NEW ISSUE RATING: See “Rating” Herein BOOK ENTRY ONLY

In the opinion of Bond Counsel, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It should be noted, however, that with respect to corporations (as corporations are defined for federal tax purposes), such interest is taken into account in determining “adjusted current earnings” for the purpose of computing the alternative minimum tax imposed on corporations by the Internal Revenue Code of 1986, as amended. Bond Counsel is also of the opinion that under existing law, interest on the Bonds is exempt from Pennsylvania personal income tax and from Pennsylvania corporate net income tax and the Bonds are exempt from personal property taxes in Pennsylvania. For a discussion of other federal tax consequences arising with respect to the Bonds, see “TAX MATTERS.”

$27,430,000 ALLEGHENY COUNTY HIGHER EDUCATION BUILDING AUTHORITY (Commonwealth of Pennsylvania) University Revenue Bonds, Series of 2017 (Robert Morris University)

Dated: Date of Delivery Due: See Inside Cover

The University Revenue Bonds, Series of 2017 (Robert Morris University) (the “Bonds”) shall bear interest at the rates set forth on the inside cover hereof payable on April 15 and October 15 of each year until maturity or earlier redemption, commencing April 15, 2018. Principal of and premium, if any, on the Bonds are payable pursuant to a Trust Indenture dated as of September 1, 2017 between the Allegheny County Higher Education Building Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”). The Bonds will be issued in fully registered form without coupons, and, when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. Purchases of beneficial ownership interest in the Bonds will be made in book entry only form in denominations of $5,000 or any integral multiple thereof. So long as Cede & Co. as nominee of DTC is the registered owner of the Bonds, principal or redemption price of and interest on the Bonds are payable directly to DTC for redistribution to DTC Participants (as defined herein) and in turn to Beneficial Owners (as defined herein) as further described herein. The purchasers of the Bonds will not receive physical delivery of certificates representing their ownership interests in Bonds purchased. See “BOOK-ENTRY ONLY SYSTEM” herein.

The Bonds are subject to redemption prior to maturity as described in “THE BONDS” herein. THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY AND ARE PAYABLE SOLELY FROM AND SECURED SOLELY BY CERTAIN FUNDS HELD BY THE TRUSTEE PURSUANT TO THE INDENTURE AND MONEYS AND REVENUES PAYABLE PURSUANT TO THE LOAN AGREEMENT. THE BONDS AND THE INTEREST THEREON WILL NEVER CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY WITHIN THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND WILL NEVER CONSTITUTE OR GIVE RISE TO PECUNIARY LIABILITY OF THE AUTHORITY NOR WILL ANY BOND OR INTEREST THEREON BE A CHARGE AGAINST THE GENERAL CREDIT AND TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING THE COUNTY OF ALLEGHENY). NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING THE COUNTY OF ALLEGHENY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS, OR OTHER COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

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

The Bonds are offered when, as and if issued by the Authority and accepted by the Underwriter, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of legality of the Bonds by Cohen & Grigsby, P.C., Pittsburgh, Pennsylvania, Bond Counsel. Certain legal matters for the University will be passed upon by its counsel, Cohen & Grigsby, P.C., Pittsburgh, Pennsylvania, and for the Authority by its counsel Clark Hill PLC, Pittsburgh, Pennsylvania. Certain legal matters will be passed upon by Buchanan Ingersoll & Rooney PC, Pittsburgh, Pennsylvania, counsel to the Underwriter. It is expected that the Bonds will be available for delivery to the Underwriter in New York, New York on or about September 26, 2017.

Dated: September 19, 2017.

$27,430,000 ALLEGHENY COUNTY HIGHER EDUCATION BUILDING AUTHORITY (Commonwealth of Pennsylvania) University Revenue Bonds, Series of 2017 (Robert Morris University)

MATURITY SCHEDULE

$1,400,000, 3.000% Term Bonds Due October 15, 2022, Price 102.024, Yield 2.570%, CUSIP 01728R MQ9**

$1,100,000, 5.000% Term Bonds Due October 15, 2026, Price 114.556, Yield 3.140%, CUSIP 01728R MR7**

$7,115,000, 5.000% Term Bonds Due October 15, 2037, Price 109.859*, Yield 3.810%*, CUSIP 01728R MS5**

$17,815,000, 5.000% Term Bonds Due October 15, 2047, Price 108.208*, Yield 4.000%*, CUSIP 01728R MT3**

* Price/yield to first optional call date. **The CUSIP (Committee on Uniform Securities Identification Procedures) numbers for the Bonds shown above have been assigned by an organization not affiliated with the University, the Authority or the Underwriter, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refunding or defeasance of such issue or the use of secondary market financial products. None of the University, the Authority or the Underwriter has agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth herein.

IN CONNECTION WITH THIS OFFERING THE UNDERWRITER 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.

THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY, OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE BONDS IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT. The information set forth herein has been obtained from the Authority, University, and other sources which are believed to be reliable, but the information provided by sources other than the Authority is not guaranteed as to accuracy or completeness by the Authority. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in any of the information set forth herein since the date hereof.

The Underwriter has provided the following sentence for inclusion in the Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under federal securities law as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

No dealer, broker, salesperson or other person has been authorized by the Authority, the Underwriter or the University to give any information or to make any representations with respect to the Bonds, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy any of the Bonds in any jurisdiction in which it is unlawful to make such an offer, solicitation, or sale.

The Bonds have not and will not be registered under the Securities Act of 1933, or under any state securities laws, and the Indenture has not been and will not be qualified under the Trust Indenture Act of 1939, as amended, because of available exemptions therefrom. Neither the Securities and Exchange Commission nor any federal, state, municipal, or other governmental agency will pass upon the accuracy, completeness, or adequacy of the Official Statement.

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

TABLE OF CONTENTS

INTRODUCTORY STATEMENT ...... 1 THE BONDS ...... 2 SECURITY FOR THE BONDS ...... 5 BOOK-ENTRY ONLY SYSTEM ...... 6 THE PROJECT AND PLAN OF FINANCING ...... 8 ESTIMATED SOURCES AND USES OF FUNDS ...... 9 ANNUAL DEBT SERVICE REQUIREMENTS ...... 10 THE UNIVERSITY ...... 10 THE ALLEGHENY COUNTY HIGHER EDUCATION BUILDING AUTHORITY ...... 11 BONDHOLDERS' RISKS ...... 12 FINANCIAL STATEMENTS ...... 15 ABSENCE OF MATERIAL LITIGATION ...... 15 APPROVAL OF LEGALITY ...... 16 TAX MATTERS ...... 16 THE TRUSTEE AND PAYING AGENT ...... 18 UNDERWRITING ...... 18 RATING ...... 18 CONTINUING DISCLOSURE ...... 19 RELATIONSHIP AMONG PARTIES ...... 20 CONCLUDING STATEMENT ...... 20

Appendix A - Robert Morris University Appendix B - Audited Financial Statements for the Fiscal Years Ended May 31, 2017 and May 31, 2016 Appendix C - Summaries of Certain Provisions of the Principal Documents Appendix D - Form of Bond Counsel Opinion Appendix E - Form of Continuing Disclosure Agreement

OFFICIAL STATEMENT

$27,430,000 Allegheny County Higher Education Building Authority (Commonwealth of Pennsylvania) University Revenue Bonds, Series of 2017 (Robert Morris University)

INTRODUCTORY STATEMENT

For definitions of terms used but not defined, herein, see Appendix C – “Summaries of Certain Provisions of the Principal Documents” herein. Purpose. The purpose of this Official Statement, including the cover page and the appendices hereto, is to set forth information in connection with the offering of $27,430,000 University Revenue Bonds, Series of 2017 (Robert Morris University) (the “Bonds”) of the Allegheny County Higher Education Building Authority (the “Authority”) on behalf of Robert Morris University (the “University”), a Pennsylvania not-for-profit corporation. The Bonds will be issued under and secured by a Trust Indenture dated as of September 1, 2017 (the “Indenture”) by and between the Authority and The Bank of New York Mellon Trust Company, N.A., Pittsburgh, Pennsylvania, as trustee (the “Trustee”). Allegheny County Higher Education Building Authority. The Authority is the issuer of the Bonds and is a body corporate and politic organized and existing under the provisions of the Commonwealth of Pennsylvania’s (the “Commonwealth”) Municipality Authorities Act, as amended and supplemented (the “Act”). The University. The University is a non-profit corporation duly organized and existing under the laws of the Commonwealth and is recognized as an organization exempt from federal income tax under Section 501(a) of the Internal Revenue Code of 1986, as amended (the “Code”), as an organization described in Section 501(c)(3) of the Code. The University offers undergraduate, graduate and continuing education programs in a variety of disciplines. For a more detailed description of the University, see Appendix A hereto. See Appendix B hereto for the audited financial statements of the University for the years indicated therein. Purpose of the Bonds. The proceeds from the sale of the Bonds will be used by the University to finance all or a portion of the costs of (a) the constructing, equipping and furnishing of an expanded Events Center to be located on the current site of the Sewall Center; (b) miscellaneous capital expenditures to be incurred at the Main Campus of the University; (c) miscellaneous capital expenditures to be incurred at the University’s Yorktown Hall student housing facility; (d) the funding of any necessary debt service reserve; and (e) the issuance of the Bonds (collectively, the “Project”). For a more detailed description of the Project, see “THE PROJECT AND PLAN OF FINANCING” herein. Security. The Bonds are limited obligations of the Authority, payable solely from the Trust Estate, which includes, among other things, Loan Payments to be made by the University under a Loan Agreement (the “Loan Agreement”) dated as of September 1, 2017 between the Authority and the University. The payment obligations of the University under the Agreement are secured by a pledge of the University’s gross revenues to the extent provided in the Security Agreement (as defined herein). See “SECURITY FOR THE BONDS” herein. Underlying Documents. The descriptions and summaries of various documents set forth in this Official Statement do not purport to be comprehensive or definitive and reference is made to each such document for complete details of all terms and conditions. All statements herein are qualified in their entirety by the terms of each such document. Copies of the Indenture and the Loan Agreement are

available in reasonable quantities upon request and reimbursement for copies and postage at the Designated Office of the Trustee currently in Pittsburgh, Pennsylvania.

THE BONDS

General Description. The Bonds are scheduled to mature on the dates and in the principal amounts set forth on the inside cover page of this Official Statement. The Bonds are issuable only as fully registered bonds without coupons in denominations of $5,000 and any integral multiple thereof. The Bonds will bear interest at the rates set forth on the inside cover page of this Official Statement. Interest on the Bonds will be payable on April 15 and October 15, (each an “Interest Payment Date”) of each year, commencing April 15, 2018. Interest on each Bond shall bear interest from the most recent Interest Payment Date to which interest has been duly paid or provided for next preceding its date of authentication, unless (1) authenticated on or after an Interest Payment Date on which interest has been paid or provided for, in which event it shall bear interest from such Interest Payment Date, (2) such Bond is authenticated on or prior to April 1, 2018, in which event it shall bear interest from its date of original issuance or delivery, (3) such Bond is authenticated after a Record Date but before the next succeeding Interest Payment Date, in which event it shall bear interest from such succeeding Interest Payment Date, or (4) interest on such Bond shall be in default, in which case such Bond shall bear interest from the last date on which interest was last paid or provided for. Interest payable on the Bonds shall be computed on the basis of a 360-day year comprising twelve 30-day months. Subject to the provisions described under “BOOK-ENTRY ONLY SYSTEM” below, the principal of, premium, if any, and interest on the Bonds shall be payable in any currency of the United States of America which, at the respective dates of payment thereof, is legal tender for the payment of public and private debts, and such principal and premium, if any, shall be payable at the Designated Office of the Trustee. Interest will be paid by check mailed on each Interest Payment Date to the persons appearing as registered owners on the registration books kept by the Trustee on each Record Date, which is the first day of the month in which each Interest Payment Date occurs; provided, however, that if funds on an Interest Payment Date are insufficient to pay the interest then due, any defaulted interest will cease to be payable to the registered owner as of the Record Date but will instead be payable on a special interest payment date established by the Trustee for payment of such defaulted interest when sufficient funds are available to the registered owners as of a Special Record Date established by the Trustee in accordance with the provisions of the Indenture. Upon written notice to the Trustee received by the Trustee at least two Business Days prior to a Record Date containing the wire transfer address (which shall be in the continental United States) to which such registered owner wishes to have such wire directed, registered owners of $1,000,000 or more in aggregate principal amount of Bonds may elect to receive payments of interest by wire transfer to such designated account commencing on the first Interest Payment Date following such Record Date. So long as The Depository Trust Company (“DTC”), New York, New York, or its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal of and interest on the Bonds will be made by the Trustee directly to Cede & Co. Disbursements of such payments to the DTC Participants (as hereinafter defined) is the responsibility of DTC. Disbursement of such payments to the owners of beneficial interests in the Bonds is the responsibility of the DTC Participants and the Indirect Participants (as hereinafter defined). See “BOOK-ENTRY ONLY SYSTEM” below. Delivery Of Certificates. Subject to the provisions described under “BOOK-ENTRY ONLY SYSTEM” below, in the event that the book-entry system for registration of the ownership of the Bonds is discontinued under the Indenture, bond certificates in fully registered form will be delivered to, and registered in the names of, the Bondholders, with maturities and principal amounts as designated in writing by DTC. Registered Owners. The ownership of the Bonds (including any Bonds delivered upon a transfer or exchange) shall be registered in the registration books for the Bonds (the “Bond Register”) to be kept by the Trustee at its Designated Office, and the Authority, the University and the Trustee shall be entitled 2

to treat the registered owners of such Bonds, as their names appear in such Bond Register as of the appropriate dates, as the owners thereof for all purposes described herein and in the Indenture. Transfers and Exchanges. Subject to the provisions described under “BOOK-ENTRY ONLY SYSTEM” below, a Bond may be transferred only upon presentation thereof to the Trustee. Such Bond must be accompanied by an endorsement duly executed by the registered owner or its duly appointed attorney. Upon surrender of any Bonds to be transferred or exchanged, the Trustee shall record the transfer or exchange in its Bond Register and shall authenticate and deliver new Bonds appropriately registered and in appropriate authorized denominations. The Trustee shall not be required to effect or register any transfer or exchange of any Bond during the period beginning on any Record Date and ending on the corresponding Interest Payment Date or during a period beginning at the opening of business 15 days before the date of mailing of notice of redemption of Bonds selected for redemption and ending at the close of business on the day of such mailing, or at any time after such Bond is selected for redemption in whole or in part. No transfer or exchange made other than as described above and in the Indenture shall be valid or effective for any purpose under the Indenture. No charge will be imposed in connection with any transfer or exchange, except for taxes or governmental charges related thereto. Mandatory Redemption. The Bonds maturing on October 15 are subject to mandatory redemption prior to maturity in part by lot, as selected by the Trustee, on October 15 of each year as set forth below, in the respective principal amounts listed opposite each such year, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption. October 15, 2022 October 15, 2026

Principal Principal Year Amount Year Amount

2019 $500,000 2023 $300,000 2020 300,000 2024 300,000 2021 300,000 2025 300,000 2022 300,000* 2026 200,000*

October 15, 2037 October 15, 2047

Principal Principal Year Amount Year Amount

2032 $1,045,000 2038 $1,410,000 2033 1,095,000 2039 1,480,000 2034 1,150,000 2040 1,555,000 2035 1,210,000 2041 1,635,000 2036 1,275,000 2042 1,720,000 2037 1,340,000* 2043 1,805,000 2044 1,900,000 2045 2,000,000 2046 2,100,000 2047 2,210,000* * Final Maturity The principal amount of the Bonds required to be redeemed on any October 15 may be reduced, at the Written Request of the University (as defined in the Indenture), by the principal amount of such Bonds (of appropriate maturities) theretofore delivered to the Trustee by the University, in lieu of cash payments, or purchased by the Trustee out of moneys in the Bond Fund pursuant to the Indenture, or redeemed in or prior to such year pursuant to the optional redemption or Extraordinary Redemption

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provisions of the Bonds, which have not theretofore been applied as a credit against any mandatory redemption payment. Optional Redemption. The Bonds maturing after October 15, 2027 are subject to redemption prior to maturity at the option of the Authority, upon the Written Request of the University, on or after October 15, 2027 in whole or in part at any time at a redemption price of 100% of the principal amount thereof plus interest, if any, accrued thereon to the date fixed for redemption. Extraordinary Redemption. The Bonds are subject to redemption and payment prior to the stated maturity thereof, at the option of the University, in whole or in part at any time, at a redemption price equal to 100% of the principal amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium, upon the occurrence of any of the following events (such redemption is referred to hereinafter as an “Extraordinary Redemption”): (1) all or a substantial portion of the facilities financed or refinanced with the proceeds of the Bonds are damaged or destroyed by fire or other casualty, or title to, or the temporary use of, all or a substantial portion of such facilities are condemned or taken for any public or quasi-public use by any authority exercising or threatening the exercise of the power of eminent domain or title thereto is found to be deficient, to such extent that in the determination of the University, (A) such facilities cannot be reasonably restored or replaced to the condition thereof preceding such event, or (B) the University is thereby prevented from carrying on its normal operations of such facilities, or (C) the cost of restoration or replacement thereof would exceed the Net Proceeds of any casualty insurance, title insurance, condemnation awards or sale under threat of condemnation with respect thereto; or (2) as a result of any changes in the Constitution of the Commonwealth or the Constitution of the United States of America or of legislative or administrative action (whether state or federal) or by final direction, judgment or order of any court or administrative body (whether state or federal) entered after the contest thereof by the University in good faith, the Indenture or the Loan Agreement becomes void or unenforceable or impossible of performance. Notice. Notice of any redemption shall be given by the Trustee not less than 30 days and not more than 60 days prior to the date fixed for redemption by mailing by first class mail a notice to the registered owners of the Bonds to be redeemed as provided in the Indenture, but failure to mail any such notice and any defect in any such notice or the mailing thereof, as it affects any particular Bond, shall not affect the validity of the proceedings for such redemption of any other Bond. If the Authority deposits funds (as more fully described in the Indenture) with the Trustee sufficient to pay the redemption price of any Bonds, together with interest accrued to the redemption date, as provided in and limited by the terms of the Indenture, interest on such Bonds will cease to accrue on the redemption date and thereafter such Bonds will be payable as to principal and interest only out of the funds so deposited. If at the time of mailing of any notice of redemption, the Authority shall not have deposited with the Trustee moneys sufficient to redeem all the Bonds called for redemption, such notice shall state that it is conditional in that it is subject to the deposit of the redemption moneys with the Trustee not later than the redemption date and shall be of no effect unless such moneys are so deposited. So long as DTC or its nominee is the registered owner of the Bonds, any failure on the part of DTC or failure on the part of a nominee of a beneficial owner (having received notice from a DTC Participant or otherwise) to notify the beneficial owner affected by any redemption of such redemption shall not affect the validity of the redemption. So long as DTC or its nominee is the registered owner of the Bonds, if less than all of the Bonds of any one maturity shall be called for redemption, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by DTC, the DTC Participants and Indirect Participants in such manner as they may determine.

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SECURITY FOR THE BONDS

The Bonds are limited obligations of the Authority, equally and ratably secured under the Indenture, and payable solely from the Trust Estate. For a detailed description of the Trust Estate, see Appendix C - “Summaries of Certain Provisions of the Principal Documents” herein. The Authority has pledged and assigned to the Trustee its interest in the Trust Estate as security for the payment of the Bonds and the performance and observance of the covenants in the Indenture. The Indenture. The Bonds are to be issued pursuant to the Indenture and will be equally and ratably secured thereunder. As security for the Bonds, the Authority will pledge to the Trustee all of its rights, title and interest in the Trust Estate, retaining only its Unassigned Rights. The Indenture provides that the Bonds are limited obligations of the Authority, payable solely from and secured solely by the Trust Estate. The Authority's assignment of the Loan Agreement is subject to any parity rights under any supplemental loan agreement which the Authority may grant in the future as security for Additional Bonds. The Indenture also requires that a debt service reserve fund (the “Debt Service Reserve Fund”) be funded at closing in an amount equal to the Reserve Requirement on the Bonds, which is an amount equal to the lesser of (i) the maximum annual debt service requirements payable on the Bonds, (ii) 125% of the average annual debt service on the Bonds and (iii) ten percent (10%) of the original proceeds of the Bonds. The Loan Agreement. The Authority and the University will enter into the Loan Agreement pursuant to which the Authority will loan the proceeds derived from the sale of the Bonds to the University to pay the costs of the Project. The Loan Agreement requires that the University make installment payments in an amount sufficient to pay the principal, interest and redemption price, if any, and the fees and expenses of the Trustee and the Authority and to pay certain other costs associated with the Bonds. The University’s obligations under the Loan Agreement, together with other obligations of the University, will be secured by a pledge of the University’s gross revenues pursuant to, and to the extent provided in, the Security Agreement described below. The security interest created by the Security Agreement can be terminated or modified with the consent of certain creditors secured thereby under certain circumstances as described therein. Upon any termination of the Security Agreement pursuant to its terms, the obligations of the University under the Loan Agreement would no longer be secured by the gross revenues of the University but would instead constitute general unsecured obligations of the University. See “The Security Agreement” below, and see “SUMMARY OF THE SECURITY AGREEMENT” in Appendix C for discussions of the termination provisions of the Security Agreement. For additional information concerning the University, see Appendix A hereto. Under the Loan Agreement, the University will make certain affirmative and negative covenants for the benefit of the owners of the Bonds and any Additional Bonds. See “SUMMARY OF THE LOAN AGREEMENT” in Appendix C hereto. The University has other long term indebtedness outstanding incurred under agreements other than the Indenture and the Loan Agreement. All existing long term indebtedness as well as certain lines of credit and other debt are secured under the Security Agreement. Except as described below, all other indebtedness are general obligations of the University and are not secured by a pledge of any particular revenues of the University. A series of notes issued by the University to finance the facility known as the “Island Sports Center” in 2003 is secured by a mortgage on such financed facility. In addition, a series of notes issued by the University in 2012 to purchase and renovate a facility to house students is secured by a first mortgage lien and assignment of leases and rents on property known as Yorktown Hall. Other than the mortgages on the Island Sports Center and Yorktown Hall, the University facilities are not currently encumbered by any mortgages. See Appendix A – “ROBERT MORRIS UNIVERSITY – OUTSTANDING INDEBTEDNESS” attached hereto for additional information regarding such other indebtedness. The Security Agreement. The University entered into a Security Agreement dated as of November 1, 2006 (as the same has been and may subsequently be amended from time to time, the 5

“Security Agreement”), with certain creditors listed in the Security Agreement and The Bank of New York Mellon Trust Company, N.A., as collateral agent (in such capacity, the “Collateral Agent”), under which the University has granted to the Collateral Agent for the benefit of all of the creditors identified in the Security Agreement and any additional creditors entering into a Joinder to the Security Agreement, on an equal and ratable basis, a security interest in the gross revenues of the University. Gross Revenues means all of the University’s rights in and to all receipts, revenues, income and other moneys receivable by or on behalf of the University, to the extent permitted by law, except those gifts, grants, bequests, donations and contributions designated at the time of making by the donor or maker for uses inconsistent with their use as security for the debt secured by the Security Agreement. The University and the Trustee will be entering into a Joinder to the Security Agreement for the purpose of adding the obligation of the University under the Loan Agreement as an additional obligation secured by the Security Agreement. The security interest created by the Security Agreement can be terminated or modified with the consent of certain creditors secured thereby under certain circumstances as described therein. Upon any termination of the Security Agreement pursuant to its terms, the obligations of the University under the Loan Agreement would no longer be secured by the gross revenues of the University but would instead constitute general unsecured obligations of the University. See “SUMMARY OF THE SECURITY AGREEMENT” in Appendix C for discussions of the provisions of the Security Agreement. Limited Obligations. THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY AND ARE PAYABLE SOLELY FROM AND SECURED SOLELY BY CERTAIN FUNDS HELD BY THE TRUSTEE PURSUANT TO THE INDENTURE AND MONEYS AND REVENUES PAYABLE UNDER THE LOAN AGREEMENT. THE BONDS AND THE INTEREST THEREON WILL NEVER CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY WITHIN THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND WILL NEVER CONSTITUTE OR GIVE RISE TO PECUNIARY LIABILITY OF THE AUTHORITY NOR WILL ANY BOND OR INTEREST THEREON BE A CHARGE AGAINST THE GENERAL CREDIT AND TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING THE COUNTY OF ALLEGHENY). NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING THE COUNTY OF ALLEGHENY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS, OR OTHER COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

BOOK-ENTRY ONLY SYSTEM

The information set forth herein concerning DTC and the book-entry only system described below has been extracted from materials provided by DTC for such purpose and is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the University, the Authority, the Trustee or the Underwriter. The Depository Trust Company (“DTC”), New York, NY, 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 maturity and will be deposited with DTC.

DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC participants (“Direct Participants”) deposit with 6

DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor's rating of: AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of 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 and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in 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 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.

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

Redemption notices shall be sent to DTC. If less than all of the 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 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 7

whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds and principal, premium and interest payments 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 Authority or 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, Trustee, University or Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal, premium and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to Authority or 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-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Authority and University believe to be reliable, but none of the Authority, the University, the Trustee or the Underwriter takes any responsibility for the accuracy thereof.

NONE OF THE AUTHORITY, THE UNIVERSITY, THE TRUSTEE OR THE UNDERWRITER WILL HAVE RESPONSIBILITY OR OBLIGATION TO THE DIRECT PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE ACCURACY OF THE RECORDS OF DTC, ITS NOMINEE OR ANY DIRECT PARTICIPANT PERTAINING TO OWNERSHIP IN THE BONDS OR THE PAYMENTS TO, OR THE PROVIDING OF NOTICE FOR, TO THE DIRECT PARTICIPANTS, OR THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS.

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

THE PROJECT AND PLAN OF FINANCING

The proceeds from the sale of the Bonds will be used by the University to finance all or a portion of the costs of (a) the constructing, equipping and furnishing of an expanded Events Center to be located on the current site of the Sewall Center (the “UPMC Events Center Project”); (b) miscellaneous capital expenditures to be incurred at the Main Campus of the University; (c) miscellaneous capital expenditures to be incurred at the University’s Yorktown Hall student housing facility; (d) the funding of any necessary debt service reserve; and (e) the issuance of the Bonds (collectively, the “Project”). See Appendix A – “ROBERT MORRIS UNIVERSITY – FIVE-YEAR STRATEGIC PLAN” for a further description of the UPMC Events Center Project.

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ESTIMATED SOURCES AND USES OF FUNDS

Sources of Funds: Par Amount of Bonds $27,430,000.00 Original Issue Premium 2,352,175.05 Total Sources $29,782,175.05 Uses of Funds: Deposit to Debt Service Reserve Fund $2,265,500.00 Deposit to Project Fund 24,900,000.00 Deposit to Bond Fund (for capitalized interest) 2,086,156.94 Financing Fees and Expenses (1) 530,518.11 Total Uses $29,782,175.05

(1) These fees include Underwriter’s discount, the Authority's initial and other administrative fees, including its legal fees, the fees and expenses of Bond Counsel, Underwriter’s Counsel and University Counsel, Trustee fees, printing costs, rating fees and miscellaneous expenses.

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ANNUAL DEBT SERVICE REQUIREMENTS

The following table sets forth, for each respective University fiscal year ending May 31, the amount required to be made available in such year for the payment of principal of, interest on and mandatory redemption of the Bonds and other outstanding debt of the University. Total Debt Aggregate Fiscal Principal on Interest on Service on Existing Total Debt Year-End 2017 Bonds 2017 Bonds 2017 Bonds Debt Service Service

5/31/2018 - $742,657 $742,657 $6,690,898 $7,433,555 5/31/2019 - 1,343,500 1,343,500 6,693,243 8,036,743 5/31/2020 $500,000 1,336,000 1,836,000 6,687,100 8,523,100 5/31/2021 300,000 1,324,000 1,624,000 6,679,102 8,303,102 5/31/2022 300,000 1,315,000 1,615,000 6,771,239 8,386,239 5/31/2023 300,000 1,306,000 1,606,000 7,581,071 9,187,071 5/31/2024 300,000 1,294,000 1,594,000 6,687,994 8,281,994 5/31/2025 300,000 1,279,000 1,579,000 7,526,974 9,105,974 5/31/2026 300,000 1,264,000 1,564,000 5,395,133 6,959,133 5/31/2027 200,000 1,251,500 1,451,500 5,395,645 6,847,145 5/31/2028 - 1,246,500 1,246,500 5,395,858 6,642,358 5/31/2029 - 1,246,500 1,246,500 4,314,652 5,561,152 5/31/2030 - 1,246,500 1,246,500 4,078,175 5,324,675 5/31/2031 - 1,246,500 1,246,500 3,392,700 4,639,200 5/31/2032 - 1,246,500 1,246,500 7,168,466 8,414,966 5/31/2033 1,045,000 1,220,375 2,265,375 2,503,656 4,769,031 5/31/2034 1,095,000 1,166,875 2,261,875 2,501,694 4,763,569 5/31/2035 1,150,000 1,110,750 2,260,750 2,509,538 4,770,288 5/31/2036 1,210,000 1,051,750 2,261,750 2,506,919 4,768,669 5/31/2037 1,275,000 989,625 2,264,625 2,498,963 4,763,588 5/31/2038 1,340,000 924,250 2,264,250 2,500,275 4,764,525 5/31/2039 1,410,000 855,500 2,265,500 2,500,319 4,765,819 5/31/2040 1,480,000 783,250 2,263,250 1,099,700 3,362,950 5/31/2041 1,555,000 707,375 2,262,375 1,085,331 3,347,706 5/31/2042 1,635,000 627,625 2,262,625 - 2,262,625 5/31/2043 1,720,000 543,750 2,263,750 - 2,263,750 5/31/2044 1,805,000 455,625 2,260,625 - 2,260,625 5/31/2045 1,900,000 363,000 2,263,000 - 2,263,000 5/31/2046 2,000,000 265,500 2,265,500 - 2,265,500 5/31/2047 2,100,000 163,000 2,263,000 - 2,263,000 5/31/2048 2,210,000 55,250 2,265,250 - 2,265,250

Total: $27,430,000 $29,971,657 $57,401,657 $110,164,642 $167,566,299

THE UNIVERSITY

Robert Morris University is a private, four-year institution of higher education which offers undergraduate and graduate programs. The University's main campus is located in Moon Township, in western Allegheny County, Pennsylvania, seventeen miles from downtown Pittsburgh and five miles from the Pittsburgh International Airport. See Appendix A for certain information on the history, organization, operations, and financial condition of the University. See Appendix B for the audited financial statements of the University for the years ended May 31, 2017 and 2016. 10

THE ALLEGHENY COUNTY HIGHER EDUCATION BUILDING AUTHORITY

General. The Authority is a body corporate and politic created pursuant to a resolution of the Board of County Commissioners of the County of Allegheny, Pennsylvania (the “County”) under the Act. The Authority was created in 1981. An amendment to the Authority's Articles of Incorporation was filed by the Authority with the Secretary of the Commonwealth of Pennsylvania on May 22, 1995, extending the Authority's existence for 50 years from that date. Another amendment to the Authority's Articles of Incorporation was filed by the Authority with the Secretary of the Commonwealth of Pennsylvania on May 22, 2013, extending the Authority's existence for 50 years from that date. The Authority is empowered under the Act to acquire, finance, hold, construct, improve, maintain, own, operate and lease, in the capacity of either lessor or lessee, buildings and facilities for private nonprofit colleges and universities. The Authority's address is One Chatham Center, Suite 900, 112 Washington Place, Pittsburgh, Pennsylvania 15219. The governing body of the Authority is a board (the “Authority Board”) consisting of up to twelve members appointed by the elected Chief Executive of the County with the approval of County Council. Members of the Authority Board are appointed for staggered five-year terms and may be reappointed, but they may not hold an elective County office. The present members of the Authority Board are as follows: Member Office Victor H. Diaz Chairman John Brown, Jr. Vice Chairman Daniel C. Connolly Member James J. Dodaro Member Stephanie Lynn Turman Member

There are currently seven (7) vacancies on the Authority Board as of the date of this Official Statement. The Authority does not and will not in the future monitor the financial condition of the University, the Project or otherwise monitor payment of the Bonds or compliance with the documents relating thereto. The responsibility for the Project will rest entirely with the University and not with the Authority. The Authority will rely entirely upon the Trustee and the University to carry out their respective responsibilities under the Indenture and Loan Agreement and with respect to the Project. The Authority has assets and may attain additional assets in the future. However, such assets are not pledged to secure payment of the Bonds, and the Authority has no obligation nor expectation of making such assets subject to the lien of the Indenture. Previous Authority Revenue Bond Issues. The Authority has issued and is authorized to issue revenue bonds and notes for various educational facility projects. Each such bond or note issue is payable from receipts and revenues derived by the Authority from the educational facility on whose behalf the bonds or notes were issued and is secured separately and distinctly from the issue for every other educational facility. The Authority expects from time to time to enter into separate indentures or other agreements for projects for the same or other colleges or universities that will provide for the issuance of bonds or notes to be secured by revenues derived from such educational facilities. THE AUTHORITY HAS NOT PREPARED OR ASSISTED IN THE PREPARATION OF THIS OFFICIAL STATEMENT, EXCEPT THE STATEMENTS UNDER THIS SECTION AND UNDER THE HEADING “ABSENCE OF MATERIAL LITIGATION” BELOW IN RESPECT OF THE AUTHORITY, AND EXCEPT AS AFORESAID, THE AUTHORITY DISCLAIMS RESPONSIBILITY FOR THE DISCLOSURES SET FORTH HEREIN MADE IN CONNECTION WITH THE OFFER, SALE AND DISTRIBUTION OF THE BONDS.

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BONDHOLDERS' RISKS

Payment of the principal of, premium, if any, and interest on the Bonds to the registered owners thereof depends entirely upon the ability of the University to pay debt service thereon. The Bonds are limited obligations of the Authority and are secured by and payable solely from the Trust Estate, which includes Loan Payments made by the University pursuant to the Loan Agreement and certain funds held by the Trustee pursuant to the Indenture and, together with certain other obligations of the University, by the Security Agreement. See “SECURITY FOR THE BONDS” herein. No representation or assurance can be given to the effect that the University will generate sufficient revenues to meet its payment obligations under the Loan Agreement. Various factors could adversely affect the University’s ability to pay the obligations under the Loan Agreement. The future financial condition of the University could be adversely affected by, among other things, economic conditions in the areas from which the University traditionally draws students, legislation, regulatory actions, increased competition from other educational institutions, changes in the demand for higher educational services, demographic changes and litigation. Some of such risk factors are described below. The following is intended only as a summary of certain risk factors attendant to an investment in the Bonds and is not intended to be exhaustive. In order to identify risk factors and make informed investment decisions, potential investors should be thoroughly familiar with the entire Official Statement (including each Appendix hereto) in order to make a judgment as to whether the Bonds are an appropriate investment. Purchasers of the Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States of America), property or casualty insurance companies, banks or other financial institutions or certain recipients of Social Security benefits, are advised to consult their tax advisors as to the tax consequences of purchasing or holding the Bonds. See “TAX MATTERS” herein. General. The Bonds are limited obligations of the Authority payable solely from the Trust Estate which includes Loan Payments made by the University pursuant to the Loan Agreement, certain rights granted to the Trustee under the Security Agreement, and certain funds held by the Trustee pursuant to the Indenture. NO REPRESENTATION OR ASSURANCE CAN BE GIVEN THAT THE UNIVERSITY WILL GENERATE SUFFICIENT REVENUES TO MEET ITS PAYMENT OBLIGATIONS UNDER THE LOAN AGREEMENT. The ability to generate such revenues could be affected adversely by future legislation, regulatory actions, economic conditions, increased competition, changes in the demand for the University's services or other factors. None of the Underwriter, Authority or Trustee have made an independent investigation of the extent to which any such factors may have an adverse effect on the revenues of the University. Other Legislative and Regulatory Actions. The University and its operations are subject to regulation, certification and accreditation by various federal, state and local government agencies and by certain nongovernmental agencies. No assurance can be given as to the effect on future operations of existing laws, regulations and standards for certification or accreditation or of any future changes in such laws, regulations and standards. Competition. The University could face additional competition in the future from other educational institutions that offer comparable services and programs to the population which the University presently serves. This could include the establishment of new programs and the construction, renovation or expansion of competing educational institutions. Tax-Exempt/Non-Profit Status/Other Changes in Tax Law. In recent years, the activities of tax-exempt organizations have been subjected to increasing scrutiny by federal, state, and local legislative and administrative agencies (including the United States Congress, the Internal Revenue Service (the “IRS”), and local taxing authorities). Various proposals either have been considered previously or are presently being considered at the federal, state, and local level which could restrict the definition of tax- exempt status, impose new restrictions on the activities of tax-exempt corporations and/or tax or 12

otherwise burden the activities of such corporations (including proposals to broaden or strengthen federal tax provisions respecting unrelated business income of nonprofit, tax-exempt corporations). There can be no assurance that future changes in the laws, rules, regulations, interpretations and policies relating to the definition, activities and/or taxation of tax-exempt corporations will not have material adverse effects on the future operations of the University. Compliance with current and future regulations and rulings of the IRS could adversely affect the ability of the University to charge and collect revenues, finance or incur indebtedness on a tax-exempt basis or otherwise generate revenues necessary to provide for payment of the Bonds. Although the University has covenanted to maintain its tax-exempt status, loss of tax-exempt status by the University would likely have a significant adverse effect on the University and could result in the inclusion of interest on the Bonds in gross income for federal income tax purposes retroactive to their date of issue or acceleration of the maturity of the Bonds.

