond Trustee and each Holder Representative evidence of all Agreement with the same effect intended as though the text of each such covenant, condition and governmental or regulatory approvals required therefor. agreement were set forth in this Agreement as express covenants, conditions and agreements of the Corporation. The Corporation shall not order or approve changes in, amendments to, or revisions of the Project Documents that will cause the resulting aggregate cost of the Project to exceed the amount available for Section 5.02 Examination of Books and Records. The Authority and the Bond Trustee or the payment of such cost in the Project Fund, including estimated earnings thereon, unless prior to the their designees shall be permitted, during normal business hours and upon reasonable notice, (a) to giving of such order or approval the amount of such excess is deposited by the Corporation in the Project examine the books and records (other than donor records, patient records, personnel records and records Fund or the Corporation has delivered to the Authority evidence, satisfactory to each Holder protected by attorney-client privilege) of the Obligated Group, including any accountant’s work papers 9 10 PPAB 4993592v5 PPAB 4993592v5

(relating to any financial statements, certificates or reports required to be delivered hereunder or under the Section 6.02 Remedies on Default. Whenever any Event of Default shall have happened and Master Indenture), with respect to compliance with the obligations of the Obligated Group hereunder and be continuing, the Bond Trustee, on behalf of the Authority may take the following remedial steps: under the Master Indenture and (b) to make copies of those portions of such books and records as the Authority or the Bond Trustee may reasonably request. The right of the Authority to examine (a) In the case of an Event of Default described in Section 6.01(a), the Bond Trustee, on accountant’s work papers shall remain in effect through the Fiscal Year in which the Bonds are defeased, behalf of Authority may take whatever action at law or in equity is necessary or desirable to collect the redeemed or otherwise paid in whole. payments then due;

Section 5.03 Further Assurances and Corrective Instruments. Subject to the provisions of (b) In the case of an Event of Default described in Section 6.01(b), the Bond Trustee, on Article XI of the Trust Agreement and Section 10.05(d) of this Agreement, the Authority and the behalf of Authority may take whatever action at law or in equity may be necessary or desirable to enforce Corporation agree that they will, from time to time, execute, acknowledge and deliver, or cause to be the performance, observance or compliance by the Corporation with any covenant, condition or executed, acknowledged and delivered, such supplements and amendments hereto and such further agreement by the Corporation under this Agreement or under the Master Indenture; and instruments as may reasonably be required for carrying out the intention of facilitating the performance of this Agreement. (c) In the case of an Event of Default described in Section 6.01(c), the Bond Trustee, on behalf of Authority, shall take such action, or cease such action, as the Master Trustee shall direct, but Section 5.04 Investment of Funds. Subject to Section 10.09, the Corporation, agrees that it only to the extent such directions are consistent with the provisions of the Trust Agreement or the Master will give written instructions to the Bond Trustee with respect to the investment of any funds required to Indenture, as applicable. be invested, pursuant to Section 6.02 of the Trust Agreement. In the event the Bonds have been declared due and payable pursuant to Section 8.02 of the Trust Section 5.05 Continuing Disclosure. The Corporation represents that it is the sole “obligated Agreement, the Bond Trustee, on behalf of Authority shall declare the entire unpaid aggregate amount of person” within the meaning of Rule 15c-12 of the Securities and Exchange Commission and agrees to the Loan to be due and payable. comply with the terms and provisions of the Continuing Disclosure Agreement. Section 6.03 Application of Amounts Realized in Enforcement of Remedies. Any amounts ARTICLE VI collected pursuant to action taken under Section 6.02 shall be paid to the Bond Trustee applied in accordance with Section 8.04 of the Trust Agreement, or, if payment of the Bonds shall have been made, D-74 EVENTS OF DEFAULT AND REMEDIES shall be applied according to the provisions of Section 10.04.

Section 6.01 Events of Default Defined. The term “Event of Default” shall mean any one or Section 6.04 No Remedy Exclusive. Subject to Section 6.02, no remedy herein conferred more of the following events: upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given (a) The Corporation shall fail to pay, or cause to be paid, in full any payment required under under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission this Agreement or under Obligation No. 1 when due, whether at maturity, redemption, acceleration or to exercise any right or power accruing upon default shall impair any such right or power or shall be otherwise pursuant to the terms hereof or thereof; provided, however, in the case of any interest or construed to be a waiver thereof, but any such right and power may be exercised from time to time and as principal payment payable by the Corporation pursuant to Sections 3.03(b)(i) and (ii), no Event of Default often as may be deemed expedient. shall be deemed to have occurred if the Corporation makes such payment within two days after it is due. Section 6.05 Agreement to Pay Attorneys’ Fees and Expenses. In any Event of Default, if (b) The Corporation shall fail duly to perform, observe or comply with any covenant, the Authority or the Bond Trustee employs attorneys or incurs other expenses for the collection of condition or agreement on its part under this Agreement (other than a failure to make any payment under amounts payable hereunder or the enforcement of the performance or observance of any covenants or subsection (a) of this Section), including any covenant, condition or agreement in the Master Indenture agreements on the part of the Corporation herein contained, whether or not suit is commenced, the applicable to the Corporation and incorporated by reference in this Agreement pursuant to Section 5.01, Corporation agrees that it will on demand therefor pay to the Authority or the Bond Trustee the fees of and such failure continues for a period of thirty (30) days after the date on which written notice of such such attorneys and such other expenses so incurred by the Authority or the Bond Trustee. failure, requiring the same to be remedied, shall have been given to the Corporation by the Bond Trustee, or to the Corporation and the Bond Trustee by the Holders of at least twenty-five percent (25%) in Section 6.06 Authority and Corporation to Give Notice of Default. The Authority and the aggregate principal amount of the Bonds then Outstanding, provided, however, that if such performance, Corporation severally covenant that they will, at the expense of the Corporation, promptly give to the observation or compliance requires work to be done, action to be taken, or conditions to be remedied, Bond Trustee and each Holder Representative written notice of any Event of Default under this which by their nature cannot reasonably be done, taken or remedied, as the case may be, within such 30- Agreement of which they shall have actual knowledge or written notice, but the Authority shall not be day period, no Event of Default shall be deemed to have occurred or to exist if, and so long as, the liable for failing to give such notice and failure to give such notice shall not constitute a waiver of any Corporation shall commence such performance, observation or compliance within such period and shall Event of Default. diligently and continuously prosecute the same to completion, provided such default is cured within ninety (90) days after receipt by the Corporation of such notice; or Section 6.07 Correlative Waivers. If an Event of Default under Section 8.01 of the Trust Agreement shall be cured or waived and any remedial action by the Bond Trustee rescinded, any (c) An “Event of Default” shall have occurred under the Trust Agreement or the Master correlative default under this Agreement shall, ipso facto, be deemed to have been cured or waived; Indenture, and such “Event of Default” shall not have been remedied or waived. 11 12 PPAB 4993592v5 PPAB 4993592v5

provided, that any Event of Default in respect of the Authority Unassigned Rights may only be waived incurrence of permanent financing for the Facility. In order to effect such a redemption, the Corporation with the Authority’s written consent. shall give written notice to the Authority and the Bond Trustee which shall specify therein the date for redemption of the Bonds, which redemption date shall not be less than twenty (20) days from the date Section 6.08 No Obligation to Enforce Assigned Rights. Notwithstanding anything to the such notice is mailed (or such shorter time acceptable to the Bond Trustee). contrary in this Agreement, the Authority shall have no obligation to and instead the Bond Trustee, in accordance with this Agreement or the Trust Agreement, shall have the right, without any direction from ARTICLE VIII or action by the Authority, to take any and all steps, actions and proceedings, to enforce any or all rights of the Authority (other than the Authority Unassigned Rights) under the Trust Agreement or this INDEMNIFICATION AND NON-LIABILITY OF THE AUTHORITY, Agreement, including, without limitation, the rights to enforce the remedies upon the occurrence and THE MASTER TRUSTEE, THE BOND TRUSTEE AND THE DEED OF continuation of an Event of Default and the obligations of the Company hereunder. TRUST TRUSTEE