In addition, current and future presidential proposals or legislative proposals in the Congress and in the states, if enacted into law, clarifications of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or not exempted from state income taxation, or otherwise prevent the holders of the Bonds from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such presidential or legislative proposals, clarifications of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel will express no opinion. See “TAX MATTERS” herein.

Property Tax Assessments. In recent years, a number of local taxing authorities in Pennsylvania, including the County, local townships and school districts, have sought to subject the facilities of nonprofit organizations to local real estate taxes, primarily by challenging their status as “purely public charities” as described in the Pennsylvania Constitution, notwithstanding the fact that Pennsylvania nonprofit educational organization historically have been viewed as exempt from such taxes. In response to the uncertainty resulting from divergent court decisions, the Pennsylvania legislature enacted The Institutions of Purely Public Charity Act on November 26, 1997 which, among other things, sets forth specific criteria to be met by an entity in order for such entity to be deemed an “institution of purely public charity”. The criteria are highly fact-specific and are to be used by the courts as guidance; therefore, there are no assurances that the University’s facilities will meet such criteria now or in the future. Notwithstanding passage of the Institutions of Purely Public Charity Act, the question whether an institution qualifies as a “purely public charity” remains a constitutional issue to be determined by the courts and it is not clear to what extent, if any, the courts will rely upon the Institutions of Purely Public Charity Act in making such determinations. In 2014, Allegheny County began a program under which the tax-exempt status of real property owned by nonprofit corporations is being reviewed. The University has no reason to believe that the University facilities that are currently tax-exempt will not retain their real estate tax exemption, but no assurance can be given that such real estate tax exemption will not be challenged in the future. See Appendix A – “ROBERT MORRIS UNIVERSITY – CAMPUS AND FACILITIES” attached hereto for additional information regarding the County’s review of tax-exempt properties in the County, including a number of properties owned by the University.

Covenant to Maintain Tax-Exempt Status of the Bonds. The tax-exempt status of interest on the Bonds is based on the continued compliance by the Authority and the University with certain covenants contained in the Indenture and the Loan Agreement. These covenants relate generally to restrictions on the use of the Project, arbitrage limitations, rebate of certain excess investment earnings to the federal government and restrictions on the amount of issuance costs financed with the proceeds of the Bonds. Failure to comply with such covenants could cause interest on the Bonds to become subject to federal income taxation retroactively to the date of issuance of the Bonds.

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Certain Matters Relating to Enforceability of Obligations. The remedies available to Bondholders upon an Event of Default under the Indenture or the Loan Agreement are in many respects dependent upon judicial action which is subject to discretion or delay. Under existing law and judicial decisions, including specifically the United States Bankruptcy Code (the “Bankruptcy Code”), the remedies specified in the Indenture and the Loan Agreement may not be readily available or may be limited. A court may decide not to order specific performance. The various legal opinions to be delivered concurrently with the original delivery of the Bonds will be qualified as to enforceability of the various legal instruments by, among other things, limitations imposed by bankruptcy, reorganization, insolvency or other similar laws or legal or equitable principles affecting creditors' rights. There exists statutory authority in Pennsylvania for a court to dissolve a nonprofit corporation or undertake supervision of its affairs on various grounds, including a finding that such corporation is insolvent. Moreover, pursuant to the common law and statutory power to enforce charitable trusts and to see that charitable funds are applied to their intended uses, the Attorney General of the Commonwealth may commence legal proceedings to dissolve a nonprofit corporation acting contrary to its charitable purposes or to restrain actions inconsistent with the charitable use of such funds or which render such non profit corporation unable to discharge its charitable functions. In certain states, such actions may arise on a court's own motion or pursuant to a petition of the attorney general or such other persons who have interests different than those of the general public. The obligations of the University may be limited by such charitable trust laws. Bankruptcy. The rights and remedies of the owners of the Bonds are subject to various provisions of the Bankruptcy Code. If the University were to file a petition for relief (or if a petition were to be filed against the University) under the Bankruptcy Code, the filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the University and its property. In a bankruptcy proceeding, the University could file a plan for the adjustment of its debts which modifies the rights of creditors generally or the rights of 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 interest 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. Termination of the Security Agreement. The security interest created by the Security Agreement can be terminated or modified with the consent of certain creditors secured thereby under certain circumstances as described therein. Upon any termination of the Security Agreement pursuant to its terms, the obligations of the University under the Loan Agreement would no longer be secured by the gross revenues of the University but would instead constitute general unsecured obligations of the University. See “SUMMARY OF THE SECURITY AGREEMENT” in Appendix C for discussions of the termination provisions of the Security Agreement. Other Factors. Additional factors that may affect future operations of the University to an extent that cannot be determined at this time include, but are not limited to, the following:

(i) Adverse labor actions that could result in a substantial reduction in revenues without corresponding decreases in cost.

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(ii) Reduced demand for higher education in general or programs offered by the University in particular. (iii) Increased costs and decreased availability of public liability insurance. (iv) Cost and availability of energy. (v) Occurrences of natural disasters, which may damage the facilities of the University or interrupt utility service to the facilities or otherwise impair the operation of the University and the generation of revenues from the facilities. (vi) High interest rates, which could strain cash flow and prevent borrowing for needed capital improvements. (vii) A decrease in the availability of student loans and other aid that permits many students the opportunity to obtain higher education. (viii) An increase in the costs of wages, health care benefits, retirement plans or other benefit packages offered by the University to its employees and retirees. (ix) Lack of demand for on-campus housing at the University. (x) A decrease in the market value of the University's investments or unrestricted net assets. (xi) Reduced ability to attract future annual or capital campaign contributions, that may limit future projects or the ability to address deferred maintenance and/or the support of expenses related to faculty salaries and tuition discounting. (xii) Reduced availability of qualified faculty to teach the programs offered by the University. (xiii) A downgrade in the University's bond rating to a level which prevents the University from being able to borrow at affordable rates in the future.

FINANCIAL STATEMENTS

The financial statements of Robert Morris University as of and for the fiscal years ended May 31, 2017 and 2016, included in this Official Statement as Appendix B have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein. There can be no assurance that the financial results achieved in the future will be similar to historical results. Such future results will vary from historical results, and actual variations may be material. The historical operating results of the University contained in this Official Statement cannot be taken as a representation that the University will be able to generate sufficient revenues in the future to make payments under the Loan Agreement. The University represents, as of the date hereof, that there have been no material adverse changes in its financial condition, as set forth in Appendix B of this Official Statement, since May 31, 2017, which is the most recent fiscal year for which audited financial statements are available.

ABSENCE OF MATERIAL LITIGATION

There is no controversy or litigation of any nature now pending or, to the knowledge of the University or the Authority, threatened, that seeks to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or in any way contests or affects the validity of the Bonds, any proceedings of the Authority taken with respect to the issuance or sale thereof, any security or the pledge or application of any moneys provided for the payment of the Bonds or the existence or powers of the Authority.

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Upon issuance of the Bonds, the University will certify as to the absence of any litigation which could have a material, adverse effect on its financial conditions.

APPROVAL OF LEGALITY

The Bonds are offered when, as and if issued by the Authority and accepted by the Underwriter, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of the legality of the Bonds by Cohen & Grigsby, P.C., of Pittsburgh, Pennsylvania, Bond Counsel. A copy of the proposed form of opinion of Bond Counsel expected to be delivered on the date of issuance and delivery of the Bonds is set forth in Appendix D – “Form of Bond Counsel Opinion.” Certain legal matters for the University will be passed upon by its counsel, Cohen & Grigsby, P.C., Pittsburgh, Pennsylvania, and for the Authority by its counsel Clark Hill PLC, Pittsburgh, Pennsylvania. Certain legal matters will be passed upon by Buchanan Ingersoll & Rooney PC, Pittsburgh, Pennsylvania, counsel to the Underwriter.

TAX MATTERS

Pennsylvania Tax Exemption

In the opinion of Bond Counsel, under existing law, the Bonds are exempt from personal property taxes in Pennsylvania and the interest on the Bonds is exempt from Pennsylvania personal income tax and corporate net income tax.

Federal Tax Exemption

As of the date of closing, Bond Counsel will issue an opinion to the effect that under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes. Furthermore, interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations by the Internal Revenue Code of 1986, as amended (the “Code”); however, with respect to certain corporations (as defined for federal income tax purposes), such interest is taken into account in determining "adjusted current earnings" for the purpose of computing the alternative minimum tax imposed on such corporations. The Internal Revenue Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Bonds in order for interest on the Bonds to be and remain excludable from gross income for purposes of federal income taxation. Examples include: the requirement that the University maintain its status as an organization exempt from federal income taxation by reason of being described in Section 501(c)(3) of the Code; 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 investment of such proceeds and other amounts; and restriction on the ownership and use of the facilities financed 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 University subsequent to issuance of the Bonds to maintain the exclusion of interest on the Bonds from income for federal income taxation purposes. Failure to comply with such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issuance of the Bonds. The opinion of Bond Counsel delivered on the date of issuance of the Bonds is conditioned on compliance by the Authority and the University with such requirements, and Bond Counsel has not been retained to monitor compliance with requirements such as described above subsequent to the issuance of the Bonds.

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Original Issue Premium

An amount equal to the excess of the purchase price of a Bond over its stated redemption price or principal due at maturity constitutes a premium on such Bond. Those maturities of the Bonds sold at such a premium are referred to herein as “OIP Bonds.” A purchaser of an OIP Bond must amortize any premium over such OIP Bond's term using constant yield principles, based on the OIP Bond's yield to maturity. As premium is amortized, the purchaser's basis in such OIP Bond and the amount of tax- exempt interest received will be reduced by the amount of amortizable premium properly allocable to such purchaser. This will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of such OIP Bond prior to its maturity. Even though the purchaser's basis is reduced, no federal income tax deduction is allowed. Purchasers of any bond at a premium, whether at the time of initial issuance or subsequent thereto, should consult their tax advisors with respect to the determination and treatment of premium for federal income tax purposes, and with respect to state and local tax consequences of owning such Bonds.

Other Tax Matters

Except as expressly stated above, Bond Counsel will express no opinion regarding any other state or federal income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue premium, purchase at a market discount or premium, taxation upon sale, redemption or other disposition and various withholding requirements and which may apply to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds.

Changes in Tax Laws

Current and future presidential proposals or legislative proposals in the Congress and in the states, if enacted into law, clarifications of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or not exempted from state income taxation, or otherwise prevent the holders of the Bonds from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such presidential or legislative proposals, clarifications of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel will express no opinion.

Bond Counsel Opinion

Bond Counsel's opinions are based on existing law, which is subject to change. Such opinions are further based on factual representations made to Bond Counsel as of the date thereof. Bond Counsel assumes no duty to update or supplement its opinions to reflect any facts or circumstances that may thereafter come to Bond Counsel's attention, or to reflect any changes in law that may thereafter occur or become effective. Moreover, Bond Counsel's opinions are not a guarantee of a particular result, and are not binding on the IRS or the courts; rather, such opinions represent Bond Counsel's professional judgment based on its review of existing law and in reliance on the representations and covenants that it deems relevant to such opinions.

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THE TRUSTEE AND PAYING AGENT

The Bank of New York Mellon Trust Company, N.A. (the “Trustee”), Pittsburgh, Pennsylvania, is the Trustee and Paying Agent under the Indenture, the obligations and duties of which are as described in the Indenture. The Trustee has undertaken only those obligations and duties which are expressly set out in the Indenture. The Trustee has not independently passed upon the validity of the Bonds, the security therefor, the adequacy of the provisions of the payment thereof or the tax-exempt status of the interest on the Bonds. The Trustee has relied upon the opinion of Bond Counsel for the validity and tax-exempt status of the interest on the Bonds, as well as other matters set out in that opinion. The Indenture expressly provides that the Trustee not be responsible for any loss or damage resulting from any action or inaction taken in good faith in reliance upon an opinion of counsel.

Under the terms of the Indenture, the Trustee is liable only for its gross negligence or willful misconduct. Under the Indenture, the Trustee is not required to take notice or be deemed to have notice of any default under the Indenture, except failure by the Authority to cause to be made any of the payments required to be made for payment of principal of the Bonds, when due at maturity or earlier redemption, or interest on the Bonds, or unless the Trustee has been specifically notified in writing of such default by the Authority, the University, or the owners of at least 10% in aggregate principal amount of the Outstanding Bonds. All notices or other instruments required by the Indenture to be delivered to the Trustee must be delivered at the Designated Office of the Trustee. In the absence of any such notice, the Trustee may conclusively assume no Event of Default exists, except as expressly stated above and in the Indenture. The summary of the Trustee's rights, duties, obligations and immunities contained herein is not intended to be a complete summary and reference is made to the Indenture for a complete statement of the Trustee's rights, duties, obligations and immunities.

UNDERWRITING

PNC Capital Markets LLC (the “Underwriter”) has agreed to purchase the Bonds at an aggregate purchase price of $29,576,450.05. This price represents the principal amount of the Bonds plus original issue premium to the public of $2,352,175.05 and less an underwriting discount of $205,725.00.

The obligation of the Underwriter to purchase the Bonds is subject to certain terms and conditions set forth in the contract for purchase of the Bonds, the approval of certain legal matters by Bond Counsel and certain other conditions. The terms of sale provide that the Underwriter will purchase all of the Bonds, if any are purchased. The terms of sale also provide, among other things, that the University will indemnify the Underwriter and the Authority against certain liabilities arising under the securities laws with respect to this Official Statement and the offering of the Bonds.

The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts and others) at prices lower than the initial offering prices set forth on the inside cover page hereof. The initial public offering prices may be changed from time to time by the Underwriter.

PNC Capital Markets LLC and PNC Bank, National Association are both wholly-owned subsidiaries of PNC Financial Services Group, Inc. PNC Capital Markets LLC is not a bank, and is a distinct legal entity from PNC Bank, National Association. PNC Bank, National Association has other banking and financial relationships, including credit relationships with the University.

RATING

Moody's Investors Services, Inc. has assigned its municipal bond rating of “Baa3” to the Bonds. Such ratings reflect only the view of Moody's at the time the ratings were given, and none of the

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Authority, the University, the Underwriter or the Trustee makes any representation as to the appropriateness of such rating.

Any explanation of the significance of such rating may only be obtained from the rating agency furnishing the same. A credit rating is not a recommendation to buy, sell or hold securities. There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency if, in the judgment of such rating agency, circumstances so warrant. None of the Authority, the University (except as described under “CONTINUING DISCLOSURE” below), the Underwriter or the Trustee has undertaken any responsibility to bring to the attention of the holders of the Bonds any proposed revision or withdrawal or to oppose any such revision or withdrawal. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds.

CONTINUING DISCLOSURE

In order to assist the Underwriter in complying with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Rule”), the University will enter into a Continuing Disclosure Agreement to be dated the date of original delivery and payment for the Bonds, the form of which is attached hereto as Appendix E to this Official Statement (the “Disclosure Agreement”). The University has determined that there are no other "obligated persons" for purposes of the Rule. Over the last five years, the University had continuing disclosure obligations under separate continuing disclosure agreements with respect to each of the Authority’s College Revenue Refunding Bonds, Series A of 1998 (Robert Morris College) (the “1998 Bonds”), the Authority’s University Revenue Refunding Bonds, Series A of 2006 (Robert Morris University) (the “2006 Bonds”), the Authority’s University Revenue Bonds, Series A of 2008 (Robert Morris University) (the “2008 Bonds”), the Authority’s University Revenue Bonds, Series A of 2010 (Robert Morris University) (the “2010 Bonds”) and the Authority’s University Revenue Bonds, Series of 2016 (Robert Morris University) (the “2016 Bonds”). Such continuing disclosure agreements require or required the University to submit information annually to certain repositories following the close of each fiscal year of the University. The University inadvertently missed or was late in filing previous financial statements and operating data with respect to its continuing disclosure obligations for the 1998 Bonds, 2006 Bonds, 2008 Bonds and 2010 Bonds.

The following provides information regarding certain late filings made to the Municipal Securities Rulemaking Board Electronic Municipal Market Access (EMMA) System with respect to the 1998 Bonds, 2006 Bonds, 2008 Bonds and 2010 Bonds over the last five years:

Operating Data- Operating Data - Fiscal Filing Audit - Date of Date of Year-Ending Deadline Date Filed Partial Filing Complete Filing May 31, 2016 10-28-16 10-21-16 10-21-16* 11-23-16* May 31, 2015 10-28-15 10-30-15* 01-14-16* 9-28-16* May 31, 2014 10-28-14 10-27-14 11-25-14* 9-28-16* May 31, 2013 10-28-13 10-25-13 11-05-13* 9-28-16* May 31, 2012 10-28-12 11-05-12* 11-05-12* 9-28-16*

* Late filing.

Event Filings: During the previous five years, the University failed to timely file event notices relating to the missed or late continuing disclosure filings outlined above. A corrective event notice with respect to fiscal years ending May 31, 2012 through 2015 was posted to EMMA on September 28, 2016.

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In addition, a notice of late filing (which related to the reporting of 2016 fall enrollment) was posted to EMMA on August 24, 2017.

The foregoing description of instances of non-compliance by the University with its continuing disclosure undertakings should not be construed as an acknowledgement by the University that any such instance was material. The University reviews its disclosure policies and procedures on an ongoing basis to ensure that the University complies with its continuing disclosure undertakings in the future.

RELATIONSHIP AMONG PARTIES

Cohen & Grigsby, P.C., bond counsel and counsel to the University, and Buchanan Ingersoll & Rooney PC, counsel to the Underwriter, both periodically provide general legal services to the University. An employee of PNC Bank, National Association, an affiliate of the Underwriter, and an employee of PNC Financial Services Group, Inc., the parent company of the Underwriter, are members of the Board of Trustees of the University. In addition, an employee of PNC Bank, National Association is a member of the Employer Advisory Board of the University.

CONCLUDING STATEMENT

All estimates, assumptions, statistical information and other statements contained herein, while taken from sources considered to be reliable, are not guaranteed by the Underwriter. So far as any statement herein includes matters of opinion, or estimates of future expenses and income, whether or not expressly so stated, they are intended merely as such and not as representations of fact. References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader's convenience. Unless specified otherwise, such websites and the information or links contained in this Official Statement, including the appendices hereto, are not incorporated into, and are not part of, this final official statement for purposes of, and as that term is defined in, the Rule. The information contained herein should not be construed as representing all conditions affecting the Authority, the University or the Bonds. The statements in Appendix C relating to the Indenture, the Loan Agreement and the Security Agreement are in summarized form, and in all respects are subject to and qualified in their entirety by express reference to the provisions of such documents in their complete form. The agreements of the Authority are set forth in such documents, and the information assembled herein is not to be construed as a contract with registered owners of the Bonds. Information with respect to the University set forth in this Official Statement has been supplied by the University and the Authority has relied upon the University with respect to the accuracy and sufficiency of such information.

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The contents hereof, including the cover page and the appendices hereto, are all part of this Official Statement and have been approved by the Authority and the University.

ALLEGHENY COUNTY HIGHER EDUCATION BUILDING AUTHORITY

BY: /s/ Victor H. Diaz Chairman

ROBERT MORRIS UNIVERSITY

BY: /s/ Dan W. Kiener Senior Vice President for Business Affairs

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Appendix A

Robert Morris University

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ROBERT MORRIS UNIVERSITY

INTRODUCTION Robert Morris University (“The University” or “RMU”) is a private, four-year institution which offers undergraduate and graduate programs. The University was founded in 1921 as the Pittsburgh School of Accountancy. In 1935, the school was named the Robert Morris School of Business in honor of the famous Pennsylvanian and Founding Father known as the financier of the American Revolution. The facilities and operations of Robert Morris School were purchased by a nonprofit corporation in 1962. With the approval of the Pennsylvania Department of Education (the “Department”), the school then became Robert Morris Junior College. In 1969, when the Department granted the College the right to award the Bachelor of Science in business administration, the name was changed to Robert Morris College. The College received program approval from the Department in 1975 to prepare teachers of business and office education. In 1977, the Department granted the College the right to award the Master of Science degree and in 1988 the right to award the Master of Business Administration degree (M.B.A.) and the Bachelor of Arts degree with programs in English and Communication. Also, in 1988 the Department granted approval for the College to certify teachers of English and Communications. Finally, in 2002 the Department granted the College approval to operate as a university and to assume the name of Robert Morris University. Since 1990, the University has been continuing to selectively diversify its curriculum. Currently, the University offers 51 undergraduate and 36 graduate degree programs, including three doctoral programs and 24 fully online degree programs. U.S. News & World Report ranks Robert Morris University No. 188 on its list of Best National Universities for 2017.

The main campus is located in Moon Township, in western Allegheny County, Pennsylvania, 17 miles from downtown Pittsburgh and 5 miles from the Pittsburgh International Airport. Thirty-seven buildings are presently in use on the 230-acre main campus. These include academic and classroom buildings, a library, residence halls, student center, dining facilities, athletic centers, athletic fields and a fitness center. Two additional residence halls and a facilities maintenance center are located just off the main campus along University Boulevard. In addition, the University offers degree programs at a location in downtown Pittsburgh, which is also the home of the RMU Bayer Center for Nonprofit Management. There are also four buildings associated with the Robert Morris University Island Sports Center (ISC) and a University House also located off campus.

In 2004, the University purchased the ISC, which is open to the public year-round, is a state-of-the-art sports training and recreation center located 12 miles from Downtown Pittsburgh and 5 miles from the main campus, on the western tip of Neville Island, an island on the Ohio River adjacent to the communities of Sewickley and Coraopolis. Its 32-acre campus includes two indoor ice arenas, two outdoor multi-purpose rinks, an indoor driving range, a miniature golf course and a pro shop. It also includes an eight lane all-weather track, throwing and jumping areas, and a natural grass soccer/lacrosse field inside the track.

Construction will commence this fall on the University’s UPMC Events Center. The building will include Peoples Court, a 4,000-plus-seat arena for RMU's successful NCAA Division I basketball and volleyball teams, plus team offices, practice facilities and locker rooms, and fan amenities including a team shop and dining areas. The arena will also be a venue for concerts, expos, and other major events. With an additional 11,000 square feet of space attached to the main arena, the UPMC Events Center will provide the expanding campus community and the Pittsburgh West/Airport Corridor with classroom and meeting space and conference facilities including catering, state-of-the-art technology, and customizable options for a variety of functions. The UPMC Events Center is the main part of a $51.2 million project that also includes a student recreation and fitness center on RMU’s Moon Township campus opening this fall.

On February 1, 2016, Dr. Christopher B. Howard began his term as the 8th President of Robert Morris University. Prior to his appointment as president of the University, Dr. Howard was the President of Hampden-Sydney College in Virginia. Dr. Howard earned his Doctorate of Philosophy in politics from the University of Oxford as a Rhodes Scholar, his M.B.A. with distinction from Harvard Business School, and his B.S. in political science from the United States Air Force Academy. He previously served as Vice President for Leadership and Strategic Initiatives at the

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University of Oklahoma. He also had a successful career in the corporate world, working in General Electric’s Corporate Initiatives Group as well as Bristol-Myers Squibb’s Corporate Associates Program. A graduate of the United States Air Force Academy, Dr. Howard won the Campbell Trophy, known as the “Academic Heisman,” and was inducted into the Verizon Academic All-America Hall of Fame. He has also received the NCAA Silver Anniversary Award. In addition, Dr. Howard is a Retired Air Force reserve lieutenant colonel and an intelligence officer for the elite Joint Special Operations Command. In 1999, Dr. Howard served a U.S. delegation to South Africa as political-military advisor. He was awarded the Bronze Star for service in Afghanistan and has served as the Reserve Air Attaché to Liberia.

MISSION AND VISION Robert Morris University is a student-centered institution that transforms lives by building knowledge, skills, and citizenship, all of which focus on the achievement of one's personal and professional goals. Engaged learning, within a highly supportive environment, enables students to develop strong communication skills, excel within collaborative settings, effectively address complex problems with innovative solutions, and lead with integrity and compassion throughout their lives and careers in a diverse and rapidly changing world.

Robert Morris University strives to become a recognized best value leader by providing a highly proactive student engagement learning environment that is focused on producing graduates of consequence and influence in their personal and professional lives.

5-YEAR STRATEGIC PLAN The 2014 – 2019 Robert Morris University strategic plan provides a comprehensive framework for building upon RMU’s existing strengths in order to focus attention on opportunities, weaknesses and threats. The strategic plan (mission, vision, core values, value proposition, initiatives and goals) was developed in fall 2013 by a steering committee comprised of 31 faculty, staff, students and administrators. Additional input into the plan was received from RMU Trustees and executive management. The strategic plan was approved by the RMU Board of Trustees on January 13, 2014.

All of the six major initiatives in the strategic plan, together with their respective goals, are directed towards fulfilling the University’s mission in accordance with its core values and promoting its value proposition.

Initiative 1 contains goals that seek to improve the quality of RMU’s schools, majors and degree programs. This goal will be accomplished by continuing to maintain and promote its accreditations and engaged learning, strengthening outcomes assessment, quality assurance and the teacher-scholar model and accentuating the importance of online education, general education and library resources.

The goals associated with Initiative 2 seek to build a distinct, quality identity for the University that will attract prospective students, provide a high quality college experience to current students and establish enrollment size targets for RMU. Student Life will continue to build on the great expansion of student programs and services carried out in the last strategic plan. Increasing undergraduate selectivity and quality will be a key driver of taking RMU to the next level of institutional quality and online enrollment will provide a large share of the incremental students called for under this plan. A focused, well-supported and successful athletic program will be a key part of the RMU Value Proposition.

For the first time the strategic plan includes a human capital component. Initiative 3 specifically recognizes the critical role that RMU’s staff plays in student success and the University’s intent to support those employees’ development and fulfillment.

Initiative 4 seeks to raise RMU’s facilities and information technology to the level of a competitive advantage via selective investments in renovations, new construction, remediation of deferred maintenance and technology infrastructure and applications

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Initiative 5 addresses the need to bring focus and recognition to RMU’s stature and presence in both existing and new markets via more and better marketing and promotion of its value proposition.

Initiative 6 proposes gaining better insights into unit-level financial contributions as an important aspect of the ongoing process of finding ways to provide good services at the highest efficiency and lowest cost possible.

Dr. Howard has launched a process to evaluate future strategic initiatives under guiding principles of improving the University’s financial viability and market distinctiveness. All current and future initiatives, objectives, and plans will be weighted based upon how well they:

 Improve graduation rates  Increase net assets  Reinforce institutional values or mission  Create preferred partnerships in the Pittsburgh region  Improve the University’s brand equity or position.

While the fundamental nature of RMU and its curricular focus are not expected to change, all components of the current strategic plan are being re-examined during 2017 and will be altered if necessary to provide a sound basis for the University’s future direction as the University seeks to provide its students with a transformational experience.

As part of the strategic initiatives, construction will commence in the fall 2017 for the University’s UPMC Events Center. The building will consist of 158,000 square feet and will include; 4000+ seats “mid-level concourse” design, concessions with a view, extensive digital media, Hall of Fame, Pro Shop, VIP Club, main competition court for basketball and volleyball, practice gym, dedicated athletic locker rooms, visitors’ locker rooms, multiple officials & coaches locker rooms, central training facility, central athletic weight room, athletic office suites, athletic media room, flexible conferencing space, pre-function corridors, catering kitchen, business center, and office suite. The UPMC Events Center is the main part of a $51.2 million project that also includes a student recreation and fitness center on RMU’s Moon Township campus.

The project will be funded with the proceeds of the Bonds being offered in this Official Statement, funds of the University, and individual donations and corporate sponsorships, including sponsorships from UPMC, Peoples, Eat'n Park Hospitality Group, PJ Dick, and PNC. The project also has received a grant through the Pennsylvania Redevelopment Assistance Capital Program.

The University has entered into a guaranteed maximum price (GMP) contract with PJ Dick for the construction of the UPMC Events Center. PJ Dick is headquartered in Pittsburgh, Pennsylvania, with regional offices serving Maryland, the District of Columbia, Northern Virginia and Ohio. PJ Dick has consistently ranked among the nation's Top 100 General Contractors and Construction Managers according to Engineering News Record, and has managed over $7 billion in commercial, industrial, federal, and specialty projects since their inception in 1979. As one of the region’s largest construction firms, PJ Dick provides professional construction management staff to estimate, plan, and build the area’s noteworthy projects for major universities, hospitals, businesses, sports teams, and industries. PJ Dick has an established relationship with the University including being the construction manager for the School of Business and the Salem Hall student housing complex.

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GOVERNANCE The Board of Trustees (the “Board”) is the governing body of the University. The Bylaws of the University require a Board of not fewer than 15 and not more than 45 members. The Board is currently comprised of 30 members. Individuals are elected by the affirmative vote of the Board to serve for a term of three years and are eligible for re- election. Members of the Board serve without pay or other compensation for Board service. The Executive Committee of the Board consists of the Chair and two Vice Chairs of the Board, the Chairs of the various standing committees, and the immediate past Board Chair who shall serve for one additional year to assist with the transition to new Board leadership, one or more at-large members, and the President of the University. The Board has full and complete authority for the general management of the affairs of the University. The Board elects its Chair, Vice Chairs, President, Provost, Senior Vice President for Business Affairs, Senior Vice President for Academic Affairs, Senior Vice President for Institutional Advancement, Vice President for Financial Operations and Treasurer, Vice President and General Counsel, Secretary and such assistant officers as the Board determines. Further, the Board establishes the educational philosophy and objectives of the University, approves the annual budget submitted by the President, and directs the use and investment of funds of the University or its property. There are at least four regular meetings of the Board each year which are held in the fall, winter and spring, and one of the winter or spring meetings serves as the annual meeting. The time and place of these meetings are set by the Chair of the Board and the University President or two (2) Trustees. A quorum consists of a majority of voting members of the Board, and the majority vote of those present is sufficient for any decision except as specifically limited by the Bylaws of the University. The Executive Committee is vested with all the powers of the Board of Trustees when the Board is not in session, except when otherwise specified by the Bylaws. In addition, there are several committees within the Board that meet throughout the year.

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BOARD OF TRUSTEES

Officers

Name Affiliation Appointed Richard J. Harshman, Chair Chairman, President and Chief Executive Officer – Allegheny 1999 Technologies Incorporated Carrie Coghill, Vice Chair President and CEO – Coghill Investment Strategies 2009 Stephen W. Klemash, Vice Chair Managing Partner – Accounts/Central Region – Ernst & Young 2004 LLP Renee T. Cavalovitch, Secretary Vice President, General Counsel and Board Secretary 2013 Jill M. Krieger, Assistant Secretary Board Liaison and Assistant Secretary 2016 Jeffrey A. Listwak, Treasurer Vice President, Financial Operations and Treasurer 2015

Members

Name Affiliation Appointed Richard Archer Partner, Risk Advisory Services – KPMG LLP 2016 Leroy Ball President and Chief Executive Officer – Koppers 2015 Jeffrey S. Broadhurst President and CEO – Eat’n Park Hospitality Group 2003 Gary R. Claus Partner (Retired) – PricewaterhouseCoopers LLP and Partner, 2004 Boyden Global Executive Search Kevin Colbert General Manager – Pittsburgh Steelers 2010 Deborah A. Cunningham Executive Vice President – Federated Investors 2013 Margaret E. DiCuccio Chief Nursing Officer and Vice President, Patient Care – 2011 Allegheny General Hospital Clarence E. Dozier Managing Director, Litigation – FedEx Ground Package System, 2016 Inc. Victor S. Gregovits Senior Vice President – Home Team Marketing 2009 Charles I. Homan President (Retired), PBS&J 1996 Thomas A. Hunley Retail Banking Executive 2009 David J. Lancia Partner, PricewaterhouseCoopers LLP 2009 Margaret D. Larkins-Pettigrew Edgar B. Jackson Chair for Clinical Excellence & Diversity, 2011 Associate Professor/Head of Global Health, Dept. of Obstetrics/Gynecology & Reproductive Biology, University Hospitals Case Medical Center Karen L. Larrimer Executive Vice President and Chief Customer Officer, PNC 2013 Financial Services Group David J. Malone President and Chief Executive Officer – Gateway Financial 2000 Ralph J. Martin Executive Vice President – Steinman Communications 2012 Norman F. Mitry President and CEO – Heritage Valley Health System 2008 Anne Nemer Dhanda Managing Director for Global Learning and Organizational 2015 Development – Lam Research Morgan K. O’Brien President and Chief Executive Officer – Peoples Natural Gas 2015 Kolia J. O’Connor Head of School – Sewickley Academy 2010 Robin R. Sanders Chief Executive Officer – FEEEDS Advocacy Initiative 2011 Michael J. Smith President and CEO – Goodwill of Southwestern Pennsylvania 2012 Gary Sokulski Chief Operating Officer – Reed Smith LLP 2010 Gregory R. Spencer Chief Executive Officer – Randall Industries, LLC 2008 Thomas W. Sterling Senior Vice President, Administration (Retired) – U. S. Steel 2002 Corporation Stephen A. Van Oss Chief Operating Officer (Retired) – WESCO Distribution, Inc. 2006 John J. Waldron Founder and CEO – Waldron Private Wealth 2010

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ADMINISTRATION

The University is administered on a day-to-day basis by the President and his senior staff. The President and the University officers are appointed by and serve at the pleasure of the Board. The following is a listing of University officers and a brief biography of each. Christopher B. Howard, D.Phil., President; Dr. Christopher B. Howard was appointed President in February 2016. Dr. Howard earned his Doctorate of Philosophy in politics from the University of Oxford as a Rhodes Scholar, his M.B.A. with distinction from Harvard Business School, and his B.S. in political science from the United States Air Force Academy. David L. Jamison, J.D., Provost and Senior Vice President for Academic Affairs; David Jamison was appointed Provost and Senior Vice President in January of 2008. He served from 2002-2008 as Dean, School of Communications and Information Systems at the University. Provost Jamison had a 30-year career at the University of Akron, where he served as the Head of the Department of Communication, Director of Graduate Studies in Communication, Assistant Provost, Associate Provost, and Provost, and was a member of the University Honors Council as well as Director of the BS/MD program. He holds a J.D. from the University of Michigan Law School, a Master of Arts (Communication) from the University of Michigan, and a B.A. from Muskingum College. Dan W. Kiener, M.B.A., Senior Vice President for Business Affairs; Dan Kiener was appointed Senior Vice President in August of 2003. He earned his M.B.A. from Columbia University and his B.S. from Georgetown University. Prior to his appointment at the University, he was Vice President and Chief Financial Officer for Banta Corporation. Prior to this position, he worked 26 years with PPG Industries, Inc., rising to the level of Treasurer. Jeffrey A. Listwak, M.B.A., C.P.A., Vice President for Financial Operations and Treasurer; Jeff Listwak was appointed Vice President in March of 2004 and Vice President for Financial Operations and Treasurer in June 2015. He earned his B.S. in accounting from Indiana University of Pennsylvania and M.B.A from the University of Pittsburgh. Prior to his appointment at Robert Morris University, he was Senior Director of Decision Support and Planning for FreeMarkets, Inc. As a Certified Public Accountant, he has experience as Controller for FreeMarkets, Inc. and as Manager of Accounting and Auditing with Deloitte & Touche LLP. Jay T. Carson, M.Ed., Senior Vice President for Institutional Advancement; Jay Carson was appointed Senior Vice President for Institutional Advancement (IA) in March of 2011. He served from 2006-2011 as Vice President for IA at the University. Prior to joining RMU, Jay served as Vice President for Institutional Advancement and Chief Development Officer at Saint Vincent College; Vice President for Development and Donor Relations at The Pittsburgh Foundation; and Vice President for Institutional Advancement for the Pittsburgh Cultural Trust. In addition, he has held positions at Carnegie Mellon University, Family Resources, United Cerebral Palsy, and the Pennsylvania Association for Retarded Citizens. He earned his B.A. in English Literature and Master’s in Education at the University of Pittsburgh. Renee Cavalovitch, J.D., Vice President, General Counsel, Secretary of the Board of Trustees; Renee Cavalovitch, J.D. was appointed Vice President, General Counsel and Board Secretary in July 2013. She earned her law degree from the University of Pittsburgh in 2004 after graduating from Robert Morris University in 2001 with a bachelor’s degree in business administration. Prior to joining the University, Renee was Corporate Counsel for H.J. Heinz Company and an associate at K&L Gates LLP, a global law firm. Prior to law school, Renee was Manager of Information Services and Corporate Compliance Officer for Baptist Homes of Western Pennsylvania.

THE UNIVERSITY AND COMMUNITY

Robert Morris University is an integral part of Moon Township and a highly active and engaged member of the broader Airport Corridor community. RMU convenes the Moon Economic Development Group, a roundtable of local business owners and real estate developers, civic leaders, and elected officials that meets quarterly to share information about upcoming projects and work together to address issues of mutual concern. The Moon Economic Development Group has been a catalyst for revitalization in the University Boulevard business district, including a new hotel, new restaurants, and a Wal-Mart. RMU is among the largest employers in Moon Township, and in 2010 purchased a hotel that was in arrears and converted into a 500-bed residence hall, infusing the local business district with customers for local shops and restaurants.

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Under the auspices of the Moon Economic Development Group, RMU led a successful campaign to convince the Port Authority of Allegheny County to increase available public transportation between downtown Pittsburgh and Moon Township. This will benefit residents and businesses in Moon and surrounding communities, including reservists and active-duty personnel at the nearby 911th Airlift Wing and 171st Air Refueling Wing. RMU offers degree programs at a reduced rate to personnel at both military units as part of its veteran’s education initiatives.

RMU strategically partners with corporations to help them eliminate a skills gap in the local workforce. RMU provides skills gap analysis, knowledge and professional skills development programs, employee engagement and development programs, leadership and organizational development programs.

RMU students and staff also serve the community through numerous volunteer programs, most notably at the Mooncrest Afterschool Program, which provides tutoring and recreation programs for children in a historic low- income neighborhood in Moon. RMU partners with the Moon Area School District on a laboratory classroom program for preschool students, and RMU offers deeply discounted college courses to academically talented high school students in high schools throughout western Allegheny County and portions of nearby Beaver County. As part of the “Maker Movement” RMU works with school districts throughout western Allegheny County through the Ohio River Consortium to provide hands-on science and engineering experiences to school-age children.

ACCREDITATIONS

The University is accredited by the Middle States Association of Colleges and Schools. The BS in Information Sciences and the BS in Information Systems Management are accredited by the Accreditation Board for Engineering and Technology - Computing Accreditation Commission (ABET/CAC). The BS in Engineering and the BS in Manufacturing Engineering are accredited by the Accreditation Board for Engineering and Technology - Engineering Accreditation Commission (ABET/EAC). The BS and MS in Nursing degrees and Doctor of Nurse Practice (DNP) programs are accredited by the Commission on Collegiate Nursing Education (CCNE). The Teacher Education programs are accredited by the Council for the Accreditation of Educator Preparation (CAEP) and the School of Business is accredited by AACSB International – The Association to Advance Collegiate Schools of Business. The BS in Actuarial Science is designated as a Center of Actuarial Excellence (CAE) by the Society of Actuaries. The BS in Nuclear Medicine Technology is accredited by the Joint Review Committee on Educational Programs in Nuclear Medicine Technology. The Regional Research and Innovation in Simulation Education (RISE) Center is accredited by the Council for Accreditation of Healthcare Simulation Programs. The University holds membership in the Pennsylvania Association of Colleges and Universities, the American Council on Education, the Pittsburgh Council on Higher Education, the Council of Independent Colleges, and the Association Independent Colleges and Universities of Pennsylvania. RMU is a member of the NCAA Division I and offers 15 collegiate sports.

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ACADEMIC PROGRAMS The University currently awards degrees at the bachelor's, masters and doctorate levels. The University awards the following degrees at the bachelor's level: Bachelor of Arts, Bachelor of Fine Arts, Bachelor of Science, and Bachelor of Science in Business Administration, Bachelor of Science in Manufacturing Engineering, and Bachelor of Science in Nursing. The University also offers several Integrated Bachelor/Master degree programs as well teacher certifications and other certificate programs. The University grants undergraduate degrees in the following areas of study: Accounting History Actuarial Science Hospitality and Tourism Management Applied Mathematics Information Sciences Biology Management Business Manufacturing Engineering Communication Marketing Competitive Intelligence System Media Arts Computer Information Systems Middle Level Education Criminal Justice Nuclear Medicine Technology Cyber Forensics and Information Security Nursing Data Analytics Organizational Leadership Early Childhood and Special Education Political Science Early Childhood Education Psychology Economics Secondary Education Engineering Social Science English Sociology Environmental Science Sports Management Finance Statistics and Predictive Analytics Health Service Administration

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In addition, the University awards the following graduate degrees: Master of Business Administration (MBA), Master of Science (MS), Master of Science in Nursing (MSN), Master of Education (MEd), and Master of Science and Master of Business Administration dual degree (MS/MBA)

The University grants master’s degrees in the following areas of study: Business Administration Information Technology Project Management Business Education Instructional Leadership Counseling Psychology Internet Information Systems Cyber Security and Information Assurance Literacy Data Analytics Nursing Engineering Management Organizational Leadership Health Services Administration Special Education Human Resource Management Taxation Information Systems Management

At the doctoral level, the University offers the Doctor of Science (D.Sc.) Information Systems and Communication; the Doctor of Philosophy (Ph.D.) in Instructional Management and Leadership; and the Doctor of Nursing Practice (D.N.P.). The Board and Administration continually monitor the need for new programs and work to implement new courses of study and degree programs efficiently.

CAMPUS AND FACILITES The RMU campus consists of a blend of contemporary architecture with a total of 45 buildings in the University system. RMU's main campus in Moon Township sits upon 230 scenic, rolling acres, just 17 minutes from downtown Pittsburgh. The grounds provide all of the benefits of a traditional university campus, while being just a short drive from the airport and downtown Pittsburgh. RMU also owns a unique Sports and Ice Complex located on Neville Island on the Ohio River just 12 miles from downtown Pittsburgh. The RMU Island Sports Complex, open to the public year-round, is a 32-acre state-of-the-art center which features ice skating, hockey, an indoor driving range, an outdoor track and outdoor miniature golf. The University which also leases space at the Heinz 57 Center in downtown Pittsburgh, home to the Bayer Center for Non-Profit Management.

In response to an Allegheny County review of all tax-exempt properties in Allegheny County which began in 2014, the University submitted a response to the County defending its real estate tax exemption for its properties. Allegheny County has not yet replied to the University's response and has not provided the University any indication as to when a reply will be given.

CAMPUS MASTER PLAN

The University last updated its master plan in 2007. The plan was envisioned to be implemented in 3 phases; Years 1-5, 6-10 and 11-20. The purpose of the master plan is to insure the built environment is consistent with the University’s strategic plan. Goals of the master plan include: Create a continuous perimeter loop road at the edge of the campus; integrate future parking areas with the perimeter loop road; take advantage of the dynamic campus topography when siting buildings and creating outdoor spaces; embellish new buildings with roof top focal points and establish a pallet of architectural materials to provide a more consistent look to future facilities. (BGSF = Building Gross Square Feet).

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ACADEMICS

Business School The School of Business was constructed in 2011 and consists of 17,941 BGSF. This building is steel frame and concrete floor construction with brick and metal panel exterior. This building houses high-tech academic space for the School of Business, such as a PNC Trading Center, Videoconferencing and Technology Resource Center, and an ATI Center with an Interactive Marketing, as well as the President's Office. It is one of the first schools (1 out of 5 on campus) to have its own signature real estate building.

Franklin Center Franklin Center, built in the 1960's, was the first classroom building on the Moon Campus site and is comprised of 7,179 BGSF. The structure is masonry wall and poured-in-place concrete floor construction. It currently houses four classrooms and the Honors Lounge.

Hale Center Hale Center was constructed in the 1970's and continues to function as the primary academic building on the Moon Campus. Hale Center consists of 38,712 BGSF on three floors. The structure is masonry bearing and concrete floor construction. This building houses 21 classrooms and computer labs, part-time faculty offices, the IT Help Desk, as well as a café on the second floor and a student lounge.

John Jay Center The main section of John Jay Center, constructed in 1968, consists of 40,123 BGSF on three floors. The structure is load bearing masonry and concrete floor construction. This main section now houses the School of Engineering, Math, and Science (“SEMS”), including over a dozen science and engineering laboratories. The Annex of John Jay Center, constructed in 1968, consists of 6,617 BGSF on two floors. The structure is masonry bearing and concrete floor construction. This section of the building consists of five general classrooms. The Gymnasium section of John Jay Center, constructed in 1968 consists of 9,496 BGSF on one floor plus the mezzanine, which serves as additional office space. The structure is masonry bearing and steel/wood timber roof construction. The basketball court/gymnasium is used for intramural recreational activities and is an alternate practice facility for numerous athletic teams. The gymnasium can accommodate one full court for basketball or volleyball while containing four additional side baskets to serve as two smaller basketball courts. Phase I of the renovations for SEMS was completed Summer of 2016 which included 10 offices and 2 workstations. Future plans include further renovations and addition for SEMS.

Massey Hall Massey Hall, constructed in 1992, consists of 28,045 BGSF on three floors. The structure is masonry bearing and steel bar joist/concrete floor construction. It houses School of Business faculty offices and the Colonial Theatre.

Patrick Henry Center The Patrick Henry Center, constructed in 1973, consists of 67,340 BGSF on four floors. The structure is poured in place concrete frame and robinson decking construction with infill masonry walls. This building houses the Library, the Academic Media Center, including the TV Studio, and the Provost's Office as well as other administrative offices. Renovations in 2014 included upgrades of the main level in the Library, constructing “glass walls”, consolidation of book stacks, new carpet and paint, creation of study areas accompanied by new furniture, and additional seating for 200. Renovations in fall of 2015 included a dedicated entrance for the Library, also known as the North Plaza Entrance, while fall 2016 renovations included a final completion of a new façade to the entire building.

Rooney House - Colonial Village The Rooney House, constructed in 2004, consists of 2,514 BGSF on three floors. The structure is wood frame construction clad in brick veneer. This building functions as a townhouse for visiting scholars.

Scaife Hall - School of Nursing Scaife Hall is the most recent academic addition to campus having been completed for the fall 2015 semester. The building consists of 32,901 BGSF on two floors and is the home of the School of Nursing. It also houses the

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Regional Research and Innovation in Simulation Education Center (RISE Center) while serving a dedicated nursing computer lab, faculty offices on the second floor, and an interior concourse.

Snee-Reinhardt House - Media Arts The Snee-Reinhardt Media Arts House, constructed in 2010, consists of 2,565 BGSF on three floors. The structure is wood frame construction clad in brick veneer. The building functions as a living-learning environment to Media Arts. It includes academic space as well as an apartment for visiting faculty.

Wheatley Center – SCIS The Wheatley Center, comprehensively renovated and expanded in 2012, consists of 54,524 BGSF on three floors. The structure is a pre-engineered building with a brick and metal siding exterior. This building is home to the School of Communications and Information Systems, including general classroom space, teaching environments for Media Arts, faculty offices, and a cafe.

STUDENT SERVICES

Benjamin Rush Center Benjamin Rush Center was constructed in the 1970's and repurposed in 2007 to house the Nuclear Medicine Program. Benjamin Rush Center consists of 4,602 BGSF on one floor. The structure is slab-on-grade masonry wall construction. This building houses student life activities and career services for both active students and alumni.

Jefferson Center The Jefferson Center, constructed in the mid 1960's, consists of 23,431 BGSF on two floors. The structure is masonry bearing and concrete floor construction. This building now houses a Fitness Center, a 24/7 Computer Lab, the Veterans Center, the Phonathon, and Student Lounges. This building was formerly the signature student center building, constructed in the “Heart of Campus.”

Nicholson Center The Nicholson Center, constructed in 1998, consists of 90,082 BGSF on four floors. The structure is masonry and steel frame construction. This building functions as the campus's "student center" including the food court, the student café, the bookstore, offices for admission, the School of Education and Social Sciences (SESS), residential life support services and selected faculty and academic space.

Rogal Chapel The Rogal Family Chapel, constructed in 2002, consists of 2,875 BGSF on one floor. The structure is masonry bearing and steel/timber frame construction. This building is a non-denominational chapel serving the RMU community and is available for structured and unstructured worship, private prayer, memorial service, and weddings.

Student Recreation & Fitness Center The Student Recreation & Fitness Center, currently being constructed will be ready for a grand opening in September 2017. The building will consist of 45,000 BGSF on two floors. The structure is a pre-engineered building with brick, metal siding and glass exterior. This building functions as the primary space for student recreation. The building amenities includes; cardio room, pilates, weight, exercise, spinning, offices, locker rooms, main court for basketball and volleyball, up to four short intramural basketball courts, seating for 600 and public restrooms.

Teetz House - Colonial Village The Melvin D. Teetz House, originally constructed in 2004 consists of 2,514 BGSF on three floors. The structure is wood frame construction clad in brick veneer. This townhouse now houses the Center for Global Engagement department.

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ATHLETICS

Joe Walton Stadium The Athletic Building/Joe Walton Stadium, constructed in 2005, consists of 36,410 BGSF on three floors. The structure is masonry and steel frame construction and concrete floors with a pre-cast masonry exterior. The Joe Walton Stadium field covers 97,000 square feet, with the surface field turf. The turf consists of sand, rubber and film polyethylene grass-like fabric with secondary backing of high polyurethane. The field, which was replaced in the summer of 2015, is lined for football, lacrosse and soccer. The Athletic Building houses Football, Athletic Department Offices, Locker Rooms, Press box, Classrooms, and Stadium support areas.

Sewall Center (Renovated to UPMC Events Center) Sewall Center, constructed in 1985, consists of 76,276 BGSF on three floors. The Sewall Center will be comprehensively renovated and expanded becoming UPMC Events Center complex as described under “5-Year Strategic Plan” section above.

RESIDENCE HALLS

Traditional Dormitories There are eight original traditional dormitories built on the Moon Campus in the 1960’s. They are: Adams, Gallatin, Hamilton, Hancock, Madison, Marshall, Monroe, and Ross halls. They house approximately 600 student beds on the Moon Campus. The dorms are configured as double occupancy with a single set of bathrooms and shower rooms located on each floor, requiring each floor to be gender based.

Braddock Hall Braddock Hall was purchased by the University for student housing and staff office space (IT Department) in 2005. It houses 62 student beds and consists of 27,733 BGSF on two floors. The structure is primarily masonry bearing and concrete floor construction. The residential space is typically dedicated to upperclassmen, and is configured as single, double, and triple occupancy bedrooms on a common corridor. Two bedrooms typically share a powder room with common bathrooms/shower rooms located on each floor. The IT department uses 5,100 sf of private and open office space within the building.

Concord Hall Concord Hall, constructed in 2006, is one of the University's three apartment style residence halls. It houses 152 student beds and consists of 62,302 BGSF on five floors. A study room and a laundry room exist on each floor. The structure is masonry bearing and concrete floor construction. The building is typically dedicated to upperclassmen and is configured as eight 4-person apartments per floor.

Lexington Hall Lexington Hall, constructed in 2001, is one of the university's three apartment style residence halls. It houses 124 student beds and consists of 39,626 BGSF on four floors. The structure is wood frame construction. The building is typically dedicated to upperclassmen and is configured as eight 4-person apartments per floor. A laundry room exists on each floor.

Salem Hall Salem Hall, constructed in 2011, is one of the university's three apartment style residence halls. The building is typically dedicated to upperclassmen, and is configured as eight 4-5 person apartments per floor. It houses 192 student beds and consists of 75,611 BGSF on six floors. The structure is masonry bearing and concrete floor construction.

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Washington Hall Washington Hall, constructed circa 1970s, with a 10-person suite style arrangement, is the second largest residence hall on the Moon Campus. It houses 347 student beds on the Moon Campus and consists of 73,098 BGSF on seven floors. It also houses the Residence Life offices. The structure is masonry bearing and concrete floor construction. The building is typically dedicated to sophomores and student organizations such as fraternities and sororities.

Yorktown Hall Yorktown Hall was strategically purchased in 2011 for $10 million.(500 beds of new construction would have cost $35 million not including the conference center, green space, and parking) It is now the largest residence hall for the University, housing 500 student beds and consists of 169,223 BGSF on twelve floors. This building is RMU's first fully integrated living-learning facility, including such amenities such as a cafe, fitness center, dedicated parking, shuttle services, and 17 acres of green space. The building is typically dedicated to upperclassmen as well as student organizations and is configured as double occupancy rooms with private bathrooms. The structure is masonry bearing and concrete floor construction.

ADMINISTRATIVE

Barry Center Barry Center, constructed in the late 1960's, houses the Public Safety Department. Barry Center consists of 1,297 BGSF on one floor. The structure is slab-on-grade masonry wall construction.

Facilities Service Center The Facilities Service Center was purchased by the University and renovated for Facilities Management, RMU's Mail & Copy Center, and the Admissions Collation Center in 2011. The building is also home to the Incident Command Center and Colonial Central (formerly Operations Center). The total building consists of 25,162 BGSF on one floor. The structure is primarily masonry bearing and concrete floor construction.

Lafayette Center The Lafayette Center was constructed in two sections beginning in 1968 and consists of 8,156 BGSF on two floors. The one story was significantly renovated in 2006. Selected new finishes were introduced throughout in 2013. This building houses the Computer/Data Center, Marketing/PR offices and Institutional Advancement. The structure is wood frame construction clad in brick veneer.

Revere Center Revere Center, constructed in several sections beginning in 1970, has undergone numerous minor renovations over several years. It now houses Student Financial Services, Financial Aid, Human Resources, the Office of the General Counsel, and other administrative offices within Financial Operations. Revere Center consists of 12,151 BGSF on three floors. The structure is wood frame construction.

AUXILIARY ENTERPRISES

Island Sports Center - Golf Dome The ISC Golf Dome, constructed in 1999 and acquired in 2003, consists of 88,309 BGSF on one floor and partial mezzanine. The structure is a pressurized athletic inflatable structure. This structure is an indoor multi-purpose athletic facility used for golf instruction and a practice athletic field. This facility is also leased for third party shows and events.

Island Sports Center - Ice Arena The ISC Ice Arena, constructed in 1999 and acquired in 2003, consists of 178,748 BGSF on two floors. The structure is pre-engineered steel frame construction with concrete floors and a metal siding exterior. This building is an ice and deck hockey facility with supporting ancillary areas as well as the Pro Shop and a bistro. The Ice Arena not only supports RMU Athletic Programs, but also generates income from external customers.

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RMU Downtown / Bayer Center The RMU Downtown site consists of 5,398 square feet of leased space located on the Seventh Floor of the Heinz 57 Center, a 13-story high-rise building in Downtown Pittsburgh. The space houses the Bayer Center for Nonprofit Management at Robert Morris University.

University House The University House consists of 8,037 BGSF, a four-bedroom home in Edgeworth, Pa., serves as the University House for the private residence of the RMU President and to host events/gatherings for RMU students, faculty, staff, alumni, and donors.

The following table details the book value of property, plant, and equipment, net of accumulated depreciation, for the past five fiscal years.

Property Plant and Equipment – Net as of May 31st

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Land$ 5,403,855 $ 5,403,855 $ 5,403,855 $ 5,403,855 $ 5,403,855 Land Improvements 23,777,001 24,681,163 25,566,375 28,304,371 30,133,928 Buildings 157,572,204 162,576,904 164,043,721 178,563,113 182,052,184 Furniture and equipment 53,301,540 56,637,860 59,805,108 63,458,846 66,104,999 Construction in progress 2,348,747 2,101,756 7,789,029 1,679,998 5,554,167 Subtotal 242,403,347 251,401,538 262,608,088 277,410,183 289,249,133 Less accumulated depreciation (90,402,788) (100,765,885) (111,526,557) (122,531,710) (133,584,430)

Total $ 152,000,559 $ 150,635,653 $ 151,081,531 $ 154,878,473 $ 155,664,703

FACULTY AND STAFF

In 2016-17, the faculty of the University was comprised of 171 full-time faculty and 407 part-time faculty. 92% of the full-time faculty has Ph.D. or terminal degrees. During 2016-17, the student-faculty ratio was 15:1, with an average class size of 23 students. Faculty at the University are hired using a probationary/non-probationary system. Faculty are reviewed annually based upon performance. They are encouraged to apply for both merit and promotion. The University has a policy to remunerate faculty and staff members commensurate with experience and market salary data. The University establishes an annual pool of funds for both faculty and staff salary adjustments. The University offers its full-time faculty and staff competitive benefits including health insurance (medical and dental), tuition assistance, long short term disability, optional life insurance, optional flexible spending and health savings accounts as well as defined contribution retirement plan program administered by Transamerica. Labor Relations - The University has four agreements with unions:  A Collective Bargaining Agreement (“CBA”) with the American Federation of Teachers – Local 3412 (representing the full-time faculty) effective July 19, 2017 through May 19, 2021;  An agreement with the Educational Support Professionals Association (“ESPA”) (representing approximately 48 maintenance employees) is effective October 1, 2016 through September 30, 2021;

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 A Collective Bargaining Agreement with the Security, Police and Fire Professionals Association (“SPFPA”) (representing approximately 9 campus public safety and police officers) effective April 1, 2014 through March 31, 2018; and  A Collective Bargaining Agreement with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC representing part-time faculty, effective June 5, 2017 through August 1, 2020.

Employees As of May 31, 2017, the University employed persons full-time in the following capacity: Faculty ...... 171 Administration ...... 56 Staff ...... 388 Total ...... 615

STUDENT ENROLLMENT Enrollment headcount figures for spring 2017 were as follows: Undergraduate: 4,031; Graduate: 755; Total: 4,786

Currently, all five schools offer academic programs in high demand. For example, in the School of Business, accounting is a high demand program as well as sports management. In the School of Communications and Information Systems, the University has experienced a high interest in the cyber forensics program that recently received the Institution of the Year award from the Washington Center. The School of Engineering, Math and Science is the home of the highly esteemed program in actuarial science, which is noted as one of the top 16 programs in North America and has the distinction of Center of Excellence. The School of Education and Social Sciences has recently added a criminal justice degree which is fully subscribed. Additionally, the psychology degree has seen an upward trajectory for the past several years. Finally, the School of Nursing and Health Sciences has recently hired a well-known national expert in nursing simulation and the applicant pool has been climbing. The University has many additional programmatic accreditations and students indicate that they chose RMU in part due to these external affirmations.

Robert Morris University has strong attraction to its doctoral programs. Thirty-five new PhD students matriculated summer 2017, and fifty-three new doctoral students in the D.Sc. and DNP programs have been admitted for fall 2017. All three doctoral programs will meet or exceed the budget targets for fall 2017. Additionally, the online programs offer flexibility to adult students wanting to complete bachelor’s degrees or seeking advancement through our graduate offerings. The University has received numerous national rankings for the quality of its online degrees. Online undergraduate and master’s students take approximately 6% of 71,709 credits in a fully online format. Many interested adult students are opting for this modality over face-to-face instruction.

The fall 2017 freshman admissions application opened on June 1, 2016 in order to extend the recruiting cycle to address the shift in the market due to prior year Free Application for Federal Student Aid (FAFSA) filing. The fall 2018 freshman admissions application opened on June 1, 2017 to continue with this best practice. The University expects to meet the target for fall 2017 traditional domestic freshmen applications and acceptances. Preliminarily, the University’s incoming freshman class for fall 2017, including international freshman, is 870 students. Additionally, the University’s freshman to sophomore retention for fall 2017 is approximately 81% which compares to 79% for fall 2016. New international and transfer students have remained consistent year over year as has the tuition discount rate. The University monitors enrollment and costs on a continuing basis and will provide final enrollment numbers by November 27, 2017 pursuant to the terms of the Continuing Disclosure Agreement.

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CERTAIN OTHER OPERATING INFORMATION AND DEMAND STATISTICS FALL 2011 – FALL 2016

ENROLLMENT Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 Fall 2016 Undergraduate Full-Time Equivalent 3,713 3,900 4,227 4,281 4,227 4,161 Head Count 3,921 4,145 4,496 4,574 4,501 4,384

Graduate Full-Time Equivalent 854 803 733 729 677 622 Head Count 1,061 1,038 985 981 880 815

APPLICATIONS AND ACCEPTANCES Freshmen Number of Applicants Received - Gross 7,078 7,055 8,419 8,903 8,508 10,455 Number of Acceptances 4,233 4,298 4,580 4,665 4,600 5,732 Number of Students Matriculated 783 848 988 888 871 890 Acceptances/Applications (Selectivity) - Gross 59.8% 60.9% 54.4% 52.4% 54.1% 54.8% Matriculations/Acceptances 18.5% 19.7% 21.6% 19.0% 18.9% 15.5% Number of Actionable Applications 5354 5,220 5,689 6,123 5,958 7,178 Acceptances/Applications (Selectivity) - Net 79.1% 82.3% 80.5% 76.2% 77.2% 79.9%

Transfers Number of Applications Received - Gross 1,170 1,111 1,006 1,519 1,168 1,166 Number of Acceptances 575 536 499 657 523 491 Number of Students Matriculated 367 436 354 347 279 272 Acceptances/Applications (Selectivity) - Gross 49.1% 48.2% 49.6% 43.3% 44.8% 42.1% Matriculations/Acceptances 63.8% 81.3% 70.9% 52.8% 53.3% 55.4% Number of Actionable Applications 677 645 610 788 637 586 Acceptances/Applications (Selectivity) - Net 84.9% 83.1% 81.8% 83.4% 82.1% 83.8%

Graduate Number of Applicants Received - Gross 774 809 868 802 681 625 Number of Acceptances 394 386 374 362 300 266 Number of Students Matriculated 291 316 293 287 198 195 Acceptances/Applications (Selectivity) - Gross 50.9% 47.7% 43.1% 45.1% 44.1% 42.6% Matriculations/Acceptances 73.9% 81.9% 78.3% 79.3% 66.0% 73.3% Number of Actionable Applications 423 439 433 433 346 310 Acceptances/Applications (Selectivity) - Net 93.1% 87.9% 86.4% 83.6% 86.7% 85.8%

Combined Number of Applications Received - Gross 9,022 8,975 10,293 10,422 10,357 12,246 Number of Acceptances 5,202 5,220 5,453 5,322 5,423 6,489 Number of Students Matriculated 1,441 1,600 1,635 1,235 1,348 1,357 Acceptances/Applications (Selectivity) - Gross 57.7% 58.2% 53.0% 51.1% 52.4% 53.0% Matriculations/Acceptances 27.7% 30.7% 30.0% 23.2% 24.9% 20.9% Number of Actionable Applications 6,454 6,304 6,732 6,911 6,941 8,074 Acceptances/Applications (Selectivity) - Net 80.6% 82.8% 81.0% 77.0% 78.1% 80.4%

Academic Quality RMU Average Freshman SAT Verbal 502 508 513 517 522 517 RMU Average Freshman SAT Math 521 529 535 535 531 529 RMU Average SAT Total 1,023 1,037 1,048 1,052 1,053 1,045 PA Average SAT Total (College-Bound Seniors) 994 992 998 1,011 1,010 1,003 National Average SAT Total (All College-Bound Seniors) 1,011 1,011 1,010 1,010 1,006 1,006

% of freshman matriculants from outside state 21.7% 17.4% 28.0% 25.0% 21.0% 21.6%

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Student Housing

Budget Fall 2013 Fall 2014 Fall 2015 Fall 2016 Fall 2017 Total Residents 1,995 1,991 2,040 2,012 2,000 Total Capacity 1,941 1,962 1,965 1,965 1,965 Student Resident Occupancy 103% 101% 104% 102% 102% Student Fees The following table shows undergraduate tuition (30 credits) and room and board charges for the prior four and current academic years. Fall 2013 Fall 2014 Fall 2015 Fall 2016 Fall 2017 Tuition $ 24,465 $ 25,380 $ 26,330 $ 27,320 $ 28,210 Average Room & Board 9,985 10,255 10,440 10,910 11,180 Other Fees 630 650 840 880 910 Student Recreation Fee ----250 Total $ 35,080 $ 36,285 $ 37,610 $ 39,110 $ 40,550

Student Financial Aid During the 2016-17 academic year, 91% of all domestic undergraduate students received some form of financial aid. Sources of financial aid include University, state and federal grants and loans, and work-study programs. In 2016- 17, total scholarships and grants provided $55,652,699, of which approximately 16% was from Federal programs, 9% from State programs and 75% from University funds, including gifts, scholarships, income on endowed scholarships and unrestricted funds.

Sources of Scholarships and Grants

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Federal Student Grants$ 9,310,937 $ 9,811,621 $ 9,504,494 $ 8,946,212 $ 8,844,474 PA State Student Grants 4,993,032 5,695,626 5,031,839 5,210,013 4,893,497 University Student Grants 30,871,072 34,624,147 36,942,187 40,126,397 41,914,728

Total Financial Grants$ 45,175,041 $ 50,131,394 $ 51,478,520 $ 54,282,622 $ 55,652,699

Sources of Loans Among the major categories of aid were federal subsidized Stafford Federal Loans and other non-subsidized loans. In 2016-17 students received $9,876,836 in Subsidized Stafford Direct loans, $16,804,177 in Unsubsidized Stafford Direct loans, $14,224,010 in Parent PLUS loans, $645,156 in Graduate PLUS loans, and $137,250 in Perkins loans.

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COMPETITION The University competes with many other colleges and universities for qualified applicants. The following chart compares the University’s tuition and fee schedules with selected competing in-state colleges and universities for the past five years. Robert Morris University’s fall 2017 approved full-time undergraduate tuition and fees is $29,370 which is a 4.1% increase. % most Primary Benchmarks re ce nt (decending order based on Fall'16) Fall 2012 Fall 2013 Fall 2014 Fall 2015 Fall 2016 increase Washington & Jefferson College$ 38,241 $ 39,710 $ 41,282 $ 43,226 $ 44,900 4.1% Chatham University 31,828 32,454 33,429 34,440 35,475 3.1% Duquesne University 30,105 31,385 32,636 33,778 35,062 3.9% Mercyhurst University 29,040 30,300 31,485 33,314 34,680 4.3% Saint Vincent College 29,684 30,706 31,736 32,770 33,814 3.3% Saint Francis University 29,198 29,992 31,078 32,128 33,344 3.9% Gannon University 26,798 27,546 28,368 29,258 30,042 2.8% Point Park University 24,906 26,170 27,190 28,250 29,030 2.9% Robert Morris University 24,040 25,095 26,030 27,170 28,200 4.0% Wheeling Jesuit University 26,922 27,830 28,030 28,030 28,030 0.0% Carlow University 24,679 25,416 26,178 26,832 27,764 3.6% La Roche College 24,318 24,778 25,500 26,250 27,000 2.9% Geneva College 24,497 25,220 25,220 25,450 25,650 0.8% Waynesburg University 20,045 20,540 21,290 22,030 22,800 3.6% University of Pittsburgh (Main Campus) 16,939 18,998 19,744 18,192 18,618 2.2% Penn State (Main Campus) 16,783 16,992 16,992 17,514 17,900 2.3% Indiana University of Pennsylvania 8,779 9,800 9,470 9,690 11,369 17.7% Clarion University 9,269 9,454 9,788 10,290 10,471 1.8% Slippery Rock University of Pennsylvania 8,930 9,087 9,300 9,645 9,892 2.7% California University of Pennsylvania 9,316 9,239 9,271 9,936 9,841 -1.0%

Source: Association of Independent Colleges and Universities of Pennsylvania (“AICUP”)

FINANCIAL INFORMATION

BUDGET MANAGEMENT The annual budget process begins in mid-October and is completed by early March with final approval from the Board of Trustees. Students are now able to file the FAFSA on October 1st. Select tuition rates are approved in the early stages of the budget to enable institutional aid packages to be awarded to prospective new students so that students and their families are given more time to evaluate the cost of higher education. The remaining revenue components and the expense portion of the budget are approved at the end of the process. At the beginning of the annual budget process the Financial Planning and Analysis team communicates a timeline to the Internal Budget Committee and requests data and assumptions from key areas of the University. The Internal Budget Committee consists of two co-chairs and committee members.

The President of the University appointed two co-chairs to lead the budget process; the Senior Vice President for Business Affairs and the Provost and Senior Vice President, Academic Affairs. While the co-chairs lead the budget process, the President provides guidance and has the final approval of the budget before it is presented to the Board.

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The remaining members of the Internal Budget Committee are comprised of senior leadership and key financial personnel.

The Financial Planning and Analysis team facilitates and consolidates the total University needs and the Internal Budget Committee determines the affordability of the submitted requests. The Internal Budget Committee meets several times throughout the budget process to review submissions and to determine the final budget allocations.

Revenue projections are developed by the Enrollment Management and Online and Off-Campus Programs teams with support from the Financial Planning and Analysis team. The University works with Ruffalo Noel Levitz, a third party consulting firm, to determine the new full-time student targets, institutional aid budget, and discount percentage. Targets for all other student categories such as returning full-time, part-time, online, on-ground masters, and doctorate students are established in discussions with key owners and by looking at historical trends of incoming new students and the retention of returning students. Housing projections are developed by Student Life with assistance from the Financial Planning and Analysis team. This process takes into consideration the number of incoming freshmen as well as the historical retention rates for returning students.

The Human Resources Department, with key stakeholders, develops the personnel cost based on employees, projected promotions, market adjustments, annual increases, and increased benefit costs with assistance from the Financial Planning and Analysis team. Financial Planning and Analysis works with various areas across the University such as Human Resources, Facilities, and Financial Operations to develop annual institutional expense projections.

The Internal Budget Committee ensures that the annual budgeted revenue exceeds the requested expenses by a predetermined goal. As the goal is achieved, the budgets are finalized and submitted to RMU’s Finance Committee and full Board of Trustees for approval. Traditional undergraduate rates are approved and set in September as a best practice in order to coincide with the early FASFA filing date.

The University has developed a multi-year projection model that is used to measure the future impact of decisions made during the budget process and “what if” exercises. Key revenue and expense drivers are able to be changed interactively to modify the projections and run multiple scenarios. This model is used during the budgeting process and updated periodically throughout the year to understand the future impact of revenue, cost changes, and strategic initiatives so that the University can plan accordingly.

The University also maintains an annual budget process for routine capital which is overseen by the Capital Committee. The Capital Committee is comprised of the same members as the Internal Budget Committee. Typically the process begins in mid-January and is completed by March with final approval from the President in April. This timeline was established so that summer projects could be approved early to allow for the work to begin immediately at the start of the new fiscal year in June so key summer projects could be completed before the fall semester. Funds available to the Capital Committee are determined during the annual operating budget process. Capital requests are gathered from across the University and are coordinated and consolidated for the Capital Committee to review and approve during the annual planning meeting. The list of approved capital requests are then presented to the President for final approval. Requests that arise throughout the year are presented and approved by the Capital Committee.