ARTICLE VII Section 8.01 General. The Company hereby fully and forever and irrevocably releases, and to the fullest extent permitted by law, the Company agrees to indemnify, hold harmless and defend (i) the PREPAYMENTS Master Trustee and the Bond Trustee, as well the officers, directors, officials, employees and agents thereof (the “Trustee Indemnified Parties”) and (ii) the Authority and each Authority Indemnified Party Section 7.01 Optional Prepayment. (together with the Trustee Indemnified Parties, the “Indemnified Parties”), against any and all fees, costs, charges, losses, damages, claims, actions, liabilities and expenses of any conceivable nature, kind or (a) The Corporation is hereby granted, and shall have, the option to prepay, together with character (including, without limitation, fees and expenses of attorneys, accountants, consultants and accrued interest, all or any portion of the unpaid aggregate amount of the Loan in accordance with the other experts, litigation and court costs, amounts paid in settlement and amounts paid to discharge terms and provisions of Section 3.01(a) of the Trust Agreement. Said prepayment shall be made by the judgments) to which the Indemnified Parties, or any of them, may become subject under any statutory law Corporation taking, or causing the Bond Trustee to take, the actions required (i) for payment of the or regulation (including federal or state securities laws and regulations and federal tax laws or Bonds, whether by redemption or purchase prior to maturity or by payment at maturity, or (ii) to effect the regulations) or at common law or otherwise (collectively, “Liabilities”), arising out of or based upon or in purchase, redemption or payment at maturity of less than all of the Outstanding Bonds according to their any way relating to: terms. D-75 (a) the Bonds, the Trust Agreement, this Agreement, the Corporation Documents or (b) To make a prepayment pursuant to this Section, an Obligated Group Representative shall the Tax Certificate or the execution or amendment hereof or thereof or in connection with give written notice to the Authority and the Bond Trustee which shall specify therein (i) the date of the transactions contemplated hereby or thereby, including the issuance, sale or resale of the Bonds; intended prepayment of the Loan, which shall not be less than forty-five (45) days from the date the notice is mailed (unless the Bond Trustee agrees to a shorter time), (ii) the source of the money that will (b) the performance or observance by or on behalf of the Authority of those things be used by the Corporation to make such prepayment of the Loan and (iii) the aggregate principal amount on the part of the Authority agreed to be performed or observed hereunder or under the Trust and maturities of the Bonds to be purchased, redeemed or paid at maturity and the date or dates on which Agreement and the documents identified in Subsection (a), above; the purchase, redemption or payment is to occur. (c) any act or omission of the Company or any of its affiliates, affiliated persons Section 7.02 [Reserved]. agents, contractors, employees, tenants, servants, or licensees in connection with the Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, Section 7.03 Right of Revocation. The Corporation shall have the right to condition any possession, conduct or management of work done in or about, or from the planning, design, notice of prepayment given pursuant to Section 7.01 in the same manner provided for redemption notices acquisition, installation or construction of, the Project or any part thereof; in Section 3.03(b) of the Trust Agreement. If a Conditional Redemption does not occur for either of the reasons permitted under Section 3.03(b) of the Trust Agreement, the corresponding notice of prepayment (d) any Lien or charge upon payments by the Company to the Authority and the given pursuant to Section 7.01 shall be deemed to be revoked. Bond Trustee hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the Authority or the Bond Section 7.04 Mandatory Prepayment upon Determination of Taxability. The Corporation Trustee in respect of any portion of the Project; shall prepay the Loan in whole, together with accrued interest, at the time and in an amount sufficient to redeem the Bonds in whole pursuant to Section 3.01(e) of the Trust Agreement upon the occurrence of a (e) any violation of any environmental regulations with respect to, or the release of Determination of Taxability. In order to effect such a redemption, the Corporation shall give written any hazardous substances from, the Project or any part thereof; notice to the Authority and the Bond Trustee which shall specify therein the date for redemption of the Bonds, which redemption date shall not be less than forty-five (45) days from the date such notice is (f) the defeasance and/or redemption, in whole or in part, of the Bonds; mailed and not more than one hundred twenty (120) days after the Determination of Taxability. (g) any untrue statement or misleading statement or alleged untrue statement or Section 7.05 Mandatory Prepayment upon Permanent Financing for Facility. The alleged misleading statement of a material fact contained in any offering or disclosure document Corporation shall prepay the Loan in whole, together with accrued interest, at the time and in an amount or disclosure or continuing disclosure document for the Bonds or any of the documents relating to sufficient to redeem the Bonds in whole pursuant to Section 3.01(c) of the Trust Agreement upon the the Bonds, or any omission or alleged omission from any offering or disclosure document or 13 14 PPAB 4993592v5 PPAB 4993592v5

disclosure or continuing disclosure document for the Bonds of any material fact necessary to be The rights of any Persons to indemnity hereunder and rights to payment of fees and stated therein in order to make the statements made therein, in the light of the circumstances reimbursement of expenses shall survive the final payment or defeasance of the Bonds and in the case of under which they were made, not misleading; the Bond Trustee any resignation or removal. The provisions of this Section shall remain valid and in effect notwithstanding repayment of the Loans hereunder or payment, redemption or defeasance of the (h) any declaration of taxability of interest on the Bonds, or allegations that interest Bonds or termination of this Agreement or the Trust Agreement. on the Bonds is taxable or any regulatory audit or inquiry regarding whether interest in the Bonds is taxable; Insofar as any document or instrument issued or delivered in connection with the Bonds (including, without limitation, the documents referred to in Subsection (a), above) purports to constitute (i) the Master Trustee's or Bond Trustee's, as applicable, acceptance or an undertaking by or impose an obligation upon the Company to provide indemnification to the Authority administration of the trust of the Master Indenture or Trust Agreement, respectively, or the or the Authority Indemnified Parties, the indemnification provision or provisions of such document shall exercise or performance of any of its powers or duties thereunder or under any of the documents not be deemed, interpreted or construed in any way as a modification of or limitation upon the Company's relating to the Bonds to which it is a party; obligations or the rights of the Authority and the Authority Indemnified Parties under this Section 8.01, and the provisions of this Section 8.01 shall in every respect supersede the indemnification provisions of (j) any injury to or death of any person or damage to property in or upon the Project any such other document and shall apply thereto as if fully set forth therein. or growing out of or connected with the use, nonuse, condition or occupancy of the Project; Section 8.02 Payment of Costs. The Corporation shall pay, and shall indemnify the Authority except (A) in the case of the foregoing indemnification of the Trustee Indemnified Parties, to the extent and the Bond Trustee against, all costs and charges, including counsel fees, lawfully and incurred in such Liabilities are caused by the negligence or willful misconduct of such Trustee Indemnified Party; or enforcing any covenant or agreement of the Corporation contained in this Agreement. (B) in the case of the foregoing indemnification of the Authority and the Authority Indemnified Parties, to the extent such Liabilities are caused by the willful misconduct of the person seeking indemnification. ARTICLE IX

THE COMPANY EXPRESSLY ACKNOWLEDGES AND TERMINATION OF AGREEMENT AGREES THAT THE AUTHORITY AND THE AUTHORITY INDEMNIFIED PARTIES SHALL BE RELEASED FROM, AND Section 9.01 Termination of Agreement. When the Bond Trustee has released the Trust D-76 INDEMNIFIED HEREUNDER AGAINST, LIABILITIES Agreement in accordance with the provisions of Section 12.01 of the Trust Agreement, this Agreement, ARISING FROM THE AUTHORITY'S OR ANY AUTHORITY except for Sections 3.04(b), 8.01 and 10.01, which shall remain in effect, shall terminate, and the Bond INDEMNIFIED PARTY'S OWN NEGLIGENCE OF ANY KIND, Trustee shall contemporaneously cancel Obligation No. 1 and shall deliver the same to the Corporation. DESCRIPTION OR DEGREE (EXPRESSLY WAIVING THE COMPARATIVE NEGLIGENCE PROVISIONS OF SECTION ARTICLE X 895.045 OF THE WISCONSIN STATUTES AND THE STATUTORY AND COMMON-LAW CONTRIBUTORY OR MISCELLANEOUS COMPARATIVE NEGLIGENCE LAWS OF ANY OTHER STATE OR JURISDICTION), OR BREACH OF CONTRACTUAL DUTY, Section 10.01 Authority Members, Officers and Employees of the Authority and the WITHOUT REGARD TO OR THE NECESSITY FOR ANY Corporation Not Liable. No Authority Indemnified Party shall be individually or personally liable for BREACH OR FAULT ON THE PART OF THE COMPANY, the payment of any principal of, premium, if any, or interest on the Bonds or any costs incidental thereto EXCEPT INSOFAR AS AND TO THE EXTENT THAT ANY or any sum hereunder or under the Trust Agreement or be subject to any personal liability or SUCH LIABILITIES ARISE FROM THE WILLFUL accountability by reason of the execution and delivery of this Agreement, the Trust Agreement or any MISCONDUCT OF THE PERSON SEEKING other Authority Documents. The members of the Board of Directors or the officers and employees of the INDEMNIFICATION. Corporation shall not be personally liable for any costs, losses, damages or liabilities caused or subsequently incurred by the Corporation or any officer, director or agent thereof in connection with or as In the event that any action or proceeding is brought against any Indemnified Party with respect a result of this Agreement. to which indemnity may be sought hereunder, the Company, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel selected Section 10.02 Amendment of Agreement. This Agreement may be amended, from time to by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to time, without the consent of or notice to any of the Holders, but with the consent of each Holder litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Party shall Representative, as shall be consistent with the terms of the Trust Agreement and hereof and, in the have the right to review and approve or disapprove any such compromise or settlement. Each opinion of the Bond Trustee, who may rely upon a written Opinion of Counsel, shall not materially and Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and adversely affect the Holders, to: participate in the investigation and defense thereof, and the Company shall pay the fees and expenses of such separate counsel; provided, however, that such Indemnified Party may only employ separate counsel (a) cure any ambiguity or formal defect or omission in this Agreement or in any at the expense of the Company if in the judgment of such Indemnified Party a conflict of interest exists by supplement thereto; reason of common representation or if all parties commonly represented do not agree as to the action (or inaction) of counsel. 15 16 PPAB 4993592v5 PPAB 4993592v5