Strategic capital projects and funding are reviewed and approved by the Board of Trustees.

MANAGEMENT DISCUSSION

The University has evolved from a small business school into a national university offering 51 undergraduate, 29 masters, 3 doctoral degrees, 13 integrated bachelor/masters majors, and 2 M.D. /D.O. affiliation agreements through five schools of study. The University had 4,161 full-time equivalent undergraduate students enrolled in the fall 2016 semester. The University campus is a residential campus where more than 53% of its traditional students live on campus. In recent years, an increasing number of students have opted to live on campus.

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Sound fiscal management has always been a strength of the University, which has more than thirty-five years of an operating surplus. Such results have been achieved by fiscal discipline, conservative budgeting practices, the addition of academic programs based on educational and financial merits, and the addition of market-driven programs aligned with the University’s mission, vision and values. Over the last few years, the University has earmarked annual contributions from operating cash into the endowment and anticipates continuing this practice in the upcoming fiscal year. Also, the University has prioritized the pay down of long-term debt and has been able to grow net tuition per student.

Also, in keeping with the current regulatory environment, the University has implemented best practices in finance governance. Over the past decade, the University has strengthened its financial management team by increasing the number of CPA’s on staff from one to seven, adding a team of financial analysts to assist academic and administrative management with financial decisions, creating an internal audit group that reports directly to the Board of Trustees, and revising the Board of Trustees structure to include a separate Audit and Risk Committee and a Finance Committee. The University also has a Code of Business Conduct that includes a whistleblower hotline. In addition, the University actively utilizes Enterprise Risk Management as a way to identify, address, and manage key risks that could impact the University. The Internal General Counsel team has more than doubled in size and continues to assist with the ever changing and complex regulatory and legal environments and many of the initiatives described above.

Robert Morris University has progressed over the past decade by many measures. The University has attracted faculty and administrative leadership from respected educational institutions and businesses, grown enrollment while increasing academic standards, and maintained and enhanced its list of Trustees and their oversight capacities. Academic excellence continues to be the primary core value at RMU. All full time faculty hired since 2010 have terminal degrees and 65% of course sections are taught by full-time faculty. Sixty-five percent of faculty have course load reductions to conduct research. The University also has a strong honors program with 205 students enrolled in fall 2017 and two faculty members have held Fulbright scholarships in the last four years.

ACCOUNTING MATTERS Potential purchasers of the Bonds should read the University’s audited financial statements as of and for the years ended May 31, 2017 and 2016 in their entirety for more complete information. The report of Deloitte & Touche LLP, the University’s independent auditors, together with the financial statements as of and for the years ended May 31, 2017 and 2016, and the related notes thereto are included in Appendix B. The financial statements of the University have been prepared on the accrual basis in conformity with accounting principles generally accepted in the United States of America. The University reports total assets, liabilities and net assets in a statement of financial position; reports the change in net assets in a statement of financial position; reports the change in net assets in a statement of activities; and reports the sources and uses of cash equivalents in a statement of cash flow.  Permanently Restricted Net Assets – Permanently restricted net assets are those subject to donor- imposed stipulations stating that they be maintained permanently by the University. Generally, the donors of these assets permit the University to use all or part of the income earned on related investments for general or specific purposes.  Temporarily Restricted Net Assets – Temporarily restricted net assets are those subject to donor- imposed stipulations stating that will be met either by actions of the University and/or the passage of time and gains on permanent endowments that are restricted by Pennsylvania law on the amount that may be expended in a given year. Contributions restricted for the acquisition and construction of land, buildings, and equipment are reported as temporarily restricted revenues. These contributions are reclassified to unrestricted net assets when the assets are placed in service.  Unrestricted Net Assets – Net assets not subject to donor imposed stipulations. They may be designated for specific purposes by actions of the Board of Trustees.

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Revenues from sources other than contributions are generally reported as increases in unrestricted net assets. Expenses are reported as decreases in unrestricted net assets. Investment income received with donor-imposed restrictions that are met in the same year as received is reported as revenue of the unrestricted net asset class. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor for specific purposes are reported as temporarily or permanently restricted support that increase those net asset classes. When a donor restriction expires, temporarily restricted net assets are reclassified as unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Unconditional promises to give are recorded at the present value of estimated future cash flows. Contributions of assets other than cash are recorded at their estimated fair value. Conditional contributions or promises are recorded when donor-imposed conditions have been substantially met. Contributed property, plant, and equipment is recorded at fair value at the date of donation. If donors stipulate how long the asset must be used, the contributions are recorded as restricted support. In the absence of such stipulations, contributions of property and equipment are recorded as unrestricted support. Non-operating activities reflect transactions affecting the net assets associated with endowment and capital campaign contributions, gains or losses on investments, change in value of split interest agreements, and other activities of a non-operating nature. The University follows guidelines published by the National Association of College and University Business Officers in determining non-operating activities.

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SUMMARY OF FINANCIAL INFORMATION

FINANCIAL INFORMATION AS OF THE FISCAL YEARS ENDED MAY 31, 2013 THROUGH 2017 BALANCE SHEET

Assets FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Current Assets: Cash and Cash Equivalents$ 17,217,783 $ 21,198,525 $ 23,580,529 $ 25,748,213 $ 25,209,085 Student Receivables 1,794,422 1,569,189 2,457,590 4,601,303 6,462,383 Contributions Receivable 679,645 779,455 3,960,976 181,688 1,204,264 Inventory 343,671 271,645 272,139 259,789 238,017 Other Current Assets 2,770,749 2,699,143 3,646,835 1,918,313 2,220,984 Total Current Assets 22,806,270 26,517,957 33,918,069 32,709,306 35,334,733

Non-Current Assets: Long-Term Receivables 814,968 755,761 834,337 819,205 801,253 Contributions Receivable 775,807 455,320 180,617 655,196 1,216,765 Investments Endowment 28,594,997 32,200,008 32,364,904 30,316,537 33,625,855 Funds Held by Bank Trustee 6,641,658 4,414,051 4,414,328 3,337,504 3,100,538 Property, Plant and Equipment, Net 152,000,559 150,635,653 151,081,531 154,878,473 155,664,703 Other Non-Current Assets 449,422 365,844 287,707 396,590 584,072 Total Non-Current Assets 189,277,411 188,826,637 189,163,424 190,403,505 194,993,186

Total Assets$ 212,083,681 $ 215,344,594 $ 223,081,493 $ 223,112,811 $ 230,327,919

Liabilities and Net Assets Current Liabilities: Accounts Payable 1,405,102 1,817,926 1,663,797 1,990,733 1,712,374 Accrued Liabilities 11,557,743 10,589,339 11,375,994 12,206,698 12,092,873 Student Deposits and Prepayments 3,080,372 3,276,305 3,087,891 3,379,901 2,653,873 Current Portion of Long-term Debt 3,682,909 2,929,382 3,150,117 3,071,089 3,705,367 Amounts Held in Custody for Others 834,914 350,329 441,108 405,362 522,771 Other Current Liabilities 986,862 1,143,222 1,367,431 1,220,502 1,275,728 Total Current Liabilities 21,547,902 20,106,503 21,086,338 22,274,285 21,962,986

Non-Current Liabilities: Long-Term Debt 83,618,318 80,749,445 77,669,470 73,430,336 73,018,069 Advances from Federal Gov't for Student Loans 1,146,151 1,146,151 1,146,151 1,146,152 1,146,152 Other Non-Current Liabilities 8,900,800 8,410,123 7,886,468 7,332,136 7,233,169 Total Non-Current Liabilities 93,665,269 90,305,719 86,702,089 81,908,624 81,397,390

Total Liabilities$ 115,213,171 $ 110,412,222 $ 107,788,427 $ 104,182,909 $ 103,360,376

Net Assets: Total Unrestricted 77,227,930 82,370,859 88,553,560 94,003,997 100,138,364 Total Temporarily Restricted 10,135,163 12,740,377 16,596,831 14,585,457 15,998,174 Total Permanently Restricted 9,507,417 9,821,136 10,142,675 10,340,448 10,831,005 Total Net Assets$ 96,870,510 $ 104,932,372 $ 115,293,066 $ 118,929,902 $ 126,967,543

Total Liabilities and Net Assets$ 212,083,681 $ 215,344,594 $ 223,081,493 $ 223,112,811 $ 230,327,919

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STATEMENT OF CHANGES IN NET ASSETS

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Operating Revenue: Tuition and fees net of allowance$ 79,671,431 $ 86,287,140 $ 91,357,490 $ 92,188,726 $ 92,017,946 Government grants and contracts 1,974,782 1,716,988 2,866,752 5,207,847 1,816,513 Private gifts & pledges 3,489,955 4,216,785 8,052,555 4,107,908 5,670,175 Investment income 762,654 732,859 722,216 786,817 1,337,001 Other sources 3,485,187 3,194,497 3,425,760 3,369,288 3,725,755 Auxiliary enterprises 28,436,150 27,511,375 27,316,397 27,564,203 28,887,628 Total operating revenues 117,820,159 123,659,644 133,741,170 133,224,789 133,455,018

Operating Expenses: Salaries & Wages 46,754,947 50,322,660 54,408,062 57,154,825 56,845,124 Fringe Benefits 13,994,220 14,951,419 15,828,664 16,246,492 15,290,685 Supplies 3,684,975 3,423,204 3,353,469 3,416,344 3,625,071 Purchased Services 20,325,508 19,936,688 19,645,372 20,609,240 20,613,420 Utilities 4,026,901 3,974,935 3,971,172 3,872,159 3,809,071 Depreciation & Amortization 10,316,670 11,283,858 10,954,337 11,328,684 11,157,071 Interest Expense 4,412,187 4,405,681 4,251,220 4,044,326 3,589,654 Other Expenses 10,735,917 10,250,704 11,184,162 10,544,628 10,720,850 Total Expenses 114,251,325 118,549,149 123,596,458 127,216,698 125,650,946

Increase/Decrease from Operations 3,568,834 5,110,495 10,144,712 6,008,091 7,804,072

Non-Operating Revenue 3,726,128 2,951,367 215,982 (2,371,255) 233,569

Total Change in Net Assets 7,294,962 8,061,862 10,360,694 3,636,836 8,037,641

Net Assets - Beginning of Year 89,575,548 96,870,510 104,932,372 115,293,066 118,929,902

Net Assets - End of Year$ 96,870,510 $ 104,932,372 $ 115,293,066 $ 118,929,902 $ 126,967,543

Historical Operating Results Set forth below is a summary of the University’s unrestricted operating surplus for debt service for the fiscal years ended May 31, 2013 through 2017.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Increase in Unrestricted Net Assets from operations $ 3,434,486 $ 3,717,883 $ 6,084,719 $ 6,556,101 $ 7,366,232 Less principal payments on debt (2,708,277) (3,707,331) (2,941,554) (3,162,953) (3,108,129) Plus depreciation, amortization and interest expense 14,728,857 15,689,539 15,205,557 15,373,010 14,746,725 Unrestricted operating surplus available for debt service $ 15,455,066 $ 15,700,091 $ 18,348,722 $ 18,766,158 $ 19,004,828

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GIFTS, CONTRIBUTIONS, AND GRANTS The following table reflects total gifts, grants, and contracts to the University for fiscal years ended May 31, 2013 through 2017:

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Unrestricted$ 1,216,537 $ 1,243,189 $ 1,283,029 $ 1,274,235 $ 1,248,409 Restricted 758,245 473,799 1,583,723 3,933,612 568,104 Government Grants and Contracts 1,974,782 1,716,988 2,866,752 5,207,847 1,816,513

Unrestricted 569,981 812,382 1,018,642 1,022,238 1,485,008 Restricted 2,919,974 3,404,403 7,033,913 3,085,670 4,185,167 Private Gifts, Grants, and Contracts 3,489,955 4,216,785 8,052,555 4,107,908 5,670,175 Total Gifts, Grants, and Contracts $ 5,464,737 $ 5,933,773 $ 10,919,307 $ 9,315,755 $ 7,486,688

FUNDRAISING The University raised $19.6 million from November 2012 to May 2016. A number of large gifts, grants and sponsorships have been secured to support the University’s Division 1 athletic teams as well as programs such as the Black Male Leadership Development Institute. Investment in RMU’s cultivation efforts has enhanced the culture of giving. The next Capital Campaign is scheduled to be announced in the spring of 2018 with the goal of raising $100 million by 2021, the 100 year anniversary of Robert Morris University. The focus of this campaign will be academics and endowment growth in addition to the UPMC Events Center.

SPONSORSHIP AGREEMENTS The University has secured $47.8 million of sponsorships and gifts towards the UPMC Events Center, with an additional potential fundraising of $3.2 million. These sponsorships are expected to be paid over 5-22 years and are intended to renew upon expiration. The majority of fundraising for the UPMC Events Center project is from sources that would otherwise not be donors to the University.

In January 2017, the University entered into two of such sponsorship agreements, including the agreement with UPMC, and will receive payments totaling approximately $35 million over 21 years. In exchange, the sponsors will receive naming rights, signage and other benefits related to the University’s new events center, which is scheduled to open in spring 2019. The payments over the next five years are as follows:

Years Ending May 31

2018 $ 4,800,000 2019 3,850,000 2020 1,250,000 2021 1,250,000 2022 1,250,000 Thereafter 22,575,000

Total $ 34,975,000

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One of the sponsors will pay the University a lump sum initial payment of $4,000,000. Upon the occurrence of certain termination events, the University will be obligated to refund the sponsor a pro rata amount of this initial payment at a rate of $200,000 for each year remaining under the 21-year term. Upon the occurrence of other termination events, a sponsor may be entitled to cease making payments.

As part of a broader strategic collaboration with RMU, UPMC has become the exclusive provider of sports medicine to the University’s 16 NCAA Division I sports programs and provides other health care services to RMU students and employees.

INVESTMENTS The following table reflects the investments by major category for fiscal years ended May 31, 2013 through 2017:

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Asset Class Market Value Market Value Market Value Market Value Market Value % of Total Cash and Cash Equivalents 1,135,557 977,055 1,493,008 1,037,578 2,153,001 6.40% Public U.S. Equities 7,977,571 8,310,586 7,690,170 7,798,250 7,403,129 22.02% Public International Equities 9,607,933 11,890,874 11,753,748 10,494,925 12,238,409 36.40% Fixed Income 5,086,037 6,100,082 6,064,232 5,406,361 6,135,352 18.25% Real Assets 1,643,552 2,141,461 2,234,868 1,947,313 1,955,088 5.81% Hedge Funds 3,144,347 2,779,950 2,862,510 2,756,845 2,943,067 8.75% Private Equity 266,368 875,265 797,808 2.37% Total$ 28,594,997 $ 32,200,008 $ 32,364,904 $ 30,316,537 $ 33,625,855

ENDOWMENT Endowment Funds The University’s endowment consists of approximately 125 individual funds established for a variety of purposes. Its endowment includes both donor-restricted endowment funds and funds designated by the Board of Trustees to function as endowments. As required by U.S. GAAP, net assets associated with endowment funds, including funds designated by the Board of Trustees, are classified and reported based on the existence or absence of donor-imposed restrictions.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Donor-Restricted Endowment Funds 15,446,092 17,217,806 17,539,204 16,333,211 18,390,333 Board-Designated Endowment Funds 13,148,152 14,807,732 14,637,910 13,795,265 15,044,019 Total$ 28,594,244 $ 32,025,538 $ 32,177,114 $ 30,128,476 $ 33,434,352

POST RETIREMENT BENEFITS Retirement Plans Retirement benefits are provided for substantially all benefit-eligible employees through four financial service organizations: the Teachers Insurance and Annuity Association College Retirement Equities Fund, The Variable Annuity Life Insurance Company, Fidelity Investments Tax-Exempt Services Company, and Transamerica Retirement Solutions, all national organizations used to fund retirement benefits for educational institutions. Under this arrangement, the University and plan participants make monthly contributions of retirement benefits earned to any or all alternatives available at a point in time to purchase fixed or variable annuities and/or mutual fund investments. Effective April 1, 2013, the University and plan participants make monthly contributions solely to Transamerica Retirement Solutions. Vesting provisions are full and immediate for employees hired prior to April 1, 2013. A five-year graded vesting schedule applies to employees hired on or after April 1, 2013. Preretirement

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survivor death benefits are also provided. The University’s share of the cost of these benefits was $3,679,103 and $3,544,276 for the years ended May 31, 2017 and 2016, respectively. The University provides postretirement benefits for certain retired unionized employees who are under age 65 as a continuation of the active employee medical insurance plan and for employees over age 65 as a monthly reimbursement payment for a Medicare supplement or a Medicare replacement plan for a period of 10 years from the date of retirement. To be eligible for pre-65 retiree medical benefits, retirement must occur on or after age 55, and combination of age and years of full-time service is equal to or greater than 75. To be eligible for post-65 retiree medical benefits, an employee must meet the definition of retiree, have at least 20 years of full-time service, and have been hired prior to April 1, 2013. Faculty retirees are only eligible for under age 65 medical insurance if they have met the retiree definition as established in the Robert Morris University Faculty Federation Agreement. The accumulated plan benefits at May 31, 2017 and 2016 equal $1,899,654 and $1,869,450 respectively. The cost of these benefits for the years ended May 31, 2017 and 2016, consisting of current service cost, interest on the accumulated transition obligation, amortization of the transition obligation, and change in liability due to assumption changes and plan experience was $107,696 and ($115,767) respectively. The University currently has no unfunded pension liability. (See footnotes 8 and 9 to the audited financial statements in Appendix B).

OUTSTANDING INDEBTEDNESS The University currently has three outstanding series of revenue refunding bonds through ACHEBA. The 2016 Series was issued to refund the 2008 Series. The 2016 Series consists of serial and term bonds that mature in varying amounts through 2038, and bear interest at rates that range from 3% to 5%. The average effective interest rate for the year ended May 31, 2017, was approximately 2.72%. On November 1, 2016, the University advance refunded the 2008 Series ACHEBA Revenue bonds with an outstanding balance of $18,978,908, which were to mature on October 15, 2038. The 2016 Series ACHEBA Revenue bonds were purchased at a cost of $21,532,400. In connection with the refunding, the University incurred a $2,489,708 loss on extinguishment of debt which represented the excess of the reacquisition price of the defeasance over the net carrying value of the bonds and other defeasance related fees and expenses. The 2010 Series was issued to finance the costs of (a) construction, equipping, and furnishing an approximately 200- bed student housing facility on the University’s main campus; (b) funding a debt service reserve fund; (c) miscellaneous capital expenditures at the University’s main campus through June 2013; (d) funding of capitalized interest; and (e) issuance of bonds. The 2010 Series consists of serial and term bonds that mature in varying amounts from 2011 through 2040, and bear interest at rates that range from 3.00% to 5.75%. The average effective interest rate for the year ended May 31, 2017, was approximately 5.55%. The 2008 Series was issued to finance the costs of (a) construction, equipping, and furnishing of various master plan projects at the University’s main campus; (b) funding a debt service reserve fund; (c) miscellaneous capital expenditures at the University’s main campus and downtown Pittsburgh former campus; (d) funding of capitalized interest; and (e) issuance of bonds. The 2008 Series consists of interest rates that range from 3.60% to 6.00%. The 2008 Series was refunded November 1, 2016 by the 2016 Series, noted above. The 1998 Series was issued to (a) refund the ACHEBA Series A of 1997 variable-rate demand University revenue bonds, (b) fund the related debt service reserve fund, and (c) pay all or part of the issuance costs related thereto. The 1998 Series consists of serial and term bonds that mature in varying amounts through 2028, and bear interest at rates that range from 4.1% to 6%. The average effective interest rate for the year ended May 31, 2017, was approximately 6.00%. The 2016 Series, 2010 Series and the 1998 Series are subject to extraordinary redemption at any time by ACHEBA, at the discretion of the University, in the event of damage to, destruction or condemnation of, or taking under power of eminent domain of a substantial portion of University premises. The 2016 Series, 2010 Series and the 1998 Series bond indentures require the University to maintain three debt service reserve funds amounting to approximately $1,412,000, $1,108,000, and $598,000, respectively.

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The 2016 Note was issued on May 17, 2016 through the Moon Industrial Development Authority and purchased by Laurel Capital in the amount of $7,510,000 to refinance the costs of refunding the 2006 Bonds. The 2016 Note was issued at a rate of 3.00% fixed with a term of 8.75 years commitment and amortization. The 2016 Note is a general obligation of the University and is secured by the full faith and credit of the University. The 2012 Notes were issued through the Wilkins Area Industrial Development Authority and purchased by Laurel Capital in the amount of $15 million in order to finance the costs of (a) purchase of a facility to house students and renovations to transform certain of the floors into a residence hall, (b) funding a debt service reserve fund, (c) miscellaneous capital expenditures at the University’s main campus through June 2013, (d) funding of capitalized interest, and (e) costs of issuance of the 2012 Notes. The 2012 Notes were issued at a rate of 3.95% per year with a 20-year commitment and amortization. On May 17, 2016 the 2012 Notes were amended to provide for a fixed rate of 3.05% for a period of 15 year amortization with interest only payments until December 1, 2016. The 2012 Notes are a general obligation of the University and are secured by the full faith and credit of the University. The 2005 Note was issued through the McCandless Industrial Development Authority and was purchased by Laurel Capital in the amount of $10 million in order to finance various capital expenditures. The 2005 Note was issued at a rate of 4.55% fixed with a 25-year commitment and amortization. The 2005 Note is a general obligation of the University and is secured by the full faith and credit of the University. The 2003 Note was issued through the Moon Industrial Development Authority and was purchased by Laurel Capital in the amount of $12.2 million in order to finance various capital expenditures. The 2003 Note was issued at a rate of 3.76% fixed for 10 years with a 25-year commitment and amortization. The interest rate on the 2003 Note reset on October 1, 2013, at a rate of 3.13%, and will reset again on October 1, 2023, at the 10-year treasury rate in effect on the reset date, plus 28 basis points. The 2003 Note is secured by a mortgage on the University’s Island Sports Center and a general obligation of the University. The 2013 Note was issued through the McCandless Industrial Development Authority and was purchased by PNC Bank in the amount of $3,876,000 in order to finance the costs of (a) refinancing all of the Pennsylvania Higher Educational Facilities Revenue Bonds, Series 2000 F2; (b) financing of various capital expenditures now being incurred, and expected to be incurred, at the University’s main campus; and (c) payment of all or part of the costs of such financing. The 2013 Note was issued at a variable rate of interest at the Bond Qualified Tax-Exempt Rate and matures on May 1, 2025. The average effective interest rate for the year ended May 31, 2017, was approximately 2.22%. The 2013 Note is a general obligation of the University and is secured by the full faith and credit of the University. The 2016 Note was issued to PNC Bank in the amount of $1,000,000 in order to finance the cost of purchasing a University House. The 2016 Note was issued at a 4.04% rate of interest and matures on May 31, 2023. The average effective interest rate for the year ended May 31, 2017, was approximately 4.38%. The 2016 Note is a general obligation of the University and is secured by the full faith and credit of the University. The fair value of the bonds and notes payable was approximately $78,465,304 as of May 31, 2017, and is classified as Level 2 in the fair value hierarchy. All of the foregoing bonds and notes are secured by the gross revenue pledge in the Security Agreement described in the forepart under “SECURITY FOR THE BONDS – The Security Agreement.”

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As of May 31, 2017 Principal Final Interest Outstanding Indebtedness Maturity Rate * 2017 1998 Bonds May 1, 2028 6.00% 4,763,259 2003 Note September 1, 2028 3.125% 6,879,860 2005 Note May 1, 2030 4.55% 6,717,533 2010 Bonds October 15, 2040 3.00% to 5.75% 14,320,862 2012 Notes December 29, 2031 3.05% 13,094,377 2013 Note May 1, 2025 2.22% 2,850,668 2016 Note February 1, 2025 3.00% 6,847,625 2016 Loan May 31, 2023 4.38% 976,562 2016 Bonds October 15, 2038 3.00% to 5.00% 21,424,610

Debt Issue Costs (1,151,920)

$ 76,723,436

* See the discussion on the preceding pages concerning whether such interest is calculated based on a fixed or a variable interest rate and whether it is subject to reset on a particular date.

INSURANCE The University maintains insurance for the protection of University assets, including human, physical and financial. The lines of insurance carried by the University include, but are not limited to:  Directors and Officers including Employment Practices Liability, Fiduciary and Cyber & Employed Lawyer  General Liability/Umbrella/Excess Liability (includes Property, Equipment Breakdown, Crime, Auto, Business Income, etc.)  Workers Compensation  Sports Accident Insurance  Student Nurses & Police Professional Liability  Ad Hoc: Builders Risk, Event Cancellation, etc.

LITIGATION

The University from time to time is a party to various legal proceedings incidental to its operations. In the opinion of management of the University, none of the legal proceedings against it either individually, or in the aggregate, currently pending or to the knowledge of the university threatened, will result in a material adverse effect on the University’s financial conditions or operations.

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Appendix B

Audited Financial Statements for the Fiscal Years Ended May 31, 2017 and May 31, 2016

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Robert Morris

University Financial Statements as of and for the Years Ended May 31, 2017 and 2016, and Independent Auditors’ Report

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INDEPENDENT AUDITORS’ REPORT

To the Board of Trustees of Robert Morris University:

We have audited the accompanying financial statements of Robert Morris University (the “University”), which comprise the balance sheets as of May 31, 2017 and 2016, and the related statements of changes in net assets and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the University as of May 31, 2017 and 2016, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

August 29, 2017

ROBERT MORRIS UNIVERSITY

BALANCE SHEETS AS OF MAY 31, 2017 AND 2016

2017 2016 2017 2016 ASSETS LIABILITIES

CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents$ 25,209,085 $ 25,748,213 Accounts payable$ 1,712,374 $ 1,990,733 Student accounts receivable—less Accrued liabilities 12,092,873 12,206,698 allowance for doubtful accounts Student deposits and prepayments 2,653,873 3,379,901 of $2,798,216 and $2,278,356 Current portion of long-term debt 3,705,367 3,071,089 at 2017 and 2016, respectively 6,462,383 4,601,303 Amounts held in custody for others 522,771 405,362 Contributions receivable—net 1,204,264 181,688 Other current liabilities 1,275,728 1,220,502 Inventory 238,017 259,789 Other current assets 2,220,984 1,918,313 Total current liabilities 21,962,986 22,274,285

Total current assets 35,334,733 32,709,306 LONG-TERM LIABILITIES: Long-term debt 73,018,069 73,430,336 LONG-TERM ASSETS: Advances from U.S. government Student notes receivable—less for student loans 1,146,152 1,146,152 allowance for doubtful accounts Other noncurrent liabilities 7,233,169 7,332,136 of $297,867 and $290,460 at 2017 and 2016, respectively 801,253 819,205 Total long-term liabilities 81,397,390 81,908,624 Contributions receivable—net 1,216,765 655,196 Investments—endowment funds 33,625,855 30,316,537 Total liabilities 103,360,376 104,182,909 Funds held by bank trustee 3,100,538 3,337,504 Property, plant, and equipment—net 155,664,703 154,878,473 NET ASSETS: Other noncurrent assets 584,072 396,590 Unrestricted 100,138,364 94,003,997 Temporarily restricted 15,998,174 14,585,457 Total long-term assets 194,993,186 190,403,505 Permanently restricted 10,831,005 10,340,448

Total net assets 126,967,543 118,929,902 TOTAL$ 230,327,919 $223,112,811 TOTAL$ 230,327,919 $223,112,811

See notes to financial statements.

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ROBERT MORRIS UNIVERSITY

STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED MAY 31, 2017 AND 2016

2017 2016 Temporarily Permanently Temporarily Permanently Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total

OPERATING REVENUES: Tuition and fees—net of scholarship allowance of $41,914,728 and $40,126,397 for 2017 and 2016, respectively$ 92,017,946 $ - $ - $ 92,017,946 $ 92,188,726 $ - $ - $ 92,188,726 Auxiliary enterprises 28,887,628 28,887,628 27,564,203 27,564,203 Government grants and contracts 1,248,409 568,104 1,816,513 1,274,235 3,933,612 5,207,847 Private gifts, grants, and contracts 1,485,008 3,694,610 490,557 5,670,175 1,022,238 2,918,256 167,414 4,107,908 Investment income designated for current operations 617,822 719,179 1,337,001 373,064 413,753 786,817 Other sources 2,514,168 1,211,587 3,725,755 2,664,418 704,870 3,369,288 Net assets released from restrictions 6,246,197 (6,246,197) - 8,710,915 (8,710,915) -

Total operating revenues 133,017,178 (52,717) 490,557 133,455,018 133,797,799 (740,424) 167,414 133,224,789

OPERATING EXPENSES: Salaries and wages 56,845,124 56,845,124 57,154,825 57,154,825 Fringe benefits 15,290,685 15,290,685 16,246,492 16,246,492 Supplies 3,625,071 3,625,071 3,416,344 3,416,344 Purchased services 20,613,420 20,613,420 20,609,240 20,609,240 Utilities 3,809,071 3,809,071 3,872,159 3,872,159 Depreciation and amortization 11,157,071 11,157,071 11,328,684 11,328,684 Interest expense 3,589,654 3,589,654 4,044,326 4,044,326 Other expenses 10,720,850 10,720,850 10,544,628 10,544,628 Transfers - 25,000 5,359 (30,359) -

Total operating expenses 125,650,946 - - 125,650,946 127,241,698 5,359 (30,359) 127,216,698

INCREASE (DECREASE) IN NET ASSETS FROM OPERATING ACTIVITIES 7,366,232 (52,717) 490,557 7,804,072 6,556,101 (745,783) 197,773 6,008,091

NONOPERATING ACTIVITIES: Other realized gains - 164 164 Net realized loss on investments (15,905) (18,230) (34,135) (31,281) (34,675) (65,956) Net unrealized gain (loss) on investments 1,268,748 1,483,664 2,752,412 (1,074,547) (1,230,916) (2,305,463) Gain on sale of fixed asset 5,000 5,000 - Loss on defeasance of debt (2,489,708) (2,489,708) -

(DECREASE) INCREASE IN NET ASSETS FROM NONOPERATING ACTIVITIES (1,231,865) 1,465,434 233,569 (1,105,664) (1,265,591) (2,371,255)

CHANGE IN NET ASSETS 6,134,367 1,412,717 490,557 8,037,641 5,450,437 (2,011,374) 197,773 3,636,836 NET ASSETS—Beginning of year 94,003,997 14,585,457 10,340,448 118,929,902 88,553,560 16,596,831 10,142,675 115,293,066

NET ASSETS—End of year$ 100,138,364 $ 15,998,174 $ 10,831,005 $ 126,967,543 $ 94,003,997 $ 14,585,457 $ 10,340,448 $ 118,929,902

See notes to financial statements.

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ROBERT MORRIS UNIVERSITY

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MAY 31, 2017 AND 2016

2017 2016

CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 8,037,641 $ 3,636,836 Adjustments to reconcile change in net assets to net cash provided by operating activities: Gain on sale of fixed assets 5,000 (164) Loss on debt defeasance 2,489,708 Depreciation and amortization 11,157,071 11,328,684 Provision for bad debt 1,578,564 1,170,756 Net depreciation (appreciation) on investments (2,718,277) 2,371,419 Contributions restricted for permanent and temporary investment (1,524,469) (4,516,748) Changes in operating assets and liabilities: Increase in accounts receivable (3,244,540) (3,313,987) (Increase) decrease in contributions receivable (783,440) 177,475 Decrease in inventory 21,772 12,350 (Increase) decrease in other assets (451,478) 1,259,999 Decrease in accounts payable (652,319) (16,555) Increase in accrued liabilities 125,893 595,781 (Increase) decrease in student deposits and prepayments (726,028) 292,010 Increase (decrease) in amounts held in custody for others 117,409 (35,746) Decrease in other liabilities (43,742) (701,260)

Net cash provided by operating activities 13,388,765 12,260,850

CASH FLOWS FROM INVESTING ACTIVITIES: Disbursements of loans to students (139,250) (162,950) Repayments of loans by students 149,796 177,684 Withdrawals of funds held by bank trustee 1,658,275 1,083,219 Deposits of funds held by bank trustee (1,421,309) (6,395) Purchases of investments (1,414,196) (1,270,249) Proceeds from sales and maturities of investments 823,155 947,197 Purchase of property, plant, and equipment (11,807,892) (14,466,927)

Net cash used in investing activities (12,151,421) (13,698,421)

CASH FLOWS FROM FINANCING ACTIVITIES: Collections from contributions restricted for long-term purposes 585,330 7,668,208 Repayments on long-term debt (24,894,202) (11,572,953) Proceeds from long-term debt 22,532,400 7,510,000

Net cash provided by (used in) financing activities (1,776,472) 3,605,255

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (539,128) 2,167,684 CASH AND CASH EQUIVALENTS—Beginning of year 25,748,213 23,580,529

CASH AND CASH EQUIVALENTS—End of year$ 25,209,085 $ 25,748,213

SUPPLEMENTAL DISCLOSURES: Interest paid $ 3,535,537 $ 4,023,622

Noncash purchase of property, plant, and equipment$ 1,528,807 $ 1,394,564

Contributions of stock $ 18,741 $ 37,994

See notes to financial statements.

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ROBERT MORRIS UNIVERSITY

NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED MAY 31, 2017 AND 2016

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The University—Robert Morris University (the “University”) is a coeducational institution authorized to grant bachelors, masters, and doctoral degrees in a number of academic fields. The majority of the student base is from southwestern Pennsylvania.

Basis of Presentation—The financial statements of the University have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America (US GAAP).

Taxes—The University is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code.

The University adopted guidance for accounting for uncertainty in income taxes, which provides criteria for the recognition and measurement of certain tax positions. This guidance requires that an uncertain tax position should be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. Recognizable tax positions should then be measured to determine the amount of benefit recognized in the financial statements. The University files U.S. federal, state, and local information returns and no returns are currently under examination. The statute of limitations on the University’s U.S. federal tax returns remains open for the years ended May 31, 2014, through the present. The University continues to evaluate its tax positions pursuant to the principles of such guidance and has determined that there is no material effect on the University’s financial statements. Accordingly, no provision for income taxes has been reflected in the University’s financial statements.

Cash and Cash Equivalents—The University considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents, except for such assets held as part of the long-term investment strategy of the endowment funds. A substantial portion of the University’s cash is maintained at two financial institutions.

Other Assets—Included within other current assets are prepaids and other deposits and receivables. Other receivables include amounts due from interest on debt service, grants, the federal government, and the National Collegiate Athletic Association. Also included in other assets are the short-term portion of advances to management and employees for tuition at other postsecondary institutions, relocation loans, and travel advances.

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Other noncurrent assets include long-term advances to management and employees for tuition at other postsecondary institutions, relocation loans, and travel advances. The breakout of other current and noncurrent assets at May 31, 2017 and 2016, is as follows:

2017 2016

Other current assets: Prepaids and other deposits$ 1,242,206 $ 950,050 Other receivables 858,895 901,055 Short-term receivables from employees 119,883 67,208

$ 2,220,984 $ 1,918,313

Other noncurrent assets: Long-term receivables from employees$ 161,901 $ 238,868 Less allowances for uncollectible receivables (24,874) (28,975)

Net long-term receivables from employees 137,027 209,893

Investment in liquor license 45,000 45,000 Cash surrender value of life insurance 139,798 136,737 Other noncurrent assets 262,247 4,960

$ 584,072 $ 396,590

Student Accounts and Notes Receivable—Student accounts and notes receivable are not collateralized. Reserves have been provided based on management’s estimate of credit losses. The reserves for losses on student accounts receivable were approximately $2,798,000 and $2,278,000 at May 31, 2017 and 2016, respectively. The reserves for losses on notes receivable were approximately $298,000 and $290,000 at May 31, 2017 and 2016, respectively.

Investments and Funds Held by Bank Trustee—Certain investments and funds held by bank trustee are recorded at fair value. The estimated fair value of such investments is based on quoted market prices. Investment income, which consists of interest and dividend income earned, realized gains or losses, and the unrealized appreciation (depreciation) on those investments, is included in the statements of changes in net assets. Investment income is included as a component of operating gains, unless the income or loss is restricted by donor or law.

The University also holds other investments without readily determinable fair values, such as hedge funds. Hedge funds are actively managed funds that tend to employ alternative investing strategies other than traditional mutual funds. Most hedge funds are established as private limited partnerships whose offering memorandum allows the fund to take risks using speculative investment strategies, including short selling, options, and the use of leverage. The investments without readily determinable fair values are carried at estimated fair values as of May 31, 2017 and 2016, based on estimates developed by the management of the investment entities investing the funds. These valuations include assumptions and methods that were reviewed by University management. The University believes that the carrying amount of its investments without a readily determinable fair

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value is a reasonable estimate of fair value as of May 31, 2017 and 2016. As the estimated value is subject to uncertainty, the reported value may differ from the value that would have been used had a ready market existed. Such differences could be material.

Funds held by the bank trustee for debt service and capital additions are principally invested in money market funds and other liquid investments.

Property, Plant, and Equipment—Property, plant, and equipment are stated at cost or at amounts assigned at the date of the gift, less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of buildings (20 years to 45 years), building improvements (20 years to 25 years), land improvements (20 years), and furniture and equipment (five years to 10 years). At the time property, plant, and equipment are retired or otherwise disposed of, the cost and the related accumulated depreciation are adjusted, and any gain or loss on disposal is included in the statements of changes in net assets. Costs associated with the construction of new facilities and renovation and expansion of existing facilities are capitalized within construction in progress, until such projects are completed. Maintenance and repairs are expensed as incurred.

Impairment of Long-Lived Assets—Management of the University reviews long-lived assets (including property and equipment) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management considers the undiscounted cash flow expected to be generated by the use of the asset and its eventual disposition to determine when, and if, impairment has occurred. Any write-downs due to impairment are charged to operations at the time impairment is identified. No such write-downs were required in 2017 and 2016.

Student Deposits and Prepayments—Student deposits and prepayments represent amounts collected from students for deposits and classes that do not begin until after fiscal year end.

Amounts Held in Custody for Others—Amounts held in custody for others are funds held by the University for student and other related organizations.

Restricted Support—The University reports gifts of cash as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted assets are reclassified to unrestricted net assets and are reported in the statements of changes in net assets as net assets released from restrictions.

A description of the University’s net asset categories is as follows:

Unrestricted Net Assets—Unrestricted net assets are those that bear no external restrictions as to use or purpose.

Temporarily Restricted Net Assets—Temporarily restricted net assets are those whose use has been limited by donors to a specific time period or purpose. The expiration of temporary restrictions on net assets is reported in the statements of changes in net assets as net assets released from restrictions. Temporarily restricted contributions and temporarily restricted endowment income whose restrictions are not met in the same period as received or earned are reported as increases in temporarily restricted net assets.

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Permanently Restricted Net Assets—Permanently restricted net assets consist of endowment funds that have been restricted by donors to be maintained in perpetuity. Income earned on such funds is unrestricted or temporarily restricted based on donor stipulations.

Accounting for Contributions—Contributions, including unconditional promises to give, are recognized as revenues in the period the pledge is made.

Contributions other than cash are recorded at their estimated fair value at the time of the contribution.

Contributions to be received after one year are discounted at a discount rate that approximates current market rates. Amortization of the discount is recorded as additional contribution revenue.

Advances from U.S. Government for Student Loans—The University administers federally funded loan programs for the benefit of its students. This liability represents the amount that must be returned to the federal government upon termination of the programs.

Advertising Costs—The University expenses the production costs of advertising as incurred. For the years ended May 31, 2017 and 2016, advertising expense was approximately $2,741,000 and $1,992,000, respectively. These costs are included in purchased services and other expenses in the statements of changes in net assets.

Use of Estimates—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ materially from those estimates.

Risks and Uncertainties—Investment securities are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in risks and values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the balance sheets.

Recent Accounting Pronouncements—In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 requires an entity to evaluate revenue recognition by identifying a contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when (or as) the entity satisfies a performance obligation. ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, delayed the effective date of ASU No. 2014-09 to annual periods beginning after December 15, 2018, including interim periods within that reporting period. The University is currently evaluating the effect that implementation of this update will have on its financial results upon adoption.

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In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent). This ASU removes the requirement to categorize the investments for which fair value is measured using net asset value per share within the fair value hierarchy. The ASU will be effective for reporting periods beginning after December 15, 2016. The adoption of this ASU will not have a material impact on the University’s financial statements.

In August 2016, the FASB issued ASU No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for Profit Entities. ASU No. 2016-14 requires not-for-profit entities to present on the face of the statement of financial position amounts for two classes of net assets at the end of the period (“net assets with donor restriction” or “net assets without donor restriction”), rather than for the currently required three classes. Additionally, this ASU requires presentation on the face of the statement of changes in net assets the amount of the change in each of the two classes of net assets rather than for the currently required three classes and enhanced disclosures. The ASU will be effective for annual financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those annual periods. The adoption of this ASU will not have a material impact on the University’s financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU No. 2016- 02 requires lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. The ASU will be effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The University is evaluating the potential impact of this adoption on the University’s financial statements.

In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU amends the requirements in U.S. GAAP related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The ASU will be effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The adoption of this ASU will not have a material impact on the University’s financial statements.

Recently Adopted Accounting Pronouncements—In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The standard requires entities to present debt issuance costs in the consolidated balance sheets as a direct reduction to the related long-term debt instead of an asset, as previously required. The University retrospectively adopted the standard for all periods presented.

The adoption of this standard resulted in a reduction of other current assets of $100,000, other noncurrent assets of $1,500,000, and long-term debt of $1,600,000 in the consolidated balance sheet for the year ended May 31, 2016. The University applied corresponding changes to Notes 2 and 7.

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2. INVESTMENTS

Investments carried at fair value are categorized in the balance sheets at May 31, 2017 and 2016, as follows:

2017 2016

Endowment funds$ 33,625,855 $ 30,316,537

Investments by major category at May 31, 2017 and 2016, consisted of the following:

2017 2016

Cash and cash equivalents$ 2,153,002 $ 1,037,578 Public US equities 7,403,129 7,798,250 Public international equities 12,238,409 10,494,925 Fixed income 6,135,352 5,406,361 Real estate 1,955,088 1,947,313 Hedge funds 2,943,067 2,756,845 Private equity 797,808 875,265

Total$ 33,625,855 $ 30,316,537

The components of total investment return from investments for 2017 and 2016 are reflected below:

2017 Temporarily Permanently Unrestricted Restricted Restricted Total

Dividends and interest$ 617,822 $ 719,179 $ - $ 1,337,001 Net realized and unrealized gains 1,252,843 1,465,434 2,718,277

Total gain on investment$ 1,870,665 $2,184,613 $ - $4,055,278

Investment return designated for current operations$ 617,822 $ 719,179 $ - $ 1,337,001 Investment gain in excess of amounts designated for current operations 1,252,843 1,465,434 2,718,277

Total gain on investment$ 1,870,665 $2,184,613 $ - $4,055,278

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2016 Temporarily Permanently Unrestricted Restricted Restricted Total

Dividends and interest$ 373,064 $ 413,753 $ - $ 786,817 Net realized and unrealized losses (1,105,664) (1,265,591) (2,371,255)

Total loss on investment$ (732,600) $ (851,838) $ - $ (1,584,438)

Investment return designated for current operations$ 373,064 $ 413,753 $ - $ 786,817 Investment loss in excess of amounts designated for current operations (1,105,664) (1,265,591) (2,371,255)

Total loss on investment$ (732,600) $ (851,838) $ - $ (1,584,438)

A summary of the investments with a reported net asset value as of May 31, 2017 and 2016, is as follows:

2017 Fair Value Estimated Using Net Asset Value per Share Unfunded Redemption Other Redemption Redemption Investment Fair Value Commitment Frequency Restrictions Notice Period

Hirtle Callaghan Total Return 12 month lock up from Hedge Fund$ 2,085,895 None Quarterly initial investment 60 days

Hirtle Callaghan Absolute Return Hedge Fund$ 857,172 None Quarterly 12 month lock up from 60 days

Hirtle Callahan Private Equity X$ 300,777 $ 690,642 NA Illiquid NA

Hirtle Callahan Private Equity XI$ 25,377 $1,224,623 N/A Illiquid NA

Hirtle Callaghan Special Opportunity$ 471,654 $ 202,469 NA Illiquid NA

2016 Fair Value Estimated Using Net Asset Value per Share Unfunded Redemption Other Redemption Redemption Investment Fair Value Commitment Frequency Restrictions Notice Period

Hirtle Callaghan Total Return 12 month lock up from Hedge Fund$ 1,940,817 None Quarterly initial investment 60 days

Hirtle Callaghan Absolute 12 month lock up from Return Hedge Fund$ 816,028 None Quarterly initial investment 60 days

Hirtle Callahan Private Equity$ 167,716 $826,784 NA Illiquid NA

Hirtle Callaghan Special Opportunity$ 707,549 $337,959 NA Illiquid NA

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3. FAIR VALUE MEASUREMENTS

Accounting standards establish a valuation hierarchy for the disclosure of inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the University’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest-level input that is significant to the fair value measurement.

The University’s assets that are measured at fair value on a recurring basis for each hierarchy level as of May 31, 2017, are as follows:

2017 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3)

Assets: Endowment: Cash and cash equivalents$ 2,153,002 $ 2,153,002 $ - $ - Public US equities 7,403,129 7,403,129 Public international equities 12,238,409 12,238,409 Fixed income 6,135,352 6,135,352 Real estate 1,955,088 1,955,088 Hedge funds 2,943,067 2,943,067 Private equity 797,808 797,808 Funds held by trustee—cash and cash equivalents 3,100,538 3,100,538

Total assets$ 36,726,393 $32,985,518 $ - $3,740,875

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The University’s assets that are measured at fair value on a recurring basis for each hierarchy level as of May 31, 2016, are as follows:

2016 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3)

Assets: Endowment: Cash and cash equivalents$ 1,037,578 $ 1,037,578 $ - $ - Public US equities 7,798,250 7,798,250 Public international equities 10,494,925 10,494,925 Fixed income 5,406,361 5,406,361 Real estate 1,947,313 1,947,313 Hedge funds 2,756,845 2,756,845 Private equity 875,265 875,265 Funds held by trustee—cash and cash equivalents 3,337,504 3,337,504

Total assets$ 33,654,041 $30,021,931 $ - $3,632,110

A reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for the years ended May 31, 2017 and 2016, is as follows:

2017 2016

Beginning balance$ 3,632,110 $ 4,212,092 Purchases 161,521 608,260 Settlements (6,584) (1,083,214) Unrealized gains (losses) (46,172) (105,028)

Ending balance$ 3,740,875 $ 3,632,110

The estimated fair value amounts for equity and fixed-income securities and real assets held by the University have been reviewed by the University and determined using available market information as supplied by the various financial institutions that act as trustees or custodians for the University. For nonliquid holdings, such as the hedge funds and private equities, estimated fair value is determined based upon financial information provided by the fund manager. This financial information includes assumptions and methods that were reviewed by University management. The University believes that the estimated fair value is a reasonable estimate of market value as of May 31, 2017 and 2016. Because the hedge funds are not readily marketable, the estimated value is subject to uncertainty and, therefore, may differ from the value that would have been used had a ready market existed, and such differences could be material.

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4. ENDOWMENT

The University’s endowment consists of approximately 125 individual funds established for a variety of purposes. Its endowment includes both donor-restricted endowment funds and funds designated by the University’s Board of Trustees (the “Board of Trustees”) to function as endowments. As required by U.S. GAAP, net assets associated with endowment funds, including funds designated by the Board of Trustees, are classified and reported based on the existence or absence of donor-imposed restrictions.

Interpretation of Relevant Law—The Board of Trustees has interpreted Pennsylvania Act 141 (“PA Act 141”) as requiring the preservation of the fair value of the original gift as specified in the individual trust instruments. As a result of this interpretation, the University classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets, until those amounts are appropriated for expenditure by the organization in a manner consistent with the standard of prudence prescribed by PA Act 141.

Endowment Net Asset Composition by Type of Fund as of May 31, 2017 Temporarily Permanently Unrestricted Restricted Restricted Total

Donor-restricted endowment funds$ (17,387) $ 7,576,715 $ 10,831,005 $ 18,390,333 Board-designated endowment funds 15,044,019 15,044,019

Total funds$ 15,026,632 $ 7,576,715 $ 10,831,005 $ 33,434,352

Changes in Endowment Net Assets for the Year Ended May 31, 2017 Temporarily Permanently Unrestricted Restricted Restricted Total

Endowment net assets— beginning of year$ 13,773,135 $ 6,014,893 $ 10,340,448 $ 30,128,476

Investment return: Investment income 626,139 718,586 1,344,725 Net appreciation (realized and unrealized) 1,252,843 1,464,225 2,717,068

Total investment return 1,878,982 2,182,811 4,061,793

Contributions 5,120 70,791 490,557 566,468

Transfer of funds -

Appropriation of endowment assets for expenditure (630,605) (691,780) (1,322,385)

Endowment net assets— end of year$ 15,026,632 $ 7,576,715 $ 10,831,005 $ 33,434,352

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Endowment Net Asset Composition by Type of Fund as of May 31, 2016 Temporarily Permanently Unrestricted Restricted Restricted Total

Donor-restricted endowment funds$ (22,130) $ 6,014,893 $ 10,340,448 $ 16,333,211 Board-designated endowment funds 13,795,265 13,795,265

Total funds$ 13,773,135 $ 6,014,893 $ 10,340,448 $ 30,128,476

Changes in Endowment Net Assets for the Year Ended May 31, 2016 Temporarily Permanently Unrestricted Restricted Restricted Total

Endowment net assets— beginning of year$ 14,637,910 $ 7,396,529 $ 10,142,675 $ 32,177,114

Investment return: Investment income 319,721 413,436 733,157 Net depreciation (realized and unrealized) (1,105,246) (1,264,590) (2,369,836)

Total investment return (785,525) (851,154) - (1,636,679)

Contributions 505,120 53,976 167,414 726,510

Transfer of funds (5,000) 30,359 25,359

Appropriation of endowment assets for expenditure (584,370) (579,458) (1,163,828)

Endowment net assets— end of year$ 13,773,135 $ 6,014,893 $ 10,340,448 $ 30,128,476

Funds with Deficiencies—From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or PA Act 141 requires the University to retain as a fund of perpetual duration. In accordance with U.S. GAAP, deficiencies of this nature that are reported in unrestricted net assets were $17,387 and $22,130 as of May 31, 2017 and 2016, respectively. These deficiencies would result from unfavorable market fluctuations that occurred after permanently restricted contributions are received and invested into the University’s endowment.

Return Objectives and Risk Parameters—The University has adopted an investment policy for endowment assets. Endowment assets include those assets of donor-restricted funds that the University must hold in perpetuity or for a donor-specified period as well as board-designated funds. The primary return objective is to achieve a total return, net of fees, in excess of spending and inflation, or total return greater than Consumer Price Index + Spending Policy. The secondary objective is to achieve a total return in excess of all benchmarks over each full market cycle. The University will reference three benchmarks for evaluating investment performance of the aggregate portfolio. First, the Domestic Benchmark will be a combined S&P 500 and the Barclays Capital Aggregate Bond Index, weighted to reflect the target equity/fixed-income composition of the fund’s portfolio. Second, a Global Index Benchmark will consist of the standard industry benchmarks for the individual asset classes, weighted according to the target asset allocation. The third will be

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a Global Peer Benchmark consisting of Lipper peer-group averages for the individual asset classes, weighted to the target asset allocation. Allocation of funds and the selection of managers shall be directed to maximizing returns while working within acceptable levels of risk.

Strategies Employed for Achieving Objectives—To satisfy its long-term rate of return objectives, the University relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The University targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints.

Spending Policy and How the Investment Objectives Relate to Spending Policy— PA Act 141 states that provided an organization adopts and follows an investment policy seeking a total return for the assets held, the organization may annually select a spending percentage between 2% and 7% of the three-year average fair market value of the assets held by an organization.

The Board of Trustees adopted a spending policy for unrestricted income from endowment funds allowing 4.00% of the trailing three-year average market value of endowment assets to be spent for unrestricted educational purposes. Any shortfalls of earnings may be made from excess earnings in prior years.

5. PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment at May 31, 2017 and 2016, are summarized below:

2017 2016

Land$ 5,403,855 $ 5,403,855 Land improvements 30,133,928 28,304,371 Buildings 182,052,184 178,563,113 Furniture and equipment 66,104,999 63,458,846 Construction in progress 5,554,167 1,679,998

Subtotal 289,249,133 277,410,183

Less accumulated depreciation (133,584,430) (122,531,710)

Total$ 155,664,703 $ 154,878,473

Depreciation expense for the years ended May 31, 2017 and 2016, was approximately $11,200,000 for each year.

6. ASSET RETIREMENT OBLIGATION

The University recognizes asset retirement obligations that are conditional on a future event, such as the obligation to remediate asbestos-contaminated materials within the University’s facilities when such facilities are renovated or otherwise dismantled.

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For the years ended May 31, 2017 and 2016, the reconciliation of the University’s asset retirement obligation is as follows:

2017 2016

Asset retirement obligations as of June 1$ 2,671,120 $ 2,843,169 Accretion expense 9,394 33,624 Payments (32,750) (1,875) Increase (decrease) in liability 36,380 (203,798)

Asset retirement obligations as of May 31$ 2,684,144 $ 2,671,120

In determining the asset retirement obligation, the University has utilized an inflation rate of approximately 1% at May 31, 2017 and 2016, and discount rates ranging from 3.95% to 6.24%. Because of inherent uncertainties in estimating inflation rates and discount rates, it is at least reasonably possible that the estimates used will change in the near future. The asset retirement obligation is reflected in other current liabilities and other noncurrent liabilities in the balance sheet.

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7. LONG-TERM DEBT

Long-term debt at May 31, 2017 and 2016, consisted of the following:

2017 2016

Allegheny County Higher Education Building Authority (ACHEBA) Bonds: 2016 Series (net of unamortized premium of $2,224,610 and $0 for 2017 and 2016, respectively)$ 21,424,610 $ - 2010 Series (net of unamortized discount of $129,138 and $134,753 for 2017 and 2016, respectively) 14,320,862 14,605,247 2008 Series 19,389,909 1998 Series (net of unamortized premium of $83,259 and $96,800 for 2017 and 2016, respectively) 4,763,259 5,071,800 Laurel Capital: 2016A Series 6,847,625 7,510,000 2012 Notes 13,094,377 13,336,529 2005 Note 6,717,533 7,088,175 2003 Note 6,879,860 7,378,050 PNC Bank: 2013 Note 2,850,668 3,157,001 2016 Note 976,562 Debt issue costs (1,151,920) (1,035,285)

76,723,436 76,501,426

Less current portion (3,705,367) (3,071,089)

Total$ 73,018,069 $ 73,430,337

The University currently has three outstanding series of revenue refunding bonds through ACHEBA.

The 2016 Series was issued to refund the 2008 Series. The 2016 Series consists of serial and term bonds that mature in varying amounts through 2038, and bear interest at rates that range from 3% to 5%. The average effective interest rate for the year ended May 31, 2017, was approximately 2.72%.

On November 1, 2016, the University advance refunded the 2008 Series ACHEBA Revenue bonds with an outstanding balance of $18,978,908, which were to mature on October 15, 2038. The 2016 Series ACHEBA Revenue bonds were purchased at a cost of $21,532,400. In connection with the refunding, the University incurred a $2,489,708 loss on extinguishment of debt that represented the excess of the reacquisition price of the defeasance over the net carrying value of the bonds and other defeasance-related fees and expenses.

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The 2010 Series was issued to finance the costs of (a) construction, equipping, and furnishing an approximately 200-bed student housing facility on the University’s main campus; (b) funding a debt service reserve fund; (c) miscellaneous capital expenditures at the University’s main campus through June 2013; (d) funding of capitalized interest; and (e) issuance of bonds. The 2010 Series consists of serial and term bonds that mature in varying amounts from 2011 through 2040, and bear interest at rates that range from 3.00% to 5.75%. The average effective interest rate for the year ended May 31, 2017, was approximately 5.55%.

The 2008 Series was issued to finance the costs of (a) construction, equipping, and furnishing of various master plan projects at the University’s main campus; (b) funding a debt service reserve fund; (c) miscellaneous capital expenditures at the University’s main campus and downtown Pittsburgh former campus; (d) funding of capitalized interest; and (e) issuance of bonds. The 2008 Series consists of interest rates that range from 3.60% to 6.00%. The 2008 Series was refunded November 1, 2016, by the 2016 Series, noted above.

The 1998 Series was issued to (a) refund the ACHEBA Series A of 1997 variable-rate demand University revenue bonds, (b) fund the related debt service reserve fund, and (c) pay all or part of the issuance costs related thereto. The 1998 Series consists of serial and term bonds that mature in varying amounts through 2028, and bear interest at rates that range from 4.1% to 6%. The average effective interest rate for the year ended May 31, 2017, was approximately 6.00%.

The 2016 Series, 2010 Series, and the 1998 Series are subject to extraordinary redemption at any time by ACHEBA, at the discretion of the University, in the event of damage to, destruction or condemnation of, or taking under power of eminent domain of a substantial portion of University premises.

The 2016 Series, 2010 Series, and the 1998 Series bond indebtedness require the University to maintain three debt service reserve funds amounting to approximately $1,412,000, $1,108,000, and $598,000, respectively.

The 2016 Note was issued on May 17, 2016, through the Moon Industrial Development Authority and purchased by Laurel Capital in the amount of $7,510,000 to refinance the costs of refunding the 2006 Bonds. The 2016 Note was issued at a rate of 3.00% fixed with a term of 8.75-year commitment and amortization. The 2016 Note is a general obligation of the University and is secured by the full faith and credit of the University.

The 2012 Notes were issued through the Wilkins Area Industrial Development Authority and purchased by Laurel Capital in the amount of $15 million in order to finance the costs of (a) purchase of a facility to house students and renovations to transform certain of the floors into a residence hall, (b) funding a debt service reserve fund, (c) miscellaneous capital expenditures at the University’s main campus through June 2013, (d) funding of capitalized interest, and (e) costs of issuance of the 2012 Notes. The 2012 Notes were issued at a rate of 3.95% per year with a 20-year commitment and amortization. On May 17, 2016, the 2012 Notes were amended to provide for a fixed rate of 3.05% for a period of 15-year amortization with interest-only payments until December 1, 2016. The 2012 Notes are a general obligation of the University and are secured by the full faith and credit of the University.

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The 2005 Note was issued through the McCandless Industrial Development Authority and was purchased by Laurel Capital in the amount of $10 million in order to finance various capital expenditures. The 2005 Note was issued at a rate of 4.55% fixed with a 25-year commitment and amortization. The 2005 Note is a general obligation of the University and is secured by the full faith and credit of the University.

The 2003 Note was issued through the Moon Industrial Development Authority and was purchased by Laurel Capital in the amount of $12.2 million in order to finance various capital expenditures. The 2003 Note was issued at a rate of 3.76% fixed for 10 years with a 25-year commitment and amortization. The interest rate on the 2003 Note reset on October 1, 2013, at a rate of 3.13%, and will reset again on October 1, 2023, at the 10-year treasury rate in effect on the reset date, plus 28 basis points. The 2003 Note is secured by a mortgage on the University’s Island Sports Center and a general obligation of the University.

The 2016 Note was issued to PNC Bank in the amount of $1,000,000 in order to finance the cost of purchasing a University House. The 2016 Note was issued at a 4.04% rate of interest and matures on May 31, 2023. The average effective interest rate for the year ended May 31, 2017, was approximately 4.38%. The 2016 Note is a general obligation of the University and is secured by the full faith and credit of the University.

The 2013 Note was issued through the McCandless Industrial Development Authority and was purchased by PNC Bank in the amount of $3,876,000 in order to finance the costs of (a) refinancing all of the Pennsylvania Higher Educational Facilities Revenue Bonds, Series 2000 F2; (b) financing of various capital expenditures now being incurred, and expected to be incurred, at the University’s main campus; and (c) payment of all or part of the costs of such financing. The 2013 Note was issued at the Bond Qualified Tax-Exempt Rate and matures on May 1, 2025, with mandatory reset in May 2020. The average effective interest rate for the year ended May 31, 2017, was approximately 2.22%. The 2013 Note is a general obligation of the University and is secured by the full faith and credit of the University.

The fair value of the bonds and notes payable was approximately $78,465,304 as of May 31, 2017, and is classified as Level 2 in the fair value hierarchy.

Minimum maturities on all debt of the University for the next five fiscal years are approximately as follows:

Years Ending May 31 2018 $ 3,526,340 2019 3,657,457 2020 3,791,067 2021 3,932,258 2022 4,181,126 Thereafter 56,608,378

75,696,626 Debt issue costs (1,151,920) Unamortized premium/discount 2,178,730 Total $ 76,723,436

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The University has a $7,000,000 line of credit available through PNC Bank. The line of credit has an interest rate on outstanding borrowings of the London InterBank Offered Rate (LIBOR), plus 200 basis points for the applicable LIBOR interest period and expires on June 30, 2018. There were no outstanding borrowings on the line of credit as of May 31, 2017.

8. RETIREMENT PLANS

Retirement benefits are provided for substantially all benefit-eligible employees through four financial service organizations: the Teachers Insurance and Annuity Association College Retirement Equities Fund, The Variable Annuity Life Insurance Company, Fidelity Investments Tax-Exempt Services Company, and Transamerica Retirement Solutions, all national organizations used to fund retirement benefits for educational institutions. Under this arrangement, the University and plan participants make monthly contributions of retirement benefits earned to any or all alternatives available at a point in time to purchase fixed or variable annuities and/or mutual fund investments. Effective April 1, 2013, the University and plan participants make monthly contributions solely to Transamerica Retirement Solutions. Vesting provisions are full and immediate for employees hired prior to April 1, 2013. A five-year graded vesting schedule applies to employees hired on or after April 1, 2013. Preretirement survivor death benefits are also provided. The University’s share of the cost of these benefits was $3,679,103 and $3,544,276 for the years ended May 31, 2017 and 2016, respectively.

9. POSTRETIREMENT BENEFITS

The University provides postretirement benefits for certain unionized employees under age 65 retirees as a continuation of the active employee medical insurance plan and over age 65 retirees as a monthly reimbursement payment for a Medicare supplement or a Medicare replacement plan for a period of 10 years from the date of retirement. To be eligible for pre-65 retiree medical benefits, retirement must occur on or after age 55, and combination of age and years of full-time service is equal to or greater than 75. To be eligible for post-65 retiree medical benefits, an employee must meet the definition of retiree, have at least 20 years of full-time service, and have been hired prior to April 1, 2013. Faculty retirees are only eligible for under age 65 medical insurance if they have met the retiree definition as established in the Robert Morris University Faculty Federation Agreement.

Retirees are also provided with a life insurance benefit of $10,000. For retirements prior to June 1, 2007, to be eligible for the life insurance benefit, a retiree must attain age 62 with 12 years of service or have at least 20 years of full-time service. Effective for retirements on June 1, 2007, and later, the eligibility criteria was changed to additionally require that an employee who terminates for any reason after attaining age 55 and whose combination of age and service is at least 75 will be eligible for the life insurance benefit. Faculty retirees are only eligible for retiree term life insurance if they have met the retiree definition established in the Robert Morris University Faculty Federation Agreement. This benefit has been terminated for any staff employee not eligible as of June 1, 2013, and for any faculty member not eligible as of July 19, 2014.

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The postretirement benefit obligations at May 31, 2017 and 2016, related to the categories of participants are as follows:

2017 2016

Retirees$ 908,364 $ 840,654 Actives fully eligible 521,453 593,494 Actives not fully eligible 469,837 435,302

Total$ 1,899,654 $ 1,869,450

Net periodic postretirement (benefit) cost at May 31, 2017 and 2016, consists of the following:

2017 2016

Service cost$ 64,016 $ 77,043 Interest cost 68,530 77,862 Amortization of transition obligation 16,252 Amortization of prior service cost (26,094) (26,094) Change in liability due to assumption changes 24,546 (128,490) Change in liability due to plan experience (49,396) (142,182) Other 26,094 9,842

Total$ 107,696 $(115,767)

Actual employer benefit payments during the years ended May 31, 2017 and 2016, were $77,492 and $81,121, respectively.

The expected benefits to be paid in the next five fiscal years are as follows: $77,444 in 2018, $102,124 in 2019, $127,701 in 2020, $148,542 in 2021, and $148,864 in 2022. The cumulative expected benefit payments for fiscal years 2023 through 2027 are $706,148. No contributions are expected to be paid to the plan during the next fiscal year.

Reconciliation of funded status at May 31, 2017 and 2016, is as follows:

2017 2016

Fair value of plan assets$ - $ -

Accumulated postretirement benefit obligation: Retirees (908,364) (840,654) Actives fully eligible for benefits (521,453) (593,494) Actives not fully eligible for benefits (469,837) (435,302)

Total (1,899,654) (1,869,450)

Funded status$ (1,899,654) $ (1,869,450)

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Amounts recognized in the balance sheets at May 31, 2017 and 2016, consist of the following:

2017 2016

Other current liabilities$ (77,444) $ (77,492) Other noncurrent liabilities (1,822,210) (1,791,958)

Total$ (1,899,654) $ (1,869,450)

Amounts recognized as changes in unrestricted net assets arising from a defined-benefit plan, but not yet included in net periodic benefit cost at May 31, 2017 and 2016, are as follows:

2017 2016

Net gain$ (127,247) $ (102,397) Prior service credit (263,253) (289,347)

Total$ (390,500) $ (391,744)

Estimated amounts of amortization of prior service cost to be recognized into net periodic benefit cost during fiscal year 2018 is $26,094.

The assumptions used to determine accumulated postretirement benefit obligation at May 31, 2017 and 2016, are as follows:

2017 2016

Discount rate 3.80 % 3.75 % Health care cost trend rate assigned for next year 7.00 % 7.00 % Ultimate rate to which cost trend is assumed to decline 4.50 % 4.50 % Fiscal year the rate reaches the ultimate trend rate 2025 2024

The assumptions used in the measurement of net periodic benefit cost at May 31, 2017 and 2016, are as follows:

2017 2016

Discount rate 3.75 % 3.75 % Health care cost trend rate assigned for next year 7.00 % 7.00 % Ultimate rate to which cost trend is assumed to decline 4.50 % 4.50 % Fiscal year the rate reaches the ultimate trend rate 2025 2024

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The other significant assumptions used in the valuations at May 31, 2017 and 2016, are as follows:

Rates of retirement 2% at ages 60–61; 15% at age 62; 7.5% at ages 63–64; 50% at age 65; 30% at ages 66–69; and 100% at age 70

Mortality RPH-2014 Total Dataset Mortality Table Projected Using MP-2016

A one-percentage-point increase in health care trend rates would increase the aggregate of interest and service cost components of the net periodic benefit costs by 7.4%, or $9,808. The accumulated postretirement benefit obligation as of May 31, 2017, would increase 2.8%, or $53,190. A one-percentage-point decrease in health care trend rates would decrease the aggregate of interest and service cost components of the net periodic benefit costs by 6.2%, or $8,218. The accumulated postretirement benefit obligation as of May 31, 2017, would decrease 2.4%, or $45,592.

10. CONTRIBUTIONS RECEIVABLE

Unconditional promises to give are recorded as receivables and revenue in the period the pledge is made. The University distinguishes between contributions received for each net asset category in accordance with donor-imposed restrictions. Pledges are recorded after being discounted to the anticipated net present value of the future cash flows. Conditional promises to give are not recorded as a receivable and revenue until the condition has been met.

Pledges are expected to be realized as of May 31, 2017 and 2016, as follows:

2017 2016

In one year or less$ 1,266,458 $ 190,999 Two to five years 1,375,578 604,035 More than five years 100,000

Gross contributions receivable 2,642,036 895,034

Less: Allowance for uncollectible pledges (165,000) (32,000) Unamortized discount (56,007) (26,150)

Total contributions receivable—net$ 2,421,029 $836,884

The current yields for five-year U.S. Treasury notes are used to discount contributions receivable. The University considers these yields to be a Level 3 input in the context of the fair value hierarchy for the purpose of valuing these receivables. Refer to Note 3 for fair value discussion.

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The change in contributions receivable—net during the year ended May 31, 2017, is as follows:

Balance—beginning of year$ 836,884 New pledges 2,114,475 Collections on pledges (362,037) Decrease in allowance for uncollectible pledges (133,000) Increase in unamortized discount (29,858) Direct write-offs (5,435)

Balance—end of year$ 2,421,029

11. COMMITMENTS AND CONTINGENCIES

At May 31, 2017, the University had outstanding contractual commitments of $6,380,874 for property, plant, and equipment expenditures.

The nature of the educational industry is such that, from time to time, claims will be presented against the University on account of alleged negligence, acts of discrimination, breach of contract, or disagreements arising from the interpretation of laws and regulations. While some of these claims may be for substantial amounts, they are not unusual in the ordinary course of providing educational services. Management of the University believes that these claims and their resolution will not have a material effect on the University’s financial position.

Under the terms of federal grants, periodic audits are required and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Such audits could lead to reimbursement to the grantor agencies. The University’s management believes disallowances, if any, will not have a material effect on the University’s financial position.

The University provides indemnification in connection with securities offering transactions in which it is involved. When the University issues securities, it provides indemnification to the underwriters or placement agents against a variety of risks to the other parties as a result of the transaction in question. Due to the nature of these indemnification provisions, it is not possible to quantify the aggregate exposure to the University resulting from them.

Pursuant to their bylaws, the University provides indemnification to directors, officers, and, in some cases, employees and agents, against certain liabilities incurred as a result of their service on behalf of or at the request of the University. The University will also advance on behalf of covered individuals costs incurred in defending against certain claims, subject to written undertakings by each such individual to repay all amounts so advanced if it is ultimately determined that the individual is not entitled to indemnification. It is not possible to determine the aggregate potential exposure resulting from the commitment to provide this indemnity or to advance such costs.

The University leases certain property and equipment under long-term operating leases expiring at various dates through 2022. The leases generally contain specific renewal or purchase options at lease-end at the then fair market amounts.

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Future minimum lease payments are as follows:

Years Ending May 31

2018 $ 316,887 2019 182,556 2020 166,194 2021 166,194 2022 42,867

Total $874,698

Rental expense related to operating leases was $322,146 and $375,352 in fiscal years 2017 and 2016, respectively.

12. SPONSORSHIP AGREEMENTS

In January 2017, the University entered into two sponsorship agreements totaling approximately $35,000,000 over 21 years. In exchange, the sponsors will receive naming rights, signage, and other benefits related to the University’s new events center, which is scheduled to open in Spring 2019. The payments to be received over the next five years are as follows:

Years Ending May 31

2018 $ 4,800,000 2019 3,850,000 2020 1,250,000 2021 1,250,000 2022 1,250,000 Thereafter 22,575,000

Total $ 34,975,000

One of the sponsors will pay the University a lump-sum initial payment of $4,000,000. In the event of early termination of this sponsorship without cause, the University will be obligated to refund to the sponsor a pro rata amount of this initial payment for each year remaining under the 21–year term.

In addition, the University also entered into two additional agreements with a sponsor. One is a service agreement indicating the sponsor shall be the exclusive provider to the University with respect to several lines of businesses. The second agreement is an option agreement whereby the University grants the sponsor an option to lease a portion of the campus for the construction of a medical office building (MOB). The sponsor will be responsible for the costs of construction of the MOB. This option agreement will expire in the year ending May 31, 2022.

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13. FUNCTIONAL EXPENSES

Expenses related to providing education at May 31, 2017 and 2016, are as follows:

2017 2016

Instruction$ 41,146,370 $ 42,854,739 Public service 126,707 164,732 Academic support 11,808,006 11,054,893 Student services 21,180,375 20,871,222 Institutional support 21,064,436 21,486,997 Auxiliary 30,325,052 30,784,115

$ 125,650,946 $ 127,216,698

Each operating department is assigned to a functional expense category based on its primary role at the University. The Instruction category includes all academic departments, as well as the international office, the radio station, the Honors Program, and the Center for Not for Profit Management.