(b) correct or supplement any provisions herein which may be inconsistent with any Sponsor, any Authority Member, the State of Wisconsin or any other political subdivision or agency other provisions herein or make any other amendments with respect to matters or questions thereof or any political subdivision approving the issuance of the Bonds, nor the faith and credit of the arising hereunder; Authority, is pledged to the payment of the principal, interest, or premium, if any, on the Bonds or any costs incidental thereto. The Authority has no taxing power. The Authority shall not be directly, (c) grant to or confer upon the Bond Trustee for the benefit of the Holders any indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions of additional rights, remedies, powers, authority or security that may lawfully be granted to or any conceivable kind on any conceivable theory, under or by reason of or in connection with this conferred upon the Holders or the Bond Trustee; or Agreement, the Bonds or the Trust Agreement, except only to the extent amounts are received for the payment thereof from the Company under this Agreement, and except as may result solely from the (d) add conditions, limitations and restrictions on the Corporation to be observed Authority's own willful misconduct. thereafter. (b) The Company hereby acknowledges that the Authority's sole source of moneys to repay Other than amendments referred to in the preceding paragraph of this Section and subject to the the Bonds will be provided by the revenues and funds assigned to the Bond Trustee or otherwise pledged terms and provisions and limitations contained in Section 11.02 of the Trust Agreement and not therefor, and hereby agrees that if the payments to be made under this Agreement shall ever prove otherwise, the Holders of not less than a majority in aggregate principal amount of the Bonds then insufficient to pay all principal of, premium, if any, and interest on the Bonds as the same shall become Outstanding shall have the right, from time to time, anything contained herein to the contrary due (whether by maturity, redemption, acceleration or otherwise) or any costs incidental thereto, then notwithstanding, to consent to and approve the execution by the Corporation and the Authority of such upon notice or demand from the Bond Trustee, the Company shall pay such amounts as are required from supplements and amendments hereto as shall be deemed necessary and desirable for the purpose of time to time to prevent any deficiency or default in the payment of such principal of, premium, if any, or modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions interest when due, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or contained herein; provided, however, nothing in this Section shall permit or be construed as permitting a malfeasance on the part of the Bond Trustee, the Authority, the Company, or any third party, subject to supplement or amendment which would: any right of reimbursement from the Bond Trustee, the Authority or any such third party, as the case may be, therefor. (i) extend the stated maturity of or time for paying interest on Obligation No. 1 or reduce the principal amount or Redemption Price of or the redemption premium or rate of interest (c) The Company has represented to the Authority that it expects that the Bonds will be payable on Obligation No. 1 without the consent of the Holders of all Bonds then Outstanding; repaid through the issuance of long-term bonds or other financing ("Permanent Financing") on or prior to D-77 the maturity date of the Bonds and has covenanted pursuant to this Agreement to diligently pursue such (ii) except as expressly permitted at the time of execution of this Agreement, grant to Permanent Financing. THE COMPANY ACKNOWLEDGES AND AGREES THAT NEITHER THIS any Person a security interest in Pledged Assets superior to that of the holders of Obligations; or AGREEMENT, THE TRUST AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT, WRITTEN OR ORAL AGREEMENT SHALL IN ANY WAY BE CONSIDERED, DEEMED OR (iii) reduce the aggregate principal amount of Bonds then Outstanding the consent of CONSTRUED AS AN EXPLICIT OR IMPLICIT UNDERTAKING, REPRESENTATION OR the Holders of which is required to authorize such supplement or amendment without the consent PROMISE BY THE AUTHORITY TO ISSUE BONDS OR OTHERWISE TO PROVIDE ALL OR of the Holders of all Bonds then Outstanding. PART OF SUCH PERMANENT FINANCING.

Section 10.03 Redemption of Bonds. Upon the request of the Corporation made in accordance (d) None of the provisions of this Agreement or the Trust Agreement shall require the with this Agreement, the Authority shall take all steps that may be proper and necessary under the Authority to expend or risk its own funds or to otherwise incur financial liability in the performance of applicable redemption provisions of the Trust Agreement to effect the redemption of all or part of the then any of its duties or in the exercise of any of its rights or powers hereunder or thereunder, unless payable Outstanding Bonds in such principal amount and on such redemption date as the Corporation shall direct. from the revenues and funds assigned to the Bond Trustee or otherwise pledged for payment of the All expenses of such redemption shall be paid from money in the hands of the Bond Trustee or by the Bonds, or unless the Authority shall first have been adequately indemnified to its satisfaction against the Corporation and not from funds of the Authority. cost, expense, and liability which may be incurred thereby. The Authority shall not be under any obligation hereunder or under the Trust Agreement to perform any administrative service with respect to Section 10.04 Surplus Funds. When all Bonds shall have been redeemed or retired and the Bonds or the Project (including, without limitation, any record keeping or legal services), it being Obligation No. 1 and all other obligations, fees and expenses incurred or to be incurred by the Authority understood that such services shall be performed or provided by the Bond Trustee or the Company. The and the Bond Trustee under the Trust Agreement or this Agreement shall have been paid, or sufficient Authority covenants that it will faithfully perform at all times any and all covenants, undertakings, funds or Defeasance Obligations shall be held in trust pursuant to the Trust Agreement for the payment of stipulations, and provisions expressly contained in this Agreement, the Trust Agreement, and in any and all such obligations, any surplus funds remaining to the credit of any fund or account established under every Bond executed, authenticated, and delivered under the Trust Agreement; provided, however, that the Trust Agreement for the security of the Bonds shall be paid to the Corporation as an overpayment of the Authority shall not be obligated to take any action or execute any instrument pursuant to any the Total Required Payments. provision hereof unless and until it shall have (i) been directed to do so by the Company or the Bond Trustee having the authority to so direct, (ii) received from the Person requesting such action or execution Section 10.05 Limitation on the Authority’s Liability and Performance. assurance satisfactory to the Authority that the Authority's expenses incurred or to be incurred in connection with taking such action or executing such instrument have been or will be paid or reimbursed (a) The Authority shall not be obligated to pay the principal of, premium, if any, or interest to the Authority, and (iii) if applicable, received in a timely manner the instrument or document to be on the Bonds or costs incidental thereto, except from the revenues and funds assigned to the Bond Trustee executed, in form and substance satisfactory to the Authority. In complying with any provision herein or or otherwise pledged for payment of the Bonds. Neither the faith and credit nor the taxing power of any in the Trust Agreement, including, but not limited to, any provision requiring the Authority to "cause" 17 18 PPAB 4993592v5 PPAB 4993592v5

another Person to take or omit any action, the Authority shall be entitled to rely conclusively (and without the Corporation for such purposes. The Corporation agrees to perform, or cause to be performed, the independent investigation or verification) on (a) the faithful performance by the Bond Trustee or the covenants set forth in the Tax Certificate which covenants are incorporated herein by reference. Company, as the case may be, of their respective obligations hereunder and under the Trust Agreement, and (b) upon any written certification or opinion furnished to the Authority by the Bond Trustee or the Section 10.11 Notices; Demands; Requests. All notices, demands and requests to be given to Company, as the case may be. In acting, or refraining from acting, under this Agreement or the Trust or made hereunder by the Corporation, the Authority or the Bond Trustee shall be given or made in Agreement, the Authority may conclusively rely on the advice of its counsel. The Authority shall not be writing and shall be deemed to be properly given or made if sent by United States registered or certified required to take any action hereunder or under the Trust Agreement that it reasonably believes to be mail, return receipt requested, postage prepaid, addressed as follows: unlawful or in contravention hereof or thereof. As to the Corporation: Aldersgate at Shalom Park, Inc. Section 10.06 Corporation’s Remedies. In the event the Authority should fail to perform any 3800 Shamrock Road of its obligations under this Agreement, the Corporation may institute such action against the Authority as Charlotte, NC 28215 the Corporation may deem necessary to compel performance; provided, however, that no such action shall Attention: Suzanne H. Pugh seek to impose, or impose, any pecuniary liability upon the Authority, or any personal or pecuniary liability upon any Authority Indemnified Party. As to the Authority: Public Finance Authority 22 E. Mifflin Street, Suite 900 Section 10.07 Consents and Approvals. Whenever the written consent or approval of the Madison, WI 53703 Authority, the Corporation, the Bond Trustee or each Holder Representative shall be required under the Attention: Scott Carper and Michael LaPierre provisions of this Agreement, such consent or approval shall not be unreasonably withheld or delayed. Unless otherwise specified herein, consents of the Authority shall be executed and delivered on behalf of As to the Bond Trustee: The Bank of New York Mellon Trust Company, N.A. the Authority by the Authority Authorized Signatory, consents of the Corporation shall be executed and 10161 Centurion Parkway North delivered on behalf of the Corporation by an Obligated Group Representative. Jacksonville, Florida 32256 Attention: Corporate Trust Services Notwithstanding the foregoing or any other provision hereof to the contrary, whenever any certificate or opinion is required by the terms of this Agreement to be given by the Authority on its own As to the Holder Representatives: HJS Advisors, Inc. D-78 behalf, any such certificate or opinion may be made or given by an Authority Authorized Signatory (and 2150 Post Road, Suite 301 in no event individually) and may be based (i) insofar as it relates to factual matters, upon a certificate of Westport, Connecticut 06824 or representation by the Bond Trustee or the Company; and (ii) insofar as it relates to legal or accounting Attention: General Counsel Office matters, upon a certificate or opinion of or representation by counsel or an accountant, in each case under Executive Vice President clause (i) and (ii) without further investigation or inquiry by such Authority Authorized Signatory or otherwise on behalf of the Authority. BB&T Capital Markets 901 East Byrd Street, Suite 260 Section 10.08 Extent of Covenants; Corporation Bound by Trust Agreement. All covenants, Richmond, Virginia 23219 stipulations, obligations and agreements of the Authority and the Corporation contained in this Attention: John Franklin Agreement shall be effective to the extent authorized and permitted by applicable law. Any such notice, demand or request may also be transmitted to the appropriate above-mentioned The Corporation agrees to perform all duties and obligations imposed upon it by the Trust party by telegram or telephone and shall be deemed to be properly given or made at the time of such Agreement in the same manner as if the Corporation was a party to the Trust Agreement. transmission if, and only if, such transmission of notice shall be confirmed in writing and sent as specified above; provided, all notices to the Bond Trustee by Electronic Means are subject to Section 9.16 of the Section 10.09 Arbitrage. The Corporation shall take no action, and shall not approve any Trust Agreement. action of, or the making of any investment or use of the proceeds of the Bonds, by the Bond Trustee that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code as such Any of such addresses may be changed at any time upon written notice of such change sent by may be applicable to the Bonds at the time of such action, investment or use. The Authority shall not United States registered or certified mail, postage prepaid, to the other parties by the party effecting the knowingly take any action or knowingly approve any action of, or the making of any investment or use of change. the proceeds of the Bonds, by the Bond Trustee that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code as such may be applicable to the Bonds at the time of such Section 10.12 Closing Expenses. In addition to and without in any way limiting its obligations action, investment or use. to pay and indemnify the Authority and the Authority Indemnified Parties against fees, costs and charges arising out of or in connection with this Agreement, the Company Documents, the Bonds or the Trust Section 10.10 Exclusion From Gross Income Covenant. The Corporation covenants that it Agreement, the Company shall pay, upon the closing of the issuance of the Bonds and as a condition will not take any action which will, or fail to take any action which failure will, cause interest on the thereto: (i) to the Authority, the Authority’s issuance fee in an amount which is the greater of (a) Bonds to become includable in the gross income of the Holders for federal income tax purposes pursuant $15,000.00 and (b) 0.20% of the par amount of the Series 2019 Bonds (less, if applicable, any application to the provisions of the Code; provided, however, that the Authority shall have no obligation to pay any fee heretofore paid by the Company to the Authority); and (ii) attorney’s fees incurred by the Authority in amounts necessary to comply with this Covenant other than from money received by the Authority from connection with the issuance of the Bonds in the amount of $______. 19 20 PPAB 4993592v5 PPAB 4993592v5

Section 10.13 Multiple Counterparts. This Agreement may be executed in multiple (f) any other provision of this Agreement not described or enumerated above that expressly provides for counterparts, each of which shall be regarded for all purposes as an original constituting but one and the its survival, shall survive and remain in full force and effect notwithstanding the payment or redemption same instrument. in full, or defeasance of the Bonds, the discharge of the Trust Agreement, and the termination or expiration of this Agreement. Section 10.14 Severability. If any one or more of the covenants, agreements or provisions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, the invalidity of Section 10.17 Effective Date of this Agreement. Notwithstanding that this Agreement is dated such covenants, agreements and provisions shall in no way affect the validity or effectiveness of the as of November 1, 2019, this Agreement shall take effect when it is fully executed and has been delivered remainder of this Agreement, and this Agreement shall continue in force to the fullest extent permitted by to the parties hereto contemporaneously with the delivery of and payment for the Bonds, and none of the law. Total Required Payments shall be payable prior to or for any period prior to the effective date of this Agreement. Section 10.15 State Law Controlling; Jurisdiction. Section 10.18 Third Party Beneficiaries. Notwithstanding any provision of this Agreement to (a) Except as and to the extent provided in subsection (b) of this Section 10.15, this the contrary, it is specifically acknowledged and agreed that, to the extent of their rights hereunder Agreement and all disputes, claims, defenses, controversies, or causes of action (whether in contract or (including, without limitation, their rights to immunity, indemnification and exculpation from pecuniary tort) that may be based upon, arise out of, or relate hereto, including as to any representation or warranty liability) each Authority Indemnified Party is a third-party beneficiary of this Agreement entitled to made by the Company in or in connection with this Agreement or as an inducement to enter this enforce such rights in his, her, its or their own name. Agreement, shall be governed by the applicable laws of the State, without regard to any conflicts of laws principles. [SIGNATURES ARE ON THE FOLLOWING PAGE]

(b) Notwithstanding subsection (a) of this Section 10.15, any disputes, claims, defenses, controversies or causes of action based upon, arising out of or relating to the following enumerated matters shall be governed by the laws of the State of Wisconsin, excluding conflicts of law principles: (i) the Authority’s organization, existence, statutory and corporate powers, and legal and contractual capacity; (ii) the Authority’s right to the payment of its fees, costs and expenses, including, but not D-79 limited to, attorneys’ fees, costs of investigation and the expenses of other professionals retained by the Authority and the reasonableness of such fees, costs and expenses; (iii) the Authority’s and each Authority Indemnified Party’s rights to indemnification from the Company (and the Company’s corresponding obligation to provide such indemnification); (iv) the Company’s release of the Authority and the Authority Indemnified Parties from liability; (v) exculpation of the Authority and the Authority Indemnified Parties from pecuniary liability; and (vi) the Authority’s governmental rights, privileges and immunities.

(c) All claims of whatever character arising out of this Agreement shall be brought in any state or federal court of competent jurisdiction located in Mecklenburg County, North Carolina; provided, that to the extent that a dispute, claim, defense, controversy, or cause of action enumerated in subsection (b) of this Section 10.15 can be separated from other disputes under this Agreement (a “Separate Dispute”), such Separate Dispute shall be adjudicated by a state or federal court of competent jurisdiction located in Dane County, Wisconsin. By executing and delivering this Agreement, each party hereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such courts; (ii) waives any defense of forum non conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by the Authority of any prior notice or procedural requirements applicable to actions or claims against or involving joint powers commissions or governmental units of the State of Wisconsin that may exist at the time of and in connection with such matter.

Section 10.16 Survival of Provisions. The provisions of this Agreement and the Trust Agreement and any other document in connection with the issuance of the Bonds to which the Authority is a party concerning (a) the tax-exempt status of the Bonds (including, but not limited to provisions concerning rebate), (b) the interpretation of this Agreement, (c) the governing law, jurisdiction and venue, (d) the Authority’s right to rely on written representations of others contained herein or in any other document regardless of whether the Authority is a party thereto, (e) the immunity, right to indemnification and exculpation from liability of the Authority and the Authority Indemnified Parties, and 21 22 PPAB 4993592v5 PPAB 4993592v5

IN WITNESS WHEREOF, the Authority and the Corporation have caused this Loan Agreement EXHIBIT A to be executed in their respective corporate names by their duly authorized signatories, all as of the date first above written. DESCRIPTION OF THE PROJECT AND THE FACILITY

PUBLIC FINANCE AUTHORITY The Project means the payment of the pre-construction and development expenses (e.g., land acquisition costs, feasibility studies and reports, marketing activities, and design and engineering costs) for the acquisition, construction and equipping of a new life planned community to be located on the intersection of Providence Road and Jefferson Drive in Charlotte, North Carolina 28226 (the “Facility”). By: The Facility is expected to initially consist of approximately one hundred thirty-six (136) total units, Name: including approximately one-hundred-twenty (120) entrance fee independent living apartments, a Title: Assistant Secretary combination of, sixteen (16) traditional assisted living units and memory care units, and additional amenities such as a clubhouse.

ALDERSGATE AT SHALOM PARK, INC.