Public Service is comprised of theatre administration, the Early Success Program, and the Economics Conference. Academic Support includes the deans’ departments and support services, such as the library, the academic media center, the veterans’ programs, and research and grants administration.

Student Services includes all NCAA programs; club and intramural athletics; graduation services; and other departments providing enrollment, financial aid, student account administration, student life, counseling, student health services, student diversity programs, tutoring and career placement services, newspaper, student identification and yearbook offices, and ministry services.

Institutional Support is comprised of the Office of the President, business operations, financial operations, human resources, employee benefits and payroll, insurances, general counsel, mail services, public safety, Information Technology, accreditations, facilities operations, and transportation. It also includes institutional advancement, capital campaign management, development, public relations and communications, alumni relations, marketing, and the Speaker Series.

The Auxiliary category includes food services and residence and student life, as well as Conference and Facilities Services, hotel, and parking administration, and Island Sports Center operations.

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14. NET ASSETS

The detail of the University’s net asset categories at May 31, 2017 and 2016, is as follows:

2017 2016

Unrestricted: Invested in property, plant, and equipment$ 85,005,627 $ 80,101,986 Loan funds 106,105 128,876 Endowment funds 15,026,632 13,773,135

Total unrestricted 100,138,364 94,003,997

Temporarily restricted: Unexpended funds received for restricted purposes 8,421,459 8,570,564 Unexpended funds from endowments 7,576,715 6,014,893

Total temporarily restricted 15,998,174 14,585,457

Permanently restricted—endowment funds 10,831,005 10,340,448

Total$ 126,967,543 $ 118,929,902

15. SUBSEQUENT EVENTS

The University has evaluated subsequent events through August 29, 2017, the date the financial statements were issued.

******

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Appendix C

Summaries of Certain Provisions of the Principal Documents

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SUMMARIES OF CERTAIN PROVISIONS OF THE PRINCIPAL DOCUMENTS

The following are summaries of certain provisions of the Loan Agreement and the Indenture. The summaries should not be regarded as full statements of the documents themselves or of the portions summarized. For complete statements of the provisions thereof, reference is made to the documents in their entireties, copies of which will be available for inspection at the designated corporate trust office of the Trustee.

DEFINITIONS OF CERTAIN TERMS

The following definitions apply to the summaries of the Indenture and the Loan Agreement, and to terms not otherwise defined in the Official Statement. Terms used but not defined herein may be found in the Indenture or the Loan Agreement. All accounting terms and definitions shall be deemed to include any equivalent term or definition used by the University in the future if the University's accounting presentation changes materially in the future.

"Act" means an Act of the General Assembly of the Commonwealth approved June 19, 2001, P.L. 22 (53 P.C.S. CL. 56), known as the Municipality Authorities Act, as amended and supplemented, and all acts supplemental thereto or amendatory thereof.

"Additional Payments" means those payments required to be made by the University pursuant to the Loan Agreement as described under the heading "SUMMARY OF THE LOAN AGREEMENT – Installment Payments".

"Affiliate" means any Person controlling, controlled by or under common control with such Person.

"Authority" means the Allegheny County Higher Education Building Authority, a body corporate and politic duly organized, existing and in good standing under the laws of the Commonwealth created and existing under and by virtue of the Act, and its successors and assigns.

"Authority Fees" means the fees payable by the University to the Authority pursuant to the Loan Agreement.

"Authorized Denominations" means $5,000 and any integral multiple thereof.

"Authorized Officer" means (a) with respect to the University, the President or any Vice President of the University, (b) with respect to the Authority, the Chairman, Vice Chairman, Secretary, Assistant Secretary or Authorized Designate of the Authority, or (c) any other officer authorized by the University or the Authority to perform the act in question.

"Board" means the Board of Trustees or other governing body of the University or Authority.

"Bond Counsel" means any nationally recognized municipal bond counsel not unsatisfactory to the Trustee.

"Bond Documents" means the Indenture, the Bonds, the Loan Agreement, the Tax Agreement, the Purchase Contract, and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing.

"Bond Fund" means the Fund by that name created by the Indenture.

"Bond Register" means the registration books of the Authority kept by the Trustee to evidence the registration and transfer of Bonds.

"Bondholder," "Holder," "Owner" or "Owner of the Bonds" means the registered owner of any Bond.

"Bond" or "Bonds" means the Authority's University Revenue Bonds, Series of 2017 (Robert Morris University) issued in the aggregate principal amount of $27,430,000 pursuant to the Indenture.

"Bond Year" shall have the meaning assigned to such term in the Tax Agreement.

"Business Day" means a day which is not a Saturday, Sunday or legal holiday on which banking institutions in the Commonwealth, the State of New York or the state in which the Designated Office of the Trustee are authorized or required by law or executive order to close for a reason not related to financial condition.

"Certified Public Accountant" or "Accountant" means any firm of certified public accountants (not an individual) who shall be Independent, appointed by the University or the Authority, as the case may be, actively engaged in the business of public accounting, and duly certified as a certified public accountant under the laws of the Commonwealth.

"Clearing Fund" means the Fund by that name created by the Indenture.

"Closing Date" means the date of the initial authentication and delivery of the Bonds.

"Code" means the Internal Revenue Code of 1986, as amended from time to time. Each reference to a section of the Code herein shall be deemed to include the United States Treasury Regulations, including temporary and proposed regulations, relating to such section which are applicable to the Bonds or the use of the proceeds thereof.

"Collateral" means collectively, the Gross Revenue of the University and Proceeds thereof, as such terms are defined in the Security Agreement.

"Collateral Agent" means The Bank of New York Mellon Trust Company, N.A.

"Commitment Debt" means the obligation of the University to repay amounts disbursed pursuant to a Credit Facility to pay when due the University's obligations with respect to Indebtedness.

"Commonwealth" means the Commonwealth of Pennsylvania.

"County" means the County of Allegheny, Pennsylvania, a political subdivision of the Commonwealth;

“Credit Facility" means any letter of credit, line of credit, insurance policy, guaranty or other agreement constituting a credit enhancement or liquidity facility which is issued by a bank, trust company, savings and loan association or other institutional lender, insurance company, financial institution or surety company.

“Debt” or "Debts" means, individually and collectively, the obligations of the University to the Debtholders identified on in the Security Agreement along with any future obligations of the University to a third party identified on a Joinder to the Security Agreement, duly executed by the third party and the

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University, together with all amendments, supplements, extensions, renewals, amendments, substitutions and replacements thereto.

"Debt Service Requirements" means, with respect to any period, the amounts required in said period to pay, or to be set aside for the payment of, the principal of, or interest on, or scheduled sinking fund deposits with respect to, all outstanding Long-Term Debt of the University. For the purpose of calculating Debt Service Requirements, the following provisions shall apply:

(a) For the purpose of ascertaining aggregate Debt Service Requirements, interest shall be computed to mandatory redemption dates to the extent that Long-Term Debt is required to be redeemed by mandatory redemption provisions, otherwise interest shall be computed to stated maturity dates.

(b) For the purpose of computing Debt Service Requirements on any Long-Term Debt for the final twelve-month period prior to the final maturity date for such Long-Term Debt, the amount of such Debt Service Requirements shall be reduced by an amount equal to the amount (if any) then on deposit in the debt service reserve fund for such Long-Term Debt.

(c) To the extent any Long-Term Debt under consideration bears interest at a variable rate, the Debt Service Requirements for such Long-Term Debt shall be calculated assuming that such Long-Term Debt shall be payable in equal annual installments of principal and interest over a term equal to the lesser of twenty (20) years or the stated term of such Long- Term Debt and assuming an interest rate equal to the greater of (1) The Bond Buyer 25 Year Revenue Bond Index then in effect (or, if such index is no longer published, a comparable index selected by the University) and (2) if the Long-Term Debt has been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation; provided, however, that for purposes of any rate covenant measuring actual debt service coverage during a period under consideration, Long-Term Debt bearing interest at a variable rate shall be deemed to bear interest at the actual rate per annum applicable during such period.

(d) To the extent any Long-Term Debt under consideration provides that 25% or more of the principal thereof, after giving effect to mandatory prepayment or redemption, is due in a single year or may, at the option of the holder or registered owner thereof, be redeemed or repurchased at one time (and cannot be remarketed), the University shall have the option of (1) considering such Long-Term Debt to be payable on the specified due date or due dates thereof or (2) assuming that such Long-Term Debt shall be payable in equal annual installments of principal and interest over a term equal to the lesser of twenty (20) years or the stated term of such Long- Term Debt and at an interest rate equal to (A) if the Long-Term Debt in question bears interest at a fixed rate, the actual fixed rate, or (B) if the Long-Term Debt in question bears interest at a variable rate, at the interest rate established pursuant to the paragraph (c) above. The assumed term of the Long-Term Debt set forth in paragraph (c) and in (2) of this paragraph (d) above shall continue to be used during the year of mandatory prepayment or maturity if the Trustee is provided evidence to its reasonable satisfaction that sufficient funds will be available to pay the amount subject to mandatory prepayment or maturity when the same is due.

(e) To the extent any Long-Term Debt under consideration represents Commitment Debt, the amount of such Commitment Debt shall not be included so long as the Indebtedness underlying such Commitment Debt is included within Long-Term Debt.

(f) Long-Term Debt which is payable from funds available under an Escrow Deposit (other than amounts so payable solely by reason of the obligor's failure to make payments from

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other sources) or funded from the proceeds of such Long-Term Debt (i.e., accrued and capitalized interest) shall be excluded from the determination of Debt Service Requirements.

(g) Any amounts payable on Interim Debt shall be calculated assuming that such Interim Debt shall be payable in equal annual installments of principal and interest over a term equal to twenty-five (25) years and assuming an interest rate equal to the interest rate described in clause (c) above; provided that to the extent the outstanding amount of Interim Debt will exceed 30% of Unrestricted Operating Revenues of the University, Debt Service Requirements on such Interim Debt shall instead be calculated based on actual debt service on such Interim Debt (including, in the case of Interim Debt that is payable upon demand and is not subject to remarketing, tender of all such Indebtedness at the earliest possible time) unless the University provides (1) a Permanent Loan Commitment or Credit Facility to pay such Indebtedness at maturity or (2) a certificate from an investment banking firm or other financial institution not unsatisfactory to the Trustee stating that Long-Term Debt of a term at least equal to twenty-five (25) years could be incurred in lieu of such Interim Debt based upon the then current financial condition of the University.

(h) The annual Debt Service Requirements on any Guaranty shall be deemed to be equal to twenty percent (20%) of the highest annual principal and interest payments which would be payable on the Indebtedness being guaranteed (the "Guaranteed Debt") for the current or any succeeding Fiscal Year during the remaining term of such Indebtedness if such Indebtedness were Indebtedness of the University; provided that if the University has made a payment on the Guaranteed Debt during the current Fiscal Year or either of the two immediately preceding Fiscal Years, the annual Debt Service Requirements on the Guaranty shall be deemed to be equal to 100% of the highest annual principal and interest payments which would be payable on the Guaranteed Debt for such Fiscal Year.

(i) In the event the University has entered into a Swap Agreement with respect to any Indebtedness, then (1) on a historic basis, Swap Payments made by the University shall be added to Debt Service Requirements for that prior period and Swap Payments received from a counterparty shall be subtracted from Debt Service Requirements for such period and (2) on a prospective basis, the effect of the Swap Agreement may, at the discretion of the University, be taken into account in making projections of Debt Service Requirements.

"Debt Service Reserve Fund" means the fund established pursuant to the Indenture and described below under "SUMMARY OF THE INDENTURE—Establishment of Funds."

"Debtholder" means each of the persons or entities listed as such in the Security Agreement.

"Defaulted Interest" means interest on any Bond which is payable but not paid on the date due.

"Designated Office" means (a) when used with respect to the Trustee, the designated corporate trust or corporate trust agency office of the Trustee performing the specified functions and (b) when used with respect to the Paying Agent, the office thereof designated in writing to the Trustee unless, in the case of the Paying Agent, the Trustee is performing such functions, in which case it shall mean the Designated Office of the Trustee.

"Documents" means the Loan Agreement, the Indenture, the Bonds, the Security Agreement, the Joinder, and all other documents executed by the Authority or the University in connection therewith.

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"Event of Default" means (a) with respect to the Indenture, any "Event of Default" as defined below under "SUMMARY OF THE INDENTURE – Events of Default", and (b) with respect to the Loan Agreement, any "Event of Default" as defined in below under "SUMMARY OF THE LOAN AGREEMENT – Events of Default".

"Favorable Opinion of Bond Counsel" means an opinion of Bond Counsel, addressed to the Authority and the Trustee, to the effect that the action proposed to be taken is authorized or permitted by the Indenture and the Loan Agreement and will not adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation under Section 103 of the Code.

"Fiscal Year" means the fiscal year of the University, currently the 12-month period beginning on June 1 of each calendar year and ending on May 31 of the following calendar year.

"Fund" means any of the funds established pursuant to the Indenture and "Funds" means all of such funds collectively.

"GAAP" means those accounting principles applicable in the preparation of financial statements of institutions of higher learning, as promulgated by the Financial Accounting Standards Board or such other body recognized as authoritative by the American Institute of Certified Public Accountants or any successor body.

"Government Obligations" means (i) bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payments on obligations issued or guaranteed by the United States of America, or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by each Rating Agency, and such obligations are held in a custody account by a custodian satisfactory to the Trustee and (ii) senior debt obligations of government sponsored agencies which are rated in the highest rating category by each Rating Agency.

"Gross Revenues" means all of the University's rights in and to all receipts, revenues, income, accounts and other moneys receivable by or on behalf of the University and the proceeds thereof, to the extent permitted by law, whether now existing or hereafter coming into existence and whether now owned or held or hereafter acquired by the University, except those gifts, grants, bequests, donations and contribution designated at the time of making by the donor or maker for uses inconsistent with their use as security for the Debt..

"Guaranty" means any obligation of the University guaranteeing in any manner any obligation of any other entity, which obligation would constitute Indebtedness under the definition set forth herein.

"Holder" shall have the same meaning as the term "Bondholder."

"Indebtedness" means, without duplication,

(i) all obligations for borrowed moneys;

(ii) all leases of real or personal property which are properly capitalized on the balance sheet of the University in accordance with GAAP; and

(iii) all Guaranties;

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provided, however, that Indebtedness shall not include any Subordinated Debt, any Non-Recourse Debt or any obligations with respect to Swap Agreements.

"Indenture" means the Trust Indenture dated as of September 1, 2017 between the Authority and the Trustee as originally executed and as amended or supplemented as therein provided.

“Independent" means a Person who is not a member of the Authority Board or of the University Board, a corporate officer or employee of the Authority or a corporate officer or employee of the University or which is not a partnership, corporation or association having a partner, director, corporate officer, member or substantial stockholder who is a member of the Authority Board or of the University Board, a corporate officer or employee of the Authority or a corporate officer or employee of the University; provided, however, that the fact that such Person is retained regularly by or transacts business with the Authority or the University shall not make such Person an employee within the meaning of this definition.

"Independent Counsel" means an attorney duly admitted to practice law before the highest court of any state and, without limitation, may include independent legal counsel for the University, the Trustee or the Authority.

"Interest Payment Date" means each April 15 and October 15 commencing on April 15, 2018.

"Interim Debt" means Indebtedness other than Short-Term Debt which matures within 60 months of the date of incurrence.

"Joinder" means the Joinder to Security Agreement dated as of September 1, 2017 executed by the Trustee and the University.

"Loan" means the amount loaned by the Authority to the University to pay the costs of the Project, which amount consists of the gross proceeds of the Bonds.

"Loan Agreement" means the Loan Agreement dated as of September 1, 2017 between the University and the Authority, as it may from time to time be supplemented or amended.

"Loan Payments" means the payments referred to in the Loan Agreement and described under the heading "SUMMARY OF THE LOAN AGREEMENT—Installment Payments".

"Long-Term Debt" means all Indebtedness which, at the time of incurrence or issuance, has a final maturity or term of 365 days or more or which is renewable at the option of the obligor thereof for a term greater than one year from the date of original incurrence or issuance; provided that Long-Term Debt shall not include Short-Term Debt, Subordinated Debt or Non-Recourse Debt.

"Majority" means Debtholders holding at least fifty and one/one-hundredth percent (50.01%) of the outstanding indebtedness evidenced by the Debt.

"Maximum Annual Debt Service Requirements" means the highest amount required to pay Debt Service Requirements on all outstanding Long-Term Debt of the University during any twelve month period.

"Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, for the purpose of the definition of Permitted Investments only, "Moody's" shall be deemed to refer to any other nationally

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recognized securities rating agency designated by the University with written notice to the Authority and the Trustee.

"Net Proceeds" means proceeds (net of all expenses, including all attorneys' fees and expenses, incurred in the collection thereof) from insurance, condemnation awards (or other similar amounts) received as a result of any damage to, destruction or taking under the power of eminent domain of the University Premises.

"Net Revenues Available for Debt Service" means, for any period, Unrestricted Operating Revenues of the University, from which shall be deducted net capital gains on investments in excess of the University's endowment spending rate, less Unrestricted Operating Expenses.

"Non-Recourse Debt" means Indebtedness which is not a general obligation of the University and which is secured solely by property acquired or financed with the proceeds of such Indebtedness.

"Officer's Certificate" means a certificate signed by an Authorized Officer of the University or the Authority (as the case may be) or, in the case of a certificate delivered by any other Person, the chief executive officer, chief financial officer or any vice president of such other Person whose authority to execute such certificate shall be evidenced to the satisfaction of the Trustee.

"Opinion of Bond Counsel" means a written opinion of Bond Counsel in form and substance acceptable to the Trustee.

"Opinion of Counsel" means a written opinion of counsel who is not unsatisfactory to the Trustee in form and substance acceptable to the Trustee.

"Original Purchaser" means PNC Capital Markets LLC, Pittsburgh, Pennsylvania, and any other purchasers listed as such in the Purchase Contract.

"Outstanding," "Bonds outstanding" or "outstanding Bonds" means, as of any given date, all Bonds which have been duly authenticated and delivered under the Indenture, except:

(a) Bonds canceled after purchase in the open market or because of payment at maturity or redemption prior to maturity;

(b) Bonds for the payment or redemption of which cash or United States Government Obligations shall have been theretofore deposited with the Trustee (whether upon or prior to the maturity or redemption date of any such Bonds) in accordance with the Indenture; provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given or arrangements satisfactory to the Trustee shall have been made therefor, or waiver of such notice satisfactory in form to the Trustee shall have been filed with the Trustee;

(c) Bonds in lieu of which other Bonds have been authenticated under the Indenture; and

(d) For the purpose of all consents, approvals, waivers and notices required to be obtained or given under the Indenture, Bonds held or owned by the University or any Affiliate of the University.

"Owner" has the same meaning as the term "Bondholder."

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"Permitted Defeasance Obligations" means any of the following:

(a) Government Obligations; or

(b) debt obligations issued by any of the following agencies which are backed by the full faith and credit of the United States of America: Federal Financing Bank; General Services Administration (participation certificates); Export-Import Bank of the United States (Eximbank- direct obligations or fully guaranteed certificate of beneficial ownership); Farmers Home Administration; U.S. Maritime Administration (Guaranteed Title XI financing); and U.S. Department of Housing and Urban Development (Project Notes, Local Authority Bonds, New Communities Debentures—U.S. government guaranteed debentures, or U.S. Public Housing Notes and Bonds—U.S. government guaranteed public housing notes and bonds).

“Permanent Loan Commitment" means a binding loan commitment (a) which is issued in favor of a Person, and (b) pursuant to which a bank, trust company, savings and loan association or other financial institution either having a combined net worth of at least $10,000,000 or not unsatisfactory to the Trustee agrees to make a loan constituting Long-Term Debt to the Person for the purpose of retiring any Outstanding Indebtedness of such Person.

"Permitted Encumbrances" shall have the meaning set forth below under "SUMMARY OF THE LOAN AGREEMENT – Permitted Encumbrances."

"Permitted Investments" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture:

(a) Government Obligations. (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies, provided that such obligations are backed by the full faith and credit of the United States of America (principal-only or interest-only ("stripped") securities are only permitted if they have been stripped by the agency itself): 1. U.S. Export-Import Bank (Eximbank) (direct obligations or fully guaranteed certificates of beneficial ownership) 2. Farmers Home Administration (FmHA) (certificates of beneficial ownership) 3. Federal Financing Bank 4. Federal Housing Administration Debentures (FHA) 5. General Services Administration (participation certificates) 6. Government National Mortgage Association (GNMA or "Ginnie Mae") (GNMA - guaranteed mortgage-backed bonds; GNMA - guaranteed pass-through obligations) 7. U.S. Maritime Administration (guaranteed Title XI financing) 8. U.S. Department of Housing and Urban Development (HUD) (Project Notes; Local Authority Bonds; New Communities Debentures - U.S. government guaranteed debentures; U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds)

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(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself): 1. Federal Home Loan Bank System (senior debt obligations) 2. Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") (participation certificates; senior debt obligations) 3. Federal National Mortgage Association (FNMA or "Fannie Mae") (mortgage-backed securities and senior debt obligations) 4. Resolution Funding Corp. (REFCORP) obligations 5. Farm Credit System (consolidated systemwide bonds and notes)

(d) Money market funds registered under the Investment Company Act of 1940, as amended, whose shares are registered under the Securities Act of 1933, as amended, and having a rating, at the time of purchase, by S&P of "AAAm-G"; "AAA-m"; or "AA-m" and, if rated by Moody’s, of "Aaa", "Aa1" or "Aa2", including, without limitation, any such fund for which the Trustee or an Affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (1) the Trustee or an Affiliate of the Trustee receives fees from such funds for services rendered, (2) the Trustee charges and collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (3) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or its Affiliates. (e) Certificates of deposit that are (1) issued by a Qualified Financial Institution or (2) issued by a commercial bank, savings and loan association or mutual savings bank and secured at all times by collateral described in subsections (a) and/or (b) above, provided that the collateral is held by a third party and the Trustee or Bondholders have a perfected first priority security interest in the collateral. (f) Certificates of deposit, including those placed by a third party pursuant to an agreement between the Trustee and the University, savings accounts, deposit accounts, trust funds, trust accounts, bank deposit products or money market deposits which are fully insured by FDIC, including DIF. (g) Investment agreements, including guaranteed investment contracts (GICs), forward purchase agreements and reserve fund put agreements, provided that either (i) the provider is a Qualified Financial Institution or (ii) the investment is collateralized by securities that are rated, or guaranteed by an entity whose unsecured long-term debt obligations are rated, by Moody's or S&P in one of the two highest rating categories assigned by such agencies. (h) Commercial paper rated, at the time of purchase, "Prime - 1" or better by Moody's and "A-1" or better by S&P. (i) Bonds or notes issued by any state or municipality which are rated, at the time of purchase, by Moody's and S&P in one of the two highest rating categories assigned by such agencies. (j) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating at the time of purchase of "Prime - 1" or "A3" or better by Moody's and "A-1" or "A" or better by S&P. (k) Repurchase agreements meeting the following criteria:

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Repurchase agreements ("repos") provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Trustee (buyer/lender), and the transfer of cash from the Trustee to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the Trustee in exchange for the securities at a specified date. (1) Repos must be between the Trustee and a dealer bank or securities firm that is a: (A) Primary dealer on the Federal Reserve reporting dealer list which is rated "A" or better by S&P and Moody's, or (B) Bank rated "A" or above by S&P and Moody's.

(2) The written repo contract must include the following: (A) Securities which are acceptable for transfer are: (i) Government Obligations, or (ii) Securities described in subsection (b) above (B) The term of the repo may not exceed 30 days (C) The collateral must be delivered to the Trustee or third party acting as agent for the Trustee before or simultaneously with payment (perfection by possession of certificated securities). (D) Valuation of collateral: (1) The securities must be valued weekly, marked-to-market at current market price plus accrued interest (aa) The value of collateral must be equal to 104% of the amount of cash transferred by the Trustee to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral declines below 104% of the value of the cash transferred by the Trustee plus accrued interest, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105% of the value of the cash transferred by the Trustee plus accrued interest at all times. (3) Legal opinion which must be delivered to the Trustee: (A) Repo meets guidelines under state law for legal investment of public funds. (l) Bank deposit products, demand deposits, including interest bearing money market accounts, time deposits, trust funds, trust accounts, overnight bank deposits, interest-bearing deposits, and certificates of deposit, including those placed by a third party pursuant to an agreement between the Trustee and the University or bankers acceptances of depository institutions, including the Trustee or any of its affiliates, rated in the AA long-term ratings category or higher by S&P or Moody’s or which are fully FDIC-insured.

"Person" means any natural person, firm, joint venture, association, partnership, business trust, corporation, public body, agency or political subdivision thereof or any other similar entity.

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"PNC" means PNC Bank, National Association, its successors and assigns.

"Pro Rata" means, with respect to the Debtholders, the ratio obtained by dividing the aggregate outstanding principal amount of all Debts held by a particular Debtholder by the aggregate outstanding principal amount of all Debt held by all the Debtholders.

"Proceeds" shall mean whatever is received when any of the Collateral is sold, exchanged, collected or otherwise disposed of, both cash and non-cash.

"Project Facilities" means the facilities financed or refinanced with the proceeds of the Bonds and identified in the Loan Agreement.

"Project Fund" means the Fund by that name established pursuant to the Indenture.

"Purchase Contract" means the Purchase Contract among the Authority, the University and the Original Purchaser with respect to the Bonds.

"Qualified Financial Institution" means a bank, trust company, national banking association, insurance company or other financial services company or entity and whose unsecured long-term debt obligations are rated, or are guaranteed by an entity whose unsecured long-term debt obligations are rated, in either of the two highest categories (or, for purposes of clause (e) and forward purchase agreements in clause (g) of the definition of Permitted Investments, any of the three highest rating categories) by Moody's or S&P.

"Rating Agency" means each nationally recognized securities rating agency then maintaining a rating on the Bonds at the request of the University, and initially means Moody’s.

"Rebate Fund" means the fund by that name created by the Indenture.

"Record Date" means the first day of the calendar month in which each Interest Payment Date occurs (whether or not a Business Day).

"Registrar" means the Trustee when acting as such, and any other bank or trust company designated and at the time serving as bond registrar under the Indenture.

"Reserve Requirement" means, for any Fiscal Year, an amount equal to the least of (a) the maximum annual debt service requirements payable on the Bonds, (b) 125% of the average annual debt service on the Bonds and (c) ten percent of the original proceeds of the Bonds. Initially, the Reserve Requirement equals $2,265,500.00.

"S&P" means Standard & Poor's Corporation, a corporation organized and existing under the laws of the State of New York, its successors and its assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, for the purpose of the definition of Permitted Investments only, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the University, with written notice to the Authority and the Trustee.

"Security Agreement" means the Security Agreement dated as of November 1, 2006 among the University, The Bank of New York Mellon Trust Company, N.A., as Collateral Agent and successor to The Bank of New York Trust Company, N.A., and the Debtholders (as defined therein), as the same may be amended from time to time.

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“Short-Term Indebtedness" means any Indebtedness having a maturity of less than 365 days.

"Special Record Date" means the date fixed by the Trustee pursuant to the Indenture for the payment of Defaulted Interest.

"Subordinated Debt" means Indebtedness which shall at all times be wholly subordinate and junior in right of payment to any and all Indebtedness of the University under the Loan Agreement or with respect to the Bonds.

"Supplemental Agreement" means any agreement supplemental or amendatory to the Loan Agreement entered into by the Authority and the University pursuant to the provisions described under the heading "SUMMARY OF THE INDENTURE – Amendments and Supplements."

"Supplemental Indenture" means any indenture supplemental or amendatory to the Indenture entered into by the Authority and the Trustee pursuant to the provisions described under the heading "SUMMARY OF THE INDENTURE – Amendments and Supplements."

"Swap Agreement" means an interest rate swap, basis swap, index swap or option, exchange cap, collar, option, floor, forward, futures contract or other hedging agreement, arrangement or security, or combination of the foregoing, however denominated, including any option to enter into the foregoing, entered into by the University or otherwise managing the University's risk of interest rate or interest rate index changes or interest rate or interest rate index exposures or risk of changes or exposures to prices of commodities, securities, portfolios, products, supplies, goods or services. Obligations of the University in respect of a Swap Agreement shall not constitute Indebtedness under the Loan Agreement.

"Swap Payments" means payments periodically required to be paid to a counterparty by the University pursuant to a Swap Agreement. “Swap Payments” shall not mean payments required to be paid as a result of a termination of a Swap Agreement.

"Tax Agreement" means the Tax Regulatory and Non-Arbitrage Certificate, executed and delivered by the Authority and the University, containing representations and covenants regarding the preservation of the tax-exempt status of the interest on the Bonds, the investment of proceeds of the Bonds, and the calculation and payment of rebate amounts under Section 148(f) of the Code.

"Trust Estate" means, together with such rights as are granted to the Trustee under the Security Agreement:

(a) All right, title and interest of the Authority in and to the Loan Payments (as defined hereinafter) and the Loan Agreement (excluding Unassigned Rights);

(b) All Funds and accounts established by the Trustee hereunder other than amounts held by the Trustee in the Rebate Fund (as defined herein and authorized hereunder) and other moneys expressly excluded pursuant hereto;

(c) All income and receipts on the Funds (other than the Rebate Fund) held by the Trustee hereunder; and

(d) Any and all other property of every kind and nature from time to time hereafter, by delivery or by writing of any kind, conveyed, pledged, assigned or transferred as and for additional security hereunder by the Authority, the University or by anyone on their behalf to the Trustee, including without limitation funds of the University held by the Trustee in any of the Funds established hereunder as security for the Bonds;

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"Transaction Documents" means the Security Agreement and any other agreement, document, certificate or instrument evidencing or ancillary to any of the Debt

"Trustee" means The Bank of New York Mellon Trust Company, N.A., Pittsburgh, Pennsylvania, or any successor trustee under the Indenture.

"Unassigned Rights" means the fees and expenses payable to the Authority, the Authority's right to indemnification under the Loan Agreement, and the Authority's right to execute and deliver supplements and amendments to the Loan Agreement.

"University" means Robert Morris University, a Pennsylvania nonprofit corporation, and its successors and assigns and any surviving, resulting or transferee corporation.

"University Premises" means those facilities of the University located on the University's main campus and financed with the proceeds of the Bonds as more particularly described in the Indenture.

"Unrestricted Net Assets" means the assets of the University not restricted as to use in accordance with GAAP applicable to the University's financial statements.

"Unrestricted Operating Expenses" means such expenses and other costs incurred by the University that would properly be recorded as deductions from Unrestricted Net Assets during the period being measured, exclusive of depreciation, amortization, other non-cash expenses (including without limitation loss recognized in connection with defeasance of indebtedness and changes in market valuation of Swap Agreements) and interest on Long-Term Debt and extraordinary items.

"Unrestricted Operating Revenues" means all unrestricted receipts, revenues, income and other moneys of the University, including without limitation tuition and fees, which, upon receipt by the University, are or are to be recorded as additions to Unrestricted Net Assets during the period being measured in accordance with GAAP and which are available for payment of debt service on the Bonds plus any realized gains or minus any realized losses from nonoperating activities as shown in the University's most recent audited financial statements.

"Written Request" means a request or certificate in writing signed by an Authorized Officer of the Authority or the University (as the case may be).

SUMMARY OF THE LOAN AGREEMENT

The Loan Agreement provides for, among other things, the loan of the proceeds of the Bonds by the Authority to the University.

The Project

The University shall use the proceeds of the Loan to undertake the Project.

Loan of Bond Proceeds

The Authority will, concurrently with the issuance of the Bonds, loan to the University the gross proceeds from the sale of the Bonds (the "Bond Proceeds") to finance the Project. The Bond Proceeds will be deposited with the Trustee to be expended and deposited in accordance with the Indenture. If the Bond Proceeds are not sufficient to pay the costs of the Project, the University will pay those costs in excess of the Bond Proceeds.

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Security

The Loan is a general obligation of the University secured by the security interest and to the Collateral granted and created by the University in favor of the Collateral Agent for the interest of Debtholders pursuant to the Security Agreement. The University has covenanted in the Loan Agreement that it shall not execute any amendment to the Security Agreement which would have the effect of releasing all or a portion of the Collateral pledged thereunder without the consent of the Owners of a majority in aggregate principal amount of Bonds then Outstanding.

Time and Manner of Repayment

The University agrees in the Loan Agreement to pay to the Trustee for the account of the Authority:

(a) Interest. On or before each Interest Payment Date, an amount which, together with other available amounts on deposit in the Bond Fund, is sufficient to pay the interest on the Bonds to be paid on such Interest Payment Date;

(b) Principal. On or before each October 15 on which the principal of any Bonds shall become due, whether by reason of maturity or mandatory redemption requirements, an amount for deposit in the Bond Fund equal to the principal of the Bonds becoming due on such October 15; provided that if the University exercises its right to redeem Bonds under any provision of the Indenture or if any Bonds are required to be redeemed (other than pursuant to mandatory sinking fund redemption provisions) under any provision of the Indenture, the amount required to redeem such Bonds shall be due on or before the applicable redemption date.

(c) Trustee's Fee. While the Bonds remain Outstanding, the reasonable compensation and expenses of the Trustee under the Indenture shall be paid directly to the Trustee by the University upon the receipt by the University of a bill for such services from the Trustee.

(d) Authority's Fees. The University will pay the Authority Fees when due as set forth in the Loan Agreement. The University will also pay any other administrative expenses incurred in connection with the financing of the Project, and any such additional fees and expenses (including reasonable attorney's fees) incurred by the Authority or the Trustee in connection with amending or supplementing the Indenture or the Loan Agreement or inquiring into, or enforcing, the performance of the University's obligations under the Loan Agreement, within thirty days of receipt of a statement from the Authority or the Trustee requesting payment of such amounts.

(e) Deficiencies in Debt Service Reserve Fund. If there is any deficiency in amounts required to be deposited in the Debt Service Reserve Fund pursuant to the Indenture, the University shall, upon notice from the Trustee, pay such amounts and at such times as is required by the Indenture to the Trustee. If a disbursement is made pursuant to a Reserve Policy provided pursuant to the Indenture, the University shall either (i) cause the maximum limits of such Reserve Policy to be reinstated, or (ii) deposit into the Debt Service Reserve Fund an amount equal to the amount of the disbursement made under such Reserve Policy, or a combination of such alternatives, as shall provide that the amount of cash, together with any such Reserve Policy then in force, in the Debt Service Reserve Fund equals the Reserve Requirement within a time period not longer than would be required to restore such Fund by operation of the Indenture.

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(f) Rebate Fund. The University will pay to the Trustee all rebate payments required under Section 148(f) of the Code and the Indenture.

(g) Additional Payments. The University shall pay when due all additional amounts required to be paid by it under the Indenture or the Loan Agreement, including without limitation all costs and expenses incurred in connection with the arbitrage rebate provisions of the Indenture, and all costs and expenses (including reasonable attorneys’ fees and expenses) of the Authority incurred in connection with the preparation of any responses, reproduction of any documentation or participation in any inquiries, investigations or audits from any Person, including without limitation, the Internal Revenue Service, Securities Exchange Commission or other governmental agency (together, "Additional Payments").

Rate Covenant

The University covenants in the Loan Agreement that it shall fix, charge and collect rates, fees and charges for services provided by the University which, together with other available moneys, will produce Net Revenues Available for Debt Service in an amount sufficient in the Fiscal Year ending May 31, 2018, and in each Fiscal Year thereafter, to provide funds for the following:

(i) the payment of all payments of interest and principal or redemption price (as described above in clauses (a) and (b) under "Time and Manner of Repayment") required to be made by the University pursuant to the Loan Agreement; and

(ii) the payment by the University of debt service on all other Long-Term Debt.