By: Suzanne H. Pugh President

[LOAN AGREEMENT] D-80

23 A-1 PPAB 4993592v5 PPAB 4993592v5 ASSIGNMENT OF CONTRACTS payment and performance bonds, whether now or hereafter existing, relating to the design, construction, renovation, installation and equipping of the Facility, and all amendments, revisions, and modifications THIS ASSIGNMENT OF CONTRACTS (this “Assignment”), dated as of November 1, 2019, is thereto are hereinafter collectively referred to as the “Contracts.” made by ALDERSGATE AT SHALOM PARK, INC. (“Shalom Park”) and ALDERSGATE LIFE PLAN SERVICES, INC. (the “Parent” and with Shalom Park, the “Assignors”), both North Carolina nonprofit E. It is a condition to the issuance of the 2019 Bonds by the Issuer that the Assignors shall corporation (the “Assignor”), to THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as master have agreed, by executing and delivering this Assignment, to assign to the Master Trustee all of their trustee (together with its successors and assigns in trust, the “Master Trustee”). respective rights, title and interests in the Contracts as security for (1) the payment of the principal of, premium, if any, and interest on all Obligations issued under the Master Indenture and (2) all costs and RECITALS expenses incurred by the Master Trustee in connection with the administration or enforcement of the Master Indenture or this Assignment. A. Simultaneously with the delivery of this Assignment, Shalom Park and the Master Trustee will enter a Master Trust Indenture, dated as of November 1, 2019 (the “Master Indenture”). STATEMENT OF AGREEMENT Pursuant to the Master Indenture, Shalom Park and any other Member of the Obligated Group (as defined in the Master Indenture) may issue Obligations (as defined in the Master Indenture) which will be equally NOW, THEREFORE, in consideration of the foregoing premises, and for other good and and ratably secured by the Master Indenture. valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignors hereby agree as follows: B. Shalom Park is undertaking to acquire, construct and equip a new life plan community to be located on approximately 12 acres of land at the intersection of Providence Road and Jefferson Drive 1. The Assignors hereby grant, transfer, and assign unto the Master Trustee, its successors in Charlotte, North Carolina 28270 (the “Facility”). The Facility is expected to initially consist of and assigns, all of the respective Assignor’s rights, title, and interests in, to and under the Contracts. The approximately one hundred forty-one (141) total units, including approximately one-hundred-twenty Assignors hereby authorize and empower the Master Trustee, at its option, to exercise any and all of the (125) entrance fee independent living apartments, a combination of, sixteen (16) traditional assisted living rights, powers, and privileges conferred by the Contracts in as full and ample manner as the Assignors are units and memory care units, and additional amenities such as a clubhouse. The Assignor is financing or may be authorized and empowered to exercise the same; provided, however, that nothing herein and refinancing the cost of pre-construction and development expenses (e.g., feasibility studies and contained shall be deemed to impose upon the Master Trustee any liability for the performance of any reports, marketing activities, and design and engineering costs) relating to the Facility with the proceeds obligation of the Assignors under any of the Contracts. The foregoing assignment shall remain in effect D-81 of revenue anticipation bonds (the “2019 Bonds”) issued by the Public Finance Authority (the “Issuer”). for so long as any of the Assignment Obligations (as hereinafter defined) remain outstanding.

C. The Parent is serving as manager for the Facility pursuant to a Life Plan Community 2. This Assignment is made in order to secure the following (collectively, the “Assignment Management Agreement (as amended, the “Management Agreement”), between the Parent and the Obligations”): (A) all payments due from Shalom Park on all Obligations issued under the Master Shalom Park. The Parent is serving as developer for the Facility pursuant to a Project Development and Indenture and (B) all costs and expenses incurred by the Master Trustee in connection with the Construction Management Agreement (as amended, the “Development Agreement”) Brian Schiff & administration or enforcement of the Master Indenture or this Assignment. The rights of the Master Associates LLC is serving as the development consultant for the Facility pursuant to a Development Trustee under this Assignment shall be operative, at the option of the Master Trustee, from and after the Consulting Agreement, dated as of August 15, 2019 (the “Development Consultant Agreement”). Shalom occurrence of any Event of Default (as defined in the Master Indenture). In the event of any such Event Park has entered into a Real Estate Purchase Agreement (the “Purchase Agreement”) with Temple Israel of Default, all rights, title, and interests of the Assignor sin, to and under the Contracts shall pass to the (Inc.) and The Foundation of Shalom Park, Inc. whereby such Purchase Agreement sets forth the purchaser or to the Master Trustee, as the case may be, and the Master Trustee is hereby irrevocably conditions and other covenants relating to the purchase of real estate for the Facility. Shalom Park has or appointed by the Assignors as attorney-in-fact for the Assignor, to assign any such Contract to any such will enter into an Agreement to Release and Terminate Terms, Conditions, Restrictions and Reversionary purchaser, without accounting to the Assignor in any manner whatsoever. Rights with seller und the Purchase Agreement and certain related parties (“Release and Termination Agreement”). Shalom Park has or will enter into a Standard Form of Agreement Between Owner and 3. The Assignors represent and warrant that (i) each of the Contracts (except those not yet Architect (the “Architect’s Agreement”) with RLPS Architects II, LLP for architectural services for the executed) is unmodified and is in full force and effect, (ii) it hasn’t made nor will make any other Facility. Shalom Park has or will enter into an agreement (the “Construction Monitoring Agreement”) assignment of any of their rights under the Contracts to any other person or entity; (iii) that they have with Construction Practices, LLC for construction monitoring services at the Facility. Shalom Park has done no act, nor failed to do any act, which might prevent the Master Trustee from exercising any of the entered into a Preconstruction Services Agreement (the “Preconstruction Services Agreement”) with rights, powers, and privileges conferred upon the Assignor by the Contracts as contemplated by this Frank L. Blum Construction Company for preconstruction services with respect to the Facility. Shalom Assignment; and (iv) that they are not in default under the provisions of any of the Contracts and, to the Park has entered into a site construction document services agreement (the “Design Agreement”) with knowledge of the Assignors, none of the other parties to the Contracts are in default under the provisions Landworks Design Group, P.A. for design and engineering services with respect to the Facility. Shalom thereof. Park has or will into an agreement (the “Marketing Agreement”) with Love & Company for marketing consultant services with respect to the Facility. 4. The Contracts are being assigned to the Master Trustee hereunder not in its individual capacity, but solely in its capacity as the trustee for the benefit of the Holders (as defined in the Master D. The Management Agreement, Development Agreement, Development Consultant Indenture) of the Obligations under the terms and conditions of the Master Indenture. The Master Trustee Agreement, the Purchase Agreement, Release and Termination Agreement, the Architect’s Agreement, shall act hereunder on the terms and conditions set forth herein and in the Master Indenture. the Construction Monitoring Agreement, the Preconstruction Services Agreement, the Design Agreement, the Marketing Agreement any and all other documents, instruments and agreements, including any

PPAB 5039014v3 PPAB 5039014v3 2 5. This Assignment may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall constitute one IN WITNESS WHEREOF, each of the Assignors have caused this Assignment of Contracts to and the same instrument. be executed by its President as of the day and year first above written.

6. This Assignment shall inure to the benefit of and be binding upon the parties hereto and ALDERSGATE AT SHALOM PARK, INC., their respective heirs, executors, legal representatives, successors and assigns.

7. This Assignment shall be governed by and construed in accordance with the laws of the State of North Carolina without regard to principles of conflicts of laws. By: Suzanne H. Pugh [The remainder of this page is left blank intentionally.] President

ALDERSGATE LIFE PLAN SERVICES, INC.,

By: Suzanne H. Pugh President

AGREED AND ACCEPTED:

D-82 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

By: Vice President

PPAB 5039014v3 3 PPAB 5039014v3 4

CONSENT AND AGREEMENT WITNESS the hand of each Contracting Party, as of the respective day and year set forth below.

FOR VALUE RECEIVED, the undersigned, each of whom has, pursuant to one or more of the ALDERSGATE LIFE PLAN SERVICES, INC. Contracts (as defined in the attached Assignment of Contracts dated as of November 1, 2019 (the “Assignment”) made by Aldersgate at Shalom Park, Inc. or Aldersgate Life Plan Services, Inc. (the “Assignor”) to The Bank of New York Mellon Trust Company, N.A., as master trustee (the “Master Trustee”), performed or supplied, or agreed to perform or supply, certain services, materials, real estate, By: and/or documents in connection with the development, construction, renovation, installation or equipping Name: of the Facility referred to in the Assignment (each of the undersigned being hereinafter severally referred Title: to as a “Contracting Party”) hereby acknowledge and consent to the Assignment. Date: ______Each Contracting Party does hereby warrant and represent that no default exists under the terms of any Contract with such Contracting Party. BRIAN SCHIFF & ASSOCIATES LLC

Each Contracting Party does hereby agree that (a) upon the occurrence of an Event of Default under the Master Indenture (as defined in the Assignment), (i) the Master Trustee shall be entitled to use without further payment or charge of any kind any and all documents prepared or owned by any By: Contracting Party to the extent Assignor is entitled to use such documents pursuant to any Contract and Name: (ii) each Contracting Party shall, upon receipt of written notice and demand of the Master Trustee, Title: continue performance on behalf of the Master Trustee, or its assignee, provided that such Contracting Party is paid all amounts owed for such performance to date and is reimbursed for such performance on behalf of the Master Trustee in accordance with its Contract for the performing or supplying of such Date: ______services, materials and/or documents and (b) upon the occurrence of any default by the Assignor under D-83 the terms of any Contract with a Contracting Party, such Contracting Party shall deliver to the Master TEMPLE ISRAEL (INC.) Trustee (The Bank of New York Mellon Trust Company, N.A., 10161 Centurion Parkway North, Jacksonville, Florida 32256, Attention: Corporate Trust Services) by certified United States mail, postage prepaid, return receipt requested, written notice of such default and the action required to cure the same, and the Master Trustee shall have a reasonable time (but in no event less than ten days after receipt By: of such notice) within which the Master Trustee shall have the right, but not the obligation, to cure such Name: default, and the delivery of such notice of default and the failure of the Master Trustee to cure the same Title: within the time allowed, as aforesaid, shall be conditions precedent to the exercise of any right or remedy of such Contracting Party arising by reason of such default. Date: ______Each Contracting Party does hereby acknowledge and agree that a party or parties other than Assignor may be assigned the right to develop the Facility (as defined in the Assignment) and THE FOUNDATION OF SHALOM PARK, INC. agrees to cooperate in respects so long as the Facility continues to be developed under the plan set forth in such applicable contracts.

[The remainder of this page is left blank intentionally.] By: Name: Title:

Date: ______

PPAB 5039014v3 PPAB 5039014v3 6 RLPS ARCHITECTS II, LLP

By: Name: Title:

Date: ______

CONSTRUCTION PRACTICES, LLC

By: Name: Title:

Date: ______

FRANK L. BLUM CONSTRUCTION COMPANY

D-84 By: [THIS PAGE INTENTIONALLY LEFT BLANK] Name: Title:

Date: ______

LANDWORKS DESIGN GROUP, P.A.

By: Name: Title:

Date: ______

LOVE & COMPANY

By: Name: Title:

Date: ______

PPAB 5039014v3 7

APPENDIX E

PROPOSED FORM OF BOND COUNSEL OPINION

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November __, 2019

Public Finance Authority Madison, Wisconsin

$______Public Finance Authority Retirement Facilities Revenue Bonds (Shalom Park Pre-Development Project) Series 2019

Ladies and Gentlemen:

We have acted as bond counsel to the Public Finance Authority (the “Authority”) in connection with the authorization, issuance and sale of $______aggregate principal amount of its Retirement Facilities Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019 (the “Bonds”).

In such capacity, we have examined (1) a specimen Bond, (2) a Master Trust Indenture, dated as of November 1, 2019 (as supplemented from time to time in accordance with its terms, the “Master Indenture”), between Aldersgate at Shalom Park, Inc. (the “Corporation”) and The Bank of New York Mellon Trust Company, N.A., as master trustee (the “Master Trustee”), (3) the Trust Agreement, dated as of November 1, 2019 (the “Trust Agreement”), between the Authority and The Bank of New York Mellon Trust Company, N.A., as bond trustee (in such capacity, the “Bond Trustee”), (4) Supplemental Indenture for Obligation No. 1, dated as of November 1, 2019 (the “Supplement No. 1”), between the Corporation and the Master Trustee, (5) Obligation No. 1, dated November __, 2019 (“Obligation No. 1”), issued by the Corporation to the Authority pursuant to Supplement No. 1, (6) the Loan Agreement, dated as of November 1, 2019 (the “Loan Agreement”), between the Corporation and the Authority, (7) a resolution adopted by the Board of Directors of the Authority on September 4, 2019 (the “Bond Resolution”), and (8) such law, certified proceedings and other documents as we have deemed necessary to render the opinions hereinafter expressed. The documents listed in (1) through (7) above are herein collectively referred to as the “Financing Documents.” All capitalized undefined terms used herein shall have the meanings given to them in the Financing Documents.

The Bonds are being issued pursuant to Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, as amended, the Bond Resolution and the Trust Agreement for the purpose of loaning the proceeds thereof to the Corporation pursuant to the Loan Agreement in order to (i) pay a portion of the Cost of the Project (as defined in the Trust Agreement), and (ii) pay certain expenses incurred in connection with the issuance of the Bonds. Under the Loan Agreement, the Corporation will agree to pay amounts sufficient to pay the principal of, premium, if any, and interest on the Bonds when due.

The Bonds will be issued in fully registered form and will mature and be subject to redemption prior to maturity at the times, in the manner and on the terms specified in the Trust Agreement. The Bonds will bear interest at fixed rates, payable at the rates and at the times as provided in the Trust Agreement.

E-1 Public Finance Authority November _, 2019 Page 2

The Bonds are secured by, among other things, payments to be made by the Corporation on Obligation No. 1, executed and delivered by the Corporation to the Authority pursuant to the Original Master Indenture and Supplement No. 1. Under the Trust Agreement, the Authority has assigned Obligation No. 1 to the Bond Trustee as security for the payment of the Bonds. As provided in the Master Indenture, each Member of the Obligated Group (as defined in the Master Indenture) is jointly and severally liable for all Obligations (as defined in the Master Indenture) heretofore and hereafter issued under the Master Indenture. As of the date hereof, the Corporation is the only Member of the Obligated Group.

As security for all Obligations issued under the Master Indenture, each Member of the Obligated Group has granted to the Master Trustee a security interest in its Pledged Assets, subject to Permitted Liens (both as defined in the Master Indenture). We have not examined any official records with respect to prior security interests in the Pledged Assets.

As to questions of fact material to the opinions hereinafter expressed, we have relied upon representations of the Authority and the Corporation contained in the Loan Agreement and the related documents thereto (including representations by the Corporation as to the Corporation’s status as an organization exempt from federal income tax as described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)), the certified proceedings and other certifications of public officials and others furnished to us, including certifications furnished to us by or on behalf of the Corporation, without undertaking to verify the same by independent investigation. We have also relied upon representations of the Corporation concerning the Corporation’s “unrelated trade or business” activities as defined in Section 513(a) of the Code. We give no opinion or assurance concerning Section 513(a) of the Code and we can’t give nor have we given any opinion or assurance about the future activities of the Corporation, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the resulting changes in enforcement thereof by the Internal Revenue Service. Failure of the Corporation to be organized and operated in accordance with the Internal Revenue Service’s requirements for the maintenance of its status as an organization described in Section 501(c)(3) of the Code, or use of bond-financed facilities in activities that are considered unrelated trade or business activities of the Corporation within the meaning of Section 513 of the Code, may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of issuance of the Bonds.

We have assumed the accuracy and truthfulness of all public records and of all certifications, documents and other proceedings examined by us that have been executed or certified by public officials acting within the scope of their official capacities and have not verified the accuracy or truthfulness thereof. We have also assumed the genuineness of the signatures appearing upon such public records, certifications and documents and proceedings.

As to the opinions given in paragraphs 1 and 2 below, we have, with your express permission, relied on the opinion of von Briesen & Roper, s.c., counsel to the Authority, dated the date hereof and addressed to us, with respect to the (1) Authority’s due authorization, execution and delivery of the Financing Documents to which it is a party and the enforceability of the Financing Documents against the Authority, (2) its governmental status and authority, (3) its due adoption of the resolution providing for the issuance of the Bonds and other matters and (4) its valid issuance of the Bonds.

Based upon the foregoing, we are of the opinion, under existing law, that:

1. The Authority has authorized the execution, delivery and performance of the Financing Documents to which it is a party by all necessary action and has duly executed and delivered each of the Financing Documents to which it is a party. Each of the Financing Documents to which the Authority is

E-2 Public Finance Authority November _, 2019 Page 3 a party constitutes the legal, valid and binding obligation of the Authority, enforceable in accordance with its terms.

2. The Bonds have been validly issued in accordance with the provisions of Section 66.0304 of the Wisconsin Statutes and are valid and binding special limited obligations of the Authority.

3. The Trust Agreement creates a valid lien on the respective rights and property described therein.

4. The Loan Agreement has been duly authorized, executed and delivered by the Authority and the Corporation, and is a valid, binding and enforceable obligation of the Authority and the Corporation.

5. The Master Indenture has been duly authorized, executed and delivered by the Corporation, and assuming due authorization and execution by the Master Trustee, is a valid, binding and enforceable obligation of the Corporation. The Master Indenture creates a valid security interest in the Pledged Assets, subject to Permitted Liens.