If the University's rates, fees and charges for services at the end of any Fiscal Year do not produce Net Revenues Available for Debt Service sufficient to provide funds for such payments pursuant to the Loan Agreement and of debt service on all other Long-Term Debt, but the University can demonstrate to the satisfaction of the Trustee that it has available moneys sufficient to make such payments, then the failure to comply with such rate covenant shall not be an Event of Default if the University (i) promptly retains a firm of accountants or business consultants selected by the University (the "University Consultant") to review the reasons for the failure to comply with such covenant and to make recommendations as to what measure(s) should be taken to comply with such covenant in the ensuing Fiscal Year and (ii) follows the recommendations of such University Consultant.

Assignment to Trustee

All of the Authority's right, title and interest in the Loan Agreement (except Unassigned Rights) are being assigned and pledged to the Trustee as security for the Bonds. The University has consented to such assignment and acknowledges that the Bonds are being issued in reliance by the Trustee upon the assignment of the Authority's rights under the Loan Agreement and such other instruments. The University agrees in the Loan Agreement that it shall perform all obligations and pay all amounts due from the Authority under the Bonds and the Indenture so that at all times there shall be no default thereunder.

Permitted Encumbrances

The University agrees in the Loan Agreement not to create or suffer to be created or exist upon the Premises any mortgage or other lien, security interest or other similar right or interest, servitude, easement, right-of-way, license, encumbrance, irregularity or defect in title, cloud on title, restriction,

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reservation or covenant running with the land, other than Permitted Encumbrances. For purposes of the Loan Agreement, "Permitted Encumbrances" shall include the following:

(a) liens arising by reason of good faith deposits with the University in connection with tenders, leases of real estate, bids or contracts (other than contracts for the payment of money), deposits by the University to secure public or statutory obligations, or to secure or in lieu of, surety, stay or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges;

(b) any lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the University to maintain self-insurance or to participate in any funds established to cover any insurance risks or in connection with worker's compensation, unemployment insurance, old age pensions or other social security, or to share in the privileges or benefits required for institutions participating in such arrangements;

(c) any judgment lien against the University so long as (i) the finality of such judgment is being contested in good faith and execution thereon is stayed, (ii) the claim is covered by insurance (excluding any deductible) or (iii) in the absence of such a contest and stay, neither the pledge and security interest of the Indenture or the Loan Agreement nor any property of the University will be materially impaired or subject to material loss or forfeiture;

(d) rights reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license, permit or provision of law, affecting any property, to (i) terminate such right, power, franchise, grant, license or permit, provided that the exercise of such right would not materially impair the use of such property for its intended purpose or materially and adversely affect the value thereof, or (ii) purchase, condemn, appropriate or recapture, or designate a purchaser of such property;

(e) any liens on any property for taxes, assessments, levies, fees, water and sewer rents, and other governmental and similar charges and any liens of mechanics, material men and laborers for work or services performed or materials furnished in connection with such property (i) which are not due and payable or are not delinquent, (ii) the amount or validity of which are being contested in good faith and on which execution is stayed or (iii) the existence of which will not materially impair the pledge and security interest of the Indenture or the Loan Agreement, or subject any property of the University to material loss or forfeiture;

(f) any lease which, in the judgment of the University, (i) is reasonably necessary or appropriate for or incidental to the proper and economical operation of such property, taking into account the nature and terms of the lease and the nature and purposes of the property subject thereto, (ii) is not necessary for the operations of the University, or (iii) represents a lease of space for retail purposes which is reasonably necessary or appropriate for or incidental to the operation of such property in light of the location of the property and the benefit to the neighborhood in which such property is located;

(g) easements, rights-of-way, restrictions and other minor defects, encumbrances, and irregularities in the title to any property which do not materially impair the use of such property for its intended purpose or materially and adversely affect the value thereof;

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(h) rights reserved to or vested in any municipality or public authority to control or regulate any property or to use such property in any manner, which rights do not materially impair the use of such property for its intended purposes or materially and adversely affect the value thereof;

(i) any lien or security interest which is existing on the date of the Loan Agreement;

(j) any additional lien, mortgage, or security interest hereafter granted to secure the Bonds, or the Bonds and other Long-Term Debt, and interest rate swaps which are on a parity with such Bonds or Long-Term Debt, including but not limited to the liens and security interests created by or granted or pledged pursuant to the Security Agreement;

(k) any mortgage lien on real property of the University which is not part of its Moon campus; and

(l) any lien on property received by the University as a gift, grant or bequest, such lien being due to restrictions imposed by the donor, grantor, or testator of such gift, grant or bequest.

Additional Long-Term Debt

The University covenants in the Loan Agreement that it shall not incur any Long-Term Debt unless the University shall deliver to the Trustee an Officer's Certificate demonstrating and concluding that:

(a) The Net Revenues Available for Debt Service of the University for the most recent Fiscal Year for which audited financial statements are available were at least equal to 100% of the Maximum Annual Debt Service Requirements outstanding after incurrence of such additional Long-Term Debt; or

(b) the Net Revenues Available For Debt Service of the University for the first full Fiscal Year succeeding the date of incurrence of such Long-Term Debt (or the first full Fiscal Year succeeding the date on which any capital project financed with the proceeds of such Long- Term Debt is expected to be in operation) will be sufficient to enable the University to pay all Debt Service Requirements payable during such Fiscal Year on all Long-Term Debt outstanding after incurrence of such additional Long-Term Debt (including any required deposits to the Debt Service Reserve Fund).

Notwithstanding the foregoing, the University may incur additional Long-Term Debt (excluding for this purpose Long-Term Debt permitted by or incurred in accordance with the provisions of the immediately preceding paragraph, which shall not be taken into account), the principal amount of which at the time incurred, together with the aggregate principal amount of all other Long-Term Debt of the University then Outstanding (excluding, as aforesaid, Long-Term Debt permitted by or incurred in accordance with the provisions of the immediately preceding paragraph), does not exceed 5% of the total Revenues of the University for the most recent Fiscal Year for which audited financial statements are available. If the University incurs any Long-Term Debt described in this paragraph without delivery of the Officer's Certificate described in the immediately preceding paragraph, and such Long-Term Debt is later included in such an Officer's Certificate, whether as a condition to the incurrence of other Long- Term Debt or otherwise, the portion of the percentage limitation described herein represented by such Long-Term Debt so reported upon shall be reinstated and may be incurred again without the filing of an Officer's Certificate pursuant to the immediately preceding paragraph, provided that the principal amount of such Indebtedness incurred after reinstatement shall not exceed the 5% limit described herein. In

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addition, the foregoing tests shall not be required to be met if the additional Long-Term Debt is being incurred to refund existing Long-Term Debt and the Maximum Annual Debt Service Requirements on the proposed Long-Term Debt is less than or equal to the Maximum Annual Debt Service Requirements on the existing Long-Term Debt.

Certain Warranties, Representations and Covenants of the University

The University makes various representations and covenants in the Loan Agreement, including the following:

Maintenance. The University agrees to maintain the Project Facilities in good condition, reasonable wear and tear excepted. The Authority shall have no obligation and makes no warranties respecting the condition or operation of the Project Facilities.

Compliance with Laws. The Premises shall be used in compliance with all material laws, ordinances and regulations, including, without limitation, all building, zoning and environmental laws, ordinances and regulations of any duly constituted authority which hereafter in any manner may affect the Project Facilities or the use thereof. The University shall have the right in good faith to contest or appeal from such laws, ordinances and regulations, and the Authority agrees that it will not unreasonably withhold consent to having the proceedings brought in the Authority's name if and to the extent deemed necessary by the University to give the University standing or authority to prosecute any such contest or appeal, but all costs, fees and expenses incurred in connection with such proceedings shall be borne by the University. The University agrees that it shall not discriminate or permit any discrimination in the use of the Project Facilities against any person on the grounds of race, color, religion or national origin, or otherwise, in any manner prohibited by the laws of the United States or Pennsylvania.

Taxes, Assessments, Other Governmental Charges. The University agrees to pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or on its income or properties prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a lien or charge upon any material portion of its properties, provided that the University shall not be required to pay any such tax, assessment, charge, levy or claim, the payment of which is being contested in good faith and by proper proceedings.

Insurance Coverage. The University covenants to maintain, or cause to be maintained, insurance covering such risks and in such amounts as is customarily carried by similar institutions and which liability policies shall name the Authority and the Trustee as additional insured. The University shall provide the Authority and the Trustee, on an annual basis, with (a) a certificate of a University Representative certifying that the insurance required by the preceding sentence is in force and (b) certificates of insurance or other evidence reasonably satisfactory to the Authority that the Authority has been named on all such insurance policies as an additional insured as its interests shall appear as required by the preceding sentence.

Application of Insurance Proceeds and of Condemnation Proceeds. The proceeds of all public liability insurance shall be applied to the payment of any judgment, settlement or liability incurred for risks covered by such insurance. In case the whole or any part of the Project Facilities is damaged or destroyed by any cause whatsoever or taken pursuant to condemnation proceedings or in lieu thereof, the provisions of Section 7.01 of the Loan Agreement shall apply.

Advances by Authority or Trustee. In the event the University fails to take out or maintain the insurance coverage required by the Loan Agreement, fails to pay the taxes and other charges required to be paid under the Loan Agreement at or prior to the time they are required to

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be paid, or fails to perform any other obligation under the Loan Agreement, the Authority or the Trustee may (but shall not be obligated to) take out the required policies of insurance and pay the premiums on the same, pay such taxes or other charges and pay such other amounts as are necessary to perform the University's obligations. All amounts so advanced by the Authority or the Trustee shall become an additional obligation of the University to the Authority or to the Trustee, as the case may be, which amounts, together with interest thereon at a rate equal to the prime rate announced from time to time by the Trustee's primary banking affiliate plus 2% (the “Prime Rate”). Any remedy vested pursuant to the Loan Agreement in the Authority or the Trustee for the collection of installment payments under the Loan Agreement also shall be available to the Authority and the Trustee for the collection of all such amounts so advanced.

Damage, Destruction and Condemnation of Project Facilities

Damage to or destruction of all or any portion of the Project Facilities by fire or any other cause or taking of all or a portion of the Project Facilities by condemnation shall not terminate the Loan Agreement or cause any abatement of or reduction in the payments to be made by the University under the Loan Agreement, or otherwise alter the respective obligations of the Authority or the University as set forth therein, except that, to the extent the proceeds of insurance or condemnation are applied by the Trustee to the redemption or purchase of the Bonds, the obligation of the University under the Loan Agreement shall be reduced accordingly. The University covenants to give written notice of any event described above to the Trustee and to the Authority within ten (10) days after the occurrence thereof.

Tax-Exempt Bond Covenants

The University covenants in the Loan Agreement that it will comply with the requirements of the Tax Agreement through the term of the Bonds including, but not limited to paying from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Bonds from time to time. This covenant shall survive payment in full or defeasance of the Bonds. The University shall pay or cause to be paid to the United States at the times and in the amounts determined under the Indenture the amount required to be rebated as rebatable arbitrage as described in the Tax Agreement.

Events of Default

The occurrence of any of the following shall constitute an Event of Default under the Loan Agreement:

(a) Failure by the University to make any payments described in clauses (a) or (b) described under the heading "Time and Manner of Repayment" when due; or

(b) Failure by the University to make any payment under the Loan Agreement or in the performance of or compliance with any of the provisions, warranties, covenants, agreements, terms or conditions contained in the Loan, other than those specified in (a) above, which continues for sixty (60) days following written notice thereof to the University from the Authority or the Trustee, except in the case of a default other than the payment of money which cannot be cured within such sixty (60) days, in which case the period shall be extended for such period as is reasonable to cure the same with due diligence, provided the University commences within sixty (60) days and proceeds diligently to cure the same; or

(c) If the University shall make an assignment of substantially all of its assets for the benefit of creditors or is adjudicated a bankrupt or shall file a bill in equity or otherwise initiate proceedings for the appointment of a receiver of its assets, or shall file a case under the Federal

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Bankruptcy Code to be declared a bankrupt or for reorganization or otherwise initiate any proceedings in any court for a composition with its creditors or for relief in any manner from the payment of its debts when due under any state or federal laws; or if any proceedings in bankruptcy or for the appointment of a receiver shall be instituted against the University under any state or federal law and shall not be dismissed within sixty (60) days; or

(d) the occurrence of an Event of Default under any of the Documents.

Unless and until the Authority or the Trustee shall have exercised any remedies upon an Event of Default, the University (or any other person on behalf of the University) may at any time (a) pay all accrued unpaid payments then due and owing on the outstanding balance of the Loan and all other sums which the University is obligated to pay under the Loan Agreement; and (b) cure all other existing defaults under the Loan Agreement, and in every such case, such payment and cure shall be deemed to constitute a waiver of the default and its consequences as though the default had not occurred.

Remedies

Upon the occurrence of an Event of Default:

(a) The Trustee may declare the entire outstanding balance of the Loan and any other sums which the University is obligated to pay to the Authority under the Loan Agreement immediately due and payable.

(b) The Trustee, after ten (10) days' notice to the University, may perform for the account of the University any covenant of the University under the Loan Agreement in the performance of which an Event of Default has accrued. The University shall pay to the Trustee upon demand any amount paid by it in the performance of such covenant and any amounts which the Trustee shall have paid by reason of failure of the University to comply with any covenant or provision of the Loan Agreement, including reasonable counsel fees incurred in connection with prosecution or defense of any proceedings instituted by reason of default of the University, together with interest at the Prime Rate, from the date of payment until repayment by the University.

(c) The Trustee may, in addition to or in lieu of the foregoing, pursue any remedy now or hereafter available at law or in equity for enforcement of the Loan Agreement or the collection of all sums due under the Loan Agreement.

(d) The Trustee may exercise all rights of a secured party under the Pennsylvania Uniform Commercial Code to enforce its security interest in the Trust Estate and exercise all remedies available thereunder with respect to the Trust Estate.

(e) The Trustee may take or pursue such actions and remedies under the Security Agreement as and to the extent provided therein.

Amendments

The Loan Agreement may not be amended except in accordance with the provisions of the Indenture described below under the heading "SUMMARY OF THE INDENTURE – Supplements and Amendments." The University shall reimburse the Authority for all costs and expenses, paid or incurred by the Authority in connection with any amendments or modifications of the Loan Agreement or to the Indenture and any document, instrument or agreement related hereto or thereto, and the discussion,

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negotiation, preparation, approval, execution and delivery of any and all documents necessary or desirable to effect such amendments or modifications.

SUMMARY OF THE INDENTURE

The Bonds are being issued under and subject to the provisions of the Indenture, to which reference must be made for complete details of the terms of the Bonds and the Indenture.

Establishment of Funds

The Indenture provides for the establishment with the Trustee of trust funds including a Clearing Fund, a Project Fund, a Bond Fund, a Debt Service Reserve Fund and a Rebate Fund.

Clearing Fund. Moneys deposited to the Clearing Fund shall be disbursed upon receipt of the Joint Written Request to be delivered at closing (subsequent to the Closing Date, such transfers shall be made upon receipt of the Written Request of the University) for the purpose of making the transfers and payments required under Section 301 of the Indenture and for payment of expenses for any recording, Trustee's and depository's fees and expenses, accounting and legal fees, financing costs, other fees and expenses incurred or to be incurred by or on behalf of the Authority or the University in connection with or incident to the issuance and sale of the Bonds. At such time as the Trustee is furnished with a Written Request from the University stating that all such fees and expenses have been paid, and in no event later than 180 days after the Closing Date, the Trustee shall transfer any moneys remaining in the Clearing Fund to the Project Fund.

Project Fund. The Trustee shall deposit a portion of the proceeds of the Bonds into the Project Fund. Amounts in the Project Fund shall be disbursed by the Trustee to or at the direction of the University, pursuant to requisitions submitted by the University in accordance with the Indenture, to pay costs of the Project

Bond Fund. The Trustee shall deposit to the credit of the Bond Fund all installment payments payable on account of the Bonds pursuant to the Loan Agreement, Net Proceeds received by the Trustee pursuant to the Indenture for the purpose of redeeming Bonds, and any other amounts required or permitted to be deposited therein pursuant to the provisions of the Indenture. Pursuant to the assignment and pledge of payments under the Loan Agreement set forth in the granting clauses contained in the Indenture, the University is directed to make payments under the Loan Agreement directly to the Trustee when and as the same become due and payable under the terms of the Loan Agreement. Moneys so deposited to the Bond Fund shall be applied as follows:

(a) to the payment of interest, when due, on all Outstanding Bonds, including any accrued interest due in connection with redemptions of Bonds;

(b) to the payment, when due, of the principal of Bonds then payable at maturity or on a date fixed for redemption (but only upon surrender of such Bonds), subject to reduction by the principal amount of Bonds of the same maturity purchased by the University and surrendered to the Trustee for cancellation or purchased for cancellation by the Trustee pursuant to subsection (c) below or the extraordinary redemption provisions of the Indenture;

(c) during the 12 month period preceding each principal maturity or mandatory redemption date for any Bonds, the Trustee shall, at the Written Request of the University and upon deposit of moneys by the University for such purpose, purchase Bonds of the maturity becoming due on such principal maturity or mandatory redemption date from funds deposited to the Bond Fund for such purpose; provided, however, that no such purchase shall be made unless

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(i) the purchase price does not exceed 100% of the principal amount of the Bonds so to be purchased, plus accrued interest, and (ii) in the case of any purchase of Bonds which are subject to mandatory redemption, firm commitments for the purchase of such Bonds shall have been accepted prior to the giving of notice of such redemption by the Trustee; and

(d) to the extent that the same have not otherwise been paid or provided for, the Trustee’s fees and expenses and the Authority Fees and expenses in respect of the Bonds shall be payable from the Bond Fund at the Written Request of the University.

Debt Service Reserve Fund. (a) On the date of issuance and delivery of the Bonds, the Trustee shall establish the Debt Service Reserve Fund, which shall be used solely to pay the principal of and interest on the Bonds in the event of a deficiency in the amounts required to be on deposit in the Bond Fund. The Trustee shall, on the Closing Date, deposit Bond proceeds in an amount equal to the Reserve Requirement into the Debt Service Reserve Fund in satisfaction of the Reserve Requirement.

The total amount required to be maintained in the Debt Service Reserve Fund shall at all times equal the Reserve Requirement. On any payment date immediately following the incurrence of any deficiency in the amount required to be maintained in the Debt Service Reserve Fund, after first having made the transfers provided for above under “Establishment of Funds – Bond Fund” (but prior to a transfer in the case of an optional redemption of the Bonds), the Trustee shall notify the University that it is required to make payments pursuant to the Loan Agreement with respect to the Bonds in an aggregate amount sufficient to eliminate the deficiency, in the following manner:

(i) The amount of any withdrawal for the purpose of subsection (b)(i) below shall be restored in not more than twelve (12) equal, consecutive, monthly installments, each payable on the last Business Day of the month, commencing with the month in which the withdrawal is made; provided that, if any withdrawal is made and if, prior to the restoration of the amount withdrawn, an additional withdrawal is made, such additional withdrawal shall be restored in equal monthly installments over the remainder of the restoration period for the initial withdrawal; and

(ii) The amount of any deficiency resulting in a change in value of Permitted Investments held in the Debt Service Reserve Fund shall be restored as required by subsection (d) below.

(b) Moneys on deposit in the Debt Service Reserve Fund shall be applied as follows:

(i) on the date of each permitted or required payment from the Bond Fund with respect to the Bonds, moneys in the Debt Service Reserve Fund shall be applied to cure any deficiency in the Bond Fund;

(ii) as soon as practicable following the annual valuation of amounts held in the Debt Service Reserve Fund pursuant to subsection (d) below, any amount in the Debt Service Reserve Fund in excess of the Reserve Requirement shall be transferred to the Bond Fund by the Trustee upon Written Request from the University, credited against the installment payments next becoming due and applied, at the option of the University and upon its Written Request, to either principal payments or interest payments in respect of the Bonds; and

(iii) in each month during the twelve month period preceding the final maturity date of the Bonds, moneys held in the Debt Service Reserve Fund shall be credited against payment of installment payments otherwise payable in respect of principal of and interest on such Bonds and shall be transferred to the Bond Fund for the payment of such principal and interest; provided,

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however, that no such transfer shall be made to the extent that, immediately prior to such crediting and transfer, the amount on deposit in the Debt Service Reserve Fund is not at least equal to the Reserve Requirement on all Bonds then Outstanding, less the amounts previously transferred to the Bond Fund during such twelve month period pursuant to this subparagraph (iii) or otherwise.

(c) In lieu of the deposit of moneys into the Debt Service Reserve Fund, the University may cause to be provided to the Trustee for the benefit of the Holders of the Bonds a letter of credit (a "Reserve Policy") in an amount equal to the difference between the Reserve Requirement and the amounts then on deposit in the Debt Service Reserve Fund. Any Reserve Policy so deposited shall be payable (upon the giving of notice as required thereunder) on any date on which moneys will be required to be withdrawn from the Debt Service Reserve Fund and applied to the payment of principal or interest on any Bonds and such withdrawal cannot be met by amounts on deposit in the Debt Service Reserve Fund or provided from available amounts in any other Fund under the Indenture. The Authority is authorized under the Indenture to grant to the provider of any Reserve Policy a security interest in and to the Trust Estate, provided that such security interest shall be subordinate and junior in payment and priority to the security interest granted to the Trustee under the Indenture. The issuer of any letter of credit shall be a bank, trust company, national banking association or a corporation, whose senior unsubordinated long term debt is rated by each Rating Agency in any of the three highest rating categories. Any Reserve Policy shall have an initial term of at least three (3) years and may be renewed or extended for one or more additional terms of one year or more, at the option of the parties, so long as any such renewal term has been agreed to by the parties no later than 180 days prior to the stated expiration date of any such Reserve Policy.

If a disbursement is made pursuant to a Reserve Policy provided pursuant to this paragraph (c), the Authority shall be obligated to cause the University to either (i) cause the maximum limits of such Reserve Policy to be reinstated, or (ii) deposit into the Debt Service Reserve Fund an amount equal to the amount of the disbursement made under such Reserve Policy, or a combination of such alternatives, as shall provide that the amount of cash, together with any such Reserve Policy then in force, in the Debt Service Reserve Fund equals the Reserve Requirement within a time period not longer than would be required to restore such Fund by operation of paragraph (a) above.

If more than one Reserve Policy has been provided to fund the Debt Service Reserve Fund, drawings under each Reserve Policy, repayment of draws, expenses and accrued interest on and reimbursement of other amounts due under each Reserve Policy shall be made on a pro-rata basis (calculated by reference to the maximum amounts available thereunder) after applying all cash available in the Debt Service Reserve Fund and prior to replenishment of any such cash draws, respectively.

(d) Investments in the Debt Service Reserve Fund shall be valued by the Trustee on the last day of each Fiscal Year of the University (or such other date as may be selected by the University) at the market value thereof. If the amount on deposit in the Debt Service Reserve Fund is less than the Reserve Requirement as a result of valuation, the University shall remedy such deficiency by paying to the Trustee an amount equal to such deficiency in not more than twelve consecutive monthly installments. If, however, the value of the Debt Service Reserve Fund is less than 90% of the Reserve Requirement on any valuation date, the difference between such Reserve Requirement and the value of the Debt Service Reserve Fund shall be restored in no more than ninety days from the date on which the valuation revealing the deficiency is made. If the amount on deposit in the Debt Service Reserve Fund is less than the Reserve Requirement as a result of a drawing by the Trustee on the Debt Service Reserve Fund to pay debt service on the Bonds, the University shall remedy such deficiency in not more than twelve consecutive monthly installments as provided in subsection (a).

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Rebate Fund. Upon the Written Request of the University, the Trustee shall create and establish the Rebate Fund. Deposits shall be made to the Rebate Fund in accordance with, and moneys and investments in the Rebate Fund shall be applied as set forth in a Written Request of the University prepared in accordance with the Tax Agreement. The Tax Agreement may be superseded or amended by a new Tax Agreement delivered by the University and accompanied by an Opinion of Bond Counsel addressed to the Trustee and the Authority to the effect that the use of such new Tax Agreement will not cause the interest on the Bonds to become includable in gross income of the recipient thereof. The Rebate Fund, and the moneys and investments therein, shall not secure the Bonds or any other Bonds.

Investment of Funds

Subject to the limitations provided in this Section, upon Written Request of the University filed with the Trustee, moneys on deposit in the Bond Fund, the Debt Service Reserve Fund, the Project Fund, the Clearing Fund and the Rebate Fund shall be invested in Permitted Investments; provided, however, that moneys held in the Bond Fund to be applied to pay the redemption price of Bonds called for redemption shall only be invested in Government Obligations with a term not exceeding the date or dates that moneys therefrom are anticipated to be required or in money market funds which invest not less than 98% of their respective assets in Government Obligations. Except as otherwise provided in the preceding sentence with respect to investments in the Bond Fund, such investments shall be made so as to mature on or prior to the date or dates that moneys therefrom are reasonably anticipated to be required. As and when any amounts invested pursuant to the Indenture may be needed for disbursements from a Fund, the Trustee shall cause a sufficient amount of such investments to be sold or otherwise converted into cash to the credit of such Fund. The Trustee, as authorized in the Indenture, may trade with itself and its Affiliates in the purchase and sale of securities for such investment; provided, however, that in no case shall any investment be otherwise than in accordance with the investment limitations contained in the Indenture. The Trustee shall not be liable or responsible for any loss resulting from any such investments. Gains from investments shall be credited to and held in and losses shall be charged to the Fund or account from which the investment is made.

The interest, income and gains received in respect of Permitted Investments in the Debt Service Reserve Fund shall be retained in such fund unless the balance in such fund shall exceed the Reserve Requirement, in which case such excess shall be transferred to the Bond Fund. The interest, income and gains received in respect of Permitted Investments in the Project Fund shall remain in the Project Fund. The interest, income and gains received in respect of Permitted Investments in the Rebate Fund shall remain in the Rebate Fund.

Supplements and Amendments

Supplemental Indentures Not Requiring Consent of Bondholders. The Authority and the Trustee may from time to time, without the consent of or notice to any of the Bondholders, enter into one or more Supplemental Indentures, for any one or more of the following purposes:

(a) to cure any ambiguity or formal defect or omission in the Indenture;

(b) to grant to or confer upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Bondholders and the Trustee, or either of them;

(c) to assign and pledge under or subject to the Indenture additional revenues, properties or collateral;

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(d) to evidence the appointment of a separate Trustee or the succession of a new Trustee under the Indenture;

(e) to permit the qualification of the Indenture under the Trust Indenture Act of 1939, as then amended, or any similar federal statute hereafter in effect or to permit the qualification of the Bonds for sale under the securities laws of any state of the United States;

(f) to effect changes to obtain or maintain a rating on any Bonds or permitted in connection with obtaining an upgrade in the rating on any Bonds to a higher rating category or subcategory;

(g) to permit continued compliance with the Tax Agreement;

(h) to provide for uncertificated Bonds and a book-entry only system of registration for the Bonds or for certificate Bonds following termination of the book-entry only system of registration for the Bonds;

(i) to provide for the refunding or advance refunding of any Bonds, including the right to establish and administer an escrow fund and to take related action in connection therewith; and

(j) to make any change that does not materially adversely affect the rights of any Bondholder.

Supplemental Indentures Requiring Consent of Bondholders. In addition to Supplemental Indentures covered by the preceding paragraph and subject to the terms and provisions contained in this Section, and not otherwise, the Owners of not less than a majority in aggregate principal amount of the Bonds which are Outstanding under the Indenture at the time of the execution of such Supplemental Indenture shall have the right, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the Authority and the Trustee of such Supplemental Indenture as shall be deemed necessary and desirable by the Authority for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing in this Section contained or in the preceding section shall permit, or be construed as permitting, a Supplemental Indenture to effect: (i) an extension of the maturity or reduction in the principal amount of, or reduction in the rate or extension of the time of paying interest on, or reduction of any premium payable on the redemption of, any Bonds, without the consent of the Owners of such Bonds; (ii) the creation of any lien prior to or on a parity with the lien of the Indenture on the Trust Estate described in the Granting Clauses of the Indenture or the deprivation of any Bondholders of the lien created by the Indenture on such Trust Estate, without the consent of the Owners of all the Bonds at the time Outstanding; (iii) a reduction in the aforesaid aggregate principal amount of Bonds the Owners of which are required to consent to any such Supplemental Indenture, without the consent of the Owners of all the Bonds at the time outstanding which would be affected by the action to be taken; or (iv) a modification of the rights, duties or immunities of the Trustee, without the written consent of the Trustee.

If at any time the Authority shall request the Trustee to enter into any such Supplemental Indenture for any of the purposes of this Section, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail postage prepaid to the registered owners of the Bonds at their addresses as the same shall appear on the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the Designated Office of the Trustee for inspection by all Bondholders. The Trustee shall not, however, be subject to any liability to

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any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided in this Section. If the Owners of the requisite principal amount of Bonds which are Outstanding under the Indenture at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof as in the Indenture provided, no Owner of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Authority from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such Supplemental Indenture as in this Section permitted and provided, the Indenture shall be and be deemed to be modified and amended in accordance therewith.

Supplemental Agreements Not Requiring Consent of Bondholders. The Authority, the University and the Trustee may, without the consent of or notice to the owners of the Bonds, consent to any Supplemental Agreement as may be required:

(a) by the provisions of the Indenture or the Loan Agreement,

(b) for the purpose of curing any ambiguity or formal defect or omission,

(c) for the purpose of permitting continued compliance with the Tax Agreement,

(d) to effect changes to obtain or maintain a rating on the Bonds or permitted in connection with obtaining an upgrade in the rating on the Bonds to a higher rating category or subcategory, or

(e) to make any change that does not materially adversely affect the rights of any Bondholder or the Authority;

Supplemental Agreements Requiring Consent of Bondholders. Except for Supplemental Agreements not requiring consent of Bondholders as set forth in the preceding paragraph, neither the Authority nor the Trustee shall consent to any other Supplemental Agreement without the written approval or consent, given and procured as provided below, of the Owners of not less than a majority in aggregate principal amount of the Bonds which are Outstanding under the Indenture at the time of execution of any such amendment, change or modification. If at any time the Authority and the University shall request the consent of the Trustee to any such proposed Supplemental Agreement, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed Supplemental Agreement to be mailed in the same manner as provided in the Indenture with respect to Supplemental Indentures. Such notice shall briefly set forth the nature of the proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the Designated Office of the Trustee for inspection by all Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such amendment, change or modification when consented to and approved as provided in this Section. If the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding under the Indenture at the time of the execution of any such Supplemental Agreement shall have consented to and approved the execution thereof as in the Indenture provided, no Bondholder shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Authority from executing the same or from taking any action pursuant to the provisions thereof. The foregoing notwithstanding, without the consent of each Bondholder affected, no Supplemental Agreement may result in anything described in clauses (i) through (iii) above under "Supplemental Indentures Requiring Consent of Bondholders."

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Rights under Security Agreement Requiring Consent of Bondholders. Except as otherwise provided in the Security Agreement, the Trustee shall not, without the written consent of the Owners of not less than a majority in aggregate principal amount of the Bonds which are then Outstanding under the Indenture, release or terminate its rights under or interest in the Security Agreement as a Debtholder thereunder with respect to the Bonds. The Owners of not less than a majority in aggregate principal amount of the Bonds which are then Outstanding under the Indenture may in writing direct the Trustee to release or terminate all or a portion of its rights under and interest in the Security Agreement as a Debtholder thereunder with respect to the Bonds, and upon receipt of such direction the Trustee shall take such actions and execute such documents as are necessary or desirable to effect such release or termination

Events of Default

If any one or more of the following events occur, it is hereby defined as and declared to be and to constitute an "Event of Default" under the Indenture:

(a) default in the due and punctual payment of any interest on any Bond when the same becomes due and payable; or

(b) default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when the same becomes due and payable, whether at the stated maturity or accelerated maturity thereof, or upon proceedings for redemption thereof; or

(c) the Authority shall for any reason be rendered incapable of fulfilling its obligations under the Indenture, or the Authority shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in the Indenture or any Supplemental Indenture on the part of the Authority to be performed, and such incapacity or default shall continue for 60 days after written notice specifying such default and requiring the same to be remedied shall have been given to the Authority and the University by the Trustee (which notice may be given by the Trustee in its discretion and shall be given at the written request of the Owners of not less than 10% in aggregate principal amount of the Bonds then Outstanding); provided that, if any such default shall be correctable but is such that it cannot be corrected within such period, it shall not constitute an Event of Default if corrective action is instituted by the Authority or the University within such period and diligently pursued until the default is corrected; or

(d) any Event of Default as specified in the Loan Agreement or the Security Agreement has occurred and is continuing and has not been waived.

With regard to any alleged default concerning which notice is given to the University under this Section, the Authority hereby grants the University full authority for account of the Authority to perform any covenant or obligation, the nonperformance of which is alleged in said notice to constitute a default, in the name and stead of the Authority, with full power to do any and all things and acts to the same extent that the Authority could do and perform any such things and acts in order to remedy such default. Upon the occurrence of an Event of Default for which the Trustee has received notice pursuant to the Indenture or under which Section the Trustee is required to take notice, the Trustee shall, within 30 days give written notice thereof by first class mail to all Bondholders.

Remedies

If an Event of Default shall have occurred and be continuing of which the Trustee has received notice pursuant to the Indenture or under which Section the Trustee is required to take or deemed to have

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notice, the Trustee may, and if requested in writing by the Owners of not less than 25% in principal amount of the Bonds Outstanding shall, by notice in writing delivered to the Authority and the University, declare the principal of all Bonds then Outstanding and the interest accrued thereon immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable; provided that if at any time after the principal of the Bonds then Outstanding shall have so become due and payable, and before the entry of final judgment or decree in any suit, action or proceeding instituted on account of such acceleration or before the completion of the enforcement of any other remedy under the Indenture, all arrears of interest, with interest (to the extent permitted by law) at the rate borne by the Bonds on overdue installments of interest in respect to which such default shall have occurred, and all arrears of payments of principal when due, as the case may be, and all fees and expenses of the Trustee in connection with such default shall have been paid or provided for, then the acceleration of the Bonds then Outstanding and the consequences of such acceleration shall be annulled or rescinded, but no such annulment or rescission shall extend to or affect any subsequent acceleration of the Bonds then Outstanding, or impair any right consequent thereon.

Appointment of Receivers in Event of Default

If an Event of Default shall have occurred and be continuing, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bondholders under the Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Trust Estate and of the Loan Payments, pending such proceedings, with such powers as the court making such appointment shall confer.

Exercise of Remedies by the Trustee

(a) Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law or equity by suit, action, mandamus or other proceeding (including any rights of a secured party under the Pennsylvania Uniform Commercial Code) to enforce the payment of the principal and Purchase Price of, redemption premium, if any, and interest on the Bonds then Outstanding, to realize on or to foreclose any of its interests or liens under the Indenture or under any other of the Bond Documents, to exercise any rights or remedies available to the Trustee, to enforce and compel the performance of the duties and obligations of the Authority as in the Indenture set forth and to enforce or preserve any other rights or interests of the Trustee under the Indenture with respect to any of the Trust Estate or otherwise existing at law or in equity.

(b) If an Event of Default shall have occurred and be continuing of which the Trustee has received notice pursuant to the Indenture or under which Section the Trustee is required to take or deemed to have notice, and if requested in writing so to do by the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding and if indemnified as provided in the Indenture, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders.

(c) All rights of action under the Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any Owners of the Bonds, and any recovery of judgment shall, subject to the provisions described under the heading "Application of Moneys", be for the equal benefit of all the Owners of the Outstanding Bonds.

(d) The Trustee may take or pursue such actions and remedies under the Security Agreement, as and to the extent provided therein.