6. Obligation No. 1 has been duly authorized, executed and issued by the Corporation to the Authority and is a valid, binding and enforceable obligation of the Corporation.

7. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The opinion set forth in the preceding sentence is subject to the condition that the Authority and the Corporation comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that the interest on the Bonds be, or continue to be, excludable from gross income for federal income tax purposes. The Authority and the Corporation have covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds.

It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds, the Trust Agreement, the Loan Agreement, the Master Indenture, Supplement No. 1 and Obligation No. 1 may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, liquidation, readjustment of debt and other similar laws affecting creditors’ rights and remedies generally, and by general principles of equity, whether such principles are considered in a proceeding at law or in equity.

The Trust Agreement and the Master Indenture permit certain future actions to be taken or avoided following the delivery to specified recipients of a subsequent bond counsel opinion. No opinion is expressed herein as to the excludability of interest on the Bonds from gross income of the owners thereof for federal income tax purposes as a result of any such future actions which are taken or avoided. In the event that such a subsequent bond counsel opinion is obtained, such opinion will be the only opinion that any person will be entitled to rely upon with respect to the matters addressed therein and the foregoing opinions shall not be deemed to address such matters.

Our services as bond counsel in connection with the issuance of the Bonds have been limited to rendering the opinions expressed above based on our review of such proceedings and documents as we deem necessary to approve the validity of the Bonds and the tax-exempt status of interest with respect thereto.

E-3 Public Finance Authority November _, 2019 Page 4

We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum as supplemented (collectively, the “Limited Offering Memorandum”), or any other offering material relating to the Bonds (except to the extent, if any, stated in the Limited Offering Memorandum), and we express no opinion herein relating thereto (excepting only the matters set forth as our opinion in the Limited Offering Memorandum) or as to the financial resources of the Authority or the Corporation or the ability of the Authority or the Corporation to make the payments required on the Bonds that may have been relied on by anyone in making the decision to purchase the Bonds.

The opinions set forth herein are limited to matters governed by the laws of the State of North Carolina, the federal laws of the United States and, as to the opinions given in paragraphs 1 and 2 above, the laws of the State of Wisconsin. No opinion is expressed herein as to the laws of any other jurisdiction (including the laws of any counties, municipalities or other subdivision or instrumentalities of the State of North Carolina, the State of Wisconsin or any other jurisdiction).

Our opinions expressed herein are as of the date hereof, and we undertake no obligation to advise you of any changes of applicable law or any other matters that may come to our attention after the date hereof that may affect our opinions expressed herein.

Respectfully submitted,

PARKER POE ADAMS & BERNSTEIN LLP

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APPENDIX F

FORM OF CONTINUING DISCLOSURE CERTIFICATE

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CONTINUING DISCLOSURE CERTIFICATE

Dated as of November 1, 2019

Relating to:

$______PUBLIC FINANCE AUTHORITY RETIREMENT FACILITY REVENUE ANTICIPATION BONDS (SHALOM PARK PRE-DEVELOPMENT PROJECT) SERIES 2019

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THIS CONTINUING DISCLOSURE CERTIFICATE (the “Disclosure Certificate”) is executed and delivered as of the 1st day of November, 2019, by ALDERSGATE AT SHALOM PARK, INC. (the “Company”), a North Carolina nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).

RECITALS

WHEREAS, the Public Finance Authority (the “Authority”) has issued or will issue its Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019 in the original aggregate principal amount of $______(the “Bonds”) pursuant to a Trust Agreement dated as of November 1, 2019 (the “Trust Agreement”), between the Authority and The Bank of New York Mellon Trust Company, National Association as Bond Trustee (the “Bond Trustee”) and has loaned or will loan the proceeds thereof to the Company pursuant to the terms and provisions of a Loan Agreement dated as of November 1, 2019 (the “Loan Agreement”), between the Authority and the Company for the purposes described in the Trust Agreement and Loan Agreement (the “Project”); and

WHEREAS, the Bonds are limited obligations of the Authority and will be payable solely from and secured by a pledge and assignment of revenues of the Authority derived from a promissory note (“Obligation No. 1”) in the aggregate principal amount of the Bonds, issued by the Company as an obligation under a Master Trust Indenture, dated as of November 1, 2019, between the Company and The Bank of New York Mellon Trust Company, National Association, as Master Trustee (the “Master Trustee”), as supplemented (the “Master Indenture”), and particularly as supplemented by Supplemental Indenture for Obligation No. 1 (“Supplement No. 1”), dated as of November 1, 2019 (collectively, the “Master Indenture”) and the Loan Agreement; and

WHEREAS, the Bonds have been offered and sold pursuant to a Preliminary Limited Offering Memorandum dated ______, 2019 and a final Limited Offering Memorandum dated ______, 2019 (collectively, the “Offering Document”); and the Authority has entered into a Bond Purchase Agreement, dated ______, 2019 (the “Bond Purchase Agreement”), with respect to the sale of the Bonds, with the Company and the Participating Underwriter, as hereinafter defined; and

WHEREAS, the Company has been asked to provide for the disclosure of certain information concerning the Bonds and other matters on an on-going basis as set forth herein for the benefit of Holders (as hereinafter defined) to enable the Participating Underwriter to comply with the provisions of Securities and Exchange Commission Rule 15c2-12, as amended from time to time (the “Rule”).

NOW, THEREFORE, the Company hereby agrees as follows:

Section 1. Definitions; Scope of this Disclosure Certificate.

(A) All terms capitalized but not otherwise defined herein shall have the meanings assigned to those terms in the Trust Agreement, the Master Indenture and the Loan Agreement, as those agreements are amended and supplemented from time to time, unless the context or use clearly indicates otherwise. The following capitalized terms shall have the following meanings.

“Beneficial Owner” shall mean any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries).

“EMMA” means the MSRB’s Electronic Municipal Market Access system.

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“Event” shall mean any of the following events with respect to the Bonds:

(i) Principal and interest payment delinquencies;

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

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

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

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

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

(vii) Modifications to rights of security holders, if material;

(viii) Bond calls, if material, and tender offers (except for mandatory scheduled redemptions not otherwise contingent upon the occurrence of an event);

(ix) Defeasances;

(x) Release, substitution or sale of property securing repayment of the securities, if material;

(xi) Rating changes;

(xii) Bankruptcy, insolvency, receivership or similar event of the obligated person (Note: For the purposes of this event, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, 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 obligated person);

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

(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

(xv) Incurrence of a Financial Obligation of the Obligated Person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms

F-2

of a Financial Obligation of the Issuer, any of which affect security holders, if material; and

(xvi) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Obligated Person, any of which reflect financial difficulties.

The SEC requires the listing of (i) through (xvi) although some of such events may not be applicable to the Bonds.

“Financial Obligation” means a (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (C) a guarantee of (A) or (B).

“Holders” shall mean any holder of the Bonds and any Beneficial Owner thereof.

“MSRB” shall mean the Municipal Securities Rulemaking Board.

“Participating Underwriter” shall mean the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

“SEC” shall mean the Securities and Exchange Commission.

“State” shall mean the State of North Carolina.

(B) This Disclosure Certificate applies to the Bonds.

Section 2. Disclosure of Information.

(A) Information Provided to the Public. Except to the extent this Disclosure Certificate is modified or otherwise altered in accordance with Section 3 hereof, the Company shall make or cause to be made public the information set forth in subsection (1) below:

(1) Information. The Company covenants that it will disseminate the items included in Appendix B to Supplement No. 1 to EMMA at least annually not later than 150 days after the end of each fiscal year of Corporation, beginning with fiscal year ending 2019 and continuing with each fiscal year thereafter.

(2) Additional Indebtedness. The Company covenants that it will disseminate or cause to be disseminated any future additional long-term parity indebtedness secured under the Master Indenture (even if privately placed), the terms of such long-term parity indebtedness; and the debt service schedule for such long-term parity indebtedness. The ongoing payment and covenant compliance with such additional long-term parity indebtedness will be subject to the continuing disclosure requirements under this Disclosure Certificate.

(3) Event Notices. The Company covenants that it will disseminate or cause to be disseminated to EMMA notice of the occurrence of an Event, in a timely manner, not in excess of ten business days after the occurrence of the Event.

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(4) Failure to Provide Information. The Company covenants that it will disseminate or cause to be disseminated to EMMA notice of the failure of the Company to provide the information by the date required herein.

(5) Information in Supplement No. 1. The Company shall disseminate or cause to be disseminated to EMMA the “Reports and Notices” set forth in Supplement No. 1.

(6) Other Information. The Company has the option to disseminate to EMMA such other information as the Company shall determine to make public. If the Company chooses to include any information, in addition to that which is specifically required by this Disclosure Certificate, the Company shall have no obligation under this Disclosure Certificate to update such information or include it in any future filing.