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Limitation on Exercise of Remedies by Bondholders

No Owner of any Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust under the Indenture or for the appointment of a receiver or any other remedy under the Indenture, unless (a) a default has occurred of which the Trustee has been notified as provided in the Indenture or of which by said section the Trustee is deemed to have notice, (b) such default shall have become an Event of Default, (c) the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding shall have made written request to the Trustee, shall have offered it reasonable opportunity either to proceed to exercise the powers granted under the Indenture or to institute such action, suit or proceeding in its own name, and shall have offered to the Trustee indemnity as provided in the Indenture, and (d) the Trustee shall thereafter fail or refuse to exercise the powers granted in the Indenture or to institute such action, suit or proceeding in its own name; and such notification, request and offer of indemnity are hereby declared in every case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of action for the enforcement of the Indenture, or for the appointment of a receiver or for any other remedy under the Indenture, it being understood and intended that no one or more Owners of the Bonds shall have the right in any manner whatsoever to affect, disturb or prejudice the Indenture by its, his or their action or to enforce any right under the Indenture except in the manner in the Indenture provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner in the Indenture provided, and for the equal benefit of the Owners of all Bonds then Outstanding. Nothing in the Indenture contained shall, however, affect or impair the right of any Bondholder to payment of the principal of and interest on any Bond at and after the maturity thereof or the obligation of the Authority to pay the principal of, redemption premium, if any, and interest on each of the Bonds to their respective Owners at the time, place, from the source and in the manner expressed in the Indenture and in the Bonds or affect or interfere with the right of any Owner to institute suit for the enforcement of any such payment.

Right of Bondholders to Direct Proceedings

Except as provided in the preceding section, the Owners of a majority in aggregate principal amount of Bonds then Outstanding shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of the Indenture, or for the appointment of a receiver, custodian or any other proceedings under the Indenture, provided that such direction shall not be otherwise than in accordance with the provisions of law and of the Indenture and provided, further, that the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall determine that the proceedings so directed would involve it in personal liability for which it has not been indemnified.

Application of Moneys

Any moneys held or received by the Trustee (after the deductions for payment of costs and expenses of proceedings resulting in the collection of such moneys) together with any other sums then held by the Trustee as part of the Trust Estate (other than the Rebate Fund), shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or premium, if any, or interest, upon presentation of the Bonds and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

(a) First: To the payment of all amounts due the Trustee under the Indenture provisions relating to compensation, reimbursement and indemnification;

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(b) Second: To the payment of the whole amount then due and unpaid upon the Outstanding Bonds for principal and premium, if any, and interest, in respect of which or for the benefit of which such money has been collected, with interest (to the extent that such interest has been collected by the Trustee or a sum sufficient therefor has been so collected and payment thereof is legally enforceable at the respective rate or rates prescribed therefor in the Bonds) on overdue principal and premium, if any, and on overdue installments of interest; and in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid upon such Bonds, then to the payment of such principal, premium, if any, and interest, without any preference or priority, ratably according to the aggregate amount so due;

(c) Third: To the payment of any amount due to the Authority under the Indenture or the Loan Agreement; and

(d) Fourth: To the payment of the remainder, if any, to the University or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

Whenever moneys are to be applied pursuant to this Section, such moneys shall be applied at such times and from time to time as the Trustee shall determine, having due regard to the amount of such moneys available and which may become available for such application in the future. Whenever the Trustee shall apply such moneys, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date and shall not be required to make payment to the Owner of any unpaid Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

Whenever all of the Bonds and interest thereon have been paid under this Section, and all fees, expenses and charges of the Trustee and the Authority, including attorneys' fees and expenses, have been paid, and all amounts owing to the United States Government under Section 148 of the Code have been paid, any balance remaining in the Bond Fund shall be paid to the University.

Resignation and Removal of Trustee

(a) The Trustee may resign at any time by giving written notice thereof to the Authority, the University and each Owner of Bonds Outstanding as their names and addresses appear in the Bond Register maintained by the Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may, at the expense of the University, petition any court of competent jurisdiction for the appointment of a successor Trustee.

(b) If the Trustee has or shall acquire any conflicting interest, it shall, within 90 days after ascertaining that it has a conflicting interest, or within 30 days after receiving written notice from the Authority or the University (so long as the University is not in default under the Indenture or the Loan Agreement and no condition exists that, with the giving of notice or the passage of time, or both, would constitute a default or an Event of Default) that it has a conflicting interest, which shall be identified in such written notice, either eliminate such conflicting interest or resign in the manner and with the effect specified in the preceding paragraph.

(c) The Trustee may be removed at any time by an instrument or concurrent instruments in writing delivered to the Authority and the Trustee signed by the Owners of a majority in principal amount of the Outstanding Bonds. In addition, the Authority at the written direction of the University (so long as

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the University is not in default under the Indenture and no condition exists that, with the giving of notice or the passage of time, or both, would constitute a default or an Event of Default) may remove the Trustee at any time for any reason. The Authority, the University, or any Bondholder may at any time petition any court of competent jurisdiction for the removal for cause of the Trustee.

(d) If at any time:

(1) the Trustee shall fail to comply with paragraph (b) above after written request therefor by the Authority or the University, or

(2) the Trustee shall cease to be eligible under the Indenture and shall fail to resign after written request therefor by the Authority, the University or by any such Bondholder, or

(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Authority may remove the Trustee, or (y) the University or any Bondholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(e) The successor Trustee shall give notice of such resignation or such removal of the Trustee and such appointment of a successor Trustee by mailing written notice of such event by first-class mail, postage prepaid, to the registered Owners of Bonds as their names and addresses appear in the Bond Register maintained by the Trustee. Each notice shall include the name of the successor Trustee and the address of its Designated Office.

(f) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee.

Defeasance

If the Authority shall pay or provide for the payment of the entire indebtedness on all Bonds Outstanding (including, for the purpose of this Article, any Bonds held by the University or an Affiliate thereof) in any one or more of the following ways:

(a) by paying or causing to be paid the principal of (including redemption premium, if any) and interest on all Bonds Outstanding, as and when the same become due and payable;

(b) by delivering to the Trustee, for cancellation by it, all Bonds Outstanding; or

(c) by depositing with the Trustee, in trust, (1) cash or Permitted Defeasance Obligations which are not callable or subject to prepayment prior to the date the moneys therefrom are anticipated to be required in such amount as will, together with the income or interest to accrue thereon, without consideration of any reinvestment thereof, and with any uninvested cash, be fully sufficient to pay or redeem (when redeemable) and discharge the indebtedness on all Bonds at or before their respective maturity dates; and (2) in the case of Bonds which do not mature or will not be redeemed within 90 days of the deposit referred to in (1) above and as to which there has not been deposited cash or Permitted Defeasance Obligations

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in an amount which, without regard for earnings or income thereon, is fully sufficient to pay or redeem (when redeemable) and discharge the indebtedness on all such Bonds at or before their respective maturity dates, a verification report of a nationally recognized independent certified public accounting firm as to the adequacy of the trust funds to fully pay the Bonds deemed to be paid. If a forward supply contract is employed in connection with a refunding of Bonds, (i) the verification report described in clause (2) above shall expressly state that the adequacy of the escrow to accomplish the refunding relies solely on the initial escrowed investments and the maturing principal thereof and interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement shall provide that in the event of any discrepancy or difference between the terms of the forward supply contract and the escrow agreement (or the Indenture, if no separate escrow agreement is executed in connection with such refunding), the terms of the escrow agreement or the Indenture, as applicable, shall be controlling; and if the Authority shall pay or cause to be paid all other sums payable under the Indenture by the Authority, then and in that case the Indenture and the estate and rights granted under the Indenture shall cease, determine and become null and void, and thereupon the Trustee shall, upon Written Request of the University, and upon receipt by the Trustee of an Officer's Certificate and an opinion of Independent Counsel, each stating that in the opinion of the signers all conditions precedent to the satisfaction and discharge of the Indenture have been complied with, forthwith execute proper instruments acknowledging satisfaction of and discharging the Indenture and the lien hereof, including its rights under and interest in the Security Agreement. In such event, the Trustee shall assign, transfer and turn over to the University the Trust Estate under the Indenture, including, without limitation, any surplus in the Bond Fund and any balance remaining in any other fund created under the Indenture (other than the Rebate Fund and said Permitted Defeasance Obligations or other moneys deposited in trust as above provided). The satisfaction and discharge of the Indenture shall be without prejudice to the rights of the Trustee to charge and be reimbursed by the Authority and the University for any expenditures which it may thereafter incur in connection herewith. Notwithstanding the foregoing, to the extent there are rebate obligations outstanding to the U.S. Treasury with respect to the Bonds, the lien of the Indenture shall not be deemed discharged until the University shall have agreed in writing to satisfy such rebate obligations in full.

The Authority or the University may at any time surrender to the Trustee for cancellation by it any Bonds previously authenticated and delivered, which the Authority or the University may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.

Liability of Authority Not Discharged

Upon the deposit with the Trustee, in trust, at or before maturity, of moneys or Permitted Defeasance Obligations in the necessary amount to pay or redeem all outstanding Bonds (whether upon or prior to maturity or the redemption date of such Bonds) and compliance with the other payment requirements described above under "Defeasance," provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in the Indenture provided, or provisions satisfactory to the Trustee shall have been made for the giving of such notice, and subject to the provisions of the Indenture, the Indenture may be discharged in accordance with the provisions hereof but the liability of the Authority in respect of such Bonds shall continue provided that the owners thereof shall thereafter be entitled to payment only out of the moneys or the Permitted Defeasance Obligations deposited with the Trustee as aforesaid.

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Provision for Payment of a Portion of Bonds

If the Authority shall pay or provide for the payment of the entire indebtedness on any portion of the Bonds, in one or more of the following ways:

(a) by paying or causing to be paid the principal of (including premium, if any) and interest on such portion of the Bonds as and when the same shall become due and payable;

(b) by depositing with the Trustee, in trust, at or before maturity, moneys in an amount sufficient to pay or redeem (when redeemable) such portion of the Bonds (including the payment of premium, if any, and interest payable on such portion of the Bonds to the maturity or redemption date thereof), provided that such moneys, if invested, shall be invested in Permitted Defeasance Obligations which are not callable or subject to prepayment prior to the date the moneys therefrom are anticipated to be required in an amount, together with the interest or income to accrue thereon, sufficient to pay or redeem (when redeemable) and discharge the indebtedness on such portion of the Bonds at or before their respective maturity dates, it being understood that the investment income on such Permitted Defeasance Obligations may be used for any other purpose under the Act provided that if such excess moneys are to be returned to the University prior to the final payment and discharge of the Bonds, there shall first be delivered to the Trustee a report prepared by an independent certified public accountant verifying the sufficiency of the funds remaining with the Trustee to pay or redeem (when redeemable) and discharge the indebtedness on all Bonds Outstanding at or before their respective maturity dates;

(c) by delivering to the Trustee, for cancellation by it, all Bonds Outstanding or any such portion thereof; or

(d) by depositing with the Trustee, in trust, Permitted Defeasance Obligations which are not callable or subject to prepayment prior to the date the moneys therefrom are anticipated to be required in such amount as will, together with the income or increment to accrue thereon, without consideration of any reinvestment thereof, and with any uninvested cash, be fully sufficient to pay or redeem (when redeemable) and discharge the indebtedness on all Bonds or any such portion thereof at or before their respective maturity dates; and if the Authority shall also pay or cause to be paid all other sums payable under the Indenture by the Authority with respect to such portion of the Bonds, and, if such portion of the Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in the Indenture provided or provisions satisfactory to the Trustee shall have been made for the giving of such notice, such portion shall cease to be entitled to any lien, benefit or security under the Indenture. The liability of the Authority in respect of such Bonds or such portion thereof shall continue but the Owners thereof shall thereafter be entitled to payment (to the exclusion of all other Bondholders) only out of the moneys or Permitted Defeasance Obligations deposited with the Trustee as aforesaid.

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SUMMARY OF THE SECURITY AGREEMENT

Rights and Remedies of a Secured Party.

The Collateral Agent shall have all the rights and remedies of a secured party under the Code, and in law or in equity.

Collateral Agent Matters.

(a) Appointment. Each of the Debtholders irrevocably authorizes, and each holder of any Debt shall be deemed to irrevocably authorize, the Collateral Agent to take such action on such Debtholders' behalf as a secured party under the Security Agreement, the Code, at law or in equity.

(b) No Fiduciary Duty; Right to Delegate. The duties of the Collateral Agent shall be mechanical and administrative in nature. The Collateral Agent shall not have by reason of the Loan Agreement a fiduciary relationship in respect of any Debtholder, and nothing in the Security Agreement or any other Transaction Document, expressed or implied, is intended to or shall be so construed as to impose upon the Collateral Agent any obligations except as expressly set forth herein or therein. The Collateral Agent may perform any of his or her duties hereunder by or through agents or employees (provided such delegation does not constitute a relinquishment of duties as the Agent hereunder) and shall be entitled to engage and pay for the advice or services of any attorneys, accountants, or other experts concerning all matters pertaining to duties hereunder and to rely upon any advice so obtained.

(c) Instructions of Majority. The Collateral Agent agrees upon the written instructions of the Majority to take any actions of the type specified as being within the Collateral Agent's rights, powers or discretion in the Security Agreement. Any action taken by the Collateral Agent within the scope of his or her authority shall be binding on all the Debtholders.

(d) Resignation. The Collateral Agent may resign upon 15 days’ written notice to the Debtholders and the University. In the event of the resignation of the Collateral Agent, one or more successors will be appointed within 15 days of such event by a Majority; provided, however, that if a Majority fails to appoint a successor Collateral Agent, the then current Collateral Agent, or one or more Debtholders, may initiate an action in a court of competent jurisdiction to have a successor Collateral Agent appointed. The death or incapacity of any Debtholder will not terminate the authority and agency of the Collateral Agent. Any successor Collateral Agent will provide the University with prompt written notice of appointment. No resignation of a Collateral Agent shall be effective until a successor Collateral Agent has been appointed.

(e) Collateral Agent Fee. In addition to any obligation of the University to the Collateral Agent under the Security Agreement, the University shall pay to the Collateral Agent an annual fee as determined in the Security Agreement.

(f) Reimbursement and Indemnification. To the extent the University does not reimburse and save harmless the Collateral Agent according to the terms of the Security Agreement for and from all costs, expenses and disbursements in connection herewith, or such costs and expenses are not satisfied from the Proceeds derived from the sale or liquidation of Collateral pursuant to the Security Agreement, such costs, expenses and disbursements, shall be borne ratably against those Debtholders who directed the Collateral Agent to take the action(s) for which reimbursement is sought. Each Debtholder hereby agrees on such basis (i) to reimburse the Collateral Agent for such Debtholder’s ratable share of all such reasonable costs, expenses and disbursements on request and (ii) to the extent of each such Debtholder's ratable share, to indemnify and save harmless the Collateral Agent against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements

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of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent, other than as a consequence of gross negligence or willful misconduct on the part of the Collateral Agent, arising out of or in connection with the Security Agreement, or any other Transaction Document, or any request of the Majority, including without limitation, the reasonable costs, expenses (including legal fees) and disbursements in connection with defending herself or himself against any claim or liability related to the exercise or performance of any of his or her powers or duties under the Security Agreement or any other Transaction Document or the taking of any action under or in connection with any of the foregoing.

(g) Collateral Agent’s Rights as Debtholder. With respect to the status of any Collateral Agent as a Debtholder hereunder, the participation as a Debtholder under the Security Agreement, or under any of the Transaction Documents, the Collateral Agent shall have the same rights and powers, duties and obligations under the Security Agreement and the other Transaction Documents as any Debtholder and may exercise such rights and powers and shall perform such duties and fulfill such obligations as though he or she were not the Collateral Agent. The Collateral Agent may accept deposits from, lend money to, act as trustee in connection with any bond issuances by or on behalf of the University, and generally engage, and continue to engage, in any kind of business with the University or any of its affiliates.

Provisions Applicable to the Collateral.

The parties covenant and agree that the following provisions shall be applicable to the Collateral:

(a) The Security Agreement constitutes a valid and continuing lien on and security interest in the Collateral in favor of the Collateral Agent, prior to all other liens, encumbrances, security interests and rights of others arising from any acts or omissions of the University, and is enforceable as such as against creditors of and purchasers from the University.

(b) The University will permit such persons as the Collateral Agent may designate to visit and examine and inspect the Collateral and to review the books and records of the University concerning the Collateral that is now owned or acquired after the date of the Security Agreement by the University and to copy the same and make excerpts therefrom and to discuss the Collateral with the University's officers, employees and independent accountants at such times and as often as the Collateral Agent may request; provided that so long as no Event of Default has occurred and is existing, the Collateral Agent shall give reasonable notice of such inspection to the University and shall limit its inspection to the normal office hours of University. The University authorizes its officers, employees and independent accountants to discuss with the Collateral Agent the affairs of the University.

(c) The University shall not change its federal or state tax identification number or its state of incorporation without delivery of at least thirty (30) days advance written notice to the Collateral Agent.

Actions with Respect to Gross Revenues.

The University covenants and agrees to use its best efforts in the collection and enforcement of the Gross Revenues.

Preservation and Protection of Security Interest.

(a) The University represents and warrants that it has, and covenants and agrees that at all times during the term of the Security Agreement, it will have, good and marketable title to the Collateral, which is owned or acquired from time to time by it, free and clear of all pledges, liens, security

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interests, charges or other encumbrances, except those in favor of the Collateral Agent and shall defend the Collateral against the claims and demands of all persons, firms and entities whomsoever.

(b) The University hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any filing office in any jurisdiction in which the Code may apply to the Collateral any initial financing statements and amendments thereto that are reasonably necessary for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether University is an organization, the type of organization and any organization identification number issued to University. University agrees to furnish any such information to the Collateral Agent promptly upon request.

(c) The University covenants and agrees to faithfully preserve and protect the Collateral Agent's security interest in the Collateral and shall, at its own cost and expense, cause, or assist the Collateral Agent to cause that security interest to be perfected and continue perfected so long as the Debt or any portion of the Debt is outstanding.

(d) The University shall do all such other acts and things and shall execute and deliver all such other instruments and documents, including further security agreements, pledges, endorsements, assignments and notices, as the Collateral Agent in its discretion, may deem necessary or advisable from time to time in order to perfect and preserve the priority of such security interest as a first lien security interest in the Collateral prior to the rights of all third persons, firms and entities.

(e) The University covenants and agrees that a carbon, photographic or other reproduction of the Security Agreement or a financing statement is sufficient as a financing statement and may be filed instead of the original.

Events of Default and Remedies.

(a) If any one or more of the Events of Default shall occur or shall exist and be continuing, then in any such event, the Collateral Agent shall have such rights and remedies in respect of the Collateral or any portion thereof as are provided by the Code and such other rights and remedies in respect thereof which it may have at law or in equity or under the Debts and other Transaction Documents.

(b) The Collateral Agent shall apply the Proceeds of any sale or liquidation of the Collateral, first to the payment of the reasonable costs and expenses incurred by the Collateral Agent in connection with such sale or collection, including without limitation reasonable attorneys' fees and legal expenses, second to the payment of the Debts Pro Rata among the Debtholders, and then to pay the balance, if any, to the University or as otherwise required by law. If such Proceeds are insufficient to pay the amounts required by law, the University shall be liable for any deficiency.

Defeasance; Release.

Notwithstanding anything to the contrary contained in the Security Agreement, the Security Agreement shall terminate and be of no further force and effect, and the Collateral Agent shall terminate its security interest in the Collateral:

(a) upon satisfaction of all outstanding Debts.

(b) upon fifteen (15) days’ prior written notice to such effect given to the Collateral Agent and the University by PNC (to the extent that PNC is a then-current Debtholder hereunder) and those Consenting Debtholders (defined below) holding at least fifty and one/one-hundredth percent

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(50.01%) of the then outstanding Consenting Debtholder Debt (defined below) held by all Consenting Debtholders unless the Collateral Agent receives a written direction from the University prior to the expiration of such fifteen (15) day period to the effect that the Agreement is to remain in full force and effect (which may be for a specified period of time). As used in the Security Agreement, the term "Consenting Debtholder" shall mean a Debtholder holding Debt which was incurred subject to the requirement that such Debtholder have the right to consent to the termination of the Security Agreement and the security interest with regard to such Debt, each such Debt being referred to herein as a “Consenting Debtholder Debt”.”

(c) upon written notice to such effect given to the Collateral Agent by the University accompanied by evidence that PNC is no longer a Debtholder hereunder and that all outstanding Consenting Debtholder Debts held by Consenting Debtholders have been satisfied.

Prior to any such termination, the Security Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns, provided that, without the prior written consent of the Collateral Agent, the University may not assign the Security Agreement or any of its rights under the Security Agreement or delegate any of its duties or obligations under the Security Agreement and any such attempted assignment or delegation shall be null and void. The Security Agreement is not intended and shall not be construed to obligate the Collateral Agent to take any action whatsoever with respect to the Collateral or to incur expenses or perform or discharge any obligation, duty or disability of the University.

Expenses, Indemnification.

University hereby agrees to protect, exonerate, defend, indemnify and hold Collateral Agent and its officers, attorneys, agents and employees harmless against and from all claims, liabilities, losses, damages, fines, penalties and expenses, including out-of-pocket expenses, incidental expenses, legal fees and expenses, the allocated costs and expenses of in-house counsel and legal staff and the costs and expenses of defending against any such claims (“Losses”) which the Collateral Agent may or shall incur under or by reason of the Security Agreement or the Collateral, or by reason of any action taken in good faith by Collateral Agent hereunder, and against and from any and all Losses which the Collateral Agent sustains or incurs in connection with the Collateral Agent's exercise of its rights with respect to the Collateral or the Security Agreement, unless any such liability, loss, damage or expense is caused solely by the Collateral Agent's gross negligence or willful misconduct. Should the Collateral Agent incur any such liability, loss, damage or expense, the amount thereof, together with interest thereon at the rate set forth as the PNC Bank, N.A. prime rate, shall be payable by the University to the Collateral Agent immediately upon demand and shall be deemed secured by the Security Agreement and secured by the lien of any other security given to the Collateral Agent to secure the Debt.

Amendments.

The Security Agreement may be amended at the request of the University and with the consent of PNC (but without the consent of any other Debtholder) as long as the Collateral Agent receives an opinion of counsel reasonably acceptable to it that such amendment does not impose additional obligations on any Debtholder.

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Appendix D

Form of Bond Counsel Opinion

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September __, 2017

TO THE PURCHASERS OF THE BELOW-REFERENCED BONDS

RE: Allegheny County Higher Education Building Authority $27,430,000 University Revenue Bonds, Series of 2017 (Robert Morris University)

Ladies and Gentlemen:

We have acted as bond counsel in connection with the issuance and sale by the Allegheny County Higher Education Building Authority (the "Authority") of $27,430,000 aggregate principal amount of its University Revenue Bonds, Series of 2017 (Robert Morris University) (the "Bonds") pursuant to the Trust Indenture dated as of September 1, 2017 (the "Indenture") between the Authority and The Bank of New York Mellon Trust Company, N.A., as Trustee (the "Trustee").

We have examined (a) an executed copy of the Indenture, (b) an executed copy of the Loan Agreement dated as of September 1, 2017 (the "Loan Agreement") between the Authority and Robert Morris University (the "University"), pursuant to which the University unconditionally agrees to pay the principal of, and interest on, the Bonds when and as the same shall become due, subject to the terms and conditions of the Loan Agreement and the Indenture, (c) the form of Bond and (d) such constitutional and statutory provisions and such other resolutions, certificates, instruments and documents as we have deemed necessary or appropriate in order to enable us to render an informed opinion as to matters set forth herein.

In rendering this opinion, we have assumed the genuineness of all signatures on all documents and certificates that we examined, the legal capacity and authority of all persons executing such documents, the authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as copies and the authenticity of the originals of said copies. As to questions of fact material to our opinion, we have relied upon the representations of the Authority and the University contained in the Indenture and the Loan Agreement and in certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation.

Based upon the foregoing, it is our opinion, under existing law and as of the date hereof, that:

1. The Authority is a body corporate and politic organized and existing under the Pennsylvania Municipality Authorities Act, approved June 19, 2001, P.L. 287, No. 22, as amended (the "Act"), and has the power to enter into the transactions contemplated by the Indenture and the Loan Agreement and to carry out its obligations thereunder.

2. The Indenture and the Loan Agreement have been duly authorized, executed and delivered by the Authority and constitute the valid and binding obligations of the Authority enforceable against it in accordance with their respective terms.

3. The Bonds have been duly authorized, executed, issued and delivered by the Authority and constitute the valid and binding limited obligations of the Authority enforceable against it in accordance with their terms, payable from the sources provided therefor in the Indenture.

To the Purchasers of the Below-Referenced Bonds September __, 2017 Page 2

4. All right, title and interest of the Authority in and to the installment payments due under the Loan Agreement have been duly assigned to the Trustee (except for the fees and expenses payable to the Authority and the Authority's right to indemnification).

5. The Bonds are exempt from personal property taxes in Pennsylvania and the interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax.

6. The interest on the Bonds is excluded from the gross income of the holders of the Bonds for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining "adjusted current earnings." For the purpose of rendering the opinion set forth in this paragraph, we have assumed compliance by the Authority and the University with requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority and the University have covenanted to comply with such requirements. 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. 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 Loan Agreement and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws heretofore or hereafter enacted affecting creditors' rights generally to the extent constitutionally applicable and by the application of general equitable principles and the exercise of judicial discretion in appropriate cases (whether such enforcement is sought in proceedings in equity or at law).

The opinions set forth above are rendered on the basis of, and limited to, federal law and the laws of the Commonwealth of Pennsylvania as enacted and construed on the date hereof. We express no opinion herein as to any matter not set forth in the numbered paragraphs above. In particular, we assume no responsibility for, and express no opinion herein with respect to, the accuracy, adequacy or completeness of the Official Statement prepared in respect of the Bonds, including the appendices thereto, and we make no representation that we have independently verified any such information. A separate opinion, dated the date hereof, has been delivered to other parties with respect to certain aspects of the Official Statement.

We are members of the Bar of the Commonwealth of Pennsylvania and do not purport to be expert as to the laws of any jurisdiction other than Pennsylvania and the United States of America. The opinions expressed in this opinion letter are therefore limited to the laws of Pennsylvania (excluding conflict of laws rules) and the United States of America, all as in effect on the date hereof, and no opinion is expressed with regard to the laws of any other jurisdiction.

To the Purchasers of the Below-Referenced Bonds September __, 2017 Page 3

The opinions set forth above are given solely for your benefit and may not be relied on by any other person or entity without our express prior written consent. The opinions set forth above are given solely as of the date hereof, and we do not undertake to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours,

COHEN & GRIGSBY, P.C.

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Appendix E

Form of Continuing Disclosure Agreement

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$27,430,000 Allegheny County Higher Education Building Authority University Revenue Bonds, Series of 2017 (Robert Morris University)

CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (the “Disclosure Agreement”) dated September 26, 2017 is executed and delivered by ROBERT MORRIS UNIVERSITY (the “Borrower”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (the “Trustee”), in connection with the issuance of $27,430,000 Allegheny County Higher Education Building Authority, University Revenue Bonds, Series of 2017 (Robert Morris University) (the “Bonds”). The Bonds are being issued pursuant to a Trust Indenture dated as of September 1, 2017 between the Allegheny County Higher Education Building Authority (the “Issuer”) and the Trustee (the “Indenture”). The proceeds of the Bonds are being loaned by the Issuer to the Borrower pursuant to a Loan Agreement dated as of September 1, 2017 between the Issuer and the Borrower (the “Loan Agreement”). The Borrower and the Trustee, intending to be legally bound, covenant and agree as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Borrower and the Trustee for the benefit of the Beneficial Owners (defined below) of the Bonds and in order to assist the Participating Underwriter (defined below) in complying with the Rule (defined below). The Borrower and the Trustee acknowledge that the Issuer has undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Agreement, and has no liability to any person, including any Holder of the Bonds, with respect to any such reports, notices or disclosures. SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined herein, the following capitalized terms shall have the following meanings: “Annual Report” shall mean any Annual Report provided by the Borrower pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. “Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. “Dissemination Agent” shall mean the Trustee, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Borrower and which has filed with the Trustee and Borrower a written acceptance of such designation. “Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. “Obligated Person” means each person or entity that is an "obligated person" as defined in the Rule, including any person who is either generally or through an enterprise, fund or account of such person committed by contract or other arrangement to support payment of all or part of the obligation on the Bonds (other than providers of municipal bond insurance, letters of credit or other liquidity facilities). “Participating Underwriter” shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. “Repository” shall mean the Municipal Securities Rulemaking Board (“MSRB”) Electronic Municipal Market Access (EMMA) System, or such other system as may be designated by the MSRB or such other repository as is then required or permitted pursuant to the Rule.

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “Submission Date” shall mean the date which is 180 days after the end of each fiscal year of the Borrower, commencing with the fiscal year ending May 31, 2017.

SECTION 3. Provision of Annual Reports. (a) The Borrower shall provide, or cause the Dissemination Agent to provide, to the MSRB by the Submission Date an Annual Report in an electronic format as prescribed by the MSRB. Not later than fifteen (15) Business Days prior to each Submission Date, the Borrower shall provide an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement to the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent). In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Borrower may be submitted separately from the balance of the Annual Report. The Borrower shall provide, or shall cause the Dissemination Agent to provide, in a timely manner, notice of a failure of the Borrower to provide the Annual Report on or before the Submission Date, in substantially the form attached as Exhibit A. (b) If by the fifteenth (15) Business Day prior to the Submission Date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Borrower to determine whether the Borrower is in compliance with its obligation to provide Annual Reports in compliance with subsection (a) above. (c) If instructed by the Borrower, the Dissemination Agent shall deliver copies of each Annual Report to the Repository as soon as practicable following the receipt thereof, but in no event later than three Business Days after receipt thereof. If instructed by the Borrower, the Dissemination Agent shall send a notice to the Repository in substantially the form attached as Exhibit A.

SECTION 4. Content of Annual Reports. The Borrower's Annual Report shall contain or incorporate by reference the following information concerning the Borrower: (a) audited financial statements for the prior fiscal year, prepared in accordance with generally accepted accounting principles; (b) selected financial and operational data for the prior fiscal year consisting of data of the type set forth in Appendix A to the Official Statement distributed in connection with the initial sale of the Bonds: (i) under the headings “ENROLLMENT”, “APPLICATIONS AND ACCEPTANCES”, “Student Fees”, "Student Financial Aid", "Sources of Scholarships and Grants", and "Sources of Loans"; and (ii) under the headings "BALANCE SHEET" and "STATEMENT OF CHANGES IN NET ASSETS" each in comparative form for the five prior fiscal years of the Borrower. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues with respect to which the Borrower is an “obligated person” (as defined by the Rule), which have been filed with the Repository. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Borrower shall clearly identify each such other document so incorporated by reference.

All documents provided to the Repository shall be accompanied by identifying information as prescribed by the Municipal Securities Rulemaking Board.

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SECTION 5. Reporting of Material Events. (a) The Borrower shall provide or cause the Dissemination Agent to provide in a timely manner not in excess of ten (10) business days after the occurrence of the Listed Event, to the Repository, notice of any of the following events with respect to the Bonds:

(1) principal and interest payment delinquencies;

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

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

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

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

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

(7) modifications to rights of Holders of the Bonds, if material;

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

(9) defeasances;

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

(11) rating changes;

(12) bankruptcy, insolvency, receivership or similar event of the Borrower;1

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

(14) appointment of a successor or additional trustee or the change of name of a trustee, if material.

(b) If the Dissemination Agent has been instructed by the Borrower to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the Repository, the Borrower and the Trustee (if the Trustee is not the Dissemination Agent). If the Dissemination Agent

1 Note: For purposes of this event number (12), 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 Borrower, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of any 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.

-3- obtains actual knowledge of the occurrence of a Listed Event described in paragraphs (1), (3), (4), (5), (8), (9) or (14) of Section 5(a) hereof, the Dissemination Agent shall notify the Borrower of such occurrence for a determination if such Listed Event shall be reported pursuant to this Section 5. All notices of Listed Events reported to the Repository shall be accompanied by identifying information as prescribed by the Municipal Securities Rulemaking Board.

SECTION 6. Termination of Reporting Obligation. The Borrower's obligations under this Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. If the Borrower's obligations under the Loan Agreement are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Agreement in the same manner as if it were the Borrower and the original Borrower shall have no further responsibility hereunder. SECTION 7. Dissemination Agent. The Borrower may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent. The initial Dissemination Agent shall be The Bank of New York Mellon Trust Company, N.A. SECTION 8. Amendment; Waiver. The Borrower and the Dissemination Agent may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, with the consent of the Beneficial Owners of the Bonds. Notwithstanding the forgoing and any other provision of this Disclosure Agreement, the Borrower and the Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, without the consent of the Beneficial Owners of the Bonds, provided that (i) the amendment requires the Borrower to provide more information than is required by this Disclosure Agreement or (ii) the following conditions are satisfied: (a) If the amendment relates to the provisions of Section 3, 4, 5, or 8, it may only be made in connection with a change in circumstances that arises from a change in or clarification of legal requirements, change of law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended, would, in the opinion of independent nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment does not, in the opinion of independent nationally recognized bond counsel, materially impair the interests of the Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Borrower shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being provided by the Borrower. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Borrower from disseminating any other information, using the means of dissemination set forth in this Disclosure

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Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Borrower chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Agreement, the Borrower shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Other Obligated Persons.

The Borrower represents and warrants that there are no other Obligated Persons as of the date hereof and that the Issuer is not an Obligated Person with respect to the Bonds. The Borrower covenants and agrees that it shall cause each other person or entity that becomes an Obligated Person subsequent to the date hereof to become a party to this Disclosure Agreement and to comply with the obligations of an Obligated Person hereunder. The Borrower shall have sole responsibility for determining whether any given person or entity is an Obligated Person.

SECTION 11. Default. In the event of a failure of the Borrower or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the request of any Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding Bonds, and the provision of indemnity satisfactory to the Trustee, shall), or any Bondholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Borrower or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture or the Loan Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the Borrower or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. SECTION 12. Duties, Immunities and Liabilities of Trustee and Dissemination Agent. (a) The Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Borrower agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including reasonable attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's gross negligence or willful misconduct. The Dissemination Agent shall be entitled to the same privileges and immunities afforded to the Trustee under Article VIII of the Indenture. (b) This Disclosure Agreement exclusively sets forth all of the duties of the Dissemination Agent with respect to any and all matters pertinent hereto. The Dissemination Agent shall have no obligation to make disclosure about the Bonds except as specifically provided herein. Furthermore, the Dissemination Agent shall have no duty, obligation or responsibility with regard to the accuracy or completeness of any information contained in any Annual Report or Listed Event notice furnished to it. The obligations of the Borrower under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Borrower, the Trustee, the Dissemination Agent, the Participating Underwriter, the Issuer and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

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SECTION 14. Notices. All reports, notices and disclosures are required to be given to the Dissemination Agent hereunder shall be in writing and shall be addressed as follows:

The Bank of New York Mellon Trust Company, N.A. 500 Ross St, 12thth Floor Pittsburgh, PA 15262 Attn: Global Corporate Trust All notices required to be given to the Borrower hereunder shall be in writing and shall be addressed as follows

Robert Morris University 6001 University Boulevard Moon Township, PA 15108 Attention: Vice President for Business Affairs

Any party may notify the other in writing of any change in address. SECTION 15. Governing Law.

This Disclosure Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Pennsylvania; provided that, to the extent that the Securities and Exchange Commission, the Municipal Securities Rulemaking Board or any other federal or state agency or regulatory body with jurisdiction of the Bonds shall have promulgated any rule or regulation governing the subject matter hereof, this Disclosure Agreement shall be interpreted and construed in a manner consistent therewith.

SECTION 16. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

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[signature pages follow]

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[SIGNATURE PAGE 1 OF 2 TO CONTINUING DISCLOSURE AGREEMENT]

ROBERT MORRIS UNIVERSITY

By: Senior Vice President for Business Affairs

[SIGNATURE PAGE 2 OF 2 TO CONTINUING DISCLOSURE AGREEMENT]

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By: Vice President

EXHIBIT A

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Allegheny County Higher Education Building Authority

Name of Bond Issue: Allegheny County Higher Education Building Authority, University Revenue Bonds, Series of 2017 (Robert Morris University)

Name of Borrower: Robert Morris University

Date of Issuance: September 26, 2017

NOTICE IS HEREBY GIVEN that Robert Morris University (the “Obligated Person”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement dated September 26, 2017 between the Obligated Person and The Bank of New York Mellon Trust Company, N.A., as Dissemination Agent. The Obligated Person anticipates that the Annual Report will be filed by ______.

Dated: ______

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent, on behalf of Robert Morris University cc: Allegheny County Higher Education Building Authority

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