(B) [Omitted]

(C) Means of Making Information Public. Information shall be deemed to have been disseminated under this Disclosure Certificate if it is transmitted to EMMA in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB, or in such other manner as may be approved by the SEC or the MSRB from time to time. To the extent the Company is obligated to file information pursuant to this Disclosure Certificate, such information may be set forth in the document or set of documents transmitted as provided in this paragraph, or may be included by specific reference to documents available on the MSRB’s internet website or filed with the SEC.

Section 3. Amendment or Waiver; Successor or Assigns of the Company.

Notwithstanding any other provision of this Disclosure Certificate, the Company may amend this Disclosure Certificate and any provision of this Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel or counsel expert in federal securities laws acceptable to the Company to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule as well as any change in circumstance.

In the event that the Company shall merge, consolidate or transfer all or substantially all of its assets to another entity, and such other entity assumes liability with respect to the Bonds, this Disclosure Certificate may be amended at the option of the Company to provide that the information required to be filed herein may be provided on a consolidated basis by the surviving entity without the necessity of requiring a separate audit or similar report for the Company.

Section 4. Miscellaneous.

(A) Representations. The Company represents and warrants that it has (i) duly authorized the execution and delivery of this Disclosure Certificate by the officer whose signature appears on the execution pages hereto, (ii) that it has all requisite power and authority to execute, deliver and perform this Disclosure Certificate under its organizational documents and any corporate resolutions now in effect, (iii) that the execution and delivery of this Disclosure Certificate, and performance of the terms hereof, does not and will not violate any law, regulation, ruling, decision, order, indenture, decree, agreement or instrument by which such party is bound, and (iv) it is not aware of any litigation or proceeding pending, or, to the best of its knowledge, threatened, contesting or questioning its existence, or its power and

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authority to enter into this Disclosure Certificate, or its due authorization, execution and delivery of this Disclosure Certificate.

(B) Governing Law. This Disclosure Certificate shall be governed by and interpreted in accordance with the laws of the State; provided that, to the extent that the SEC, the MSRB or any other federal or state agency or regulatory body with jurisdiction over the Bonds shall have promulgated any rule or regulation governing the subject matter hereof, this Disclosure Certificate shall be interpreted and construed in a manner consistent therewith.

(C) Severability. If any provision hereof shall be held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions hereof shall survive and continue in full force and effect.

(D) [Omitted]

(E) Termination. This Disclosure Certificate may be terminated upon thirty days’ written notice of termination delivered to the Master Trustee; provided the termination of this disclosure Certificate is not effective until (i) the Company or its respective successors or assigns, execute a new continuing disclosure instrument and agree to continue to provide, in substantially the manner provided herein, the information required to be communicated pursuant to this Agreement (subject to Section 3 above), (ii) nationally recognized bond counsel or counsel expert in federal securities law provides an opinion that the new continuing disclosure instrument is in compliance with all State and Federal Securities laws and (iii) notice of the termination of this Disclosure Certificate is provided to the MSRB. This Disclosure Certificate shall terminate when all of the Bonds are or are deemed to be no longer outstanding by reason of redemption or legal defeasance or at maturity.

(F) Defaults: Remedies. A party shall be in default of its obligations hereunder if it fails to carry out or perform its obligations hereunder. If an event of default occurs and continues beyond a period of 30 days following notice of such failure given in writing, the non-defaulting party or any such beneficiary may seek to enforce the obligations of the defaulting party under this Disclosure Certificate; provided, however, the sole remedy available in any proceeding to enforce this Disclosure Certificate shall be an action in mandamus, for specific performance or similar remedy to compel performance and no damages shall be sought from the defaulting party.

The occurrence of any event of default as provided in this Disclosure Certificate shall not constitute an event of default under the Trust Agreement, the Master Indenture or the Loan Agreement.

(G) Beneficiaries. This Disclosure Certificate is entered into by the Company and shall inure solely to the benefit of the Company, the Participating Underwriter and the Holders, and shall create no rights in any other person or entity.

(H) Dissemination Agent. The Company may, from time to time, appoint a dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and the Company may, from time to time, discharge the Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not a designated Dissemination Agent, the Company shall be the Dissemination Agent.

[Signatures and Seals to Follow]

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute this Disclosure Certificate, as of the day and year first above written.

ALDERSGATE AT SHALOM PARK, INC.

By: Suzanne H. Pugh President

[Signature Page of Continuing Disclosure Certificate]

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APPENDIX G

BOOK-ENTRY ONLY SYSTEM

The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Bonds, payments of principal of and interest on the Bonds to The Depository Trust Company (“DTC”), its nominee, Direct Participants (defined below) or Beneficial Owners (defined below), confirmation and transfer of beneficial ownership interests in the Bonds and other bond-related transactions by and between DTC, the Direct Participants and Beneficial Owners is based solely on information furnished by DTC.

DTC will act as securities depository for the Bonds. The 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 Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the “Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Direct and Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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

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

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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.

Redemption notices shall be sent to DTC. If less than all of the 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 any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal of and interest on the 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 Bond Trustee on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Authority or the Bond Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Bond 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 Bonds at any time by giving reasonable notice to the Authority and the Bond Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.

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

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

Neither the Authority nor the Bond Trustee has any responsibility or obligation to the Direct or Indirect Participants or the Beneficial Owners with respect to (a) the accuracy of any records maintained by DTC or any Direct or Indirect Participant; (b) the payment by any Direct or Indirect Participant of any amount due to any Beneficial Owner in respect of the principal of and interest on the Bonds; (c) the delivery or timeliness of delivery by any Direct or Indirect Participant of any notice to any Beneficial Owner that is required or permitted under the terms of the Trust Agreement to be given to Holders; or (d) any other action taken by DTC, or its nominee, Cede & Co., as Holder, including the effectiveness of any action taken pursuant to an Omnibus Proxy.

So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references in this Limited Offering Memorandum to the Holders of the Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners, and Cede & Co. will be treated as the only Holder of Bonds for all purposes under the Trust Agreement.

The Authority may enter into amendments to the agreement with DTC or successor agreements with a successor securities depository, relating to the book-entry system to be maintained with respect to the Bonds without the consent of Beneficial Owners or Holders.

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APPENDIX H

FORM OF INVESTMENT LETTER

[THIS PAGE INTENTIONALLY LEFT BLANK] FORM OF INVESTOR LETTER

Public Finance Authority 22 E. Mifflin Street, Suite 900 Madison, Wisconsin 53703

The Bank of New York Mellon Trust Company, N.A. 10161 Centurion Parkway North Jacksonville, Florida 32256

Re: Public Finance Authority Retirement Facility Revenue Anticipation Bonds (Shalom Park Pre-Development Project) Series 2019

Ladies and Gentlemen:

Capitalized terms not defined herein shall be given the meaning ascribed thereto in the Trust Agreement.

In connection with the sale of the Bonds to Investor, Investor hereby makes the following representations upon which you may rely:

2. Investor has sufficient knowledge and experience in financial and investment matters to be able to evaluate the risks and merits of an investment in the Bonds.

4. Investor understands that it may be required to bear the risks of this investment in the Bonds for an indefinite time, since any sale prior to maturity may not be possible.

5. The Bonds are a financially suitable investment for Investor consistent with Investor’s investment needs and objectives.

6. Investor is (i) an “accredited investor” within the meaning of Rule 501(a)(1) of Regulation D under the Securities Act of 1933, as amended (the “1933 Act”) or (ii) a “Qualified Institutional Buyer” as defined in Rule 144A under the 1933 Act; Investor understands that the Bonds are not registered under the 1933 Act and that such registration is not legally required as of the date hereof; and further understands that the Bonds (i) are not being registered or otherwise qualified for sale under the “Blue Sky”

H-1 laws and regulations of any state, (ii) will not be listed in any stock or other securities exchange, (iii) will not carry a rating from any rating service, and (iv) will be delivered in a form which may not be readily marketable.

7. Investor acknowledges that the Bonds are not transferable except to (i) another “accredited investor” or (ii) another “Qualified Institutional Buyer” as provided by the Trust Agreement, and Investor agrees to abide by the transfer restrictions set forth in the Trust Agreement; and that Investor shall be solely and exclusively responsible for compliance with such transfer restrictions, including verifying that its transferee is an accredited investor or a Qualified Institutional Buyer, as the case may be.

9. INVESTOR ACKNOWLEDGES THAT THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE REVENUES OF THE CORPORATION AND OTHER FUNDS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE TRUST AGREEMENT AND THE AUTHORITY SHALL NOT BE DIRECTLY OR INDIRECTLY OR CONTINGENTLY OR MORALLY OBLIGATED TO USE ANY OTHER MONEYS OR ASSETS OF THE AUTHORITY FOR ALL OR ANY PORTION OF THE PRINCIPAL OF AND INTEREST ON THE BONDS.

______, as Investor

By: Name: Title:

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Public Finance Authority • RETIREMENT FACILITY REVENUE ANTICIPATION BONDS (SHALOM PARK PRE-DEVELOPMENT PROJECT) SERIES 2019